<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
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 appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[x] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
NORTHFIELD LABORATORIES INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
<PAGE> 2
NORTHFIELD LABORATORIES INC.
1560 Sherman Avenue, Suite 1000
Evanston, Illinois 60201-4800
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held
on October 12, 2000
----------------------------
TO THE STOCKHOLDERS OF NORTHFIELD LABORATORIES INC:
The Annual Meeting of the stockholders of Northfield Laboratories Inc. (the
"Company") will be held on Thursday, October 12, 2000, at 9:00 A.M., local time,
at the Third Floor, 1560 Sherman Avenue, Evanston, Illinois 60201-4800, for the
following purposes:
1. To elect six directors to hold office until the next Annual Meeting of
the stockholders of the Company;
2. To approve the appointment of KPMG LLP as independent auditors of the
Company to serve for the Company's 2001 fiscal year; and
3. To transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on August 14, 2000
as the record date for determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment or postponement thereof.
Stockholders are requested to complete and sign the enclosed Proxy, which
is solicited by the Board of Directors, and promptly return it in the
accompanying envelope.
By Order of the Board of Directors
JACK J. KOGUT
Secretary
Evanston, Illinois
August 18, 2000
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD. PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE EVEN IF YOU INTEND TO BE PRESENT AT THE
ANNUAL MEETING. RETURNING THE PROXY WILL NOT LIMIT YOUR RIGHT TO VOTE IN PERSON
OR TO ATTEND THE ANNUAL MEETING, BUT WILL ENSURE YOUR REPRESENTATION IF YOU
CANNOT ATTEND. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
<PAGE> 3
NORTHFIELD LABORATORIES INC.
-------------------------------------------------
PROXY STATEMENT
-------------------------------------------------
This document is being furnished to holders of the common stock of
Northfield Laboratories Inc. in connection with the solicitation of proxies for
use at Northfield's annual meeting of stockholders to be held on Thursday,
October 12, 2000, commencing at 9:00 A.M., local time, at the Third Floor, 1560
Sherman Avenue, Evanston, Illinois 60201-4800, and at any adjournment or
postponement thereof, for the purpose of considering and acting upon the matters
set forth in the accompanying Notice of Annual Meeting of Stockholders.
This document is first being mailed to holders of common stock on or about
August 18, 2000.
Our principal executive offices are located at 1560 Sherman Avenue, Suite
1000, Evanston, Illinois 60201-4800. Our telephone number is (847) 864-3500. We
also maintain an Internet web-site at www.northfieldlabs.com. The information
contained on our web-site is not deemed to be soliciting material and is not
incorporated by reference in this document.
VOTING AND RECORD DATE
Only holders of record of common stock as of the close of business on
August 14, 2000, the record date for the annual meeting, are entitled to notice
of and to vote at the annual meeting. As of August 14, 2000, there were
14,242,375 shares of common stock outstanding and entitled to be voted at the
annual meeting.
QUORUM
Each holder of record of shares who is entitled to vote may cast one vote
per share held on all matters properly submitted for the vote of the
stockholders at the annual meeting. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of common stock entitled to vote
at the annual meeting is necessary to constitute a quorum at the annual meeting.
If a stockholder withholds its vote for the election of directors or abstains
from voting on the other proposals to be considered at the annual meeting, the
shares owned by that stockholder will be considered to be present at the annual
meeting for purposes of establishing the presence or absence of a quorum for the
transaction of business.
REQUIRED VOTE
The affirmative vote of a majority of the votes cast at the annual meeting
will be required to approve the proposals with respect to the election of
directors and the appointment of independent auditors. Withheld votes and
abstentions will be considered as votes cast with respect to these proposals and
will have the same effect as a vote against these proposals.
If any nominee for director fails to receive the affirmative vote of a
majority of the votes cast at the annual meeting, the majority of the directors
then in office will be entitled under our certificate of incorporation and
bylaws to fill the resulting vacancy in the board of directors. Each director
chosen in this manner will hold office for a term expiring at our next annual
meeting of stockholders.
<PAGE> 4
PROXIES
All shares entitled to vote and represented by properly executed proxies
received, and not revoked, prior to the annual meeting will be voted at the
annual meeting in accordance with the instructions indicated on those proxies.
