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
Agri-Nutrition Group Limited
(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>
AGRI-NUTRITION GROUP LIMITED
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 6, 1997
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of
Agri-Nutrition Group Limited (the "Company") will be held at 2:00 p.m. local
time on Thursday, March 6, 1997, at the Radisson Hotel St. Louis Airport, 11228
Lone Eagle Drive, Bridgeton, Missouri 63044 for the following purposes:
1. to elect one Class 3 Director to serve on the Board for a
three-year term; and
2. to transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on January 27,
1997 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting and at any adjournments thereof.
IF YOU ARE UNABLE TO ATTEND THE MEETING, YOU ARE REQUESTED TO COMPLETE,
SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED.
By Order of the Board of Directors,
Robert J. Elfanbaum
Secretary
Maryland Heights, Missouri
February 7, 1997
<PAGE>
AGRI-NUTRITION GROUP LIMITED
RIVERPORT EXECUTIVE CENTER II
13801 RIVERPORT DRIVE, SUITE 111
MARYLAND HEIGHTS, MISSOURI 63043
(314) 298-7330
PROXY STATEMENT
FOR THE
1997 ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of the Common Stock of
Agri-Nutrition Group Limited (the "Company") in connection with the solicitation
on behalf of the Board of Directors of the Company of proxies to be used in
voting at the annual meeting of stockholders to be held on March 6, 1997 and any
adjournments thereof.
The enclosed proxy is for use at the meeting if the stockholder will
not be able to attend in person. Any stockholder who executes a proxy may revoke
it at any time before it is voted by delivering to the Secretary of the Company
either an instrument revoking the proxy or a duly executed proxy bearing a later
date. A proxy also may be revoked by any stockholder present at the meeting who
expresses a desire to vote his shares in person.
All shares represented by valid proxies received pursuant to this
solicitation and not revoked before they are exercised will be voted in the
manner specified therein. If no specification is made, the shares will be voted
in favor of the election of Alec L. Poitevint, II to serve as a Class 3 Director
of the Company for a term of three years.
Only the holders of Common Stock of record at the close of business on
January 27, 1997 are entitled to vote at the meeting. On such date, 8,384,099
shares of Common Stock were outstanding. Each share is entitled to one vote on
each matter to be voted upon at the meeting. A majority of such shares is
required to be represented to constitute a quorum for holding the meeting. The
failure of a quorum to be represented at the meeting will necessitate
adjournment and will subject the Company to additional expense.
The Notice of Annual Meeting of Stockholders, this Proxy Statement, the
accompanying proxy, and the 1996 Annual Report to Stockholders were first mailed
to stockholders on or about February 7, 1997.
1
<PAGE>
ELECTION OF DIRECTOR
The Company's Articles of Incorporation and Bylaws provide that the
number of Directors of the Company shall be not less than five nor more than
thirteen. In addition, they provide for the division of the Board of Directors
into three classes, designated Class 1, Class 2, and Class 3, with staggered
terms of three years. The terms of Class 1, Class 2, and Class 3 Directors
expire in 1999, 1998, and this year, respectively.
The Board currently consists of five members. W.M. Jones, Jr. and
Robert E. Hormann are Class 1 Directors, Bruce G. Baker and Robert W. Schlutz
are Class 2 Directors, and Alec L. Poitevint, II is a Class 3 Director. At the
meeting, one Class 3 Director is to be elected to serve for a term of three
years and until his successor is duly elected.
The Company's Bylaws provide for the election of Directors by the
affirmative vote of the majority of shares represented at a meeting and entitled
to vote for the election of Directors.
DIRECTORS AND NOMINEES
Alec L. Poitevint, II, who has been the Chairman of the Board of
Directors since February 1, 1997 and a Director of the Company since January
1996, has been nominated by the Board to serve as a Class 3 Director for a
three-year term. The following table sets forth certain information with respect
to the nominee and Company's other Directors:
Name Age Position
Alec L. Poitevint, II 49 Chairman
Robert E. Hormann 60 Vice Chairman
Bruce G. Baker 53 Director, President and Chief
Executive Officer
W. M. Jones, Jr. 64 Director and Vice President -
Development
Robert W. Schlutz 61 Director
Alec L. Poitevint, II has been the Company's Chairman since February 1,
1997 and a Director since January 1996. Mr. Poitevint has been Chairman and
President of Southeastern Minerals, Inc. and its affiliated companies since 1981
and 1976, respectively. Since May 1991, he has served as Director of the
American Feed Industry Insurance Company, Des Moines, Iowa, and from May 1994 to
April 1995, he served as Chairman of the American Feed Industry Association
("AFIA"). He is a director of the Georgia Agribusiness Council and a life member
of the Poultry Leader Round Table of the Georgia Poultry Federation, and in 1988
and 1989 he served as Chairman of the National Feed Ingredients Association. He
also has served in various capacities relating to Eastern European agricultural
trade and market development, including Director of the International Republican
Institute since March 1992. In addition, Mr. Poitevint currently serves as
Treasurer of the Republican National Committee and during 1996 served as
Treasurer of the Republican National Convention, a member of the RNC Budget
Committee, and Republican National Committeeman for Georgia. He has served as
the Vice Chairman and a director of the First Port City Bank, Bainbridge,
Georgia since January 1994 and February 1989, respectively.
