SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
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/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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NORTHFIELD LABORATORIES INC.
(Name of Registrant as Specified in Its Charter)
C. ROBERT COATES and
MANAGEMENT INSIGHTS, INC.
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
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/ / Check box if any part of the fee is offset as provided by Exchange Act
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previously. Identify the previous filing by registration statement number, or
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<PAGE>
PRELIMINARY COPY, SUBJECT TO COMPLETION
DEFINITIVE COPY INTENDED TO BE RELEASED
TO SECURITY HOLDERS ON SEPTEMBER ___, 2000
PROXY STATEMENT OF C. ROBERT COATES AND MANAGEMENT INSIGHTS, INC.
IN CONNECTION WITH
A STOCKHOLDER SOLICITATION REGARDING
THE ELECTION OF DIRECTORS OF NORTHFIELD LABORATORIES INC.
September ___, 2000
C. Robert Coates and Management Insights, Inc. furnish this
Proxy Statement in connection with the solicitation of proxies for use at the
Annual Meeting (the "Annual Meeting") of stockholders of Northfield Laboratories
Inc. ("Northfield" or the "Company") to be held at 9:00 a.m. local time on
October 12, 2000, at Northfield's corporate headquarters in Evanston, IL, or at
any postponement or rescheduling. Copies of the Proxy Statement and proxy card
are being mailed by Mr. Coates and Management Insights, Inc. to stockholders on
or about September ___, 2000. The mailing address of the Company's principal
executive offices is: Northfield Laboratories Inc., 1560 Sherman Avenue, Suite
1000, Evanston, IL 60201-4800.
Dear Fellow Northfield Stockholder:
C. Robert Coates and Management Insights, Inc. are soliciting your proxies to
elect its nominees to the Board of Directors of Northfield Laboratories Inc. We
ask for your support because we are concerned about the future of the investment
of Northfield stockholders and the capability of the current directors and
management to make that investment prosper.
REASONS FOR ELECTING THE NOMINEES
Despite the longest bull market in American history,
Northfield stockholders over the last five years actually lost money on their
investment. Northfield's own proxy admits that, over the 5 year period between
May 31, 1995 and May 31, 2000, $100 invested in the NASDAQ Stock Market Index
would be worth $402.10 today and $100 invested in the NASDAQ Pharmaceutical
Index would be worth $416.10. That same $100 invested in the stock of Northfield
is now worth only $80.90.
Now the Northfield Board of Directors, not wanting to face its
own stockholders, is denying you the right to question them in person at the
upcoming Annual Meeting and hold them accountable. In a recent SEC filing, they
announced that no questions concerning the Company's progress and prospects
would be allowed at the Annual Meeting! You must submit any questions you have
seven days in advance and any answers they choose to give will only be broadcast
over the Internet or the telephone. YOUR DIRECTORS AND THE MANAGEMENT WHOSE
SALARIES YOU PAY WON'T EVEN ADDRESS YOU FACE TO FACE.
NOW THAT SAME GROUP OF DIRECTORS HAS SENT YOU A WHITE PROXY CARD
ASKING YOU TO RE-ELECT THEM FOR ANOTHER YEAR OF FRUSTRATION.
We have an alternate proposal for you to consider.
Fundamental changes in the way the Company conducts its business are long
overdue. We believe that any changes in the Company's policies will require the
participation of new directors who are more committed to maximizing the
Company's value for all stockholders.
To this end, we propose to ask you to vote for C. Robert Coates, Bert R.
Williams III, Jerry L. Ruyan, and Christopher S. Coates to serve on Northfield's
Board of Directors.
These nominees for the board of directors offer the fresh perspective,
experience and judgment that Northfield stockholders need to enhance the value
of their investment. They are fully committed to implementing the corporate
governance principles and practices that are fundamental to the success of a
publicly held firm. When individuals - be they doctors, coaches, teachers or any
other kind of American worker -fail in the performance of their duties they are
first held accountable and then if necessary removed or required to leave.
<PAGE>
THAT TIME HAS ARRIVED FOR THIS BOARD.
If elected, our nominees will immediately institute a program of accountability
on the part of the company's Chief Executive Officer AND Board of Directors and
establish the following benchmarks to evaluate their performance. These will be
communicated on a regular basis to investors:
o RETURN ON INVESTMENT AND MARKET CAPITALIZATION. ROI is a fundamental
measurement of a company's performance. Hand-in-glove with this
measurement is a company's market capitalization. Questions such as
"What is the company's market capitalization compared to competitors?"
and "How has its share price performed over the last three to five
years?" should be answered. These are not invasive questions, nor
should all their answers be proprietary. Rather, they represent
need-to-know data, a common denominator for all investors.
o LEADERSHIP OPENNESS AND INTEGRITY. The Chief Executive Officer should
be forthright and make a good faith effort to accurately present the
company to its stakeholders, including the company's stockholders,
employees, current and potential customers, suppliers and the
surrounding community in which it does business. Examples abound in
which a company's leadership has been less than candid with its
stakeholders, has disseminated inaccurate information, or has hyped
the stock for artificial gain. We stand solidly against these
practices.
