<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 under Rule 14a-12
KYZEN CORPORATION
(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 Rule 14a-6(i)(1) and 0-11.
[ ] 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.
<PAGE> 2
KYZEN CORPORATION
430 HARDING INDUSTRIAL DRIVE
NASHVILLE, TN 37211
March 27, 2000
TO THE SHAREHOLDERS OF
KYZEN CORPORATION:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of Kyzen Corporation, to be held on Thursday, April 27, 2000, at
1:00 p.m., Nashville Time, at Kyzen Corporation's corporate headquarters, 430
Harding Industrial Drive, Nashville, Tennessee 37211.
Please read the enclosed Annual Report to Shareholders and Proxy
Statement for the 2000 Annual Meeting of Shareholders. Whether or not you plan
to attend the meeting, please sign, date and return the enclosed proxy card as
soon as possible so that your vote will be recorded. If you attend the meeting,
you may withdraw your proxy and vote your shares personally. You must provide
proof of ownership of Kyzen Corporation Common Stock as of the record date,
March 6, 2000, in order to attend the meeting.
On behalf of the Board of Directors and management of Kyzen
Corporation, I would like to thank you for your continued support and
confidence, and look forward to meeting as many of our shareholders as possible
on April 27, 2000.
Sincerely,
/s/ Mike Bixenman
Mike Bixenman
Chairman of the Board
IMPORTANT
COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY.
<PAGE> 3
KYZEN CORPORATION
430 HARDING INDUSTRIAL DRIVE
NASHVILLE, TN 37211
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 2000
-------------------------
TO THE SHAREHOLDERS OF
KYZEN CORPORATION:
The Annual Meeting of Shareholders of Kyzen Corporation (the "Company")
will be held on Thursday, April 27, 2000, at 1:00 p.m., Nashville Time, at the
Company's corporate headquarters, 430 Harding Industrial Drive, Nashville,
Tennessee 37211, for the following purposes:
(1) To elect two nominees as directors to serve on the Board
of Directors until the Annual Meeting of Shareholders in 2003; and
(2) To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 6, 2000
as the record date for determining shareholders entitled to notice of and to
vote at the Annual Meeting and any adjournment thereof.
By order of the Board of Directors,
/s/ John Sanders
John Sanders
Corporate Secretary
Nashville, Tennessee
March 27, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, TO
ASSURE THE PRESENCE OF A QUORUM, PLEASE COMPLETE, DATE, SIGN AND MAIL THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE. IF YOU ATTEND THE ANNUAL MEETING AND
WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY DO SO AT ANY TIME BEFORE THE PROXY
IS EXERCISED.
<PAGE> 4
KYZEN CORPORATION
430 HARDING INDUSTRIAL DRIVE
NASHVILLE, TN 37211
-------------------------
PROXY STATEMENT
-------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board of Directors") of Kyzen
Corporation (the "Company"), to be voted at the Annual Meeting of Shareholders
(the "Annual Meeting") to be held at 430 Harding Industrial Drive, Nashville,
Tennessee 37211, on April 27, 2000, at 1:00 p m., Nashville Time, for the
purposes set forth in the accompanying notice, and at any adjournment thereof.
This Proxy Statement and the accompanying form of proxy are first being mailed
or given to shareholders of the Company on or about March 27, 2000.
The close of business on March 6, 2000 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting. As of the close of business on that date, the Company had
4,777,787 shares of Common Stock, $.01 par value (the "Common Stock"),
outstanding and entitled to vote. No other shares of the Company's capital stock
are outstanding. Holders of the Common Stock are entitled to one vote per share
on any matter which may properly come before the Annual Meeting.
A shareholder who signs and delivers a proxy has the right to revoke it
at any time before it is exercised by writing to the Corporate Secretary, by
timely delivery of a properly executed, later-dated proxy or by voting by ballot
at the Annual Meeting.
If the enclosed proxy is properly executed, returned and not revoked,
it will be voted in accordance with the instructions, if any, given by the
shareholder, and if no instructions are given, will be voted (a) FOR the
election as directors of the nominees listed thereon and described in this Proxy
Statement, and (b) in accordance with the recommendations of the Board of
Directors on any other proposal that may properly come before the Annual
Meeting. The persons named as proxies in the enclosed form of proxy were
selected by the Board of Directors.