Robert E. Hormann has been the Company's Vice Chairman since August
1996 and a Director since September 1993. He has been President and a director
of Durvet, Inc., a national animal health marketing, warehousing, and
distribution company, since 1975. From 1970 to 1975, Mr. Hormann was Advertising
Sales Manager for Miller Publishing Company, and prior thereto he held various
positions in field sales and product management with Abbot Laboratories and Olin
Mathieson Chemical Corporation. Mr. Hormann has served as Director of the AFIA
and Chairman of its Animal Health Committee. He is a member of the Board of
Delegates of the National Association of Wholesalers and Distributors and is an
Advisory Director of Boatmen's Bank.
Bruce G. Baker has been President and Chief Executive Officer of the
Company since November 1, 1996. From March 1994 through October 1996, he was
Vice President and Deputy Chief Executive Officer of the Company, and he has
been a Director since August 1993. From 1965 to February 1993, he held various
management positions with Ralston Purina and Purina Mills, including Vice
President Research and Marketing of Purina Mills from 1990 to February 1993.
This was preceded by responsibilities as Vice President - Consumer Group,
directing research, marketing, manufacturing, sales, and administration for a
division of Purina Mills. Mr. Baker also has served in various capacities
relating to European, Canadian, and Mexican market development and coordination.
W. M. "Dub" Jones, Jr. has been a Director of the Company since
September 1993. From March 1994 through October 1996, Mr. Jones was the
Company's President and Chief Executive Officer and from September 1993 through
January 31, 1997, he was its Chairman. Mr. Jones was President and
Chief Executive Officer of Purina Mills, the world's largest producer of animal
feed, from 1981 to 1988. He was Chief Executive Officer of BP Nutrition America,
including Purina Mills and BP's other agriculture companies in North America,
from January 1988 to February 1989, and from October 1986
to February 1989, he was a director of BP Nutrition. Prior to 1981, Mr. Jones
was Corporate Vice
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<PAGE>
President of Purina Mills' Chow Division and Group Vice President of its Produce
Products Division. Mr. Jones has served as Chairman of the AFIA.
Robert W. Schlutz has been a Director of the Company since September
1993. Since 1970, he has been President of Schlutz Enterprises, Inc., which owns
and operates Kentucky Fried Chicken franchises and various other business and
real estate development properties. Mr. Schlutz currently serves on the Board of
Directors of I.E.S. Industries, Inc., a public utility company, and the Iowa
Foundation for Agricultural Advancement, and, until recently, served on the
Board of Directors of MidAmerica Savings Bank and the National Certified Angus
Beef Board. He also served for eight years on the Iowa Environmental Protection
Commission, including six years as President.
CERTAIN BOARD INFORMATION
The Board of Directors supervises the management of the Company as
provided by Delaware law. The Board has established two committees, the Audit
Committee and the Compensation Committee. The Audit Committee makes
recommendations for selection of the Company's independent auditors, reviews the
annual audit reports of the Company, and reviews audit and any non-audit fees
paid to the Company's independent auditors. The Compensation Committee is
responsible for supervising the Company's executive compensation policies,
administering the employee incentive plans, reviewing officers' salaries,
approving significant changes in executive employee benefits, and recommending
to the Board such other forms of remuneration as it deems appropriate. The
members of the Audit Committee are Messrs. Hormann, Jones, and Schlutz, and the
members of the Compensation Committee are Messrs. Poitevint, Hormann, and
Schlutz.
The Board of Directors held five meetings and acted by unanimous
consent on two occasions during the fiscal year ended October 31, 1996. The
Audit Committee held one meeting and the Compensation Committee held two
meetings during such period. All of the Company's Directors attended at least 75
percent of the meetings of the Board and of the committees of which they were
members. The Board of Directors has no nominating committee.
Directors of the Company are reimbursed for out-of-pocket expenses in
connection with attendance at meetings. Non-employee Directors receive an annual
retainer of $10,000 per year, $7,000 of which is payable in Common Stock and
$3,000 of which is payable in cash, plus $500 for each meeting attended. In
addition, non-employee Directors are awarded options to purchase 5,000 shares of
Common Stock upon election to the Board and options to purchase 1,000 shares of
Common Stock annually thereafter. Each such option has an exercise price of the
market value of the Company's Common Stock on the date of grant, and becomes
exercisable in three equal annual installments beginning on the first
anniversary of the date of grant. Beginning in 1997, the Company's Chairman will
receive $75,000 per year, $50,000 of which will be payable in cash and $25,000
of which will be payable in Common Stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE ELECTION OF MR. POITEVINT AS CLASS 3 DIRECTOR TO SERVE FOR A TERM
OF THREE YEARS. Election of Directors requires the affirmative vote of a
majority of the shares represented in person or by proxy at the meeting. Shares
represented by the enclosed proxy will be voted for the election of Mr.
Poitevint unless authority is withheld. If for any reason Mr. Poitevint is not a
candidate for election as a Director at the meeting as the result of an event
not now anticipated, the shares represented by the enclosed proxy will be voted
for such substitute as shall be designated by the Board.
