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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]|X|
Filed by a Party other than the Registrant [ ]|_|
Check the appropriate box:
[ ]|X| 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 Section 240.14a-11(c) or Section 240.14a-12
Molecular Devices Corporation
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MOLECULAR DEVICES CORPORATION
(Name of Registrant as Specified In Its Charter)
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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]|X| No fee required.
[ ]|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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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:
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[ ]|_| 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.
6. Amount Previously Paid:
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7. Form, Schedule or Registration Statement No.: DefinitivePreliminary 14A
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8. Filing Party: Molecular Devices Corporation
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9. Date Filed: April 25, 2000
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MOLECULAR DEVICES CORPORATION
1311 ORLEANS DRIVE
SUNNYVALE,Orleans Drive
Sunnyvale, CA 94089
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 25, 200024, 2001
TO THE STOCKHOLDERS OF MOLECULAR DEVICES CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Molecular
Devices Corporation,MOLECULAR DEVICES CORPORATION, a Delaware corporation (the "Company"), will be
held on Thursday, May 25, 200024, 2001 at 10:30 a.m. local time at the Company's
corporate headquarters, located at 1311 Orleans Drive, Sunnyvale, California
94089 for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve the Company's 1995 Stock Option Plan, as amended, to
increase the aggregate number of shares of Common Stock authorized for
issuance under such plan by 1,000,000 shares (resulting in a net
increase in the shares authorized for issuance under the Company's
employee equity incentive plans of 470,991 shares based on a concurrent
reduction in the number of shares authorized under LJL BioSystems' 1994
Equity Incentive Plan, 1997 Stock Plan and 1998 Directors' Stock Plan,
as described in the Proxy Statement accompanying this Notice).
3. To approve an amendment to the Company's Certificate of Incorporation
to increase the authorized number of shares of Common Stock from
30,000,000 to 60,000,000 shares.
4. To ratify the selection of Ernst & Young LLP as independent auditors of
the Company for its fiscal year ending December 31, 2000.
3.2001.
5. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 27, 2000,April 23,
2001, as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ JAMESJames C. KITCHKitch
-----------------------------
James C. Kitch
Secretary
Sunnyvale, California
April 26, 2000, 2001
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ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
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MOLECULAR DEVICES CORPORATION
1311 ORLEANS DRIVE
SUNNYVALE, CALIFORNIAOrleans Drive
Sunnyvale, CA 94089
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 25, 2000
------------------------24, 2001
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Molecular Devices Corporation, a Delaware corporation ("Molecular Devices" or
the "Company"), for use at the Annual Meeting of Stockholders to be held on May
25, 2000,24, 2001, at 10:30 a.m. local time (the "Annual Meeting"), or at any adjournment
or postponement thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting. The Annual Meeting will be held at the
Company's corporate headquarters, located at 1311 Orleans Drive, Sunnyvale,
California 94089. The Company intends to mail this proxy statement and
accompanying proxy card on or about April 26, 2000,2001, to all stockholders entitled
to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy statement,
the proxy card and any additional information furnished to stockholders. Copies
of solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid to directors, officers or other
regular employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on
March
27, 2000April 23, 2001 will be entitled to notice of and to vote at the Annual Meeting.
At the close of business on March 27, 2000April 23, 2001 the Company had outstanding and
entitled to vote 9,741,501__________ shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to
one vote for each share held on all matters to be voted upon at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. BrokerExcept for Proposal 3, broker non-votes
are counted towards a quorum, but are not counted for any purpose in determining
whether a matter has been approved. With respect to Proposal 3, abstentions and
broker non-votes will have the same effect as negative votes.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, 1311
Orleans Drive, Sunnyvale, California 94089, a written notice of revocation or a
duly executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
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STOCKHOLDER PROPOSALS
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 20012002 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is December 21, 2000. The deadline for submitting a stockholder
proposal13, 2001. Stockholders wishing to submit proposals or
a nomination for director nominations that isare not to be included in such proxy statement and
proxy ismust do so by February 19, 2001.11, 2002. Such proposal or nomination, however, may
not be submitted before January 20, 2001.12, 2002. Stockholders are also advised to
review the Company's By-laws,Bylaws, which contain additional requirements with respect
to advance notice of stockholder proposals and director nominations.
PROPOSAL 1
ELECTION OF DIRECTORS
There are eight nominees for the eightnine Board positions presently
authorized in the Company's By-laws.Bylaws. Each director to be elected will hold office
until the next annual meeting of stockholders and until his successor is elected
and has qualified, or until such director's earlier death, resignation or
removal. Each nominee listed below is currently a director of the Company,
all eight directors
having been elected by the stockholders. Lev J. Leytes, who joined the Board in
August 2000 in connection with the Company's acquisition of LJL BioSystems, has
decided to resign from his position as a director of the Company, effective as
of the date of the Annual Meeting. (Currently, the Company's Bylaws authorize
nine directors; however, the Board intends to amend the Company's Bylaws,
effective as of the date of the Annual Meeting, to reduce the authorized size of
the Board to eight directors).
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote. Shares represented by executed
proxies will be voted, if authority to do so is not withheld, for the election
of the eight nominees named below. In the event that any nominee should be
unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. Each person nominated for election has agreed to serve if elected and
management has no reason to believe that any nominee will be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
NOMINEES
The names of the nominees and certain information about them are set
forth below:
NAME AGE PRINCIPAL OCCUPATION/POSITION HELD WITH THE COMPANY
- ---- --- ---------------------------------------------------
Joseph D. Keegan, Ph.D............... 46Ph.D.................. 47 President, Chief Executive Officer
Moshe H. Alafi....................... 71Alafi.......................... 72 General Partner, Alafi Capital Company
David L. Anderson.................... 56 General Partner,Anderson....................... 57 Managing Director, Sutter Hill Ventures
A. Blaine Bowman..................... 53Bowman........................ 54 President, Chief Executive Officer, Dionex Corporation
Paul Goddard, Ph.D................... 50Ph.D...................... 51 President and Chief Executive Officer, Elan Pharmaceuticals
Andre F. Marion...................... 64Marion......................... 65 Independent Investor
Harden M. McConnell, Ph.D............ 72Ph.D............... 73 Robert Eckles Swain Professor of Physical Chemistry at Stanford
University, Management Consultant
J. Allan Waitz, Ph.D................. 64Ph.D.................... 65 Independent Investor
Joseph D. Keegan, Ph.D., was appointed as President and Chief Executive
Officer of the Company effective March 30, 1998. From 1992 to 1998, Dr. Keegan
served in various positions at Becton Dickinson and Company, a research and
diagnostic company, including the positions of Vice President, Sales and
Service, Vice President, General Manager of the Immunocytometry Systems Division
and, most recently, President of the Worldwide Tissue Culture Business. From
1987 to 1992, he was employed by LEICA, Inc., a microscope manufacturer, where
he held various senior management positions. Dr. Keegan is a member of the Board
of Directors of Argonex, Inc. Dr. Keegan holds a Ph.D. in Chemistry from
Stanford University.
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Moshe H. Alafi has been a director of the Company since 1985. Mr. Alafi
has been the general partner of Alafi Capital Company, which specializes in
forming new companies in the medical, pharmaceutical and biological fields,
since January 1984.
2
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David L. Anderson has been a director of the Company since 1983. Mr.
Anderson has been a managing director of the general partner of Sutter Hill Ventures, a California
limited partnership, a venture capital firm,investment partnership, since 1974. Mr.
Anderson is also a director of Dionex Corporation (Dionex), a leading supplier
of analytical instrumentation, and Broadvision, and several private corporations.Inc., a software company.
A. Blaine Bowman has been a director of the Company since 1985. Mr.
Bowman is, and has been since 1980, President, Chief Executive Officer and a
director of Dionex.
Paul Goddard, Ph.D., has been a director of the Company since September
1995. Dr. Goddard hasis the Chairman of Advanced Polymer Systems, which develops,
manufactures and sells patented delivery systems to enhance the safety and
effectiveness of prescription products, and Alchemia Inc., a private Australian
company. Dr. Goddard served as President and Chief Executive Officer of Elan
Pharmaceuticals, a division of Elan PLC, sincefrom 2000 through 1998. Dr. Goddard
served as Chairman, Chief Executive Officer and Director of Neurex Corporation
from 1991 through 1998 when Neurex Corporation was acquired by Elan PLC. From
1976 through February 1991, Dr. Goddard was employed by SmithKline Beecham
Corp., a pharmaceutical company, and its predecessors in various positions, most
recently as Senior Vice President and Director, Japan-Pacific. He is also a
director of Onyx Pharmaceutical Inc.
and
was a director of RibiImmunochem Research until October 1999.
Andre F. Marion has been a director of the Company since September
1995. Mr. Marion was a founder of Applied Biosystems, Inc., a supplier of
instruments for biotechnology research, and served as its Chief Operating
Officer from 1983 to 1986, its President from 1985 to 1993, its Chief Executive
Officer from 1986 to 1993 and its Chairman of the Board from 1987 to February
1993, when it merged with the Perkin-Elmer Corporation.Corporation, a manufacturer of
analytical instruments. Mr. Marion served as Vice President of Perkin-Elmer
Corporation and President of its Applied Biosystems Division until his
retirement in February 1995. Mr. Marion is presently a management consultant and
also a director of Cygnus, Inc., Applied Imaging Corp., Cygnus, Inc.Alpha M.O.S., Aclara
Biosciences Corp., Integrated Biosystems Inc. and several private corporations.Quantum Dot Corp.
Harden M. McConnell, Ph.D., founder of the Company, has been a director
of and a consultant to the Company since the Company's inception in July 1983.
He is the Robert Eckles Swain Professor of Physical Chemistry at Stanford
University and a member of the National Academy of Sciences. Dr. McConnell has
received many awards in recognition of his scientific work, most recently these
include the 1987 Pauling Medal for Chemistry and, in 1988, the National Academy
of Sciences Award in Chemical Sciences. Dr. McConnell has also received the Wolf
Prize (1984), the Wheland Medal (1988), the National Medal of Science (1989),
the Peter Debeye Award in Physical Chemistry (1990) and the Bruker Prize of the
Royal Society of Chemistry (1995). Dr. McConnell holds a Ph.D. degree from the
California Institute of Technology.