<PAGE> 5
PROPOSAL 1:
ELECTION OF DIRECTORS
NOMINEES
The Restated Charter of the Company provides that the terms for the
Board of Directors are to be staggered so that approximately one-third of the
directors are elected at each annual meeting. Pursuant to the Restated Charter,
the Board of Directors has divided the current Board into two classes of two
directors each and one class of three directors. One class of directors is
elected each year. The terms of Thomas M. Forsythe and James R. Gordon expire at
the Annual Meeting.
The Board of Directors has nominated Messrs. Forsythe and Gordon for
election at the Annual Meeting to serve until the annual meeting of shareholders
in 2003 or until their successors have been elected and qualified. Messrs.
Forsythe and Gordon have consented to be candidates and to serve as directors if
elected.
In accordance with the Tennessee Business Corporation Act and the
Restated Charter, directors are elected by a plurality of the votes cast by the
shares entitled to vote at a meeting of shareholders at which a quorum is
present. The Company's Restated Charter does not provide for cumulative voting
and, accordingly, the holders of Common Stock do not have cumulative voting
rights with respect to the election of directors. Consequently, each shareholder
may cast only one vote per share for each of the nominees.
Unless a proxy specifies otherwise, the persons named in the proxy will
vote the shares covered by the proxy for the individuals nominated by the Board
of Directors. Should any nominee become unavailable for election, shares covered
by a proxy will be voted for a substitute nominee selected by the current Board
of Directors.
The Board of Directors recommends that shareholders vote FOR the
election of the following nominees:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Thomas M. Forsythe 42 Vice President, Treasurer, Chief
Accounting Officer and Director
James R. Gordon 54 Director
</TABLE>
THOMAS M. FORSYTHE has served as Vice President since September 1995,
as Treasurer and Chief Accounting Officer since January 1998 and as a director
of the Company since June 1995. Mr. Forsythe joined the Company in 1992 and
served as General Manager from July 1992 to September 1995. From 1989 to 1992,
Mr. Forsythe served as Business Manager of a business unit of WR Grace & Co.
charged with entering the CFC-free cleaning chemical market focusing on the
aerospace industry.
JAMES R. GORDON has served as a director of the Company since July
1996. Mr. Gordon retired in 2000 as the President and director of TCS Management
Group, Inc., a multi-national software development company formed by Mr. Gordon
in 1975. TCS Management Group, Inc. is a wholly-owned subsidiary of Aspect
Telecommunications Corporation (Nasdaq:ASPT), for which Mr. Gordon acts as a
consultant. Mr. Gordon currently serves on the Board of Directors and Executive
Committee of the Society of International Business Fellows and is a member of
the Board of Trustees of Harding Academy in Nashville, Tennessee.
2
<PAGE> 6
CONTINUING DIRECTORS
The persons named below will continue to serve as directors until the
annual meeting of shareholders in the years indicated and until their successors
are elected and qualified. The following table shows the names, ages and
positions of each continuing director:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
TERMS EXPIRING IN 2001:(1)
Kyle J. Doyel 44 President, Chief Executive Officer
and Director
TERMS EXPIRING IN 2002:
Janet Korte Baker 47 Director
Michael L. Bixenman 46 Chairman of the Board, Vice President
and Director
John A. Davis III 67 Director
</TABLE>
- ---------------
(1) Effective July 19, 1999, Mr. Larry A. Lofgreen resigned as a director of
the Company to pursue other interests for undisclosed reasons. Mr.
Lofgreen did not indicate any disagreement with the Company on any matter
related to the Company's operations, policies or practices. In 2000, the
Board of Directors plans to fill the vacancy created by Mr. Lofgreen's
departure for the remainder of his term, which expires at the annual
meeting in 2001.
KYLE J. DOYEL has served as Chief Executive Officer, President and
director since the Company's inception in 1990, and served as Chairman of the
Board from the Company's inception until February 1995. Prior to co-founding the
Company in 1990, Mr. Doyel was employed in several management, sales, commercial
development and product development positions within the chemical industry.
JANET KORTE BAKER has served as a director of the Company since January
1999. Ms. Baker has been an independent business consultant and financial
advisor in Nashville, Tennessee since 1990. She specializes in financial
advisory work for clients ranging from small business owners to companies with
up to $100 million in revenues. Prior to 1990, Ms. Baker spent 14 years in the
banking industry. She was a Senior Vice President of SunTrust Bank, Nashville
and Executive Vice President of Brentwood National Bank.