o COMMUNICATION. What is the company's level and quality of
communication? Does it respond to inquiries from stockholders, the
media, and prospective customers? The best companies communicate
frequently and fully through press releases, analyst and investor
conferences, meetings with the media and public speaking. The
content of their communication encompasses everything from cash flow
and R&D performance to product development reports and personnel
changes. Again, we believe it is the leadership's responsibility to
get in front of those who have a stake in the company's welfare and
talk about how it plans to make good on their investment.
o INSTITUTIONAL INVESTORS. Institutional investors are often key to a
company's success. It's only fair to ask a company how it has
cultivated and collaborated with this influential group, whose
decision-making power over huge sums of money can go a long way toward
helping a company reach its goals. How many institutional investors
are behind the company? Who are they and whom do they represent? Most
importantly, what are they saying about the company? Along with stock
market analysts, their recommendations carry a tremendous amount of
weight.
o STAFF TALENT. Investors deserve to know that the leadership is hiring
top-notch people, and that these people are filling jobs that are
vital to the company's welfare. For example, in a company devoted to
research and development, a vice-president of regulatory affairs is
critical. In the biomedical industry, experience and a proven track
record of working with the Food & Drug Administration is a must.
Further, every company needs a key executive in charge of business
development. Experienced in marketing and the building of long-term
relationships, this individual should target potential customers in
the military, health care and disaster support agencies such as the
American Red Cross.
o ALLIANCES. Finally, no company does business in a vacuum. To assess a
company's performance, it is important to understand the alliances and
partnerships that it has created to help its product succeed. This is
especially true when a product is in the development stage, when the
company does not yet have any other demonstrably successful product.
Stockholders want to know whom the manufacturer will be, who will
distribute it, where the product will be available and how its arrival
to market will be communicated. Again, the disclosure of proprietary
information is not called for. An explanation of plans to create
widespread use of the product is.
<PAGE>
MEETINGS ANC COMMUNICATIONS WITH NORTHFIELD MANAGEMENT
During 1998, C. Robert Coates contacted Richard DeWoskin by phone several times.
On about June 1998, he mentioned his recent purchase of a significant number of
shares and his strong interest in Polyheme. He also discussed with Mr. DeWoskin
various topics that had been mentioned in the following Northfield press
releases:
Northfield Laboratories Enters Home Stretch for Blood Substitute Product, May 6,
1997 PRNewswire. Source: Northfield Laboratories, Inc.
Northfield Laboratories to Start European Trials of Blood Substitute with
Pharmacia & Upjohn AB, May 12, 1998. PRNewswire. Source: Northfield
Laboratories, Inc.
Mr. Coates grew increasingly concerned about Northfield's progress and its
direction as Northfield's stock price declined from $18.125 in July 1998 to
$9.125 in October 1998. His staff conducted market research and talked to
several experts on blood substitutes and to several doctors at Dallas hospitals.
In several calls and letters to Mr. DeWoskin in November and December of 1998,
Mr. Coates offered to share this research with Northfield and Mr. DeWoskin at no
cost.
Mr. DeWoskin declined to discuss the company with Mr. Coates or to meet with Mr.
Coates.
Here are excerpts from a letter Management Insights sent to Mr. DeWoskin on
December 1, 1998 by a vice president of Management Insights.
Dear Richard:
It was a pleasure meeting you and Steven Gould at the Blood Substitutes and
Oxygen Therapeutics Conference last week. Northfield Laboratories clearly is
succeeding in the area of research and development and should be commended for
its efforts towards bringing PolyHeme to market.
At the same time, it is necessary for Northfield to succeed in the area of
maximizing shareholder value, rewarding investors who have believed in the
Northfield vision. Without them, the research and development efforts could not
exist. We are not alone in this view as demonstrated by other shareholders at
the Annual Meeting.
For example, an immediate area where we believe Northfield could redirect its
current effort is in the area of corporate communications. As Northfield
transitions from a sole focus on R&D to production, sales and marketing, it is
imperative to deliver a continuous flow of press releases and shareholder
communication.
Management Insights believes that at least two substantive press releases should
be provided to the public prior to yearend. In addition, the first in a series
of continuous corporate communiques should begin the first week of January 1999
outlining and updating strategic direction. In the absence of traditional
financial and managerial measurements such as return on equity and earnings
growth, the quality and quantity of positive information made public becomes an
important yardstick.
<PAGE>
Management Insights has attempted to meet with you on two previous occasions
with the intention of passing along our analysis and insight, however you have
declined meeting in both instances. For this reason, we will begin copying the
Directors on all correspondence.
Please recognize that our investment of 675,000 shares does not represent a
casual investment. While it is certainly our right to ask for and obtain the
Northfield shareholder list, we are not doing so at this time, as we would
rather work with management in an effort to increase shareholder value. Our
offer to meet with you and share our insights remains open. At the same time, we
will monitor the increase in Northfield press releases and corporate
communications through yearend as a measure of management's increasing efforts
to improve shareholder wealth.