J. Allan Waitz, Ph.D., has been a director of the Company since 1990.
Dr. Waitz is currently retired. Until 1992, Dr. Waitz was President and Chief
Executive Officer of DNAX Research Institute of Molecular and Cellular Biology,
Inc., a subsidiary of Schering-Plough Corporation.Corporation, a pharmaceutical company.
From 1991 through December 1996, Dr. Waitz served as chairperson of the Area
Committee on Microbiology of the National Committee for Clinical Laboratory
Standards.
He is alsoTHE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
DIRECTOR WHOSE TERM EXPIRES AT THE ANNUAL MEETING
Lev J. Leytes, age 45, has been a director of TerraGen Diversity,the Company since August
2000. He co-founded LJL BioSystems, Inc. and served as its President, Chief
Executive Officer and Chairman since its inception in 1988 until it merged with
the Company in August 2000. Prior to the founding of LJL BioSystems, Mr. Leytes
worked in various technical and management positions at Beckman Instruments,
Inc., a life sciences company, as well as the Company. Mr. Leytes holds an M.S.
in engineering from the Moscow Engineering Institute.
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BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1999,2000 the Board of Directors
held six meetings. The Board of Directors has an Audit Committee and a Compensation
Committee. The CompanyBoard does not have a nominating committee.
The Audit Committee recommends engagement ofmeets with the Company's independent auditors approves services performed by suchat
least annually to review the results of the annual audit and discuss the
financial statements; recommends to the Board the independent auditors and reviews andto be
retained; oversees the independence of the independent auditors; evaluates the
Company's accounting systemindependent auditors' performance; and its systemreceives and considers the independent
auditors' comments as to controls, adequacy of internal accountingstaff and management performance
and procedures in connection with audit and financial controls. The Audit
Committee is composed of three non-employee directors: Dr. McConnell, Dr. Goddard and Mr.
Bowman. It met one time during the fiscal year ended December 31, 1999.2000. All
members of the Company's Audit Committee are independent (as independence is
defined in Rule 4200(a)(14) of the NASD listing standards). The Audit Committee
has adopted a written Audit Committee Charter that is attached hereto as
Appendix A.
The Compensation Committee makes recommendations to the Board concerning cashsalaries
and long-term incentive compensation, forawards stock options to employees of the Company. The
Compensation Committee also makes recommendations to the Board regarding the
number of shares that should be subject to options, the timing of grants of
optionsand consultants
under the Company's 1995 Stock Option Planstock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the number of shares and
the timing of offerings of such shares to employees under the Company's 1995
Employee Stock Purchase Plan.Board may
delegate. The Compensation
3
6 Committee is composed of three non-employeeoutside directors: Mr.
Anderson, Mr. Marion and Dr. Waitz. It met two timesone time during suchthe fiscal year.year ended
December 31, 2000.
During the fiscal year ended December 31, 1999,2000, all directors except
Mr. Alafi, Dr. Goddard Mr. Bowman and Mr. AlafiDr. McConnell attended at least 75% or more of the aggregate
of the meetings of the Board and of the committees on which they served, held
during the period for which they were a director or committee member,
respectively.
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS (1)
The audit committee oversees the Company's financial reporting process
on behalf of the board of directors. Management has the primary responsibility
for the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the committee
reviewed the audited financial statements in the Annual Report with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with accounting principles generally accepted in the United
States, their judgments as to the quality, not just the acceptability, of the
Company's accounting principles and such other matters as are required to be
discussed with the committee under auditing standards generally accepted in the
United States, including those described in Statement on Auditing Standards No.
61, as amended, "Communication with Audit Committees" and discussed and reviewed
results of the independent auditors' examination of the financial statements. In
addition, the committee has discussed with the independent auditors the
auditors' independence from management and the Company and received a letter and
other written disclosures from independent auditors, as required by the
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees." The committee also considered whether provision of non-audit
services are compatible with maintaining auditor's independence.
The committee discussed with the Company's independent auditors the
overall scope and plans for their audits. The committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
committee held one meeting during fiscal year 2000.
In reliance on the reviews and discussions referred to above, the
committee recommended to the board of directors (and the board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 2000 for filing with the Securities and
Exchange Commission. The committee has recommended to the board or directors the
selection of the Company's independent auditors.
AUDIT COMMITTEE
A. Blaine Bowman
Paul Goddard, Ph.D.
Harden M. McConnell, Ph.D.
- --------
(1) This material in this report is not "soliciting material," is not deemed
"filed" with the SEC and is not to be incorporated by reference in any filing of
the Company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, whether made before or after the date hereof
and irrespective of any general incorporation language in any such filing.
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PROPOSAL 2
APPROVAL OF 1995 STOCK OPTION PLAN, AS AMENDED
In October 1995, the Board of Directors adopted, and the stockholders
subsequently approved, the Company's 1995 Stock Option Plan (the "Option Plan").
In January 1999, the Board amended the Option Plan to make certain technical
amendments and to increase the number of shares of the Company's Common Stock
authorized for issuance to 2,750,000 shares. The stockholders subsequently
approved such amendment.
As of February 15, 2001, options (net of canceled or expired options)
covering an aggregate of 1,235,563 shares of the Company's Common Stock had been
granted and were outstanding under the Option Plan, and only 313,211 shares of
Common Stock (plus any shares that might in the future be returned to the Option
Plan as a result of cancellations or expiration of options or the reacquisition
by the Company of issued shares) remained available for future grant under the
Option Plan.
In August 2000, the Company completed its acquisition of LJL
BioSystems, Inc. As part of the merger, the Company assumed LJL BioSystems' 1994
Equity Incentive Plan, 1997 Stock Plan and 1998 Directors' Stock Option Plan
(the "LJL Plans"), and all outstanding options to purchase shares of LJL
BioSystems common stock were converted into options to purchase Common Stock of
the Company. As of February 15, 2001, options to acquire 260,406 shares of the
Company's Common Stock were outstanding under the LJL Plans, and an aggregate of
529,009 shares of the Company's Common Stock remained available for grant under
the LJL Plans.
In February 2001, the Board amended the Company's Option Plan, subject
to stockholder approval, to increase the number of shares of Common Stock
authorized for issuance under the Option Plan by 1,000,000 shares. The Board has
approved, subject to stockholder approval of this Proposal 2, an amendment to
the LJL Plans to prohibit future grants under the plans and to decrease the
aggregate number of shares authorized for issuance under the plan to the number
of shares subject to outstanding options under the plan. Because the integration
of LJL BioSystems with the Company has been completed, the Board believes it to
be in the best interests of the Company to grant options in the future to
employees under a single plan, the Company's Option Plan. However, the amendment
of the LJL Plans will not become effective unless Proposal 2 is approved by the
stockholders. Based on the number of shares subject to outstanding options as of
February 15, 2001, the net effect of the amendment of the Company's Option Plan
and the amendment of the LJL Plans is an increase in the number of shares
authorized under the Company's employee equity incentive plans of 470,991
shares. The Board adopted these amendments in order to ensure that the Company
can continue to grant stock options at levels determined appropriate by the
Board.
Stockholders are requested in this Proposal 2 to approve the Company's
1995 Stock Option Plan, as amended, to increase the aggregate number of shares
of Common Stock authorized for issuance under such plan by 1,000,000 shares
(resulting in a net increase in the shares authorized for issuance under the
Company's employee equity incentive plans of 470,991 shares based on a
concurrent reduction in the number of shares authorized under the LJL Plans, as
described above). To summarize, if this proposal is approved: a) The aggregate
number of shares of common stock authorized for issuance under the 1995 Stock
Option Plan will be increased by 1,000,000 shares, b) the LJL Plans will be
amended to decrease the aggregate number of shares of common stock authorized
for issuance under the plans by 529,009, and c) the net increase in shares
authorized for issuance under the Company's employee equity incentive plans will
be 470,991. The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and entitled to vote at the meeting
will be required to approve the amendment to the Company's Option Plan.
Abstentions will be counted toward the tabulation of votes cast on proposals
presented to the stockholders and will have the same effect as negative votes.
Broker non-votes are counted towards a quorum, but are not counted for any
purpose in determining whether this matter has been approved. For purposes of
this vote abstentions and broker non-votes will not be counted for any purpose
in determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
6
The essential features of the Option Plan are outlined below:
GENERAL
The Option Plan provides for the grant of both incentive and
nonstatutory stock options. Incentive stock options granted under the Option
Plan are intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
Nonstatutory stock options granted under the Option Plan are not intended to
qualify as incentive stock options under the Code. See "Federal Income Tax
Information" for a discussion of the tax treatment of options.
PURPOSE
The Board adopted the Option Plan to provide a means by which
employees, directors and consultants of the Company and its affiliates may be
given an opportunity to purchase stock in the Company, to assist in retaining
the services of such persons, to secure and retain the services of persons
capable of filling such positions and to provide incentives for such persons to
exert maximum efforts for the success of the Company and its affiliates. All of
the approximately 370 employees, directors and consultants of the Company and
its affiliates are eligible to participate in the Option Plan.
ADMINISTRATION
The Board administers the Option Plan. Subject to the provisions of the
Option Plan, the Board has the power to construe and interpret the Option Plan
and to determine the persons to whom and the dates on which options will be
granted, the number of shares of Common Stock to be subject to each option, the
time or times during the term of each option within which all or a portion of
such option may be exercised, the exercise price, the type of consideration and
other terms of the option.
The Board has the power to delegate administration of the Option Plan
to a committee composed of not fewer than two members of the Board. In the
discretion of the Board, a committee may consist solely of two or more outside
directors in accordance with Section 162(m) of the Code or solely of two or more
non-employee directors in accordance with Rule 16b-3 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The Board has not delegated
administration of the Option Plan to a committee of the Board. As used herein
with respect to the Option Plan, the "Board" refers to any committee the Board
appoints as well as to the Board itself.
The regulations under Section 162(m) of the Code require that the
directors who serve as members of the committee must be "outside directors." The
Option Plan provides that, in the Board's discretion, directors serving on the
committee may be "outside directors" within the meaning of Section 162(m). This
limitation would exclude from the committee directors who are (i) current
employees of the Company or an affiliate, (ii) former employees of the Company
or an affiliate receiving compensation for past services (other than benefits
under a tax-qualified pension Option Plan), (iii) current and former officers of
the Company or an affiliate, (iv) directors currently receiving direct or
indirect remuneration from the Company or an affiliate in any capacity (other
than as a director), and (v) any other person who is otherwise considered an
"outside director" for purposes of Section 162(m). The definition of an "outside
director" under Section 162(m) is generally narrower than the definition of a
"non-employee director" under Rule 16b-3 of the Exchange Act.