If no instructions are indicated on a properly executed proxy, the shares
represented by that proxy will be voted as recommended by the Board of
Directors.
If any other matters are properly presented at the annual meeting for
consideration, including, among other things, consideration of a motion to
adjourn the annual meeting to another time or place, the persons named in the
enclosed form of proxy will have discretion to vote on those matters in
accordance with their best judgment to the same extent as the person signing the
proxy would be entitled to vote. It is not currently anticipated that any other
matters will be raised at the annual meeting.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. A proxy may be revoked by filing with
Northfield's Corporate Secretary, at or before the taking of the vote at the
annual meeting, a written notice of revocation or a duly executed proxy, in
either case later dated than the prior proxy relating to the same shares. A
proxy may also be revoked by attending the annual meeting and voting in person,
although attendance at the annual meeting will not itself revoke a proxy. Any
written notice of revocation or subsequent proxy should be sent so as to be
delivered to Northfield Laboratories Inc., 1560 Sherman Avenue, Suite 1000,
Evanston, Illinois 60201-4800, Attention: Corporate Secretary, or hand delivered
to the Corporate Secretary, at or before the taking of the vote at the annual
meeting.
ANNUAL REPORT
A copy of our Annual Report on Form 10-K for our 2000 fiscal year,
including financial statements, has been sent simultaneously with this document
or has been previously provided to all stockholders entitled to vote at the
annual meeting.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the election of the nominees
for election as directors and FOR approval of the appointment of KPMG LLP as
independent auditors for Northfield's 2001 fiscal year.
2
<PAGE> 5
ITEM 1. ELECTION OF DIRECTORS
Directors elected at the annual meeting will hold office until the next
annual meeting or until their earlier resignation or removal. In the event any
of the nominees should become unavailable for election, the Board of Directors
may designate substitute nominees, in which event shares represented by all
proxies returned will be voted for the substitute nominees unless an indication
to the contrary is included on the proxies.
<TABLE>
<CAPTION>
DIRECTOR OF
NORTHFIELD PRINCIPAL OCCUPATION AND
NAME SINCE OFFICE BUSINESS EXPERIENCE
---- ----------- ------ ------------------------
<S> <C> <C> <C>
Richard E. DeWoskin......... 1985 Chairman of the Board of Mr. DeWoskin, age 52, is a founding
Directors and Chief member of Northfield's scientific
Executive Officer team and has served as Chairman of
Board of Directors and Chief
Executive Officer of Northfield since
its inception in 1985. Prior to 1985,
Mr. DeWoskin served as the Assistant
Director of Surgical Research and as
a business advisor to the Department
of Surgery at Michael Reese Hospital
and Medical Center in Chicago,
Illinois. In 1979, Mr. DeWoskin
founded and operated Medalease, Inc.,
a medical billing business based at
Michael Reese. From 1973 to 1977, Mr.
DeWoskin served as the Assistant
Administrator of Surgical Research at
the Hektoen Institute of Cook County
Hospital in Chicago, Illinois. Mr.
DeWoskin received his B.S. degree
from Roosevelt University.
Steven A. Gould, M.D. ...... 1993 President and Director Dr. Gould, age 53, is a founding
member of Northfield's scientific
team and has served as President and
a director of Northfield since July
1993. Prior to that time, Dr. Gould
served as a Consultant and Principal
Investigator for Northfield's
clinical trials. From 1989 to 1993,
Dr. Gould served as Chief of the
Department of Surgery of Michael
Reese. Since 1990, Dr. Gould has also
served as Professor of Surgery
(nonsalaried) at the University of
Illinois College of Medicine. From
1979 through 1989, Dr. Gould was
Assistant Professor and then
Associate Professor in the Department
of Surgery at The University of
Chicago School of Medicine. Dr..
Gould has been involved in
development of national transfusion
policy through his participation in
the activities of the National Heart
Lung Blood Institute, the National
Blood Resource Education Panel, the
Department of Defense, the American
Association of Blood Banks, the
American College of Surgeons and The
American Red Cross. Dr. Gould
received his M.D. degree from the
Boston University School of Medicine
in 1973.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR OF
NORTHFIELD PRINCIPAL OCCUPATION AND
NAME SINCE OFFICE BUSINESS EXPERIENCE
---- ----------- ------ ------------------------
<S> <C> <C> <C>
Gerald S. Moss, M.D. ....... 1989 Director Dr. Moss, age 65, is a founding
member of Northfield's scientific
team and has served as a director of
Northfield since 1989. Since 1989,
Dr. Moss has been the Dean of the
University of Illinois College of
Medicine. From 1977 until 1989, Dr.