MICHAEL L. BIXENMAN has served as Chairman of the Board since June
1995, Vice President since the Company's inception in 1990 and director since
December 1994. Prior to co-founding the Company, Mr. Bixenman was employed in
several positions, the last as Vice President-General Manager with Bix
Manufacturing Company.
JOHN A. DAVIS III has served as a director of the Company since
August 1995. Mr. Davis is an attorney in Little Rock, Arkansas and has practiced
there since 1993. From 1979 to 1993, Mr. Davis served as Senior Vice President,
General Counsel and Secretary for United Dominion Industries (NYSE:UDI), a
multinational construction and industrial machinery producer. Mr. Davis is the
uncle of Mr. Doyel's wife.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held four scheduled meetings during 1999. All
directors attended at least 75% of the meetings of the Board of Directors and
its committees held while they were directors.
The Board of Directors has an Audit Committee and a Compensation
Committee, both of which consist of at least two "non-employee directors" as
defined by Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
The Audit Committee makes recommendations to the Board of Directors
with respect to the Company's financial statements and the appointment of
independent accountants. The Audit Committee also reviews significant audit and
accounting policies and practices, meets with the Company's independent public
accountants concerning, among other things, the scope of their audit of the
Company's financial statements, and reviews the performance of the overall
accounting and financial controls of the Company. Ms. Baker and Messrs. Gordon
and Davis serve on the Audit Committee. The Audit Committee held only one
meeting during the year and at that meeting meet with the independent public
accountants with respect to the 1999 audit.
3
<PAGE> 7
The Compensation Committee reviews and approves salaries, bonuses and
other compensation and benefits of executive officers. The Compensation
Committee also advises management regarding benefits and other terms and
conditions of compensation and administers the Company's stock option plans. Ms.
Baker and Messrs. Gordon and Doyel serve on the Compensation Committee. The
Compensation Committee held one meeting during 1999.
The Company currently has no standing nominating committee or other
standing committees.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no additional
compensation for serving on the Board of Directors or any board committee.
Directors who are not employees of the Company are paid one thousand dollars
($1,000) each calendar quarter for serving as a member of the Board of
Directors. Directors are reimbursed for any travel expenses incurred in
attending meetings of the Board of Directors.
In April 1999, each of Ms. Baker and Messrs. Gordon, Davis and Lofgreen
(a former director) were granted 5,000 options to purchase Common Stock at an
exercise price of $0.75 per share under the Company's 1994 Stock Option Plan
(the "Plan").
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership as of March 6, 2000 of the Common Stock by (a) each person known by
the Company to be a beneficial owner of more than 5% of the outstanding shares
of Common Stock, based on a review of electronic filings made with the
Securities and Exchange Commission (the "SEC"), (b) each director of the
Company, (c) each individual listed under "Executive Compensation - Summary
Compensation Table" below and (d) all directors and executive officers of the
Company as a group. Each beneficial owner named below has advised the Company
that such owner has sole investment and voting power with respect to the shares
of Common Stock shown below. The Company has no reason to believe such
information is inaccurate. The address for each of the beneficial owners is
shown below.
<TABLE>
<CAPTION>
PERCENT OF COMMON
NUMBER OF SHARES STOCK BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OWNED(1)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Christopher B. Cannon
60 East South Temple, Salt Lake City, UT 1,113,535(2) 23.3%
Kyle J. Doyel
430 Harding Industrial Drive, Nashville, TN 581,455(3) 11.9%
Michael L. Bixenman
430 Harding Industrial Drive, Nashville, TN 415,014(4) 8.6%
Thomas M. Forsythe
430 Harding Industrial Drive, Nashville, TN 150,482(5) 3.1%
Thomas J. Herrmann
430 Harding Industrial Drive, Nashville, TN 98,895(6) 2.0%
John A. Davis III
500 E. Markham St., Little Rock, AR 59,000(7) 1.2%
James R. Gordon
430 Harding Industrial Drive, Nashville, TN 30,000(8) *
Larry A. Lofgreen
6525 W. 10760 N., Highland, UT 25,000(9) *
Janet Korte Baker
430 Harding Industrial Drive, Nashville, TN 5,000(10) *
All executive officers and directors as a group
(6 persons) 1,389,339(11) 24.5%
</TABLE>
- ---------------
* Represents less than 1% of the outstanding shares of Common Stock.