ELIGIBILITY
Incentive stock options may be granted under the Option Plan only to
employees (including officers) of the Company and its affiliates. Employees
(including officers), directors and consultants of both the Company and its
affiliates are eligible to receive nonstatutory stock options under the Option
Plan.
No option may be granted under the Option Plan to any person who, at
the time of the grant, owns (or is deemed to own) stock possessing more than 10%
of the total combined voting power of the Company or any affiliate of the
Company, unless the exercise price is at least 110% of the fair market value of
the stock subject to the option on the date of grant and the term of the option
does not exceed five years from the date of grant. In addition, the aggregate
fair market value, determined at the time of grant, of the shares of Common
Stock with respect to
7
which incentive stock options are exercisable for the first time by an
optionholder during any calendar year (under the Option Plan and all other such
plans of the Company and its affiliates) may not exceed $100,000.
No person may be granted options under the Option Plan exercisable for
more than 500,000 shares of Common Stock during any calendar fiscal year (the
"Section 162(m) Limitation").
STOCK SUBJECT TO THE OPTION PLAN
Subject to this Proposal, an aggregate of 2,750,000 shares of Common
Stock, plus up to 1,000,000 shares issuable in connection with the Company's
terminated 1988 Stock Option Plan (the "1988 Plan"), is reserved for issuance
under the Option Plan. If options granted under the Option Plan or the 1988 Plan
expire or otherwise terminate without being exercised, the shares of Common
Stock not acquired pursuant to such options again becomes available for issuance
under the Option Plan. If the Company reacquires unvested stock issued under the
Option Plan, the reacquired stock will not again become available for reissuance
under the Option Plan.
TERMS OF OPTIONS
The following is a description of the permissible terms of options
under the Option Plan. Individual option grants may be more restrictive as to
any or all of the permissible terms described below.
EXERCISE PRICE; PAYMENT. The exercise price of incentive stock options
may not be less than 100% of the fair market value of the stock subject to the
option on the date of the grant and, in some cases (see "Eligibility" above),
may not be less than 110% of such fair market value. The exercise price of
nonstatutory options may not be less than 85% of the fair market value of the
stock on the date of grant and, in some cases (see "Eligibility" above), may not
be less than 110% of such fair market value. If options were granted with
exercise prices below market value, deductions for compensation attributable to
the exercise of such options could be limited by Section 162(m) of the Code. See
"Federal Income Tax Information." As of March 26, 2001, the closing price of the
Company's Common Stock as reported on the Nasdaq National Market System was
$45.50 per share.
The exercise price of options granted under the Option Plan must be
paid either in cash at the time the option is exercised or at the discretion of
the Board, (i) by delivery of other Common Stock of the Company, (ii) pursuant
to a deferred payment arrangement or (iii) in any other form of legal
consideration acceptable to the Board.
REPRICING. In the event of a decline in the value of the Company's
Common Stock, the Board has the authority to offer optionholders the opportunity
to replace outstanding higher priced options with new lower priced options. To
the extent required by Section 162(m) of the Code, a repriced option is deemed
to be canceled and a new option granted. Both the option deemed to be canceled
and the new option deemed to be granted will be counted against the Section
162(m) Limitation.
OPTION EXERCISE. Options granted under the Option Plan may become
exercisable in cumulative increments ("vest") as determined by the Board. Shares
covered by currently outstanding options under the Option Plan typically vest at
the rate of 20-25% per year during the optionholder's employment by, or service
as a director or consultant to, the Company or an affiliate (collectively,
"service"). Shares covered by options granted in the future under the Option
Plan may be subject to different vesting terms. The Board has the power to
accelerate the time during which an option may vest or be exercised. In
addition, options granted under the Option Plan may permit exercise prior to
vesting, but in such event the optionholder may be required to enter into an
early exercise stock purchase agreement that allows the Company to repurchase
unvested shares, generally at their exercise price, should the optionholder's
service terminate before vesting. To the extent provided by the terms of an
option, an optionholder may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such option by a cash payment upon
exercise, by authorizing the Company to withhold a portion of the stock
otherwise issuable to the optionholder, by delivering already-owned Common Stock
of the Company or by a combination of these means.
TERM. The maximum term of options under the Option Plan is 10 years,
except that in certain cases (see "Eligibility") the maximum term is five years.
Options under the Option Plan generally terminate three months after termination
of the optionholder's service unless (i) such termination is due to the
optionholder's disability, in which case the option may, but need not, provide
that it may be exercised (to the extent the option was exercisable at the
8
time of the termination of service) at any time within 12 months of such
termination; (ii) the optionholder dies before the optionholder's service has
terminated, or within a period specified in the option after termination of such
service, in which case the option may, but need not, provide that it may be
exercised (to the extent the option was exercisable at the time of the
optionholder's death) within 18 months of the optionholder's death by the person
or persons to whom the rights to such option pass by will or by the laws of
descent and distribution; or (iii) the option by its terms specifically provides
otherwise. An optionholder may designate a beneficiary who may exercise the
option following the optionholder's death. Individual option grants by their
terms may provide for exercise within a longer period of time following
termination of service.
RESTRICTIONS ON TRANSFER
The optionholder may not transfer an incentive stock option otherwise
than by will or by the laws of descent and distribution. During the lifetime of
the optionholder, only the optionholder may exercise an incentive stock option.
In addition to transfers effective on death, an optionee may transfer a
nonstatutory stock option pursuant to certain domestic relations orders and the
transferee may then exercise such option according to its terms. Except as noted
above, options granted under the Option Plan are generally nontransferable.
Shares subject to repurchase by the Company under an early exercise stock
purchase agreement may be subject to restrictions on transfer that the Board
deems appropriate.
ADJUSTMENT PROVISIONS
Transactions not involving receipt of consideration by the Company,
such as a merger, consolidation, reorganization, stock dividend or stock split,
may change the class and number of shares of Common Stock subject to the Option
Plan and outstanding options. In that event, the Option Plan will be
appropriately adjusted as to the class and the maximum number of shares of
Common Stock subject to the Option Plan and the Section 162(m) Limitation, and
outstanding options will be adjusted as to the class, number of shares and price
per share of Common Stock subject to such options.
EFFECT OF CERTAIN CORPORATE EVENTS
The Option Plan provides that, in the event of a dissolution,
liquidation or sale of substantially all of the assets of the Company, specified
types of merger, or other corporate reorganization ("change in control"), to the
extent permitted by law, any surviving corporation will be required to either
assume options outstanding under the Option Plan or substitute similar options
for those outstanding under the Option Plan, or such outstanding options will
continue in full force and effect. If any surviving corporation declines to
assume options outstanding under the Option Plan, or to substitute similar
options, then, with respect to optionholders whose service has not terminated,
the vesting and the time during which such options may be exercised may, at the
discretion of the Board, be accelerated. An outstanding option will terminate if
the optionholder does not exercise it before a change in control. The
acceleration of an option in the event of an acquisition or similar corporate
event may be viewed as an anti-takeover provision, which may have the effect of
discouraging a proposal to acquire or otherwise obtain control of the Company.
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the Option Plan without stockholder
approval or ratification at any time or from time to time. Unless sooner
terminated, the Option Plan will terminate on October 29, 2005.
The Board may also amend the Option Plan at any time or from time to
time. However, no amendment will be effective unless approved by the
stockholders of the Company within 12 months before or after its adoption by the
Board if the amendment would (i) modify the requirements as to eligibility for
participation (to the extent such modification requires stockholder approval in
order for the Option Plan to satisfy Section 422 of the Code, if applicable, or
Rule 16b-3 of the Exchange Act); (ii) increase the number of shares reserved for
issuance upon exercise of options; or (iii) change any other provision of the
Option Plan in any other way if such modification requires stockholder approval
in order to comply with Rule 16b-3 of the Exchange Act or satisfy the
requirements of Section 422 of the Code or any securities exchange listing
requirements. The Board may submit any other amendment to the Option Plan for
stockholder approval, including, but not limited to, amendments intended to
9
satisfy the requirements of Section 162(m) of the Code regarding the exclusion
of performance-based compensation from the limitation on the deductibility of
compensation paid to certain employees.
FEDERAL INCOME TAX INFORMATION
Long-term capital gains currently are generally subject to lower tax
rates than ordinary income or short-term capital gains. The maximum long-term
capital gains rate for federal income tax purposes is currently 20% while the
maximum ordinary income rate and short-term capital gains rate is 39.6%.
Slightly different rules may apply to optionholders who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
INCENTIVE STOCK OPTIONS. Incentive stock options under the Option Plan
are intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code.
There generally are no federal income tax consequences to the
optionholder or the Company by reason of the grant or exercise of an incentive
stock option. However, the exercise of an incentive stock option may increase
the optionholder's alternative minimum tax liability, if any.
If an optionholder holds stock acquired through exercise of an
incentive stock option for at least two years from the date on which the option
is granted and at least one year from the date on which the shares are
transferred to the optionholder upon exercise of the option, any gain or loss on
a disposition of such stock will be a long-term capital gain or loss.
Generally, if the optionholder disposes of the stock before the
expiration of either of these holding periods (a "disqualifying disposition"),
then at the time of disposition the optionholder will realize taxable ordinary
income equal to the lesser of (i) the excess of the stock's fair market value on
the date of exercise over the exercise price, or (ii) the optionholder's actual
gain, if any, on the purchase and sale. The optionholder's additional gain or
any loss upon the disqualifying disposition will be a capital gain or loss,
which will be long-term or short-term depending on whether the stock was held
for more than one year.
To the extent the optionholder recognizes ordinary income by reason of
a disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) of the Code
and the satisfaction of a tax reporting obligation) to a corresponding business
expense deduction in the tax year in which the disqualifying disposition occurs.