Moss was a Professor in the
Department of Surgery of The
University of Chicago School of
Medicine and Chairman of the
Department of Surgery of Michael
Reese. Dr. Moss has been involved in
development of national transfusion
policy through his participation in
the activities of the National Heart
Lung Blood Institute, the National
Blood Resource Education Panel, the
Department of Defense, the American
Association of Blood Banks, the
American Blood Commission, the
American College of Surgeons and The
American Red Cross. Dr. Moss received
his M.D. degree from the Ohio State
University College of Medicine in
1960.
Bruce S. Chelberg........... 1989 Director Mr. Chelberg, age 66, has served as a
director of Northfield since 1989.
Mr. Chelberg has served since May
1992 as the Chairman and Chief
Executive Officer of Whitman
Corporation, a principal stockholder
in Northfield. From 1982 to 1992, Mr.
Chelberg served in a number of
executive positions with Whitman
Corporation. Mr. Chelberg is also a
director of Whitman Corporation,
First Midwest Bancorp, Inc., Snap-On
Tools Corp. and is a member of the
Illinois Bar Association. Mr.
Chelberg received his LLB degree from
the University Of Illinois College of
Law in 1958.
Jack Olshansky.............. 1989 Director Mr. Olshansky, age 71, has served as
a director of Northfield since 1989.
Mr. Olshansky is an independent
consultant to companies in the
biotechnology industry. From 1983 to
July 2000, Mr. Olshansky was a
founding general partner of
Montgomery Medical Ventures, L.P. Mr.
Olshansky served as vice president of
the Medical Division of Cutter
Laboratories. Mr. Olshansky is also a
director of EndiCor, Inc.,
PrisMedical, Inc., Tandem and The
Trylon Corporation. Mr. Olshansky
received his B.A. degree from
Brooklyn College in 1950.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR OF
NORTHFIELD PRINCIPAL OCCUPATION AND
NAME SINCE OFFICE BUSINESS EXPERIENCE
---- ----------- ------ ------------------------
<S> <C> <C> <C>
David A. Savner............. 1998 Director Mr. Savner, age 56, has served as a
director of Northfield since April
1998. Mr. Savner has since April 1998
been the Senior Vice President and
General Counsel of General Dynamics
Corporation. From 1987 to 1998, Mr.
Savner was a senior partner in the
law firm of Jenner & Block. Mr.
Savner received his J.D. degree from
Northwestern University Law School in
1968.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
We currently have two standing committees. The compensation committee,
which did not meet during the 2000 fiscal year, is composed of Messrs. DeWoskin
(Chairman), Chelberg and Olshansky. The compensation committee has the
authority, as delegated by the Board of Directors, to administer our executive
compensation plans and to determine the salaries and incentive compensation,
including the grant of stock options, to be received by our executive officers
and employees.
The audit committee, which met twice during the 2000 fiscal year, is
currently composed of Messrs. Savner (Chairman), Chelberg and Olshansky. The
functions of the audit committee include the review of the planning and results
of our annual audit, the adequacy of our internal accounting controls, and the
auditing and accounting principles and practices to be used in the preparation
of our financial statements.
MEETING ATTENDANCE
During fiscal 2000, the Board of Directors met four times, and no incumbent
director attended fewer than 75 percent of the total number of meetings of the
Board of Directors and the committees of which he was a member.
COMPENSATION OF DIRECTORS
We compensate outside directors for their participation at Board of
Directors meetings and at committee meetings of the Board of Directors at a rate
of $1,000 per meeting. Directors are also reimbursed for their expenses for
attending meetings of the Board of Directors and committees. Mr. Chelberg has
declined this compensation and reimbursement of expenses.