(1) Pursuant to the rules of the SEC, shares of Common Stock which beneficial
owners set forth in this table have a right to acquire within 60 days of
the date hereof pursuant to the exercise of stock options are deemed to
be outstanding for the purpose of computing the percent of Common Stock
beneficially owned by that owner but are not deemed outstanding for the
purpose of computing percentage ownership of any other beneficial owner
shown in the table.
(2) Includes options currently exercisable to purchase 10,000 shares
(3) Includes options currently exercisable to purchase 53,001 shares.
(4) Includes options currently exercisable to purchase 48,000 shares.
(5) Includes options currently exercisable to purchase 54,472 shares.
4
<PAGE> 8
(6) Includes options currently exercisable to purchase 81,667 shares. Mr.
Herrmann did not serve as an executive officer after November 5, 1999. Mr.
Herrmann's Employment Agreement expired without renewal on February 29,
2000.
(7) Includes options currently exercisable to purchase 49,000 shares.
(8) Includes options currently exercisable to purchase 20,000 shares.
(9) Includes options currently exercisable to purchase 25,000 shares. Mr.
Lofgreen did not serve as a director after July 19, 1999.
(10) Includes options currently exercisable to purchase 5,000 shares.
(11) Excludes Messers. Herrmann and Lofgreen, who no longer serve as an
executive officer or director, respectively, of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company pays royalties to Bix Manufacturing Company, a shareholder,
in connection with the Company's acquisition of certain patent rights. These
royalty payments are based on 2% of revenues related to the patented chemistry.
The Company is currently satisfying its royalty obligation through consulting
services performed by the Company. In 1999 and 1998, $41,000 and $46,675,
respectively, was recorded as royalty expenses to reflect these transactions.
Michael L. Bixenman, a director and officer of the Company, is a 10% shareholder
of Bix Manufacturing Company.
The Company paid $11,670 and $19,850 in 1999 and 1998, respectively,
for transportation services from Benco Sales. Benco Sales is owned by Benny
Bixenman, who is a shareholder of the Company and the brother of Michael L.
Bixenman, a director and officer of the Company.
The Company paid $9,532 and $14,633 in 1999 and 1998, respectively, to
John A. Davis III, a director of the Company, for investor relations and
consulting services.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities at any time during the year to file
with the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
shareholders who beneficially own greater than ten percent are required by the
SEC's regulations to furnish the Company with copies of all such filings. The
Company is required to report in this Proxy Statement any failure to file such
reports by the specific dates that these reports are required to be filed during
the year ended December 31, 1999.
Based on a review of the copies of reports furnished to the Company and
certain written representations that no other reports were required, the Company
believes, except as noted below, that all Section 16(a) reporting and filing
requirements applicable to its executive officers, directors and greater than
ten percent shareholders were complied with during the year ended December 31,
1999. Each of Kyle J. Doyel, Michael L. Bixenman, Thomas M. Forsythe, John A.
Davis III, James R. Gordon and Janet K. Baker were two days late in filing a
Form 5 with the SEC indicating the grant of options to such person in 1999.
Christopher B. Cannon, an owner of more than ten percent of the Company Common
Stock, was late in filing both a Form 5 and a Schedule 13(G) pertaining to his
holdings as of December 31, 1999.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following table reflects the compensation of the Company's Chief
Executive Officer and each of the Company's most highly compensated executive
officers whose total annual salary and bonus exceeded $100,000 in each year for
all services rendered in all capacities to the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------------------------------------
AWARDS
NAME AND PRINCIPAL SECURITIES UNDERLYING ALL OTHER
POSITION YEAR SALARY OPTIONS COMPENSATION
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kyle J. Doyel, 1999 $129,820 33,334 --
Chief Executive Officer 1998 122,860 6,000 --
1997 115,994 -- --
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Michael L. Bixenman, 1999 $121,520 33,333 --
Chairman of the Board 1998 114,847 6,000 --
1997 107,190 -- --
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Thomas M. Forsythe, 1999 $112,070 5,000 --
Vice President 1998 106,332 12,000 --
1997 98,490 -- --
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Thomas J. Herrmann(1), 1999 $106,687 5,000 $10,000(2)
Vice President 1998 101,000 15,000 --
1997 92,460 -- --
- ----------------------------------------------------------------------------------------------
</TABLE>
- -----------------
(1) Effective November 5, 1999, Mr. Thomas J. Herrmann no longer served as an
executive officer of the Company. Mr. Herrmann's Employment Agreement
with the Company expired without renewal on February 29, 2000.