NONSTATUTORY STOCK OPTIONS. Nonstatutory stock options granted under
the Option Plan generally have the following federal income tax consequences:
There are no tax consequences to the optionholder or the Company by
reason of the grant of a nonstatutory stock option. Upon exercise of a
nonstatutory stock option, the optionholder normally will recognize taxable
ordinary income equal to the excess, if any, of the stock's fair market value on
the date of exercise over the option exercise price. However, to the extent the
stock is subject to certain types of vesting restrictions, the taxable event
will be delayed until the vesting restrictions lapse unless the participant
elects to be taxed on receipt of the stock. With respect to employees, the
Company is generally required to withhold from regular wages or supplemental
wage payments an amount based on the ordinary income recognized. Subject to the
requirement of reasonableness, the provisions of Section 162(m) of the Code and
the satisfaction of a tax reporting obligation, the Company will generally be
entitled to a business expense deduction equal to the taxable ordinary income
realized by the optionholder.
Upon disposition of the stock, the optionholder will recognize a
capital gain or loss equal to the difference between the selling price and the
sum of the amount paid for such stock plus any amount recognized as ordinary
income upon exercise of the option (or vesting of the stock). Such gain or loss
will be long-term or short-term depending on whether the stock was held for more
than one year. Slightly different rules may apply to optionholders who acquire
stock subject to certain repurchase options or who are subject to Section 16(b)
of the Exchange Act.
10
POTENTIAL LIMITATION ON COMPANY DEDUCTIONS. Section 162(m) of the Code
denies a deduction to any publicly held corporation for compensation paid to
certain "covered employees" in a taxable year to the extent that compensation to
such covered employee exceeds $1 million. It is possible that compensation
attributable to stock options, when combined with all other types of
compensation received by a covered employee from the Company, may cause this
limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options will qualify as performance-based compensation if
the option is granted by a compensation committee comprised solely of "outside
directors" and either (i) the plan contains a per-employee limitation on the
number of shares for which options may be granted during a specified period, the
per-employee limitation is approved by the stockholders, and the exercise price
of the option is no less than the fair market value of the stock on the date of
grant, or (ii) the option is granted (or exercisable) only upon the achievement
(as certified in writing by the compensation committee) of an objective
performance goal established in writing by the compensation committee while the
outcome is substantially uncertain, and the option is approved by stockholders.
PROPOSAL 3
APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Restated Certificate of Incorporation to increase the
Company's authorized number of shares of Common Stock from 30,000,000 shares to
60,000,000 shares.
The additional Common Stock to be authorized by adoption of the
amendment would have rights identical to the currently outstanding Common Stock
of the Company. Adoption of the proposed amendment and issuance of the Common
Stock would not affect the rights of the holders of currently outstanding Common
Stock of the Company, except for effects incidental to increasing the number of
shares of the Company's Common Stock outstanding, such as dilution of the
earnings per share and voting rights of current holders of Common Stock. If the
amendment is adopted, it will become effective upon filing of a Certificate of
Amendment of the Company's Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware.
In addition to the 16,331,167 shares of Common Stock outstanding at
December 31, 2000, the Board has reserved 2,881,278 shares for issuance upon
exercise of options and rights granted under the Company's stock option and
stock purchase plans.
Although at present the Board of Directors has no other plans to issue
the additional shares of Common Stock, it desires to have such shares available
to provide additional flexibility to use its capital stock for business and
financial purposes in the future. The additional shares may be used, without
further stockholder approval, for various purposes including, without
limitation, raising capital, providing equity incentives to employees, officers
or directors, establishing strategic relationships with other companies and
expanding the company's business or product lines through the acquisition of
other businesses or products.
The additional shares of Common Stock that would become available for
issuance if the proposal were adopted could also be used by the Company to
oppose a hostile takeover attempt or delay or prevent changes in control or
management of the Company. For example, without further stockholder approval,
the Board could strategically sell shares of Common Stock in a private
transaction to purchasers who would oppose a takeover or favor the current
Board. Although this proposal to increase the authorized Common Stock has been
prompted by business and financial considerations and not by the threat of any
hostile takeover attempt (nor is the Board currently aware of any such attempts
directed at the Company), nevertheless, stockholders should be aware that
approval of proposal could facilitate future efforts by the Company to deter or
prevent changes in control of the Company, including transactions in which the
stockholders might otherwise receive a premium for their shares over then
current market prices.
11
The Company's audited consolidated financial statements, management's
discussion and analysis of financial condition and results of operations, and
certain supplementary financial information are incorporated by reference to
pages 22 through 52 of the Company's 2000 annual report to stockholders.
The affirmative vote of the holders of a majority of the shares of the
Common Stock will be required to approve this amendment to the Company's
Restated Certificate of Incorporation. As a result, abstentions and broker
non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 3.
12
PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 20002001 and has
further directed that management submit the selection of Ernst & Young, LLPindependent auditors
for ratification by the stockholders at the Annual Meeting. Ernst & Young LLP
has audited the Company's financial statements since its inception in 1983.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's By-lawsBylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice. If
the stockholders fail to ratify the selection, the Audit Committee and the Board
will reconsider whether or not to retain that firm. Even if the selection is
ratified, the Audit Committee and the Board in their discretion may direct the
appointment of different independent auditors at any time during the year if
they determine that such a change would be in the best interests of the Company
and its stockholders.
The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and entitled to vote at the Annual Meeting
will be required to ratify the selection of Ernst & Young LLP. Abstentions will
be counted toward the tabulation of votes cast on proposals presented to the
stockholders and will have the same effect as negative votes. Broker non-votes
are counted towards a quorum, but are not counted for any purpose in determining
whether this matter has been approved.
DISCLOSURE OF AUDITOR FEES
In addition to retaining Ernst & Young LLP, the Company's independent
auditors, to audit the consolidated financial statements for fiscal year 2000,
the Company and its subsidiaries retained Ernst & Young LLP to provide other
services and expect to continue to do so in the future. The aggregate fees
incurred for professional services rendered by Ernst & Young LLP relating to the
fiscal year ended December 31, 2000 were:
AUDIT FEES: $207,234 for services rendered relating to the annual audit
of the Company's consolidated financial statements for the fiscal year ended
December 31, 2000 and the quarterly reviews of the consolidated financial
statements included in the Company's quarterly reports on Form 10-Q filed during
fiscal year 2000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES: The
Company did not engage Ernst & Young LLP to provide advice to the Company
regarding financial information systems design and implementation during fiscal
year 2000.
ALL OTHER FEES: $376,000 for all other services rendered during fiscal
year 2000. Of these fees, $229,000 relate to audit related services (which
typically include fees for accounting consultations, SEC Registration
Statements, and statutorily required audits in certain locations outside the
United States where the Company has operations).
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
44.
13
7
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of February 29, 200015, 2001 by: (i) each
director and nominee for director; (ii) each of the executive officers named in
the Summary Compensation Table; (iii) all executive officers and directors of
the Company as a group; and (iv) all those known by the Company to be beneficial
owners of more than five percent of its Common Stock.
BENEFICIAL OWNERSHIP(1)
-----------------------OWNERSHIP (1)
NUMBER OF SHARES PERCENT OF NAME OF BENEFICIAL OWNER SHARES CLASS
------------------------ --------- -------------------------- ----------------
Kopp Investment Advisors, Inc.(2)........................... 1,878,405 19.3%Inc............................. 2,140,457 13.0%
7701 France Ave. South, Ste. 500
Edina, Minnesota 55435
Chase Manhattan Corporation(2).............................. 985,075 10.1%
270T. Rowe Price Associates, Inc............................. 1,183,849 7.2%
100 E. Pratt Street
Baltimore, Maryland 21202
Scudder Kemper Investments, Inc........................... 877,670 5.3%
345 Park Avenue 35th Floor
New York, New York 10017-2070
Putnam Investments(2)....................................... 648,000 6.7%
One Post Office Square
Boston, Massachusetts 0210910154
Pilgrim Baxter & Associates, Ltd.(2)........................ 590,900 6.1%Ltd.......................... 843,100 5.1%
825 Duportail Road
Wayne, Pennsylvania 19087
Moshe H. Alafi(3)........................................... 424,840 4.4%Alafi(2)......................................... 333,540 2.0%
Harden M. McConnell, Ph.D.(4)............................... 356,600 3.7%(3)............................. 262,000 1.6%
A. Blaine Bowman(4)....................................... 67,500 *
David L. Anderson(5)........................................ 188,907 1.9%...................................... 54,407 *
Joseph D. Keegan, Ph.D.(6).................................. 91,084 **
A. Blaine Bowman(7)......................................... 62,000 **................................ 44,902 *
Robert J. Murray(8)......................................... 50,759 **
Gillian M.K. Humphries, Ph.D.(9)............................ 41,033 **Murray(7)....................................... 34,259 *
Paul Goddard, Ph.D.(10)..................................... 22,000 **(8).................................... 27,500 *
J. Allan Waitz, Ph.D.(11)................................... 22,000 **(9).................................. 17,500 *
Timothy A. Harkness(12)..................................... 19,478 **Harkness(10)................................... 14,942 *
Tony M. Lima(11).......................................... 14,646 *
Andre F. Marion(13)......................................... 16,500 **
Tony M. Lima(14)............................................ 10,969 **Marion(12)....................................... 12,000 *
John S. Senaldi(15)......................................... 8,517 **Senaldi(13)....................................... 7,918 *
Lev J. Leytes 1,412 *
All directors and executive officers as a group
(13(17 persons)(16).............................................. 1,314,687 13.5%(14).......................................... 961,939 5.8%
- ---------------
*** Less than one percent
(1) Percentage of beneficial ownershipThis table is based on 9,709,971 shares of common
stock outstanding as of February 29, 2000, except as otherwise noted in the
footnotes. Beneficial ownership is determined in accordance with the rules
of the Securitiesupon information supplied by officers, directors
and Exchange Commissionprincipal stockholders and generally includes voting or
investment power with respect to securities. Shares of common stock subject
to options currently exercisable or exercisable within 60 days of February
29, 2000 are deemed outstanding for computing the percentage of the person
holding such options but are not deemed outstanding for computing the
percentage of any other person.
(2) Based on information as of December 31, 1999 reflected in Schedules 13D
13F and 13G filed with the
Securities and Exchange Commission.
(3)Commission (the "SEC") . Unless otherwise indicated
in the footnotes to this table and subject to community property laws where
applicable, the Company believes that each of the stockholders named in
this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Applicable percentages are based on
16,452,359 shares outstanding on February 15, 2001, adjusted as required by
rules promulgated by the SEC.