5
<PAGE> 8
MANAGEMENT
EXECUTIVE OFFICERS
The Board of Directors will elect our executive officers at its first
meeting following the annual meeting. Our executive officers are as follows:
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Richard E. DeWoskin....................... Chairman of the Board of Directors and Chief Executive
Officer
Steven A. Gould, M.D...................... President
Jack J. Kogut............................. Vice President -- Finance, Secretary and Treasurer
John A. Dybas, Jr......................... Vice President -- Regulatory Affairs
John D. Grove............................. Vice President -- Operations
Marc D. Doubleday......................... Vice President -- Process Engineering
Robert L. McGinnis........................ Vice President -- Manufacturing Development
</TABLE>
-------------------------
A biographical summary of the business experience of Mr. DeWoskin and Dr.
Gould is included under "Election of Directors."
Mr. Kogut, age 53, has served as Vice President -- Finance since 1986. Mr.
Kogut has also served as Northfield's Secretary and Treasurer since January
1994. From 1982 to 1986, he was the Group Controller-Health Products for Sybron
Corporation and also served as President of Sybron Asia. Mr. Kogut received his
M.B.A. degree from Loyola University of Chicago in 1972.
Mr. Dybas, age 62, has served as Vice President -- Regulatory Affairs since
January 1996. From 1989 to 1996, he served as Northfield's Director of
Regulatory Affairs. Prior to 1989, Mr. Dybas was a Director of Regulatory
Affairs for the Pharmaceutical Products Division of Abbott Laboratories, Inc.
and was a self-employed consultant. Mr. Dybas received his M.S. degree from
Syracuse University in 1963.
Mr. Grove, age 51, joined Northfield in July 1993 as Vice
President--Operations. From 1981 until joining Northfield, Mr. Grove served in
various managerial positions with the Nutrasweet Company. Most recently, Mr.
Grove was the Director of EQUAL Operations for Nutrasweet. Mr. Grove received
his B.S. degree from Purdue University in 1972.
Mr. Doubleday, age 41, has served as the Vice President -- Process
Engineering since December 1994. Prior to that time, he served as Northfield's
Plant Manager and Senior Process Engineer. Before joining Northfield in 1988,
Mr. Doubleday was employed in various capacities with Davy McKee, Millipore
Corporation and Abbott Laboratories, Inc. Mr. Doubleday received his M.M. degree
from Northwestern University in 1991.
Mr. McGinnis, age 36, has served as the Vice President -- Manufacturing
Development since August 1997. From 1995 to 1997, Mr. McGinnis was a Project
Manager for Raytheon Engineering and Construction. Prior to 1995, Mr. McGinnis
was employed by the John Brown division of Trafalgar House as a Project Manager
and Engineer. Mr. McGinnis received his MBA degree from the University of
Chicago in 1995.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table summarizes all compensation paid for our last three
completed fiscal years to our Chief Executive Officer and four other most highly
compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR(1) SALARY COMPENSATION(2) OPTIONS(#) COMPENSATION(3)
--------------------------- ------- ------ --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Richard E. DeWoskin.............. 2000 $262,309 $24,209 -- --
Chief Executive Officer 1999 255,022 22,395 40,000 --
1998 244,213 20,666 20,000 $ 706
Steven A. Gould, M.D............. 2000 278,276 26,292 -- --
President 1999 270,546 25,594 30,000 --
1998 259,079 23,800 15,000 --
Jack J. Kogut.................... 2000 219,772 22,790 -- --
Vice President -- Finance 1999 213,668 21,197 25,000 --
1998 204,611 20,481 15,000 578
John A. Dybas, Jr................ 2000 167,646 14,741 -- --
Vice President -- Regulatory
Affairs 1999 162,989 13,961 10,000 --
1998 156,081 11,960 10,000 --
John D. Grove.................... 2000 167,204 12,737 -- --
Vice President -- Operations 1999 162,559 11,749 10,000 --
1998 159,242 11,574 5,000 --
</TABLE>
-------------------------
(1) Our fiscal year begins on June 1 and ends on May 31. Our 2000 fiscal year
ended May 31, 2000.
(2) The indicated amounts represent life insurance premiums paid by Northfield
and contributions made by Northfield to the indicated executive officer's
401(k) plan account.
(3) The indicated amounts represent the amortization of below market stock
option grants.