(2) Outplacement services provided by the Company.
The following table shows the aggregate number of options/SARs granted
to each of the named executive officers during 1999.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SARS GRANTED EXERCISE OF
OPTIONS/SARS TO EMPLOYEES IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED YEAR ($/SHARE) DATE
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kyle J. Doyel,
Chief Executive Officer 33,334 32.2% $3.09 April 9, 2004
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Michael L. Bixenman,
Chairman of the Board 33,333 32.2% $3.09 April 9, 2004
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Thomas M. Forsythe,
Vice President 5,000 4.8% $0.75 April 9, 2009
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Thomas J. Herrmann,
Vice President 5,000 4.8% $0.75 April 9, 2009
- --------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 10
The following table shows the aggregate number of options/SARs
exercised by each of the named executive officers and the value of unexercised
in-the-money options/SARs at the end of 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
NUMBER OF UNEXERCISED
SHARES SECURITIES UNDERLYING
ACQUIRED ON OPTIONS/SARS AT FY-END
NAME EXERCISE VALUE REALIZED (EXERCISABLE/UNEXERCISABLE)
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kyle J. Doyel,
Chief Executive Officer -- -- 52,001 / 2,333
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Michael L. Bixenman,
Chairman of the Board -- -- 47,000 / 2,333
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Thomas M. Forsythe,
Vice President 80,000 $10,000 48,000 / 12,333
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Thomas J. Herrmann,
Vice President -- -- 35,833 / 14,677
--------------------------------------------------------------------------------------------
</TABLE>
EMPLOYMENT AGREEMENTS
Kyle J. Doyel serves as President and Chief Executive Officer and each
of Michael L. Bixenman and Thomas M. Forsythe serve as Vice Presidents pursuant
to Employment Agreements dated January 1, 1995, and amended in 1999. The
Employment Agreement, as amended, of Thomas J. Herrmann, who served as Vice
President of the Company, expired without renewal on February 29, 2000. Each
Employment Agreement, as amended (each, an "Employment Agreement"), provides for
an initial term of one year and thereafter renews automatically for successive
one-year periods unless terminated by sixty (60) days notice by either party
prior to the end of an existing one-year period. Each Employment Agreement was
amended in 1999 to conform with existing change in control provisions in the
Company's Shareholder Rights Agreement.
Each Employment Agreement provides that if the Employee is terminated
upon a "Change of Control," the Employee shall immediately be paid, among other
things, all accrued compensation to the date of termination. For the remainder
of the existing employment term and for a period of two years thereafter, the
Employee shall be entitled to receive semi-monthly severance payments equal to
salary payment which otherwise would have been paid to the Employee pursuant to
the Employment Agreement. In addition, the Employee shall be entitled to
immediately exercise all awards granted to such Employee under the Plan, or any
successor plan, and shall continue to accrue retirement benefits and shall
continue to enjoy any benefits under any plans of the Employer in which Employee
is a participant to the full extent of the Employee's rights under such plans,
including any perquisites provided under the Employment Agreement through the
remainder of the employment term. As defined in the Employment Agreement,
"Termination Upon a Change in Control" means either (i) a termination of the
Employee following a "Change in Control" (as defined in the Employment
Agreement) or (ii) resignation by the Employee following a "Change in Control."
The Employment Agreement contain confidentiality agreements that
survive the expiration or termination of the Employment Agreement and covenants
not to compete during the period of the Employment Agreement and for a period of
two years after termination, subject to certain limitations. Messrs. Doyel,
Bixenman and Forsythe have agreed to salary deferral in the event the Company
determines it does not have the necessary funds to pay the full amounts of their
salaries. If their salaries are deferred, they are entitled to interest on the
deferred amounts at a rate of 12% per annum, compounded monthly.
7
<PAGE> 11
SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
a company's ability to take a deduction for federal tax purposes for certain
compensation paid to its executive officers. The Company currently expects that
all compensation payable to executive officers during 1999 will be deductible by
the Company for federal income tax purposes. The Compensation Committee's policy
with respect to compensation to be paid to executive officers is to structure
compensation payments to executive officers so as to be deductible under Section
162(m).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1999, the Compensation Committee was composed of Ms. Baker and
Messrs. Gordon and Doyel. Mr. Doyel is the President and Chief Executive Officer
of the Company. Ms. Baker and Mr. Gordon are not employed by the Company. During
1999, the Compensation Committee recommended salary adjustments for the
executive officers to levels competitive with similar positions in the chemical
and high technology industries.