(2) Includes 402,840306,040 shares beneficially owned by Alafi Capital Company, of
which Mr. Alafi, a director of the Company, is a general partner, and
22,00027,500 shares that may be acquired within 60 days after February 29, 200015, 2001
pursuant to outstanding stock options.
5
8
(4)(3) Includes 351,100251,000 shares held by the Harden M. McConnell and Sophia G.
McConnell Trust, of which Dr. McConnell is a co-trustee, and 5,50011,000 shares
that may be acquired within 60 days after February 29, 200015, 2001 pursuant to
outstanding stock options.
(4) Includes 27,500 shares that may be acquired within 60 days after February
15, 2001 pursuant to outstanding stock options.
(5) Includes 14,71026,907 shares beneficially owned by Anvest, L.P., of which Mr.
Anderson is a general partner, and 22,00027,500 shares that may be acquired
within 60 days after February 29, 200015, 2001 pursuant to outstanding stock
options. Mr. Anderson disclaims beneficial ownership of shares held by
Sutter Hill Ventures and Anvest, L.P., and individuals and entities
associated with Sutter Hill Ventures and Anvest, L.P., except as to the
shares held of record in his name and his proportionate partnership
interest in the shares held of record by Sutter Hill Ventures and Anvest,
L.P.
(6) Includes 71,75039,750 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options and periodic stock grants.options.
(7) Includes 22,0008,625 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options.
(8) Includes 50,16527,500 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options.
(9) Includes 41,03317,500 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options.
(10) Includes 22,00011,250 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options.
(11) Includes 22,00013,250 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options.
(12) Includes 11,50012,000 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options and periodic stock grants.options.
(13) Includes 16,5004,600 shares that may be acquired within 60 days after February
29, 2000 pursuant to outstanding stock options.
(14) Includes 10,000 shares that may be acquired within 60 days after February
29, 2000 pursuant to outstanding stock options.
(15) Includes 6,200 shares that may be acquired within 60 days after February
29, 200015, 2001 pursuant to outstanding stock options
all of which will vest upon
a change of control of the Company.
(16)(14) Includes 768,650583,947 shares held by entities affiliated with certain directors
and 322,648271,340 shares that certain directors and officers have the right to
acquire within 60 days after February 29, 200015, 2001 pursuant to the exercise of
outstanding stock options and/or periodic stock grant rights. See Footnotes
(2) through (15)(13).
14
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act") requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, 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 greater than ten
percent stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1999,2000, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with,with; except that a
statementDr.
Modlin was delinquent in reporting two transactions in Decebmer 2000 and
reported an incorrect number of change in beneficial ownership report was filed late by Dr. Keegan.
The failure to timely file such report of ownership wasshares owned due to administrativean error andmade in a previous
year. This error was corrected by the filing of a year-endamending his previous Form 5.
6
93 report.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers and certain key employees of the Company and
their ages and positions as of February 29,15, 2000 are as follows:
NAME AGE POSITION
- ---- --- --------
Joseph D. Keegan, Ph.D. ...................... 46Ph.D.................. 47 President, Chief Executive Officer
Timothy A. Harkness........................... 33Harkness..................... 34 Vice President, Chief Financial Officer
Gillian M.K. Humphries, Ph.D............ 63 Vice President, Assay and Reagent R&D
Tony M. Lima.................................. 41Lima............................ 42 Vice President, Sales and Service
Douglas N. Modlin, Ph.D. ............... 48 Vice President, Instrument Technology R&D
Robert J. Murray........................ 53 Vice President, Operations
John S. Senaldi............................... 35Senaldi......................... 36 Vice President, Marketing
Robert J. Murray.............................. 52Patricia C. Sharp....................... 57 Vice President, Operations
Gillian M.K. Humphries,Human Resources
Andrew T. Zander, Ph.D. ................ 6155 Vice President, Research and DevelopmentEngineering
Joseph D. Keegan, Ph.D., has servedwas appointed as our President and Chief Executive
Officer sinceof the Company effective March 30, 1998. From 1992 to 1998, Dr. Keegan
served in various positions at Becton Dickinson and Company, a research and
diagnostic company, including the positions of Vice President, Sales and
Service, Vice President, General Manager of the Immunocytometry Systems Division
and, most recently, President of the Worldwide Tissue Culture Business. From
1987 to 1992, he was employed by LEICA, Inc., a microscope manufacturer, where
he held various senior management positions. Dr. Keegan is a member of the Board
of Directors of Argonex, Inc. Dr. Keegan holds a Ph.D. in Chemistry from
Stanford University.
Timothy A. Harkness has served as our Vice President, Finance and Chief
Financial Officer of the Company since July 1998. From 1997 to 1998, Mr.
Harkness was Vice President of Business Development at Vivra Specialty Partners,
a physician practice management company. Previously, Mr. Harkness was with
Montgomery Securities in the Health Care Investment Banking Group from 1994 to
1997 and with Arthur Andersen & Co. from 1989 to 1992. Mr. Harkness holds an MBA
from Stanford University Graduate School of Business and is a CPA.
Gillian M.K. Humphries, Ph.D., has served as a Vice President of the
Company since March 1990. Dr. Humphries served as a consultant to the Company
since its inception in 1983. In 1984, Dr. Humphries joined the Company on a full
time basis as a research scientist and, from 1985 to 1990, she served as
Director of MAXline and Cytosensor Development. Dr. Humphries holds a Ph.D. in
Biochemistry from Stanford University and an MS in Biochemistry from San Jose
State University.
Tony M. Lima has served as Vice President, in charge of Worldwide Sales and Service, of the
Company since July 1998. Previously, Mr. Lima was Manager, Sales and Marketing
at Cavro Scientific Instruments during a portion of 1998,
15
President/CEO of Aydius, Inc. from 1996 to 1997, and Vice President, Customer
Services of Behring Diagnostics (formerly Syva Company) from May 1995 to March
1996. From 1981 to May 1995 he was employed by Syva Co., a global clinical
diagnostics company, where he held various senior management positions in
England, Belgium and the United States. Mr. Lima holds a higher TEC Degree in
Electronics from Kingston College London, England.
Douglas N. Modlin, Ph.D., joined the Company in August 2000 when it
merged with LJL BioSystems, Inc., and was appointed as Vice President of
Instrument Technology Research and Development in October 2000. Since October
1997, Dr. Modlin worked at LJL BioSystems as Vice President of Instrumentation
Systems Research and Development and served as Senior Director of Research and
Development since December 1996. Prior to that, Dr. Modlin was the Manager of
Advanced Test Systems Development at Micro Module Systems, Inc., from November
1995 to December 1996, and was the Associate Technical Director of Research at
the Company August 1993 to October 1995. From November 1991 to August 1993, Dr.
Modlin was the Program Manager of Diagnostic Instrumentation for Affymax NV, a
drug discovery company. Dr. Modlin holds a B.S. in electrical engineering from
the California Polytechnic State University, San Luis Obispo, and an M.S. and
Ph.D in electrical engineering from Stanford University.
Robert J. Murray has served as a Vice President, in charge of Worldwide
Operations, since July 1995. Mr. Murray served as the Company's Director of
Operations from 1993 to 1995. During 1993, Mr. Murray was a consultant to Tandem
Computers, Incorporated, a computer manufacturer. From 1991 to 1993, Mr. Murray
was Vice President of Marketing and Manufacturing at Electromer Corporation, an
electronic component company, and from 1989 to 1991, as Vice President and
General Manager of Comptronix Corp., a contract manufacturing company. Prior to
that, Mr. Murray was Vice President of Operations of Gould, Inc., a diversified
conglomerate. Mr. Murray holds an M.S. in Electrical Engineering from San Jose
State University and a B.S. from the University of California at Davis.
John S. Senaldi has served as Vice President, in charge of Worldwide
Marketing of the Company since August 1998. From 1993 to 1998, Mr. Senaldi
served in various management positions at Becton Dickinson and Company, a
research and diagnostic company, including the positions of Director of Business
Development and Senior Product Manager in both Europe and North America for
Becton's Diabetes Healthcare business. Most recently, he was in a Program
Management role for Becton's Immunocytometry Systems Division. Prior to joining
Becton Dickinson, Mr. Senaldi held various management positions in manufacturing
and marketing with General Electric Company's Medical Systems Business Group and
in engineering functions with several start-up medical diagnostic companies. Mr.
Senaldi holds an MBA from Harvard Business School, an MSEE from Rensselaer
Polytechnic Institute and a BSB.S. in Engineering from Trinity College.
Robert J. Murray hasPatricia C. Sharp was appointed as Vice President of Human Resources of
the Company effective September 2000. From 1997 to 2000, Ms. Sharp served as a
Human Resources consultant at Sharp Associates Consulting specializing in Human
Resources management, leadership and organizational development. Previously, Ms.
Sharp was with Apple Computer, Inc., as Senior Vice President, Human Resources.
Ms. Sharp has a B.A. in charge of Worldwide
Operations, since July 1995. Mr. Murray served as the Company's Director of
Operations from 1993 to 1995. During 1993, Mr. Murray was a consultant to Tandem
Computers, Incorporated, a computer manufacturer. From 1991 to 1993, Mr. Murray
was Vice President of Marketing and Manufacturing at Electromer Corporation, an
electronic component company, and from 1989 to 1991, was Vice President and
General Manager of Comptronix Corp., a contract manufacturing company. Prior to
joining Comptronix Corp., Mr. Murray was Vice President of Operations of Gould,
Inc., a diversified conglomerate. Mr. Murray holds an MS in Electrical
EngineeringBehavioral Sciences from San Jose State University and a BS from UC Davis.
7
10
Gillian M.K. Humphries,University.
Andrew T. Zander, Ph.D., has servedjoined the Company as a Vice President,
of the
Company sinceEngineering in March 1990.2000. Dr. Humphries served as a consultantZander came to the Company since its inceptionfrom Transgenomic,
where he was Vice President, Research and Development, and prior to that he was
at Varian Associates for 12 years, where he was a Director of Research for
Varian's corporate R&D activities. Before Varian, he had worked at Perkin-Elmer
and Beckman. As an Officer in 1983. In 1984, Dr. Humphries joined the Company on a full
time basisU.S. Naval Reserve, he worked with the Office
of Naval Research as a research scientistScientific Liaison Officer. Dr. Zander hold a B.S. in
Chemistry from the University of Illinois and from 1985 to 1990, she served as
Director of MAXline and Cytosensor Development. Dr. Humphries holds a Ph.D. in BiochemistryAnalytical Chemistry
from Stanfordthe University and an MS in Biochemistry from San Jose
State University.of Maryland.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
For the year 2000,2001, each member of the Company's Board of Directors will
receive $1,000 for each Board meeting attended by such director and $500 for
each Board committee meeting attended. In addition, the members of the Board may
be reimbursed for out-of-pocket and travel expenses incurred in connection with
attendance at Board and committee meetings.