OPTION GRANTS IN LAST FISCAL YEAR
We granted no stock options to our Chief Executive Officer or other named
executive officers during our last completed fiscal year. The following table
sets forth information regarding stock option exercises by our Chief Executive
Officer and other named executive officers and the aggregate value as of May 31,
2000 of unexercised stock options held by these individuals.
7
<PAGE> 10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Richard E. DeWoskin.......... -- -- 75,000/40,000 $20,475/$9,450
Steven A. Gould, M.D......... -- -- 110,000/30,000 16,538/7,087
Jack J. Kogut................ -- -- 63,750/26,250 84,169/5,906
John A. Dybas, Jr............ -- -- 28,500/12,500 33,983/2,363
John D. Grove................ -- -- 51,000/10,000 33,983/2,363
</TABLE>
-------------------------
(1) These figures are based on a fair market value for our common stock at May
31, 2000 of $11.125 per share, the closing price of the common stock as
reported by the Nasdaq National Market as of that date. May 31, 2000
represents the last trading day in our 2000 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee of the Board of Directors consists of Messrs.
DeWoskin (Chairman), Chelberg and Olshansky. Mr. DeWoskin is the Chief Executive
Officer of Northfield. Mr. DeWoskin did not serve as a director of any other
entity during our last completed fiscal year.
EMPLOYMENT AGREEMENTS
We have employment agreements with Richard E. DeWoskin, our Chief Executive
Officer, Steven A. Gould, M.D., our President, and Jack J. Kogut, our Vice
President -- Finance, Secretary and Treasurer. These employment agreements
provide for terms expiring in December 2000. The annual salaries payable under
the employment agreements with Mr. DeWoskin, Dr. Gould and Mr. Kogut are
$262,309, $278,276 and $219,772, respectively. The employment agreements provide
that the salaries of the respective executive officers may be reviewed annually
by the Board of Directors and may be increased but not decreased from the
foregoing amounts. The employment agreements also provide for certain payments
following a termination of employment occurring after a change in control of
Northfield.
EMPLOYEE STOCK OPTION PLANS
Our Restated Nonqualified Stock Option Plan lapsed on September 30, 1996.
Following termination of this plan, all options outstanding prior to plan
termination continue to be exercisable in accordance with their terms. As of May
31, 2000, options to purchase a total of 108,000 shares of common stock at
prices of $6.38 and $15.19 per share were outstanding under this plan. These
options expire in 2003 and 2004, ten years after the date of grant.
The Northfield Laboratories Inc. 1996 Stock Option Plan provides for the
granting of stock options to purchase up to 500,000 shares of common stock to
directors, officers, key employees and consultants. As of May 31, 2000, options
to purchase a total of 442,500 shares of common stock at prices between $9.56
and $13.38 were outstanding under the 1996 plan. These options expire between
2006 and 2010, ten years after the date of grant.
The Northfield Laboratories Inc. 1999 Stock Option Plan was established
effective June 1, 1999. The 1999 plan provides for the granting of stock options
to purchase up to 500,000 shares of common stock to directors, officers, key
employees and consultants. No options have been granted to date under the 1999
plan.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
The Nonqualified Stock Option Plan for Outside Directors provides for the
granting of stock options to purchase up to 200,000 shares of common stock to
directors who are neither employees of nor consultants to
8
<PAGE> 11
Northfield and who were not directors on June 1, 1994. As of May 31, 2000,
options to purchase a total of 15,000 shares of common stock at a price of
$13.38 per share were outstanding under this plan. These options expire in 2008.
EMPLOYEE BENEFIT PLANS
We sponsor a defined contribution 401(k) savings plan covering each of our
employees satisfying certain minimum length of service requirements. We make
discretionary contributions to this plan subject to certain maximum contribution
limitations. Our expenses incurred under this plan for the years ended May 31,
2000, 1999 and 1998 were $129,496, $118,167 and $98,567, respectively.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires that our
directors, executive officers and persons who beneficially own more than 10% of
our common stock file with the Securities and Exchange Commission initial
reports of beneficial ownership of the common stock and reports of changes in
their beneficial ownership.
To our knowledge, based solely upon a review of copies of reports furnished
to us and written representations that no other reports were required during the
fiscal year ended May 31, 2000, our officers, directors and greater than 10%
beneficial owners complied during our last fiscal year with all applicable
Section 16(a) filing requirements.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report of the compensation committee of the Board of Directors
discusses our executive compensation policies and the bases for the compensation
paid to our Chief Executive Officer during our last completed fiscal year.