STOCK PERFORMANCE GRAPH
Although not required of small business issuers, the Company has
historically provided a stock performance graph in its Proxy Statement. The
Company previously provided the graph because its Common Stock traded on the
Nasdaq SmallCap Market and because of the relative ease in obtaining comparative
data for the Nasdaq indices with which the performance of the Company's Common
Stock may be compared. As of February 2000, the Company's Common Stock no longer
trades on the Nasdaq SmallCap Market. The Company's securities are currently
listed on the Boston Stock Exchange and on the OTC Bulletin Board. Management of
the Company is unaware of any indices that measure the performance of these
markets and, therefore, has decided to omit this graph.
GENERAL INFORMATION
INDEPENDENT AUDITORS
The Company's financial statements for the year ended December 31, 1999
were audited by PricewaterhouseCoopers LLP, which has audited the Company's
books and records since the Company's inception in 1990. PricewaterhouseCoopers
LLP has been selected by the Company's Audit Committee to audit the Company's
books and records for 2000.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting, and, while they do not plan to make a statement
at the meeting, such representatives will be available to respond to appropriate
questions from shareholders in attendance.
SHAREHOLDER PROPOSALS FOR THE ANNUAL MEETING OF SHAREHOLDERS IN 2001
Shareholder proposals intended to be presented at the Company's 2001
annual meeting of shareholders must be received by the Company at its executive
offices, located at the address listed below, not later than November 27, 2000
in order for the proposal to be included in the Company's Proxy Statement and
proxy card.
To be included on the agenda for the 2001 annual meeting a shareholder
proposals must be submitted in accordance with the following procedure.
Shareholders who wish to nominate a candidate for election to the Board of
Directors (other than the candidates proposed by the Board of Directors or a
nominating committee appointed by the Board) or propose any other business at
the 2001 annual meeting must deliver written notice to the Secretary of the
Company at the address below not earlier than October 28, 2000 nor later than
November 27, 2000.
Any nomination for director or other proposal by a shareholder that is
not timely submitted and does not comply with these notice requirements will be
disregarded, and upon the instructions of the presiding officer of the annual
meeting, all votes cast for each such nominee and such proposal will be
disregarded. The Company's Board of Directors, or a nominating committee
appointed by the Board, will consider shareholder nominations of candidates for
election to the Board of Directors that are timely and otherwise submitted in
accordance with the requirements described in this subsection.
8
<PAGE> 12
A shareholder's written notice submitted to the Secretary of the
Company nominating candidates for election to the Board of Directors or
proposing other business must include: (i) the name and address of the
shareholder; (ii) the class and number of shares of Stock held of record and
beneficially owned by such shareholder; (iii) the name(s) including any
beneficial owners, and address(es) of such shareholder(s) in which all such
shares of Stock are registered on the stock transfer books of the Company; (iv)
a representation that the shareholder intends to appear at the meeting in person
or by proxy to submit the business specified in such notice; (v) a brief
description of the business desired to be submitted to the annual meeting of
shareholders, the complete text of any resolutions intended to be presented at
the annual meeting and the reasons for conducting such business at the annual
meeting of shareholders; (vi) any personal or other material interest of the
shareholder in the business to be submitted; (vii) as to each person whom the
shareholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Exchange Act (including such
person's written consent to being named in the Proxy Statement as a nominee and
to serving as a director if elected); and (viii) all other information relating
to the nomination or proposed business which may be required to be disclosed
under applicable law. In addition, a shareholder seeking to submit such
nominations or other business at the meeting shall promptly provide any other
information reasonably requested by the Company. Such notice shall be sent to
the following address:
Kyzen Corporation
430 Harding Industrial Drive
Nashville, Tennessee 37211
Attention: Corporate Secretary
The individuals named as proxies on the proxy card for the Company's
2001 annual meeting of shareholders will be entitled to exercise their
discretionary authority in voting proxies on any shareholder proposal that is
not included in the Company's Proxy Statement of the 2001 annual meeting, unless
the Company receives notice of the matter(s) to be proposed by November 27,
2000. Even if proper notice is received within such time period, the individuals
named as proxies on the proxy card for that meeting may nevertheless exercise
their discretionary authority with respect to such matter(s) by advising
shareholders of the proposal(s) and how the proxies intend to exercise their
discretion to vote on these matter(s), unless the shareholder making the
proposal(s) solicits proxies with respect to the proposal(s) to the extent
required by Rule 14a-4(c)(2) under the Exchange Act.