16
Since the Company was founded in 1983 through the end of fiscal year
2000, Dr. McConnell has provided consulting services to the Company regarding, among
other matters, the Company's research and development activities and business
strategy. Dr. McConnell is
currentlywas paid $5,000 per month for such services. This
consulting arrangement ended on December 31, 2000.
During 1995, the Board adopted the 1995 Non-Employee Directors' Stock
Option Plan (the "Directors' Plan") to provide for the automatic grant of
options to purchase shares of Common Stock to non-employee directors of the
Company ("Non-Employee Directors"). The maximum number of shares of Common Stock
that may be issued pursuant to options granted under the Directors' Plan is
347,500.
Pursuant to the terms of the Directors' Plan, each Non-Employee
Director is automatically granted an option to purchase 16,500 shares of Common
Stock on the date of his or her election to the Board. On the date of adoption
of the Directors' Plan, each person who was then a Non-Employee Director of the
Company was granted an option to purchase 16,500 shares of Common Stock of the
Company under the Directors' Plan, at an exercise price of $5.25 per share.
Thereafter each Non-Employee Director is automatically granted an option to
purchase an additional 16,500 shares of Common Stock under the Directors' Plan
upon full vesting of any stock option previously granted to such person under
the Directors' Plan. Each newly elected Non-Employee Director is automatically
granted an option to purchase 10,000 shares of Common Stock on the date of his
or her initial election to the Board and each Non-Employee Director will be
granted an option to purchase an additional 4,000 shares of Common Stock
immediately following each annual meeting of stockholders. The Company's
currently existing non-employee directors will not receive any option grants
under the Directors' Plan until September 2001 when their current options under
the Directors' Plan fully vest, at which time they will be treated as first-time
elected non-employee directors and receive the 10,000 share initial grant at
that time, and will receive the 4,000 share grants at the annual meetings of
stockholders thereafter.
Outstanding options under the Directors' Plan will vest over a period
of three years from the date of grant in equal annual installments. The exercise
price of options granted under the Directors' Plan must equal or exceed the fair
market value of the Common Stock on the date of grant. No option granted under
the Directors' Plan may be exercised after the expiration of ten years from the
date it was granted. Options granted under the Directors' Plan are generally
non-transferable. The Board may suspend or terminate the Directors' Plan at any
time. In the event of a merger or consolidation, or a reverse merger or
reorganization in which the Company is not the surviving corporation, options
outstanding under the Directors' Plan will automatically become fully vested and
will terminate if not exercised prior to such event. Future option grants under
the Directors' Plan will vest over a period of four years from the date of
grant.
817
11
COMPENSATION OF EXECUTIVE OFFICERS
Summary of CompensationSUMMARY OF COMPENSATION
The following table shows for the fiscal years ended December 31, 1997,19981998,
1999 and 1999,2000, compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its other fivefour most highly compensated executive
officers at December 31, 19992000 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION ANNUAL COMPENSATION AWARDS
------------------- ---------------------------------------------------------- ------------------------------
RESTRICTED SECURITIES ALL OTHER
SALARY BONUS STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL STOCK AWARDS UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS ($)(1) AWARD(S)($) OPTIONS(#)OPTIONS (#) COMPENSATION ($)
----------------------------------- ---- -------- ------------------ ------------ --- ----------- ---------- ----------------------------
Joseph D. Keegan, Ph.D.(2).............Ph.D............ 2000 $325,000 $195,000 - 75,000 $14,651(3)
1999 $296,670 $165,000 --296,670 165,000 - 50,000 $ 14,540(4)
President and Chief Executive Officer 1998 210,015 105,000 $577,500(3)$577,500(2) 170,000 163,962(5)
Executive Officer
Tim Harkness(6)........................Timothy A. Harkness............... 2000 189,333 100,000 - 30,000 2,104(7)
Vice President and Chief Financial 1999 177,083 79,688 --- 30,000 1,859(7)
Vice President, Chief FinancialOfficer 1998 74,479 35,750 $167,500(8)$167,500(6) 75,000 89,124(9)
Officer89,124(8)
Tony Lima(10).......................... 1999 179,170 71,668 -- 30,000 2,100(7)M. Lima...................... 2000 189,000 95,000 - 25,000 1,929(7)
Vice President, Sales and Service 1999 179,170 71,688 - 30,000 2,100(7)
1998 76,291 36,619 --- 50,000 1,755(7)
John Senaldi(11)....................... 1999 164,170 65,668 -- 30,000S. Senaldi................... 2000 172,577 80,000 - 25,000 1,792(7)
Vice President, Marketing 1999 164,170 65,668 - 30,000 1,792(7)
1998 64,707 31,000 $ 36,875(12)$36,875(9) 46,000 31,622(13)31,622(10)
Robert J .Murray.......................J. Murray.................. 2000 183,750 75,000 - 22,500 1,583(7)
Vice President, Operations 1999 160,683 64,273 --- 20,000 2,231(7)
Vice President, Operations
1998 124,600 50,000 -- --- - 2,161(7)
1997 118,920 38,649 -- 10,000 2,146(7)
Gillian M.K. Humphries, Ph.D. ......... 1999 159,591 63,836 -- 25,000 3,499(7)
Vice President, Research and 1998 131,450 63,120 -- -- 3,319(7)
Development 1997 118,013 38,354 -- 16,000 3,210(7)
- ---------------
(1) Represents amounts accrued by the Company in 1997, 1998, 1999 and 1999,2000, but
paid in 1998, 1999, 2000 and 20002001 at the election of the Company.
(2) Dr. Keegan has served as President and Chief Executive Officer of the
Company since March 1998.
(3) Consists of an award of 30,000 shares of restricted stock valued at
$577,500 on the date of grant.
(3) Consists of the following payments made by the Company: (i) $1,151 for
the taxable portion of the group life insurance, (ii) $1,500 for the
Company's discretionary contribution to employee's 401(k) account, and
(iii) $12,000 for use of automobile by employee.
(4) Consists of the following payments made by the Company: (i) $1,040 for
the taxable portion of group life insurance, (ii) $1,500 for the
Company's discretionary contribution to employee's 401(k) account, and
(iii) $12,000 for use of automobile by employee.
(5) Consists of the following payments made by the Company: (i) $150,000
signing bonus upon employment with the Company on March 30, 1998, (ii)
$2,280$780 for the taxable portion of group life insurance and(iii) $1,500 for
the Company's discretionary contribution to employee's 401(k) accounts,
(iii) $2,682 for relocation costs reimbursed to the employee, and (iv)
$9,000 for automobile costs reimbursed to the employee.
(6) Mr. Harkness has served as Vice PresidentConsists of Finance and Chief Financial
Officeran award of 10,000 shares of restricted stock valued at
$167,500 on the Company since July 1998.date of grant.
(7) Represents the taxable portion of group life insurance paid by the
Company and the Company's discretionary contribution to employee's
401(k) account.
(8) Consists of an award of 10,000 shares of restricted stock valued at 167,500
on the date of grant.
(9) Consists of the following payments made by the Company: (i) $87,500
signing bonus upon accepting a new position with the Company on July 9,
1998, and (ii) $1,624 for the taxable portion of group life insurance
and the Company's discretionary contribution to employee's 401(k)
account.
(10) Mr. Lima has served as Vice President of Worldwide Sales and Service of the
Company since July 1998.
(11) Mr. Senaldi has served as Vice President of Marketing since August 1998.
(12)(9) Consists of an award of 2,500 shares of restricted stock valued at
$36,875 on the date of grant.
9
12
(13)(10) Consists of the following payments made by the Company: (i) $30,000
signing bonus upon accepting a position with the Company on August 6,
1998, (ii) $1,622 for the taxable portion of group life insurance and
the Company's discretionary contribution to employee's 401(k) accounts.
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under its 1995
Stock Option Plan (the "Option Plan"). As of February 15, 2001, options to
purchase a total of 1,235,563 shares were outstanding under the Option Plan and
options to purchase 313,211 shares remained available for grant thereunder.
18
The following tables show for the fiscal year ended December 31, 2000,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
OPTION GRANTS IN LAST FISCAL YEAR VALUE AT ASSUMED ANNUAL
--------------------------------- RATES OF STOCK PRICE
% OF TOTAL APPRECIATION FOR OPTION
NUMBER OF OPTIONS TERM (3)
SECURITIES GRANTED TO EXERCISE -------------------------
UNDERLYING EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR(1) ($/SH) (2) DATE 5% ($) 10% ($)
- ---- ----------- -------------- ---------- ---- ------ -------
Joseph D. Keegan, Ph.D.(4)....... 75,000 9.96% $48.00 02/07/10 $2,332,740 $5,846,897
Timothy A. Harkness(4)........... 30,000 3.99% 48.00 02/07/10 933,096 2,338,759
Tony M. Lima(4).................. 25,000 3.32% 48.00 02/07/10 777,580 1,948,966
John S. Senaldi(4)............... 25,000 3.32% 48.00 02/07/10 777,580 1,948,966
Robert J. Murray (4)............. 22,500 2.99% 48.00 02/07/10 699,822 1,754,069
(1) Based on 753,309 shares subject to options granted to employees in 2000.
(2) The exercise price is equal to 100% of the fair market value of the Common
Stock on the date of the Grant.
(3) The potential realizable value is calculated based on the term of the
option at its time of grant (10 years) and is calculated by assuming that
the stock price on the date of grant as determined by the Board of
Directors appreciates at the indicated annual rate compounded annually for
the entire term of the option and that the option is exercised and sold on
the last day of its term for the appreciated price. The 5% and 10% assumed
rates of appreciation are derived from the rules of the Securities and
Exchange Commission and do not represent the Company's estimate or
projection of the future Common Stock price.