Mr. DeWoskin wrote back on December 16, 1998. Here are excerpts from his letter:
While I agree with you that Northfield's current stock price does not accurately
reflect the Company's true long-term value, the Board of Directors and
management of Northfield believe it is not possible at this time to implement
the measures suggested in your letter. The process of obtaining regulatory
approval for PolyHeme in the United States is at a critical stage. Northfield
has concluded that extensive public communication regarding its regulatory and
business strategies is not advisable and that such actions could in fact be
detrimental to Northfield's efforts to pursue regulatory approval of PolyHeme.
We are also mindful of the possibility that corporate communications regarding
the timing of regulatory approvals and other matters outside of the control of
the Company could be misperceived by our public shareholders. Like other
responsible companies in the industry, Northfield believes it is unfair to raise
shareholder expectations regarding these matters prior to the achievement of
objective milestones.
Given the foregoing situation, I do not believe it would be productive for us to
meet to discuss the suggestions raised in your recent letter. Northfield
appreciates your input and hopes you will continue to support our efforts.
On October 14, 1999, Mr. Coates sent a letter to Mr. DeWoskin requesting the
opportunity to review the stocklist and saying that he might communicate with
stockholders. He also said he looked forward to the annual meeting on October
28, 1999 and was interested in learning from the meeting whether enrollment in
the expanded third stage trials (600 plus patients) was completed by the
beginning of the third quarter of 1999 as management had predicted. Mr. Coates
also expressed a hope that Mr. DeWoskin would discuss the status of their effort
to enlist a strategic marketing partner.
To Mr. Coates' knowledge, Mr. DeWoskin did not respond to this letter in any
way.
<PAGE>
During November and December, 1999, Mr. Coates sent several letters to Mr.
DeWoskin asking to discuss the possibility of his joining the Board of
Northfield. He stated that he would prefer to join the board by invitation
rather than through a proxy contest.
To Mr. Coates' knowledge, Mr. DeWoskin did not respond to those letters.
In his letter of December 16, 1999, Mr. Coates said the following:
"I beneficially own 652,000 shares of Northfield's common stock. I have been
concerned with the direction of the company. I believe that my business
experience may help increase Northfield's shareholder value.
I am considering whether to seek election as a director of Northfield at its
2000 annual meeting, either alone or with other candidates who may have
concerns. I believe that, as a director, I would be able to identify and help
implement meaningful steps to improve the company for all shareholders.
I am forwarding this letter to you as an invitation to discuss these matters
further. I hope we have the opportunity to do so in the next few weeks. Please
contact me at (972) 755-2006."
To our knowledge, Mr. DeWoskin did not reply to this letter. So Mr. Coates had
an attorney send a letter on February 28, 2000, asking for a response.
On March 13, 2000, Mr. DeWoskin replied to our attorneys letter as follows:
"With respect to board membership, I appreciate your interest. But, the board
sees no current need to expand its membership. We have, on occasion, considered
additions to the board. These were individuals with either FDA or health care
backgrounds of specific value to the board at the time of consideration. As your
background doesn't seem to include credentials of this sort, it is unlikely that
the board would favorably act on your expression of interest."
On June 22, 2000, convinced that there was no other way to get Mr. DeWoskin to
provide Northfield's shareholders with more information about the company, Mr.
Coates issued a press release and mailed a letter to shareholders dated June 19,
2000. More than six hundred shareholders responded to Mr. Coates' letter
expressing support for his efforts.
On July 24, 2000 Mr. C. Robert Coates met with Northfield Labs' CEO and
President, Mr. Richard DeWoskin and Dr. Steven Gould, to discuss our June 19,
2000 letter to the company's stockholders and share the feedback we had received
from many stockholders supporting our actions. By mutual consent we did not
discuss any information about Northfield Labs that is not publicly available.
In that meeting, Mr. Coates discussed:
-- our belief that PolyHeme represented an incredible scientific
achievement.
-- his background, including his MBA and PhD in Finance, Economics and
Accounting from the University of Chicago, his ownership and management
for the last twenty years of a very successful consulting company, and
his extensive experience in the valuation of companies -- including
having served as an expert witness in that area.
-- a comparison of Northfield's market value with those of its peers and
his reasons for expecting a higher market value if Mr. DeWoskin followed
standard business practices. These include adding staff in the marketing
and investor relations areas and communicating with securities
analysts, shareholders, the medical community and the general public.
-- his concerns that Northfield was falling behind several of its
competitors.
See "Stock Value contained in August 31, 2000 Press Release."
Mr. Coates believed that he was going to receive a response from Mr. DeWoskin to
the issues raised by Mr. Coates at that meeting. When he did not, Mr. Coates
issued his own press release on August 2, 2000 confirming the meeting.
August 10, 2000. Mr. Coates submitted a detailed package nominating four
directors to the Board of Directors.
On August 14, 2000, Northfield replied that we may have failed to satisfy their
nomination requirements.
August 15, 2000, we responded to the Northfield letter by verifying additional
information about our nominees.
On August 18, 2000, Northfield sent a letter saying they would not include the
proposed nominees in the list of directors recommended by the Northfield board.