COMPENSATION POLICY
Our policy with respect to executive compensation has been designed to
compensate executive officers fairly and adequately in relation to their
responsibilities, capabilities and contributions to Northfield. We have also
sought to align the interests of senior management with those of our
stockholders with respect to long-term increases in the price of our stock. The
compensation committee considers it essential to our success that the
compensation paid to executive officers remain competitive with similar or
competitive companies in order to attract and retain the talented senior
management necessary to achieve our business objectives.
COMPONENTS OF COMPENSATION
The components of compensation paid for our last completed fiscal year to
our executive officers consisted of base salary and certain other benefits. No
stock options were granted and no cash bonuses were paid to our Chief Executive
Officer or other named executive officers during our most recent fiscal year.
We have employment agreements which provide for specified annual salaries
with Richard E. DeWoskin, our Chief Executive Officer, Steven A. Gould, M.D.,
our President, and Jack J. Kogut, our Vice President -- Finance, Secretary and
Treasurer. See "Management -- Employment Agreements." The annual salaries
provided in these employment agreements were determined based principally on the
compensation levels for similar or competitive companies, including companies in
the pharmaceutical and biomedical industries, as well as the levels of
responsibility and experience of the individual executive.
The other benefits provided to our executive officers consist of enhanced
life and disability insurance coverage. Executive officers are also eligible for
coverage under our general medical and life insurance programs and may
participate in our defined contribution 401(k) savings plan on the same terms as
other employees.
9
<PAGE> 12
CHIEF EXECUTIVE OFFICER COMPENSATION
During our 2000 fiscal year, our Chief Executive Officer, Richard E.
DeWoskin, received $262,309 in base salary pursuant to his employment agreement.
The terms of Mr. DeWoskin's employment agreement were determined based
principally on compensation levels applicable to the chief executive officers of
similar or competitive companies and secondarily on Mr. DeWoskin's prior
contributions to Northfield and his high level of experience and involvement
with the development and clinical testing of our blood substitute product.
Members of the Compensation Committee
Richard E. DeWoskin, Chairman
Bruce S. Chelberg
Jack Olshansky
10
<PAGE> 13
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return on our common
stock from May 31, 1995 through May 31, 2000 with the CRSP Total Return Index
for the Nasdaq Stock Market (U.S. Companies) and the Nasdaq Pharmaceutical
Index. The total stockholder return assumes that $100 was invested in our common
stock and each of the two indexes on May 31, 1995 and also assumes the
reinvestment of any dividends. The return on our common stock is calculated
using the closing price for the common stock on May 31, 2000, as quoted on The
Nasdaq Stock Market, Inc. Past financial performance may not be a reliable
indicator of future performance, and investors should not use historical trends
to anticipate results or trends in future periods.
95 96 97 98 99 2000
Nasdaq 100.00 184.10 167.80 174.30 230.30 416.10
Northfield 100.00 122.70 71.80 111.40 87.70 80.90
Nasdaq Stock
Market 100.00 145.30 163.80 207.70 293.60 402.10
-------------------------
The Report of the Compensation Committee on Executive Compensation and the
Stock Performance Graph are not deemed to be soliciting material or to be filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, or Securities Exchange Act of 1934, as amended, or incorporated by
reference in any document so filed.
11
<PAGE> 14
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth information known to us with respect to the
beneficial ownership of our common stock as of May 31, 2000, for (i) each person
who is known by us to be the beneficial owner of more than five percent of the
outstanding common stock, (ii) each of our directors, (iii) each of our
executive officers named under "Management--Executive Compensation--Summary
Compensation Table" and (iv) all directors and executive officers as a group.