EXECUTIVE COMPENSATION
The following table sets forth compensation for the fiscal years ended
October 31, 1996, 1995, and 1994 earned by the Chief Executive Officer and each
of the most highly compensated executive officers whose individual remuneration
on an annual basis exceeded $100,000 during such fiscal years (the "Named
Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Name and Year Ended Shares Underlying All Other
Principal Position October 31 Salary Bonus Options Compensation
- ------------------ ---------- ----------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Bruce G. Baker (1) 1996 $ 180,000 - 100,000 $ 25,071(2)
President and Chief 1995 180,000 $ 90,000 - 8,440
Executive Officer 1994 180,000 140,000 - 9,641
W.M. Jones, Jr. (3) 1996 $ 250,000 - - $ 182,486(4)
Vice President 1995 250,000 $125,000 - 4,675
--Development 1994 141,667(5) 70,833 558,000 4,750
George W. Daignault (6) 1996 $ 180,000(7) - 387,500(8) $ 21,601(9)
1995 180,000 $ 90,000 - 4,675
1994 105,000(10) 52,500 - 4,070
</TABLE>
3
<PAGE>
(1) Mr. Baker became the Company's President and Chief Executive Officer
effective November 1, 1996. During the fiscal year ended
October 31, 1996, Mr. Baker served as the Company's Vice President and
Deputy Chief Executive Officer.
(2) Includes a $15,649 payment consisting of 6,008 shares of Common Stock
valued at $1.5625 per share, the closing price of the Company's Common
Stock on the NASDAQ National Market on August 23, 1996, the date of
payment, plus cash to satisfy related tax withholding. Based upon the
closing price of the Company's Common Stock on the NASDAQ National
Market on October 31, 1996, such shares have a value of $9,951. Also
includes matching contributions by the Company under its 401(k) savings
plan of $4,750 and premiums and allowances in connection with life
insurance policies of $4,672. Does not include a bonus of $137,351
payable in cash to which Mr. Baker will be entitled in the event that
the Company consummates the acquisition of Anthony Products Company, a
private company specializing in the development and manufacture of
pharmaceutical animal health products ("Anthony"), prior to October 31,
1997. The Company entered into a letter of intent with respect to the
acquisition of Anthony in August 1996.
(3) Mr. Jones became the Company's Vice President - Development effective
November 1, 1996. During the fiscal year ending October 31, 1996, Mr.
Jones served as the Company's President and Chief Executive Officer.
(4) Includes a $150,000 severance payment in connection with Mr. Jones'
resignation as the Company's President and Chief Executive Officer paid
in cash in January 1997. Also includes a $21,794 payment consisting of
8,351 shares of Common Stock valued at $1.5625 per share, the closing
price of the Company's Common Stock on the NASDAQ National Market on
August 23, 1996, the date of payment, plus cash to satisfy related tax
withholding. Based upon the closing price of the Company's Common Stock
on the NASDAQ National Market on October 31, 1996, such shares have a
value of approximately $13,832. Also includes matching contributions by
the Company under its 401(k) savings plan of $4,750, and premiums and
allowances in connection with life insurance policies of $5,942. Does
not include a bonus of $190,751 payable in cash and Common Stock valued
at $1.5625 per share to which Mr. Jones will be entitled in the event
that the Company consummates the acquisition of Anthony prior to
October 31, 1997.
(5) Mr. Jones became an executive officer in March 1994, and his salary on
an annualized basis for the fiscal year ended October 31,
1994 was $212,501.
(6) Mr. Daignault resigned as the Company's Chief Financial Officer
effective August 23, 1996. He no longer serves as an officer of
the Company.
(7) Includes all salary paid during the fiscal year ended October 31, 1996,
including payments made following Mr. Daignault's resignation as an
officer of the Company effective August 23, 1996.
(8) Consists of options granted in January 1994, the terms of which were
amended during the fiscal year ended October 31, 1996. See
"Repricing of Options."
(9) Includes a $15,649 payment consisting of 6,008 shares of Common Stock
valued at $1.5625 per share, the closing price of the Company's Common
Stock on the NASDAQ National Market on August 23, 1996, the date of
payment, plus cash to satisfy related tax withholding. Based upon the
closing price of the Company's Common Stock on the NASDAQ National
Market on October 31, 1996, such shares have a value of approximately
$9,951. Also includes matching contributions by the Company under its
401(k) savings plan of $4,750 and premiums and allowances in connection
with life insurance policies of $1,202. Does not include severance
payments of $15,000 per month through April 30, 1997 to which Mr.
Daignault will be entitled in the event that he ceases to be an
employee of the Company prior to such date. Also does not include a
bonus of $137,351 payable in cash and Common Stock valued at $1.5625
per share to which Mr. Daignault will be entitled in the event that the
Company consummates the acquisition of Anthony prior to October 31,
1997.
(10) Mr. Daignault became an executive officer in March 1994, and his
salary on an annualized basis for the fiscal year ended October
31, 1994 was $157,500.
STOCK OPTION GRANTS
The following table contains information concerning the grant of stock
options to each of the Named Executives during the fiscal year ended October 31,
1996.