<PAGE>
August 31, 2000, Mr. Coates issues a press release announcing the filing of a
slate of four directors and distributed a second letter to shareholders.
September 13, 2000, Mr. Coates sent a letter to Mr. Gould suggesting that they
get together.
Mr. Coates called Mr. Bruce Chelberg's office several times in August and
September, 2000 and asked Mr. Chelberg's assistant if he would meet with Mr.
Coates. Mr. Chelberg was in meetings and was unavailable to meet with Mr.
Coates.
September 18, 2000, Northfield's attorney sent Mr. Coates a letter stating that
in response to Mr. Coates' letter, Northfield's senior management would meet
again with Mr. Coates if Mr. Coates would provide an agenda or summary of the
matters he would like to discuss at the meeting. Mr. Coates has not yet
responded to this letter.
STOCK VALUE CONTAINED IN AUGUST 31, 2000 PRESS RELEASE
This Press Release refers to Mr. Coates' belief that Northfield Lab's common
stock could have a value of thirty-five dollars ($35.00) or more. His belief is
based on a review of the stock prices of a comparable company, Biopure Corp.,
using the average of the closing stock prices ($20.21) for all the days in July
2000 immediately preceding the meeting scheduled between Mr. Coates and
Northfield Labs on July 24, 2000, and dividing that market value by the number
of Northfield shares that were issued and outstanding at that time. Biopure was
chosen as a comparable company by Mr. Coates because it has a similar competing
product in the same stage of FDA development and both companies are one product
companies. Biopure's market value may not be an accurate reflection of the value
of Northfield Lab's common stock. Even if all of our nominees are elected to the
Board, there can be no guarantee that any actions they take will result in
Northfield's Common Stock reaching the value discussed in the press release.
ITEM 1: ELECTION OF DIRECTORS
We believe that Mr. Robert Coates, Mr. Williams, Mr. Ruyan, and Mr. Christopher
Coates will be the type of independent, effective directors that Northfield
needs to protect stockholder interests and increase stockholder value. None of
these directors works for a company that is a direct or indirect competitor to
Northfield Labs. Each of the nominees has consented to serve as a director if
elected.
Management Insights is primarily a diversified management consulting firm with
limited venture capital investment operations. It has been in business since
1980 and is located primarily in Dallas, Texas. It specifically advises Fortune
1000 companies in obtaining state and federal tax credits. It has a list of over
50 Fortune 1000 clients. It has 65 employees, many of whom are CPAs and MBAs. It
recently started a recruiting company located in Chicago.
Management Insights does not engage in any investment activities other that
those related to the investments of its own money and the personal investments
of Mr. Coates and his family. Management Insights has reviewed a number of
possible venture capital investments during the past several years. So far it
has invested in Artbyte, a magazine, and in an internal company venture named
Revhire, a recruiting company.
NOMINEES
C. ROBERT COATES
Age: 55
For the past twenty years, Mr. Coates has been Chief Executive Officer of
Management Insights, Inc., a diversified management consulting, venture capital,
and investment firm with offices in Lake Forest, IL, Chicago, IL and Dallas, TX.
He maintains homes both in Lake Forest and Dallas. Mr. Coates earned a Bachelor
of Arts Degree in Economics with Distinction from the University of Virginia,
MBA in Finance from the University of Chicago and Ph.D. in Finance, Economics
and Accounting from the University of Chicago. Mr. Coates served on the Board of
Directors of Inprise Corporation, a publicly traded company, from June 1999 to
February 2000. He was not a member of that Board's compensation committee.
<PAGE>
BERT R. WILLIAMS III
Age: 43
Since November 1993, Bert R. Williams III has been President of Immuno Concepts
N.A. Ltd., a leading manufacturer and worldwide distributor of medical
diagnostic kits. He is responsible for production, marketing, technical support
and operations. He implemented the program that achieved ISO 9001 certification
at Immuno Concepts.
Mr. Williams has also served as Director of Marketing at Immuno Concepts since
1985. In that role, he has been responsible for strategic marketing development
and direction, nationally and internationally. He expanded international market
penetration from four countries to over sixty. His duties include responsibility
for full-scope marketing, product pricing, campaign development, sales training,
advertising, collateral materials design and production, and technical
workshops.
Mr. Williams holds a Bachelor of Science degree from Wayne State University and
an MBA from Marquette University. He also serves as a Director of the Intestinal
Health Institute, a Dallas-based non-profit organization, and has been an
Adjunct Professor at the University of Dallas' Graduate School of Management
since 1996. Mr. Williams is co-patent holder of patent #5490830 covering the
innovative design of a biohazard centrifuge.
JERRY L. RUYAN
Age: 54
Jerry L. Ruyan has been Chairman and Chief Executive Officer of publicly traded
Hemagen Diagnostics, Inc. since October 1999. Prior to that, he co-founded
Redwood Holdings, Inc., a privately held venture capital firm. He co-founded
Meridian Diagnostics, Inc., a public company that develops diagnostic test
products for the global medical industry, in 1977 and served as its CEO from
1990 through 1992. He served as a Director of Meridian from March 1977 to July
1999, when he became part of a consent solicitation to change the board of
Hemagen Diagnostics, Inc. He has served on the board of Meritage Hospitality
Group, Inc., a publicly traded company, since October 1996. He served on the
board of PopMail.com Inc, a publicly traded company, from October 1998 through
April 2000. He has not served on the Compensation Committee of any boards.