(4) The options have a ten-year term, subject to earlier termination upon
death, disability or termination of employment. These options vest at the
rate of 25% per year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
FY-END (#) OPTIONS AT FY-END
SHARES ACQUIRED VALUE EXERCISABLE/ ($) EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
- ---- --------------- ------------ ------------- ----------------
Joseph A. Keegan, Ph.D......... 50,000 $ 2,546,875 56,000/189,000 $2,667,750/$6,873,188
Timothy A. Harkness............ 35,310 1,490,816 5,940/93,750 307,024/3,686,016
Tony M. Lima................... 4,300 153,725 27,500/75,000 1,238,381/2,849,063
John S. Senaldi................ 25,900 1,786,512 2,300/72,800 124,631/2,822,663
Robert J. Murray............... 34,999 823,227 24,500/40,000 2,151,572/1,559,928
- --------------------
(1) Represents the fair market value of the underlying shares on the last day
of the fiscal year ($68.4375 based on the closing sales price of the Common
Stock as reported on the Nasdaq National Market) less the exercise price of
the options multiplied by the number of shares underlying the option.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
CHIEF EXECUTIVE OFFICER KEY EMPLOYEE AGREEMENT
On March 11, 1998, Joseph D. Keegan, Ph.D., entered into a Key Employee
Agreement with the Company that provided for the following:
-o Dr. Keegan was appointed as President and Chief Executive
Officer, effective March 30, 1998 (the "Employment Date").
-19
o Dr. Keegan willwould be paid an annual base salary of $280,000.
-o Dr. Keegan willwould receive a one time "signing bonus" of
$150,000. Such bonus iswas subject to repayment if Dr. Keegan
terminatesterminated his employment with the Company within the first
year of his employment.
-o Dr. Keegan is eligible to receive an annual performance bonus
up to 50% of his base salary based on achievement of certain
goals specified by the Board.
-o The Board will grantgranted Dr. Keegan options to purchase 170,000
shares of the Company's Common Stock with an exercise price
equal to the fair market value of the Common Stock on the
Employment Date. The Options will vest over five years with
34,000 shares vesting on the first anniversary of the
Employment Date and 8,500 shares vesting every June 30,
September 30, December 30, and March 30 thereafter. Vesting
ceases if Dr. Keegan's employment terminates at any time for
any reason with the following exceptions: (a) Dr. Keegan is
retained by the Company in a post-employment consulting
position, as specified, thus providing for an additional year
of vesting, or (b) if Dr. Keegan is demoted without cause, as
defined in the agreement, within two years following certain
defined transactions, then vesting of the remaining unvested
options will accelerate such that Dr. Keegan will be fully
vested with respect to the options to purchase 170,000 shares
of the Company's Common Stock.
-o The Board will grantgranted Dr. Keegan an aggregate of 30,000 shares of
the Company's Common Stock subject to applicable securities
laws restrictions, over two years. A total of 3,750 shares
will be granted following the completion of each quarter of
service with the Company as President and Chief Executive
Officer on June 30, 1998 and 1999, September 30, 1998 and
1999, December 30, 1998 and 1999, and March 30, 1999 and 2000.
Upon granting, each individual grant will bewould fully earned and
vested. Granting of stock ceaseswould cease if Dr. Keegan's
employment terminatesterminated at any time for any reason with the
following exception: if Dr. Keegan iswas demoted without cause,
as defined in the agreement, within two years following
certain defined transactions, then granting of the remaining
ungranted shares willwould accelerate such that Dr. Keegan willwould
be granted a total of 30,000 shares of the Company's Common
Stock. The Company agreesagreed to loan Dr. Keegan amounts required
for the payment of tax obligations related to these share
grants. As of December 31, 1994
$235,1812000, $378,825 was outstanding
under these loans.
-o In the event Dr. Keegan's employment is terminated by the
Company without cause, as defined in the agreement, the
Company shall provide Dr. Keegan with a one-year consulting
agreement, as defined, and outplacement services.
CHIEF FINANCIAL OFFICER EMPLOYEE AGREEMENT
On July 8, 1998, Timothy A. Harkness, entered into an Employee
Agreement with the Company that provided for the following:
-o Mr. Harkness was appointed as Vice President of Finance and
Chief Financial Officer, effective July 9, 1998 (the
"Employment Date").
10
13
-o Mr. Harkness willwould be paid an annual base salary of $150,000.
His salary willwould increase to $162,000 per year in 3 months and
$175,000 per year in 6 months upon certain milestone
achievements.
-o Mr. Harkness willwould receive a one time hiring bonus of $87,500.
-o Mr. Harkness is eligible to participate in the Company's bonus
plan at 40% of his base salary prorated for employment tenure.
-o Mr. Harkness iswas eligible to receive options to purchase
75,000 shares of the Company's Common Stock. The options will
vest over five years with 15,000 shares vesting on the first
anniversary of the Employment Date and 3,750 shares vesting
every quarter thereafter.
-20
o Mr. Harkness is eligible to receive an aggregate of 10,000
shares of the Company's Common Stock. A total of 1,250 shares
willwould be granted following each quarter of service with the
Company. Upon granting, each share will be fully earned and
vested. If Mr. Harkness is terminated without cause within the
first two years, then (i) the granting of shares will
accelerate such that Mr. Harkness willwould receive 10,000 shares
of the Company's Common Stock and (ii) Mr. Harkness willwould
receive a one-time severance payment equal to the prior 6
months compensation. The Company agreesagreed to loan Mr. Harkness
amounts required for the payment of tax obligations related to
these share grants. As of December 31, 1999
$61,8062000, $148,549 was
outstanding under these loans.
-o In the event of a change of control resulting in either
termination or demotion, all of Mr. Harkness' stock options
and shares will become fully vested on such date. In addition,
Mr. Harkness would be granted a one-time severance payment
equal to the last 12 monthsmonths' compensation.
VICE PRESIDENT EMPLOYMENT AGREEMENT
On July 9, 1998, Tony M. Lima, Vice President of Worldwide Sales and
Service, entered into an employment agreement with the Company that provided for
the following:
-o Mr. Lima willwould be paid an annual base salary of $175,000.
-o Mr. Lima is eligible to participate in the Company's bonus
plan at 40% of his base salary prorated from the time he has
been employed, with a guaranteed minimum bonus of $30,000
under the plan for the 1998 plan year.
-o Mr. Lima iswas eligible to receive options to purchase 50,000
shares of the Company's Common Stock. The options will vest
over five years with 10,000 shares vesting on each of the
first and second anniversary of the employment date and 2,500
shares vesting quarterly following the second anniversary of
the employment date.
VICE PRESIDENT EMPLOYMENT AGREEMENT
On July 13, 1998, John S. Senaldi, Vice President of Worldwide
Marketing, entered into an employment agreement with the Company that provided
for the following:
-o Mr. Senaldi willwould be paid an annual base salary of $160,020.
Mr. Senaldi willwould receive a one time signing bonus of $30,000.
-o Mr. Senaldi is eligible to participate in the Company's bonus
plan at 40% of his base salary prorated from the time he has
been employed, with a guaranteed minimum bonus of $30,000
under the plan for the 1998 plan year.
-o Mr. Senaldi will bewas eligible to receive options to purchase 46,000
shares of the Company's Common Stock. The options will vest
over five years with 10,000 shares vesting on each of the
first and second anniversary of the employment date and 2,500
shares vesting quarterly following the second anniversary of
the employment date.
-o Mr. Senaldi will bewas eligible to receive an aggregate of 2,500
shares of the Company's Common Stock. The shares will be
granted ratably and quarterly over a period of two years. 11
14
-The
Company agreed to loan Mr. Senaldi amounts required for the
payment of tax obligations related to these share grants. As
of December 31, 2000, $36,219 was outstanding under these
loans.
o In the event of a Change of Control, all of Mr. Senaldi's
stock options and shares will become fully vested at such
date.
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under its 1988 Stock
Option Plan (the "1988 Plan") and 1995 Stock Option Plan (the "1995 Plan" and
collectively with the 1988 Plan, the "Option Plans"). The 1988 Plan was
terminated upon establishment of the 1995 Plan. As of21
CHANGE IN CONTROL SEVERANCE BENEFIT PLAN
In February 29, 2000, options
to purchase a total of 1,777,152 shares were outstanding under the Option Plans
and options to purchase 513,715 shares remained available for grant under the
1995 Plan.
The following tables show for the fiscal year ended December 31, 1999,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
OPTION GRANTS IN LAST FISCAL YEAR
--------------------------------------------------- POTENTIAL REALIZABLE VALUE
PERCENTAGE OF AT ASSUMED ANNUAL
NUMBER OF TOTAL OPTIONS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OPTION TERM(3)
OPTIONS FISCAL PRICE EXPIRATION ---------------------------
NAME GRANTED YEAR(1) ($/SH)(2) DATE 5% 10%
---- ---------- ------------- --------- ---------- ----------- -------------
Joseph D. Keegan(4).......... 50,000 9.13% $26.625 05/19/2009 $867,757 $2,170,303
Timothy A. Harkness(4)....... 30,000 5.48% 26.625 05/19/2009 520,655 1,302,181
Tony M. Lima(4).............. 30,000 5.48% 26.625 05/19/2009 520,655 1,302,181
John S. Senaldi(4)........... 30,000 5.48% 26.625 05/19/2009 520,655 1,302,181
Robert J. Murray(4).......... 20,000 3.65% 26.625 05/19/2009 347,103 868,121
Gillian M.K. Humphries(4).... 25,000 4.57% 26.250 05/19/2009 433,879 1,085,151
- ---------------
(1) Based on 547,500 shares subject to options granted in 1999.
(2) The exercise price is equal to 100% of the fair market value of the Common
Stock on the date of the Grant.