4
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
Percent of Potential Realizable
Number of Total Shares Value at Assumed
Shares Underlying Options Annual Rates
Underlying Granted to Per Share of Stock Price
Options Employees in Exercise Expiration Appreciation
Name Granted Fiscal Year Price Date 5% 10%
- --------- ----------- ---------------- -------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Bruce G. Baker 100,000(1) 11.71% $1.5625 8/23/06 $254,515 $405,272
George W. Daignault 387,500(2) 45.37 1.5625 10/31/99 707,531 821,113
</TABLE>
(1) Consists of statutory stock options with an exercise price of the
closing price of the Company's Common Stock on the NASDAQ National
Market on the date of grant, all of which are currently exercisable.
Mr. Baker is eligible to participate in the Company's Reload Option and
Exchange Exercise Plan in connection with the exercise of such options.
Under such plan, Mr. Baker may pay the exercise price of such options
by tendering shares of the Company's Common Stock held by him valued at
the closing price of such stock on the NASDAQ National Market on the
date of exercise and receive new options to acquire a number of shares
of the Company's Common Stock equal to the number of shares surrendered
upon exercise at a price per share equal to the valuation per share
applicable to the shares so surrendered.
(2) Consists of non-statutory stock options granted in January 1994, the
terms of which were amended during the fiscal year ended October 31,
1996, all of which are currently exercisable. See "Repricing of
Options."
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning the exercise of
options during the fiscal year ended October 31, 1996 and the value of
unexercised options held as of the end of the fiscal year with respect of each
of the Named Executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Value Options at 10/31/96 Options at 10/31/96(1)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Bruce G. Baker - - 64,000 36,000 - -
W.M. Jones, Jr. - - 558,000 - $472,235 -
George W. Daignault - - 387,500 - (2) -
</TABLE>
(1) Calculated by multiplying the number of shares underlying options by
the difference between the closing price of the Common Stock on the
NASDAQ National Market on October 31, 1996 and the exercise price of
the options.
(2) Mr. Daignault's options are not in-the-money as the result of an
increase in the exercise price of such options during the last fiscal
year. See "Repricing of Options."
REPRICING OF OPTIONS
The following table sets forth information concerning the repricing of
options held by Named Executives since the Company's inception.
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<PAGE>
OPTION REPRICING
<TABLE>
<CAPTION>
Length of
Number of Market Original Option
Shares Price of Exercise Term
Underlying Stock at Price at Remaining at
Options Time of Time of New Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended Amendment Amendment Price Amendment
- ------- ------------- ------------- ------------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
George W.
Daignault (1) 8/23/96 387,500 $1.5625 $.81 $1.5625 90 days
</TABLE>
(1) Following Mr. Daignault's resignation as an officer of the Company
effective August 23, 1996, Mr. Daignault agreed to increase the
exercise price of his options from $.81 per share to $1.5625 per share,
the closing price of the Company's Common Stock on the NASDAQ National
Market on the date of the amendment of the terms of such options, in
consideration for an extension of the period of time during which his
options may be exercised. Pursuant to the terms of the options as
amended, they expire on October 31, 1999.
BOARD OF DIRECTORS
Alec L. Poitevint, II
Robert E. Hormann
Bruce G. Baker
W.M. Jones, Jr.
Robert W. Schlutz
EMPLOYMENT AND TERMINATION AGREEMENTS
The Company has entered into employment agreements with Bruce G. Baker
and W. M. Jones, Jr. to serve as President and Chief Executive Officer and Vice
President - Development, respectively, which became effective November 1, 1996.
During the fiscal year ended October 31, 1996, the Company had employment
agreements with Messrs. Baker and Jones to serve as Deputy Chief Executive
Officer and President and Chief Executive Officer, respectively.
Mr. Baker's current employment agreement, which has a term of five
years, provides that he is entitled to an annual salary of at least $195,000. In
addition, at the end of each fiscal year during the term of the agreement, Mr.
Baker may be granted, at the discretion of the Compensation Committee, a cash
bonus of up to 120% of his salary and/or a performance-based stock bonus. The
agreement also provides for participation in all benefit plans, including health
care plans, maintained by the Company for salaried employees, reimbursement for
that portion of his and his covered dependents' expenses actually incurred but
not reimbursed under the Company's health care plans, and a car allowance of
$1,000 per month. In the event Mr. Baker's employment is terminated without
cause or as the result of a change in control, he is entitled to receive (i) his
salary through October 31, 1999, (ii) $10,000 per month for a period of 24
months commencing on (A) November 1, 1999, in the event such termination occurs
on or before October 31, 1999, or (B) the date of such termination, in the event
that such termination occurs after such date, and (iii) the benefits,
reimbursement, and allowance described above for so long as he is entitled to
receive other payments from the Company. In the event Mr. Baker terminates the
agreement, he is entitled to receive his salary and such benefits,
reimbursement, and allowance for a period of one year following termination. In
addition, Mr. Baker is entitled to a bonus of $137,351 in the event that the
Company consummates the acquisition of Anthony Products Company, a private
company specializing in the development and manufacture of pharmaceutical animal
health products ("Anthony"), prior to October 31, 1997, payable in cash. The
Company entered into a letter of intent with respect to the acquisition of
Anthony in August 1996. Mr. Baker's previous employment agreement provided for
an annual salary of $180,000, cash and stock bonuses based upon the consummation
of acquisitions and operating performance, health care benefits and
reimbursement, allowances, and severance payments.