He also serves on the boards for Schonstedt Instrument Company and The Last Best
Place Catalog Company, both private companies, and is a Trustee for Ashland
University. Mr. Ruyan earned a B.S. degree in Biology from Ashland University
and a Master's Degree in Microbiology from Ohio State University.
CHRISTOPHER S. COATES
Age: 46
Since May 1993 Christopher S. Coates has been President and CEO of Ahlstrom
Technical Specialties LLC, a $32 million, 120-employee manufacturer of
laboratory and process filtration products used for blood and pharmaceutical
purification techniques. His responsibilities include strategic planning,
management of R&D, production, and sales functions, budgeting and financial
management, and identification and negotiation of acquisitions.
From 1991 to 1993, Mr. Coates served as the company's Vice-President of Sales
and Marketing in the scientific, industrial, and non-woven sectors. His duties
included pricing strategy, key account development, managing inside and outside
sales professionals, and development of forecasts and long term planning. Prior
to that he was the Director of Marketing for five years, launching new products
and creating an international distribution network.
Mr. Coates previously served in several sales and marketing capacities in the
analytical, healthcare, and bioscience markets. He holds a B.A. in Chemistry and
Business from Shippensburg University and has completed the Executive
Development Program at the INSEAD in Paris, France.
<PAGE>
SHARES OWNED BY NOMINEES
The table below shows the amount of Northfield's outstanding common stock
beneficially owned by the our nominees.
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
NAME AND ADDRESS OWNERSHIP CLASS
================================================================================
C. Robert Coates (1)(6) 647,550 (2) 4.5%
Bert R. Williams III (3) 0 --
Jerry L. Ruyan (4) 0 --
Christopher S. Coates (5) (6) 0 --
(1) Mr. Robert Coates' main business address is: 14755 Preston Road, Suite 525,
Dallas TX 75240.
(2) 1,000 shares are held by Mr. Robert Coates in his own name; 357,800 shares
are personally held in street name, 282,000 shares are held in street name
by Management Insights, Inc. and 1,750 shares are held in street name by
Mr. Coates son, a minor. Mr. Coates is a director of a not-for-profit
foundation which owns 5,000 shares.
(3) Mr. William's business address is Immuno Concepts, 9779 Business Park
Drive, Sacramento, CA 95827
(4) Mr. Ruyan's business address is Hemagen Diagnostics, Inc, 34-40 Bear Hill
Road, Waltham, MA 02451.
(5) Mr. Christopher Coates' business address is: Ahlstrom Technical Specialties
LLC, 122 West Butler Street, Mount Holly Springs, PA 17065.
(6) Mr. Christopher S. Coates and Mr. C. Robert Coates are brothers.
The following table shows the purchases and sales of Northfield stock held
beneficially and directly by Mr. Robert Coates:
MANAGEMENT INSIGHTS, INC.
Shares of
Northfield
Common Stock Action Price Date
5,000 Buy 13 15/16 5/27/98
2,000 Buy 15 3/8 6/5/98
30,000 Buy 17 1/2 7/15/98
20,000 Buy 17 7/15/98
10,000 Buy 15 5/8 7/28/98
14,000 Buy 13 8/21/98
1,000 Buy 12 3/4 8/21/98
95,000 Buy 13 8/24/98
5,000 Buy 12 15/16 8/24/98
15,000 Buy 12 1/2 8/26/98
85,000 Buy 12 5/8 8/26/98
<PAGE>
C. ROBERT COATES
Shares of
Northfield
Common Stock Action Price Date
5,000 Buy 15 6/12/98
10,000 Buy 14 3/8 6/15/98
10,000 Buy 14 7/16 6/15/98
6,000 Buy 14 3/16 6/15/98
200 Buy 14 5/16 6/16/98
10,000 Buy 14 1/2 6/17/98
10,000 Buy 14 3/8 6/18/98
10,000 Buy 14 1/2 6/18/98
10,000 Buy 14 1/8 6/19/98
3,500 Buy 14 5/16 6/23/98
2,000 Buy 14 5/16 6/24/98
1,000 Buy 14 3/8 6/25/98
1,100 Buy 14 1/2 6/26/98
9,900 Buy 14 7/8 6/26/98
10,000 Buy 15 6/29/98
5,200 Buy 14 7/8 6/30/98
10,000 Buy 15 7/1/98
3,000 Buy 14 7/8 7/1/98
6,600 Buy 14 5/8 7/2/98
2,000 Buy 15 3/8 7/7/98
2,500 Buy 15 3/8 7/9/98
2,500 Buy 16 7/13/98
10,000 Buy 16 1/2 7/14/98
5,000 Buy 16 3/4 7/14/98
3,600 Buy 16 3/4 8/4/98
115,000 Buy 17.207 8/6/98
65,000 Buy 17.289 8/7/98
50,000 Buy 16 7/8 8/10/98
13,900 Buy 17 8/10/98
10,000 Sell 15 1/2 1/6/99
10,000 Sell 15 3/8 1/6/99
2,000 Sell 14 1/16 9/8/99
1,000 Sell 14 9/8/99
9,800 Sell 21 1/24/00
100 Sell 21 3/16 1/24/00
1,200 Sell 21 3/4 1/24/00
100 Sell 21 1/25/00
SPENCER COATES, MINOR SON
Shares of
Northfield
Common Stock Action Price Date
700 Buy 13 1/2 6/6/00
450 Buy 13 5/8 6/6/00
300 Buy 13 7/16 6/6/00
300 Buy 12 5/8 6/6/00
NON-PROFIT FOUNDATION
Shares of
Northfield
Common Stock Action Price Date
200 Buy 12 3/8 6/19/00
1,600 Buy 12 7/16 6/20/00
500 Buy 12 3/8 6/20/00
500 Buy 12 3/8 6/21/00
1,800 Buy 12 1/2 6/21/00
400 Buy 12 5/8 6/21/00
<PAGE>
Except as described above, none of our nominees have purchased or sold
Northfield securities within the past two years.