Except as otherwise indicated, the address of each person named in the following
table is c/o Northfield Laboratories Inc., 1560 Sherman Avenue, Suite 1000,
Evanston, Illinois 60201-4800.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER BENEFICIALLY
NAME OF STOCKHOLDER OF SHARES OWNED(1)
------------------- --------- ------------
<S> <C> <C>
Richard E. DeWoskin......................................... 717,715(2) 5.0%
Steven A. Gould, M.D........................................ 638,450(3) 4.5%
Jack J. Kogut............................................... 128,560(4) *
John A. Dybas, Jr........................................... 41,500(5) *
John D. Grove............................................... 54,500(6) *
Marc D. Doubleday........................................... 30,000(7) *
Robert L. McGinnis.......................................... 10,000(8) *
Gerald S. Moss, M.D. ....................................... 589,150 4.1%
c/o UIC College of Medicine
1853 West Polk Avenue
Chicago, Illinois 60612
Bruce S. Chelberg........................................... 1,502,345(9) 10.5%
c/o Whitman Corporation
III Crossroad of Commerce
3501 Algonquin Road
Rolling Meadows, Illinois 60008
Jack Olshansky.............................................. 28,017(10) *
5950 Castle Drive
Oakland, California 94611-2734
Whitman Corporation......................................... 1,502,345 10.5%
III Crossroads of Commerce
3501 Algonquin Road
Rolling Meadows, Illinois 60008
David A. Savner............................................. 17,000(11) *
c/o General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, Virginia 22042
All directors and executive officers as a group (eleven
persons).................................................. 3,757,237 25.7%
</TABLE>
-------------------------
* Less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
subject to stock options and warrants currently exercisable or exercisable
within 60 days are deemed outstanding for computing the percentage
ownership of the person holding the options and the percentage ownership
of any group of which the holder is a member, but are not deemed
outstanding for computing the percentage ownership of any other person.
Except as indicated by footnote, and subject to community property laws
where applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
12
<PAGE> 15
(2) Includes 75,000 shares of common stock which Mr. DeWoskin is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Does not include 40,000 shares acquirable pursuant to
stock options not currently exercisable or exercisable within 60 days.
(3) Includes 110,000 shares of common stock which Dr. Gould is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Also includes 484,630 shares held in a personal trust and
43,820 shares held in a family trust. Does not include 30,000 shares
acquirable pursuant to stock options not currently exercisable or
exercisable within 60 days.
(4) Includes 63,750 shares of common stock which Mr. Kogut is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Also includes 64,805 shares held in a personal trust. Does
not include 26,250 shares acquirable pursuant to stock options not
currently exercisable or exercisable within 60 days.
(5) Includes 28,500 shares of common stock which Mr. Dybas is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Does not include 12,500 shares acquirable pursuant to
stock options not currently exercisable or exercisable within 60 days.
(6) Includes 51,000 shares of common stock which Mr. Grove is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Does not include 10,000 shares acquirable pursuant to
stock options not currently exercisable or exercisable within 60 days.
(7) Includes 28,500 shares of common stock which Mr. Doubleday is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Does not include 12,500 shares acquirable pursuant to
stock options not currently exercisable or exercisable within 60 days.
(8) Includes 10,000 shares of common stock which Mr. McGinnis is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Does not include 15,000 shares acquirable pursuant to
stock options not currently exercisable or exercisable within 60 days.
(9) Includes shares of common stock held by Whitman Corporation. Mr. Chelberg
is the Chairman and Chief Executive Officer of Whitman Corporation. Under
the rules and regulations of the Securities and Exchange Commission, Mr.
Chelberg may be deemed a beneficial owner of the stock held by Whitman
Corporation. Mr. Chelberg disclaims beneficial ownership of the stock held
by Whitman Corporation.
(10) Includes 20,000 shares of common stock which Mr. Olshansky is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days. Does not include 10,000 shares acquirable pursuant to
stock options not currently exercisable or exercisable within 60 days.
(11) Includes 15,000 shares of common stock which Mr. Savner is entitled to
acquire pursuant to stock options currently exercisable or exercisable
within 60 days.
13
<PAGE> 16
ITEM 2. APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP as Northfield's independent
auditors for the fiscal year ending May 31, 2001, and has further directed that
the selection of independent auditors be submitted for approval by the
stockholders at the annual meeting.