Mr. Jones' current employment agreement provides that he will serve as
Vice President Development of the Company through October 31, 1999. Under the
agreement, Mr. Jones is entitled to an annual salary of $10,000, $3,000 of which
is payable in cash and $7,000 of which is payable in Common Stock. In addition,
Mr. Jones is entitled to a bonus of $190,751 in the event that the Company
consummates the acquisition of Anthony prior to October 31, 1997, payable in
cash and Common Stock valued at $1.5625 per share. Mr. Jones' previous
employment agreement provided for an annual salary of $250,000, cash and stock
bonuses based upon the consummation of acquisitions and operating performance,
health care benefits, allowances, and severance payments.
The Company entered into an agreement with Mr. Daignault dated as of
August 23, 1996 terminating the employment agreement pursuant to which Mr.
Daignault had served as the Company's Chief Financial Officer through such date.
The agreement provides that Mr. Daignault will assist the
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Company with acquisitions, particularly the Anthony acquisition, on a full-time
basis through October 31, 1996, and ten hours per month from November 1, 1996
until April 30, 1997, unless more of Mr. Daignault's time is required in order
to complete the Anthony acquisition. Mr. Daignault is entitled to a salary of
$15,000 per month, plus $5,000 per month for each month from November 1996
through April 1997 in which work on the Anthony acquisition is required. In the
event that Mr. Daignault ceases to be employed by the Company prior to April 30,
1997, he is entitled to severance payments of $15,000 per month through that
date. In addition, Mr. Daignault is entitled to a bonus of $137,351 in the event
that the Company consummates the acquisition of Anthony prior to October 31,
1997, payable in cash and Common Stock valued at $1.5625 per share. The
agreement also provides that Mr. Daignault is entitled to health insurance
benefits through April 30, 1998. The term of the employment agreement that was
terminated by the agreement described above provided for an annual salary of
$180,000, cash and stock bonuses based upon the consummation of acquisitions and
operating performance, health care benefits and reimbursement, allowances, and
severance payments.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for supervising the Company's
executive compensation policies, administering the employee incentive plans,
reviewing officers' salaries, approving significant changes in executive
employee benefits, and recommending to the Board such other forms of
remuneration as it deems appropriate. The Compensation Committee is composed of
three Directors who are not employees of the Company.
COMPENSATION PHILOSOPHY
The Company's executive compensation program is designed to attract,
retain, and motivate a highly qualified and experienced senior management team.
The Compensation Committee believes that these objectives can best be obtained
by directly tying executive compensation to meeting annual and long-term
financial performance goals and to appreciation in the Company's stock price. In
accordance with these objectives, the total compensation program for the
executive officers of the Company and its subsidiaries consists of three
components:
o base salary;
o annual incentive compensation consisting of bonuses based
upon achievement of financial performance objectives; and
o long-term equity incentives composed of stock options and
other incentive awards, including outright share grants,
which may be conditioned upon future events such as
continued employment and/or the attainment of performance
objectives. Performance objectives may be measured by
reference to the earnings of the Company (or a subsidiary
or division of the Company) or to the market value of the
Common Stock, among other things.
It is the Company's policy to consider the deductibility of executive
compensation under applicable income tax rules as a factor used to make specific
compensation determinations consistent with the goals of the Company's executive
compensation program. No component of the Company's executive compensation has
been determined to be non-deductible to the Company for the fiscal year ended
October 31, 1996.
BASE SALARY
The base salaries of the Company's executive officers are determined by
the Compensation Committee by evaluating the responsibilities of the positions,
experience, and performance. To assist in establishing salary levels for the
1996 fiscal year, the Compensation Committee performed an informal survey of
salary levels of executives at other companies in the animal health and
agriculture industries. The Compensation Committee utilizes the salary component
of the executive compensation program primarily to attract and retain qualified
and experienced senior managers.
ANNUAL BONUS
The Company's annual bonus program is intended to promote superior
performance by making incentive compensation an important part of the executive
officers' compensation. For the 1996 fiscal year, the Company's Chief Executive
Officer, Chief Financial Officer, and Deputy Chief Executive
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<PAGE>
Officer received bonuses of Common Stock valued at $21,794, $15,649, and
$15,649, respectively, as of August 22, 1996, the date of grant, based upon the
successful completion of an acquisition. The current Chief Executive Officer's
agreement provides that he may be granted an annual cash bonus of up to 120% of
his salary and/or a performance-based stock bonus at the discretion of the
Compensation Committee.
Other executive officers of the Company, including subsidiary and
division heads, corporate and subsidiary vice presidents, and other managers,
also are entitled to receive annual bonuses and/or stock options or grants based
upon a percentage of their base salaries and Company and/or individual
performance.
LONG-TERM INCENTIVES
The Compensation Committee believes that it is important to provide
executive officers incentive compensation based upon the Company's stock price
performance, thus aligning the interests of its executive officers with those of
its stockholders and encouraging them to contribute to the Company's long-term
success. Such incentive compensation also encourages employees to remain in the
service of the Company.
During the fiscal year ended October 31, 1996, the Company's current
Chief Executive Officer and Chief Financial Officer were granted options to
purchase 100,000 and 60,000 shares, respectively, of the Company's Common Stock
in connection with their promotions to those positions. In addition, several of
the Company's subsidiaries' presidents, vice presidents, and other managers have
been granted stock options. The number of shares subject to such options are
based upon position and performance, the exercise price is the market value of
the Company's Common Stock on the date of grant, and the options generally
become exercisable in three equal installments beginning on the first
anniversary of the date of grant.