SHARES OWNED BY CERTAIN STOCKHOLDERS
According to the Company's Proxy Statement, filed August 18, 2000, two entities
each beneficially owned more than five percent of Northfield's outstanding
common stock. We know of no other stockholder who beneficially owns more than 5
percent of Northfield's outstanding common stock.
PERCENTAGE
NUMBER BENEFICIALLY
NAME OF STOCKHOLDER OF SHARES OWNED(1)
------------------- --------- ------------
Richard E. DeWoskin............................... 717,715(2) 5.0%
Bruce S. Chelberg................................. 1,502,345(3) 10.5%
c/o Whitman Corporation
III Crossroad of Commerce
3501 Algonquin Road
Rolling Meadows, Illinois 60008
Whitman Corporation............................... 1,502,345 10.5%
III Crossroads of Commerce
3501 Algonquin Road
Rolling Meadows, Illinois 60008
(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.
(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 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.
LEGAL PROCEEDINGS
There are no material pending legal proceedings in which any of the nominees or
any other participant or any of their respective associates is a party adverse
to Northfield or any of its affiliates or in which any of the nominees or any
other participant or any of their respective associates has an interest adverse
to Northfield or any of its affiliates.
<PAGE>
ITEM 2. APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Company's 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.
VOTING AND PROXY PROCEDURES
The Company's Board of Directors has fixed the close of business on August 14,
2000 as the record date for determining the stockholders of the Company entitled
to notice of and to vote at the Annual Meeting and any adjournment thereof. Only
stockholders of record as of August 14, 2000 are entitled to vote at the Annual
Meeting. At each Annual Meeting, stockholders elect all the members of the Board
of Directors.
Based on publicly available information, C. Robert Coates and Management
Insights, Inc. believe that the only outstanding class of securities of
Northfield Laboratories Inc. is shares of Northfield's common stock. According
to Northfield's Proxy Statement, as of the record date, there were 14,242,375
shares of Northfield common stock issued and outstanding.
QUORUM
According to the Company's proxy statement, 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. There can be no
broker non-votes at this annual meeting.
REQUIRED VOTE
According to the Company's proxy statement, 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.
According to the Company's proxy statement, 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 the
Company's 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 the Company's next annual meeting of stockholders.
VOTING FOR FOUR NOMINEES
We are soliciting proxies for four directors. We are not soliciting proxies for
six directors. This means that at least two of Northfield's incumbent directors
can be elected if they received the requisite majority vote as described above
under "Required Vote." Election of all our nominees will constitute a majority
of the directors under Northfield's Certificate of Incorporation and By-Laws and
will allow our directors to approve all actions taken by the Board. There are no
supermajority or unanimous approval requirements in Northfield's Certificate of
Incorporation or By-Laws for actions to be taken by the Board.
By using our proxy only, stockholders will be voting for four directors and
giving up their right to vote for six directors.
We do not intend to replace any of the current directors if we are elected.
Instead, we leave that choice to our stockholders. The six directors with the
highest number of votes will serve on the Board, assuming they receive the
requisite majority vote. See "Required Vote."
There is a possibility, although we think it very unlikely, that none of the
current Northfield directors will serve on the Board with us. If we need to fill
two vacancies because Northfield's elected directors decide not to serve, we
will seek out retired senior managers of major pharmaceutical companies that are
not direct or indirect competitors of Northfield.
If three of our nominees are elected along with three incumbent directors, we do
not know what the possible effect would be of a split Board. If a split Board
persists, we may not be able to implement the proposals discussed in the proxy
materials or any other proposals brought before the Board and we cannot predict
the impact this would have on Northfield. Nevertheless, we believe that no
director should be tied to or loyal to any officer or other board member, but
should instead hold all officers and directors accountable to the stockholders,
employees and customers of Northfield.