Representatives of KPMG LLP will be present at the annual meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
EXPENSES OF SOLICITATION
We have engaged Innisfree M&A Incorporated to assist in the solicitation of
proxies for the annual meeting. We will bear all expenses of this solicitation,
including the fees and expenses of Innisfree, which are anticipated to be
approximately $20,000, and the cost of preparing and mailing this document. In
addition to solicitation by use of the mails, proxies may be solicited in person
or by telephone, telegram or other means of communication. Our directors,
officers and employees will participate in the solicitation of proxies without
additional compensation, but may be reimbursed for their reasonable
out-of-pocket expenses in connection with this solicitation. Arrangements will
be made for forwarding proxy solicitation materials to beneficial owners of
shares held of record by custodians, nominees and fiduciaries and we will
reimburse these custodians, nominees and fiduciaries for their reasonable
expenses incurred in connection with this solicitation.
PROCEDURE FOR SUBMITTING STOCKHOLDER PROPOSALS
Stockholders may present proper proposals for inclusion in Northfield's
proxy statement and for consideration at the next annual meeting of our
stockholders by submitting their proposals to us in a timely manner. In order to
be included in our proxy statement for our next annual meeting, stockholder
proposals must be received by us no later than April 20, 2001, and must
otherwise comply with the requirements of the applicable rules of the Securities
and Exchange Commission. In addition, our bylaws establish an advance notice
procedure with regard to certain matters, including stockholder proposals not
included in our proxy statement, to be brought before any annual meeting of
stockholders. In general, notice must be received by our corporate secretary not
less than 60 days nor more than 90 days prior to the date of the annual meeting,
except if less than 70 days' notice or prior public disclosure of the date of
the meeting is given or made to our stockholders, in which event notice by the
stockholders to be timely must be received no later than the close of business
on the tenth day following the date on which notice of the date of the annual
meeting was mailed or public disclosure was made. It is currently expected that
the 2001 annual meeting of stockholders will be held on or about October 11,
2001. Therefore, the deadline for timely submission of a stockholder proposal
for consideration at the 2001 annual meeting is currently expected to be August
12, 2001.
All notice of proposals by stockholders, whether or not to be included in
our proxy materials, should be sent to Northfield Laboratories Inc., 1560
Sherman Avenue, Suite 1000, Evanston, Illinois 60201-4800, Attention: Corporate
Secretary.
GENERAL
The Board of Directors does not know of any other matters to be presented
at the annual meeting. If any additional matters are properly presented, the
persons named in the proxy will have discretion to vote in accordance with their
own judgment on these matters.
14
<PAGE> 17
PROXY NORTHFIELD LABORATORIES INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS-OCTOBER 12, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Northfield Laboratories Inc. hereby
appoints Jack J. Kogut and Carmen Wilcox, and each of them, attorneys and
proxies, with full power of substitution, to vote at the Annual Meeting of the
stockholders of Northfield Laboratories Inc. to be held on Thursday, October 12,
2000, at 9:00 A.M., local time, at 1560 Sherman Avenue, Evanston, Illinois
60201-4800, and at any adjournment or postponement thereof, in the name of the
undersigned and with the same force and effect as if the undersigned were
present and voting such shares, on the following matters and in the following
manner.
The shares represented by this proxy will be voted in accordance with
the specifications made hereon. If no specification is made, the shares
represented by this proxy will be voted by each of the above persons for each of
the proposals to be presented at the Annual Meeting and for such other matters
as may properly come before the Annual Meeting as the above persons may deem
advisable.
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER USING DARK INK ONLY.
The Board of Directors recommends a vote "FOR" each of the listed proposals.
<TABLE>
<S> <C> <C> <C>
FOR all nominees
listed above (except
as indicated to the WITHHOLD
contrary below) Authority
1. ELECTION OF DIRECTORS --
Nominees: Richard E. DeWoskin, Steven A. Gould, M.D., |_| |_|
Gerald S. Moss, M.D., Bruce S. Chelberg, Jack Olshansky
and David A. Savner
FOR AGAINST ABSTAIN
2. To approve the appointment of KPMG LLP |_| |_| |_|
as independent auditors of the Company to serve for
the Company's 2001 fiscal year.
3. In their discretion, to act on any other matters
which may properly come before the Annual Meeting
and any adjournment or postponement thereof.
</TABLE>
<PAGE> 18
Dated: , 2000
Signature(s)
Sign exactly as your name(s) appear
hereon. When signing as attorney,
administrator, trustee, guardian or
other representative capacity, please
so indicate.
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED PREPAID ENVELOPE.