COMPENSATION COMMITTEE
Alec L. Poitevint, II
Robert E. Hormann
Robert W. Schlutz
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
AND CERTAIN TRANSACTIONS
During the year ended October 31, 1996, the Company had net sales of
approximately $954,000 to Durvet, Inc., a corporation in the veterinary supplies
business that is the general partner of Durvet/PMR, L.P., a stockholder of the
Company. In addition, Durvet, Inc. has agreed to purchase 750,000 shares of the
Company's Common Stock at a price of $1.41 per share in the event the Company
consummates the acquisition of a sterile fill pharmaceutical manufacturer prior
to March 31, 1997. Robert E. Hormann, who is a Director and member of the
Compensation Committee of the Board of Directors and a stockholder of the
Company, is the president and a director of Durvet, Inc.
In connection with the acquisition of Zema Corporation ("Zema") in
April 1995, the Company entered into an agreement to pay $300,000, along with
interest at the prime rate published by the Wall Street Journal, to the
corporation that formerly owned Zema, on or before April 28, 1998. The president
of the subsidiary of the Company that acquired Zema is the holder of 55 percent
of the common stock of such corporation. In addition, the Company is a party to
a lease agreement with a limited partnership, the general partner of which is
the president of such subsidiary. The lease, which expires in April 2000,
relates to Zema's operating facility. Rent expense under the lease was $95,000
for the year ended October 31, 1996.
In connection with the acquisition of St. JON Laboratories, Inc.("St.
JON") in August 1995, the Company executed a promissory note in the principal
amount of $2,000,000 to the former owner of St. JON, who is currently president
of the subsidiary of the Company that acquired St. JON. Under the note,
principal and interest at the rate of 7.6 percent per annum are payable in six
equal annual installments commencing in March 1997. The Company also assumed a
promissory note payable to the former owner, which was paid in full in January
1996. The January 1996 payment consisted of $1,054,280, including principal and
interest on the note from the date of the acquisition to the date of payment. In
addition, the Company is a party to a lease agreement with the former owner. The
lease, which expires in August 2000, relates to St. JON's operating facility.
Rent expense under the lease was $167,301 for the year ended October 31, 1996.
8
<PAGE>
The Company has adopted a policy that any transaction between the
Company and any of its officers, Directors, or holders of as much as five
percent of any class of its capital stock is required (i) to be on terms no less
favorable than those that could be obtained from unaffiliated parties and (ii)
to be approved by a majority of disinterested Directors.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and Directors, and persons who own
more than ten percent of the Company's Common Stock, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
The Company believes that each such person complied with such filing
requirements during the fiscal year ended October 31, 1996.
COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of January 27, 1997 by (i) each
person who is known by the Company to be the beneficial owner of more than five
percent of the Company's outstanding Common Stock, (ii) each Director of the
Company and each Nominee, (iii) each Named Executive, and (iv) all Directors and
executive officers of the Company as a group. Except as otherwise indicated, the
Company believes that the beneficial owners of the Common Stock listed, based on
information furnished by such owners, have sole investment and voting power with
respect to such shares, subject to community property laws where applicable.
Unless otherwise indicated, the address of each stockholder is: c/o
Agri-Nutrition Group Limited, Riverport Executive Center II, 13801 Riverport
Drive, Suite 111, Maryland Heights, Missouri 63043.
<TABLE>
<CAPTION>
Beneficial Owner Shares Beneficially Owned (1) Percentage Ownership (1)
---------------- ----------------------------- ------------------------
<S> <C> <C>
Durvet/PMR, L.P. (2) 1,240,000 14.8%
W. M. Jones, Jr. (3) 650,573 7.3%
Bruce G. Baker (4) 613,691 7.2%
Robert W. Schlutz (5) 468,706 5.6%
George W. Daignault(6) 402,397 4.6%
Alec L. Poitevint, II (7) 355,233 4.2%
Robert E. Hormann (8) 178,888 2.1%
Directors and Executive Officers
as a Group (7 persons) (9) 2,681,988 28.4%
</TABLE>
(1) Includes shares issuable upon the exercise of options that are
exercisable within 60 days of the date of this Proxy Statement. The
shares underlying such options are deemed to be outstanding for the
purpose of computing the percentage of outstanding stock owned by such
persons individually and by each group of which they are a member, but
are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(2) The address of Durvet/PMR, L.P. is P.O. Box 279, 100 S.E. Magellan Drive,
Blue Springs, Missouri 64014. The general partner of Durvet/PMR, L.P.
is Durvet, Inc., and the limited partners of Durvet/PMR L.P. are the 25
stockholders of Durvet, Inc., each of which has a 3.2% interest in the
partnership.
(3) Includes options to purchase 558,000 shares of Common Stock.
(4) Includes options to purchase 100,000 shares of Common Stock and shares
held by Mr. Baker's spouse. Excludes 37,200 shares held by an independent
trustee for the benefit of three adult children and 12,000 shares held by
such children.