If only four nominees are elected, in accordance with the Company's Certificate
of Incorporation and By-Laws, a majority of the directors then in office will be
entitled to fill the resulting vacancies in the Board of Directors. See the
second paragraph under "Required Vote."
PROXY PROCEDURES
C. Robert Coates and Management Insights, Inc. urge all stockholders to attend
the Annual Meeting in person.
Any stockholder executing a proxy has the power to revoke it at any time before
it is voted. A proxy may be revoked by filing with the Secretary of the Company
a written notice of revocation, by delivering a duly executed proxy bearing a
later date or by attending the Annual Meeting and/or by voting in person. If you
have already executed the Company's proxy card, you may revoke that proxy by
executing the enclosed BLUE proxy card and returning it to the appropriate
address.
Please sign and date the enclosed BLUE proxy card, and return it in the
postage-paid envelope as promptly as possible. By returning the enclosed BLUE
proxy card, stockholders will be able to vote on the election of C. Robert
Coates, Bert R. Williams III, Jerry L. Ruyan, and Christopher S. Coates.
<PAGE>
PLEASE SIGN, DATE AND RETURN TODAY THE ENCLOSED BLUE PROXY CARD TO:
Beacon Hill Partners
90 Broad Street
New York, NY 10004
If any of the individuals nominated becomes unavailable, the
proxies received will be voted for the remaining nominees or for a substitute
nominee selected by C. Robert Coates and Management Insights, Inc.
PLEASE VOTE TO ELECT THE NOMINEES-- C. ROBERT COATES, BERT R. WILLIAMS III,
JERRY L. RUYAN, AND CHRISTOPHER S. COATES.
SOLICITATION INFORMATION
C. Robert Coates and Management Insights, Inc. have retained Beacon Hill
Partners for solicitation and advisory services in connection with this
solicitation. Under the agreement with Beacon Hill Partners, Beacon Hill will
receive a fee estimated not to exceed $75,000, plus reimbursement for its
reasonable out-of-pocket expenses. C. Robert Coates has agreed to indemnify
Beacon Hill against certain liabilities and expenses. Beacon Hill Partners may
employ up to 25 to 30 people in connection with the solicitation of proxies for
the Annual Meeting. Proxies will be solicited by mail, courier services,
Internet, advertising, telephone or telecopier or in person. We also intend to
use agents and employees of Management Insights, Inc., without compensation, to
solicit proxies by telephone, mail, or in person.
C. Robert Coates and Management Insights, Inc. are bearing the costs of this
solicitation. The total expenditures to date in preparation for the solicitation
of stockholders are approximately $25,000. The total expenditures for this
solicitation are expected to be approximately $250,000. We currently intend to
seek reimbursement from Northfield for the reasonable expenses in connection
with this solicitation but do not expect to submit the matter to a vote of
security holders, unless required by law.
OTHER MATTERS AND ADDITIONAL INFORMATION
Except as described above, none of the nominees or any other participant or any
associate of the nominees, directly or indirectly owns any securities of
Northfield or any subsidiary of Northfield beneficially or of record, has the
right to acquire beneficial ownership within 60 days, or has purchased or sold
such securities within the past two years.
Except as described above, none of the nominees or any other participant has any
substantial interest, direct or indirect, by security holdings or otherwise, in
any matter to be acted upon at the Annual Meeting, except for the election of
directors.
No part of the purchase price of any of the shares of common stock beneficially
owned by any of the nominees or any other participant is represented by funds
borrowed or otherwise obtained for the purpose of acquiring or holding such
securities.
None of the nominees or any other participant is, or within the past year has
been, a party to any contract, arrangement or understanding with any person with
respect to any securities of Northfield.
None of the nominees has engaged in any transaction or series of transactions
since the beginning of Northfield's last fiscal year or has currently proposed
any transaction, to which Northfield or any of its subsidiaries is a party,
where the amount involved was in excess of $60,000.
None of the nominees has been indebted to Northfield or any of its subsidiaries
at any time since the beginning of Northfield's last fiscal year.
None of the nominees or any other participant or any associate of the nominees,
has any arrangement or understanding with any person (A) with respect to any
future employment by Northfield or (B) with respect to any future transactions
to which Northfield or any of the affiliates will or may be a party.
None of the nominees or any other participant holds any position or office with
Northfield or any parent, subsidiary, or affiliate of Northfield, and none of
the nominees or any other participant has ever served as a director of
Northfield or any parent, subsidiary, or affiliate of Northfield. Management
Insights, Inc. is not an affiliate of Northfield Laboratories, Inc.
Except as described above, none of the nominees or any other participant has any
family relationship, by blood, marriage, or adoption, to any director, executive
officer, or person nominated or chosen by Northfield to become a director or
executive officer of Northfield. During the last three fiscal years, no
compensation was awarded to, earned by, or paid to any of the nominees or any
other participant by any person for any services rendered in any capacity to
Northfield or its subsidiaries.
<PAGE>
None of the nominees or any other participant has any arrangement or
understanding with any nominee or any other person pursuant to which the
nominations were made, other than each nominee's agreement to be nominated and
to serve as a director if elected.