COUNTING OF VOTES
All matters specified in this Proxy Statement that are to be voted on
at the Annual Meeting will be by written ballot. Inspectors of election will be
appointed by the Board of Directors to, among other things, determine the number
of shares represented at the Annual Meeting, the existence of a quorum and the
validity and effect of proxies, to receive votes or ballots, to hear and
determine all challenges and questions arising in connection with the right to
vote, to count and tabulate all votes or ballots and to determine the result.
Each item presented herein to be voted on at the Annual Meeting must be approved
by the affirmative vote of the holders of the number of shares described under
each such item. The inspectors of election will treat shares represented by
proxies that reflect abstentions as shares that are present and entitled to vote
for purposes of determining the presence of a quorum. Abstentions, however, do
not constitute a vote "for" or "against" any matter and thus will be disregarded
in the calculation of "votes cast."
Inspectors of election will treat shares subject to "broker non-votes"
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum. For purposes of determining the outcome of any matter as
to which the broker has physically indicated on the proxy that it does not have
discretionary authority to vote, however, those shares will be treated as not
present and not entitled to vote with respect to that matter (even though those
shares are considered entitled to vote for quorum purposes and may be entitled
to vote on other matters).
MISCELLANEOUS
The Company will bear the cost of printing, mailing and other expenses
in connection with this solicitation of proxies and will also reimburse brokers
and other persons holding shares in their names or in the names of nominees for
their expenses in forwarding this proxy material to the beneficial owners of
such shares. Certain of the directors, officers and employees of the Company
may, without any additional compensation, solicit proxies in person or by
telephone.
9
<PAGE> 13
Management of the Company is not aware of any matters other than those
described above which may be presented for action at the Annual Meeting. If any
other matters properly come before the Annual Meeting, it is intended that the
proxies will be voted with respect thereto in accordance with the judgment of
the person or persons voting such proxies subject to the direction of the Board
of Directors.
A copy of the Company's 1999 Annual Report to Shareholders is being
mailed with this Proxy Statement.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1999 (WITHOUT EXHIBITS), AS FILED WITH THE SEC, ARE AVAILABLE TO
SHAREHOLDERS FREE OF CHARGE BY WRITING TO: INVESTOR RELATIONS DEPARTMENT, KYZEN
CORPORATION, 430 HARDING INDUSTRIAL DRIVE, NASHVILLE, TENNESSEE 37211.
By order of the Board of Directors,
/s/ John Sanders
John Sanders
Corporate Secretary
Nashville, Tennessee
March 27, 2000
10
<PAGE> 14
PROXY CARD
KYZEN CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Kyle J. Doyel and Michael L. Bixenman,
and either of them, as proxies, with full power of substitution and
resubstitution, to vote all of the shares of Common Stock which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of Kyzen Corporation,
to be held at 430 Harding Industrial Drive, Nashville, Tennessee 37211, on
Thursday, April 27, 2000, at 1:00 p.m., Nashville Time, and at any adjournment
thereof.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE
VOTED AS SPECIFIED. IF NOT OTHERWISE SPECIFIED, THE ABOVE-NAMED PROXIES WILL
VOTE (A) FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED ON THE REVERSE SIDE
OF THIS CARD AND (B) IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
(Continued on reverse side)
1. Election of directors. Nominees: Thomas M. Forsythe and James R.
Gordon.
<TABLE>
<S> <C> <C>
FOR nominees listed (except AGAINST nominees listed WITHHOLD AUTHORITY to vote for any
withheld to the contrary) individual nominee(s). Write name of
nominee(s) here:
--------------------------------------
</TABLE>
2. In their discretion, the proxies are authorized to vote in accordance
with the recommendations of the Board of Directors upon such other
matters which may properly come before the meeting or at any
postponements or adjournments thereof.
Dated:___________________________, 2000
----------------------------------------
Signature
---------------------------------------
Signature if held jointly
IMPORTANT: Please sign exactly as your
name or names appear on this proxy and
mail promptly in the enclosed envelope.
If you sign as agent or in any other
capacity, please state the capacity in
which you sign.