(5) Mr. Schlutz's address is Schlutz Enterprises, Box 269, 14812 "N" Avenue,
Columbus Junction, Iowa 52738. Includes shares held by
Mr. Schlutz as trustee for his spouse.
(6) Includes options to purchase 387,500 shares of Common Stock.
(7) Mr. Poitevint's address is Southeastern Minerals, Inc., P.O. Box 1866,
1100 Dothan Road, Bainbridge, Georgia 31718. Includes options
to purchase 1,667 shares of Common Stock. Also includes 166,900
shares held by Marshall Minerals, Inc. and 184,000 shares held
by Mineral Associates, Inc. Mr. Poitevint is president and chairman of
both corporations, but is not a controlling shareholder of either
corporation, and disclaims beneficial ownership of such shares.
(8) Mr. Hormann's address is P.O. Box 279, 100 S.E. Magellan Drive, Blue
Springs, Missouri 64014. Includes shares held by and jointly
with spouse. Does not include 1,240,000 shares held by Durvet/PMR,
L.P., the general partner of which is Durvet, Inc., of which Mr.
Hormann is a director and president. Mr. Hormann is not a stockholder
of Durvet and disclaims beneficial ownership of such shares.
(9) Includes options to purchase 1,054,667 shares of Common Stock.
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common
Stock to the cumulative total return to stockholders of (i) the stocks included
in the NASDAQ National Market - United States Index, (ii) a group of
non-financial companies with market capitalizations comparable to that of the
Company as of October 31, 1995, with the investment weighted based on market
capitalization, and (iii) a group of non-financial companies with market
capitalizations comparable to that of the Company as of October 31, 1996, with
the investment weighted based on market capitalization.
The companies in the group referred to in (ii) above are: BUM
International, Inc., Sunrise Resources, Inc., Instituform East, Inc., Rotonics
Manufacturing, Inc., Sbs Technologies, Inc., View Corporation, Data Race, Inc.,
Town & Country Corporation, Bio-Dental Technologies Corporation, FiberChem,
Inc., Ameriwood Industries International Corporation, Candela Corporation,
AmeriQuest Technologies, Inc., Sport Chalet, Inc., U.S.-China Industrial
Exchange, Inc., Amistar Corporation, Analytical Surveys, Inc., Ramsay Health
Care, Inc., U.S. Home Care Corporation, Rheometric Scientific, Inc., Mc
Shipping, Inc., Advanced Promotion Technologies, Inc., Sundance Homes, Inc.,
Rocky Shoes & Boots, Inc., Vectra Technologies, Inc., Harry's Farmers Market,
Inc., and Texfi Industries, Inc.
The companies in the group referred to in (iii) above are: Computer
Outsourcing Services, Inc., C-Phone Corp, PDK Labs Inc., Microfield Graphics,
Inc., Winter Sports, Inc., Infinity, Inc., Hector Communications Corporation,
Airport Systems International, Inc., D & K Wholesale Drug, Inc., Scott's Liquid
Gold, Inc., Internet Communications Corporation, Frontier Adjusters of America,
Inc., Timber Lodge Steakhouse, Inc., Video Sentry Corporation, Starcraft
Corporation, O.I. Corporation, Micro Component Technology, Inc., The Sands
Regent, Endogen, Inc., H.E.R.C. Products, Inc.,Travel Ports of America, Inc.,
The Smithfield Companies, Inc., Infosafe Systems, Inc., Eateries, Inc., American
River Oil Company, Lifeway Foods, Inc., Go-Video, Inc., Northstar Computer
Forms, Inc., Hawkins Energy Corporation, and Gamma Biologicals, Inc.
The graph includes comparisons to two groups of non-financial companies
because the Company's market capitalization decreased substantially during the
fiscal year ended October 31, 1996. The Company determined that it would provide
comparisons based upon market capitalization, rather than industry or
line-of-business based comparisons, because of the diverse nature of its
operations and product lines.
COMPARISON OF 40 MONTH CUMULATIVE TOTAL RETURN*
Among Agri-Nutrition Group Limited, the NASDAQ
Stock Market-US
Index, a 1995 and 1996 Group of Non-Financial
Companies with Market Capitalizations Comparable to
that of the Company
<TABLE>
<CAPTION>
7/12/94 10/31/94 10/31/95 10/31/96
<S> <C> <C> <C> <C>
Agri-Nutrition Group Limited 100 99 40 27
NASDAQ Stock Market-US 100 110 148 175
1995 Group of Companies with
Comparable Market Caps 100 91 71 76
1996 Group of Companies with
Comparable Market Caps 100 93 80 62
</TABLE>
* $100 invested on 7/12/94 in stock or index -- including reinvestment of
dividends. Fiscal year ending October 31.
The first date of the measurement period covered by the graph is July
12, 1994, the date that the Company's stock was initially sold to the public,
and the price of the Company's stock on such date as reflected by the graph is
$6.25 per share, the closing price on the NASDAQ National Market on such date.
OTHER MATTERS
10
<PAGE>
The Board of Directors has no knowledge of any additional business to
be presented for consider ation at the meeting. Should any such matters properly
come before the meeting or any adjournments thereof, the persons named in the
enclosed proxy will have discretionary authority to vote such proxy in
accordance with their best judgment on such other matters and with respect to
matters incident to the conduct of the meeting. Certain financial and other
information regarding the Company, including audited consolidated financial
statements of the Company and its subsidiary for the last fiscal year, is
included in the Company's 1996 Annual Report to Stockholders mailed together
with this Proxy Statement.