C. Robert Coates and Management Insights, Inc. are not aware of any business
other than as set forth in this Proxy Statement and Northfield's proxy materials
that will be presented at the Annual Meeting. Should other proposals be brought
before the Annual Meeting about matters unknown to the stockholders within a
reasonable time before this solicitation, the persons named as proxies on the
enclosed BLUE proxy card will vote on such matters at their discretion.
The information concerning Northfield contained in this Proxy Statement has been
taken from, and is based upon, publicly available information.
PROCEDURE FOR SUBMITTING STOCKHOLDER PROPOSALS
The Company's proxy statement indicates that stockholders may present proper
proposals for inclusion in Northfield's proxy statement and for consideration at
the next annual meeting of the Company's stockholders by submitting their
proposals to the Company in a timely manner. In order to be included in the
Company's proxy statement for its next annual meeting, stockholder proposals
must be received by the Company 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, the Company's 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 the Company's 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 the
Company's proxy materials, should be sent to Northfield Laboratories Inc., 1560
Sherman Avenue, Suite 1000, Evanston, Illinois 60201-4800, Attention: Corporate
Secretary.
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IMPORTANT
Your vote is important. No matter how many shares you own, please give us your
proxy FOR the election of the nominees by taking the following steps:
1. SIGN the enclosed BLUE proxy card;
2. DATE the enclosed BLUE proxy card;
3. MAIL the enclosed BLUE proxy card TODAY in the envelope provided (no
postage is necessary if mailed in the United States); or
4. CONTACT your broker and instruct the broker to execute a BLUE proxy card
FOR the election of the Committee's nominees.
If any of your shares are held in the name of a brokerage firm, bank, bank
nominee or other institution, only it can vote such shares and only upon receipt
of your specific instructions. Accordingly, we recommend that you return the
BLUE proxy card provided by your broker or contact the person responsible for
your account and instruct that person to execute the BLUE proxy card
representing your shares.
<PAGE>
If you have any questions or require additional information, please contact
Beacon Hill Partners, 90 Broad Street, New York, NY 10004. You can also contact
Beacon Hill Partners by calling toll free 1(800) 755-5501, or by e-mail at:
[email protected]
PLEASE VOTE FOR C. ROBERT COATES, BERT R. WILLIAMS III, JERRY L. RUYAN, AND
CHRISTOPHER S. COATES.
Sincerely,
C. Robert Coates and
Management Insights, Inc.
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DEFINITIVE COPY INTENDED TO BE RELEASED
TO SECURITY HOLDERS ON SEPTEMBER __, 2000
NORTHFIELD LABORATORIES INC.
2000 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY C.ROBERT COATES AND MANAGEMENT INSIGHTS, INC.
The undersigned hereby appoints C. Robert Coates and Bert R. Williams III,
as attorneys and agents with full power of substitution as proxy of the
undersigned at the 2000 Annual Meeting of Stockholders of Northfield
Laboratories Inc. ("Northfield" or the "Company"), to be held at 9:00 a.m.
local time on October 12, 2000, at the Company's corporate headquarters,
1560 Sherman Avenue, Suite 1000, Evanston, IL 60201-4800, or at any
postponement or rescheduling, and to vote all shares of common stock of
Northfield Laboratories Inc,, that the undersigned would be entitled to vote
if personally present. The undersigned hereby revokes any previous proxies
with respect to the matters covered by this proxy.
VOTING
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
ITEM 1:
C. ROBERT COATES AND MANAGEMENT INSIGHTS, INC. RECOMMEND VOTING FOR C.
ROBERT COATES, BERT R. WILLIAMS III, JERRY L. RUYAN, AND CHRISTOPHER S.
COATES TO SERVE AS DIRECTORS.
C. Robert Coates Bert R. Williams III Jerry L. Ruyan Christopher S. Coates
[ ] Vote For All Nominees [ ] Withhold Authority to Vote for [ ] Exceptions
All Nominees
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK THE "EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME.)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED HEREIN.
WHERE NO VOTING INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR C.ROBERT COATES, BERT R. WILLIAMS III, JERRY L.
RUYAN, AND CHRISTOPHER S. COATES.
<PAGE>
ITEM 2:
C. ROBERT COATES AND MANAGEMENT INSIGHTS, INC. RECOMMEND VOTING TO
APPROVE THE APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS OF THE
COMPANY TO SERVE FOR THE COMPANY'S 2001 FISCAL YEAR.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, C. Robert Coates and Bert R. Williams III are
authorized to vote upon such other business as may properly come before
the Annual Meeting or any adjournment, postponement or rescheduling,
about matters unknown to the stockholders within a reasonable time
before this solicitation.
Please date and sign this proxy exactly as your name appears hereon:
Dated: ___________________, 2000
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(Signature)
================================================================================
(Signature, if held jointly)
================================================================================
(Title)
When shares are held by joint tenants,
both should sign. When signing as
attorney-in-fact, executor,
administrator, trustee, guardian,
corporate officer or partner, please
give full title as such. If a
corporation, please sign in corporate
name by President or other authorized
officer. If a partnership, please sign
in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE PROVIDED.