STOCKHOLDERS MAY OBTAIN A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K AND THE SCHEDULE THERETO BY WRITING TO ROBERT J. ELFANBAUM, SECRETARY,
AGRI-NUTRITION GROUP LIMITED, RIVERPORT EXECUTIVE CENTER II, 13801 RIVERPORT
DRIVE, SUITE 111, MARYLAND HEIGHTS, MISSOURI 63043. ADDITIONAL COPIES OF THIS
PROXY STATEMENT AND THE ACCOMPANYING PROXY ALSO MAY BE OBTAINED
FROM MR. ELFANBAUM.
The affirmative vote of the holders of a majority of the shares
entitled to vote that are present in person or represented by proxy at the
meeting is required to elect Directors and act on any other matters properly
brought before the meeting. Shares represented by proxies marked "withhold
authority" with respect to the election of the nominee for Director will be
counted for the purpose of determining the number of shares represented by proxy
at the meeting. Such proxies thus will have the same effect as if the shares
represented thereby were voted against such nominee. If a broker indicates on
the proxy that it does not have discretionary authority to vote in the election
of Directors, those shares will not be counted for the purpose of determining
the number of shares represented by proxy at the meeting.
The Company will pay the cost of soliciting proxies. In addition to
solicitation by use of the mails, certain officers and employees of the Company
may solicit the return of proxies by telephone, telegram, or in person. The
Company has requested that brokerage houses, custodians, nominees, and
fiduciaries forward soliciting materials to the beneficial owners of Common
Stock of the Company and will reimburse them for their reasonable out-of-pocket
expenses.
A list of stockholders of record entitled to be present and vote at the
meeting will be available at the offices of the Company for inspection by the
stockholders during regular business hours from February 24, 1997 to the date of
the meeting. The list will also be available during the meeting for inspection
by stockholders who are present. Votes will be tabulated by an automated system
administered by Boatmen's Trust Company, St. Louis, Missouri, the Company's
transfer agent. Members of the Company's independent accounting firm, Price
Waterhouse LLP, are expected to attend the meeting to make a statement if they
so desire and to respond to questions from stockholders.
IN ORDER TO ASSURE THE PRESENCE OF THE NECESSARY QUORUM AT THE MEETING,
PLEASE SIGN AND MAIL THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. NO
POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES. SIGNING AND RETURNING
THE PROXY WILL NOT PREVENT YOU FROM ATTENDING THE MEETING AND VOTING IN PERSON,
SHOULD YOU SO DESIRE.
STOCKHOLDER PROPOSALS FOR THE
1998 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder who wishes to present a proposal for consideration at
the annual meeting of stockholders to be held in 1998 must submit such proposal
in accordance with the rules promulgated by the Securities and Exchange
Commission. In order for a proposal to be included in the proxy materials
relating to the 1998 annual meeting, it must be received by the Company no later
than October 10, 1997. Such proposals should be addressed to Robert J.
Elfanbaum, Secretary, Agri-Nutrition Group Limited, Riverport Executive Center
II, 13801 Riverport Drive, Suite 111, Maryland Heights, Missouri 63043.
11
<PAGE>
[card front]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AGRI-NUTRITION GROUP LIMITED -- COMMON STOCK PROXY -- FOR THE ANNUAL MEETING OF
STOCKHOLDERS AT 2:00 P.M. LOCAL TIME, THURSDAY, MARCH 6, 1997, AT THE RADISSON
HOTEL ST. LOUIS AIRPORT, 11228 LONE EAGLE DRIVE, BRIDGETON, MISSOURI 63044.
The undersigned hereby appoints Bruce G. Baker and Robert J. Elfanbaum, or
either of them, with full power of substitution, as Proxies to represent and
vote all of the shares of Common Stock of Agri-Nutrition Group Limited held of
record by the undersigned at the above-stated Annual Meeting, and any
adjournments thereof, upon the matter set forth in the Notice of Annual Meeting
of Stockholders and Proxy Statement dated February 7, 1997, as follows:
ELECTION OF ALEC L. POITEVINT, II AS CLASS 3 DIRECTOR FOR A TERM OF THREE YEARS
___ FOR ___ WITHHOLD AUTHORITY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MR. POITEVINT AS DIRECTOR.
In their discretion, the Proxies are authorized to vote upon such other matters
as may properly come before the Annual Meeting.
This proxy, when properly executed, will be voted as specified. IF NO
SPECIFICATION IS MADE, IT WILL BE VOTED FOR MR. POITEVINT AS DIRECTOR, AND IN
THE DISCRETION OF THE PROXY OR PROXIES ON ANY OTHER BUSINESS.
[card reverse]
Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s) on
this proxy. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title.
Any proxy heretofore given by the undersigned with respect to such stock is
hereby revoked. Receipt of the Notice of the 1997 Annual Meeting and Proxy
Statement, and 1996 Annual Report to Stockholders is hereby acknowledged. PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
- ----------------------------------- -------------------------------
SIGNATURE DATE SIGNATURE DATE
12