(3) The potential realizable value is calculated based on the term of the option
at its time of grant (10 years) and is calculated by assuming that the stock
price on the date of grant as determined by2001, the Board of Directors appreciatesadopted a Change in Control
Severance Benefit Plan to provide certain benefits and protections to designated
executive officers who have not entered into individual severance benefit or
change in control agreements with the Company. The plan provides that in the
event of a constructive or involuntarily termination without cause within 13
months after a Change in Control, as defined in the plan, such terminated
executive officer will receive (i) a lump sum payment equal to 12 months'
salary, (ii) a bonus payment equal to what would have been earned at the indicated annual rate compounded annually100% of
target for the entire
termyear of termination, (iii) continued health insurance benefits
for 12 months, unless the optionexecutive officer obtains coverage from another
employer during that time, (iv) full acceleration of vesting for all outstanding
options, and (v) payment for an executive assistance program lasting up to three
months and not to exceed $7,500, provided that the option is exercised and sold onexecutive officer enrolls
within six months following termination. If the last daytotal amount of its term forpayments under
the appreciated price. The 5% and 10% assumed rates of
appreciation are derived fromplan would cause the rules ofexecutive officer to incur "golden parachute" excise
tax liability in connection with the Securities and Exchange
Commission and do not representChange in Control, then the Company's estimatepayments will
be reduced to the extent necessary to leave him or projection of the
future Common Stock price.
(4) The options haveher in a ten-year term, subject to earlier termination upon death,
disability or termination of employment. Options vest at the rate of 25% per
year.
12
15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
---- --------------- ----------------- ------------------- --------------------
Joseph D. Keegan............. -- -- 59,500/160,500 1,956,063/4,901,438
Timothy A. Harkness.......... -- -- 18,750/86,250 660,938/2,744,063
Tony M. Lima................. -- -- 10,000/70,000 343,750/2,136,250
John S. Senaldi.............. -- -- 9,200/66,800 347,300/2,150,450
Robert J. Murray............. -- -- 46,999/30,000 2,214,389/944,063
Gillian M.K. Humphries....... -- -- 39,733/34,600 1,857,962/1,010,163
- ---------------
(1) Represents the fair market value of the underlying shares on the last day of
the fiscal year ($52.00 based on the closing sales price of the Common Stock
as reported on the NASDAQ National Market) less the exercise price of the
options multiplied by the number of shares underlying the option.better after-tax
position than if no such reduction had occurred.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATIONCOMPENSATION(1)
The Compensation Committee of the Board of Directors (the "Committee")
is comprised of Messrs.Mr. Anderson, andMr. Marion and Dr. Waitz, none of whom has been a
permanent officer or employee of the Company. The Committee is responsible for
establishing the Company's compensation for executive officers.
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract, retain
and reward executive officers and other key employees who contribute to the
long-term success of the Company and to motivate them to enhance long-term
stockholder value. To meet these goals, the Committee has adopted a mix of the
compensation elements of salary, bonus and stock options.
Base Salary.BASE SALARY. The Committee meets at least annually to review and
approve each executive officer's salary for the ensuing year. When reviewing
base salaries, the Committee considers the following factors, in order of
importance: competitive pay practices, individual performance against goals,
levels of responsibility, breadth of knowledge and prior experience. To provide
the Committee with more information for making compensation comparisons, the
Company surveys a group of comparable companies with a capitalization similar to
that of the Company.
Bonus.BONUS. The bonus program is a discretionary program for executive
officers and other key employees of the Company. The Committee meets in the
first quarter following the year of the awards to be made to determine the
amount of the bonuses. The bonus award depends on the extent to which the
Company and individual performance objectives are achieved. The Company's
objectives consist of operating, strategic and financial goals that are
considered to be critical to the Company's fundamental long-term goal of
building stockholder value. For fiscal 1999,year 2000, these goals were related to
specific increases in revenue, operating income and earnings per share over the
prior years.
Stock Options.STOCK OPTIONS. The Option PlansPlan maintained by the Company have beenwas
established to provide employees of the Company with an opportunity to share,
along with stockholders of the Company, in the long-term performance of the
Company. Initial grants of stock options are generally made to eligible
employees upon commencement of employment, with additional grants being made to
certain employees periodically or following a significant change in the job
responsibilities, scope or title of such employment. Stock options under the
Options PlansPlan generally vest over a four or five-year period and expire ten years
from the date of grant. The exercise price of such options is usually 100% of
the fair market value of the underlying stock on the date of grant.
13- ----------
1 The material in this report is not "soliciting material," is not deemed
"filed" with the SEC, and is not to be incorporated by reference into any filing
of the Company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, whether made before or after the date hereof
and irrespective of any general incorporation language contained in such filing.
22
16
Guidelines for the number of stock options for each participant under
the Option PlansPlan are generally determined by a formula established by the
Committee whereby several factors are applied to the salary and performance
level of each participant and then related to the approximate market price of
the stock at the time of grant. In awarding stock options, the Committee
considers individual performance, overall contribution to the Company, officer
retention, the number of unvested stock options held by the officer and the
total number of stock options to be awarded.
Section 162(m) of the Internal Revenue Code of 1986 limits the Company
to a deduction for federal income tax purposes of up to $1 million of
compensation paid to certain Named Executive Officers in a taxable year.
Compensation above $1 million may be deducted if it is "performance-based
compensation." The Compensation Committee has determined that stock options
granted under the Company's 1995Option Plan with an exercise price at least equal to
the fair market value of the Company's common stock on the date of grant shall
be treated as "performance-based compensation" and any compensation recognized
by a Named Executive Officer as a result of the grant of such a stock options is
deductible by the Company.
CEO Compensation.COMPENSATION. The Committee used the same procedures described
above in setting the annual salary, bonus and stock option awards for the CEO.
The grant of restricted stock to Dr. Keegan was arrived at through arms-length
negotiations in connection with his initial hire as CEO. The CEO's salary is
determined based on comparisons with companies with a capitalization similar to
that of the Company.
Summary.SUMMARY. Through the plans described above, a significant portion of
the Company's compensation program for its executive officers (including the
CEO) is contingent upon the individual's and Company's performance, and
realization of benefits by the CEO and the other executive officers is closely
linked to increases in long-term stockholder value. The Company remains
committed to this philosophy of pay for performance, recognizing that the
competitive market for talented executives and the volatility of the Company's
business may result in highly variable compensation during any given annual
period.
COMPENSATION COMMITTEE
David L. Anderson
Andre F. Marion
J. Allan Waitz, Ph.D.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the Compensation Committee is comprised of three
non-employee directors: Messrs.Mr. Anderson, andMr. Marion and Dr. Waitz. Mr. Marion
served as an interim chief executive officer of the Company between October 1997
and March 1998. No member of the Compensation Committee is or was formerly a
permanent officer or employee of the Company. No interlocking relationship
exists between the Company's Board of Directors or Compensation Committee and
the board of directors or compensation committee of any other company, nor has
such interlocking relationship existed in the past.
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PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph shows the total stockholder return of an investment
of $100 in cash on December 13, 199531, 1996 for (i) the Company's Common Stock, (ii)
the Nasdaq Stock Index and (iii) a peer group index comprised of all public
companies using SIC Code 3826 (Laboratory Analytical Instruments) (the "Peer
Group")(2). All values assume reinvestment of the full amount of all dividends and
are calculated as of December 31 of each year.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG MOLECULAR DEVICES CORP.,
NASDAQ MARKET INDEX AND SIC CODE INDEX(3)year:
[PERFORMANCE CHART]
MOLECULAR DEVICES ANALYTICAL INSTRUMENTS NASDAQ
----------------- ---------------------- ------FISCAL YEAR ENDING
12/13/95 100.00 100.00 100.00
COMPANY/INDEX/MARKET 12/29/95 92.31 108.68 99.631995 12/31/96 136.81 130.06 123.811996 12/31/97 186.81 154.29 151.451997 12/31/98 191.21 193.75 213.611998 12/31/99 457.14 313.47 376.741999 12/29/2000
Molecular Devices 100 148.21 202.38 207.14 495.24 651.79
Analytical Instruments 100 119.67 141.97 178.27 288.43 453.27
NASDAQ Market Index 100 124.27 152.00 214.39 378.12 237.66
ASSUMED $100 INVESTED ON DECEMBER 13, 1995
ASSUMES DIVIDED REINVESTED
FISCAL YEAR ENDING DECEMBER 31, 1999
(1)CERTAIN TRANSACTIONS
The Company has entered into employment agreements with certain of its
executive officers. See "Employment Agreements."
- ----------
1 This Section is not "soliciting material," is not deemed "filed" with the SEC
and is not to be incorporated by reference in any filing of the Company under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, whether made before or after the date hereof and irrespective of any
general incorporation language in any such filing.
(2) Upon written request of a stockholder, the Company will provide a list of
companies comprising the Peer Group.
(3) The cumulative total return on investment (change in year-end stock price
plus reinvested dividends) for the Company, the Nasdaq Stock Index and the
Peer Group, based on December 13, 1995 = 100. In accordance with the rules
of the SEC, the returns of companies comprising the Peer Group are weighted
according to their respective stock market capitalization at the beginning
of each period for which a return is indicated.
CERTAIN TRANSACTIONS
The Company has entered into employment agreements with certain of its
executive officers. See "Employment Agreements."
1524
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OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ JAMESJames C. KITCHKitch
------------------------------
James C. Kitch
Secretary
April 26, 2000, 2001
--
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 19992000 IS AVAILABLE
WITHOUT CHARGE UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, MOLECULAR DEVICES
CORPORATION, 1311 ORLEANS DRIVE, SUNNYVALE, CALIFORNIA 94089.
1625
19
1467-PS-00
20
DETACH HERE
PROXY
MOLECULAR DEVICES CORPORATION
PROXY SOLICITED BYAPPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF THE
BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 25, 2000PURPOSE:
The undersigned hereby appoints Joseph D. Keegan, Ph.D., and Timothy A.
Harkness, and each of them, as attorneys and proxiespurpose of the undersigned, with
full powerAudit Committee (the "Committee") of substitution, to vote all sharesthe Board of
stockDirectors (the "Board") of Molecular Devices Corporation, a Delaware corporation
(the "Company"), shall be to make such examinations as are necessary to monitor
the corporate financial reporting and the internal and external audits of the
Company, to provide to the Board the results of its examinations and
recommendations derived therefrom, to outline to the Board improvements made, or
to be made, in internal accounting controls, to nominate independent auditors,
and to provide such additional information and materials as it may deem
necessary to make the Board aware of significant financial matters which require
the undersigned mayBoard's attention.
COMPOSITION:
The Committee will be entitled to votecomprised of two or more members of the Board.
The members of the Committee and its Chairman will be appointed by and serve at
the Annual Meetingdiscretion of Stockholdersthe Board.
FUNCTIONS AND AUTHORITY:
The operation of Molecular Devicesthe Committee shall be subject to the provisions of
the Bylaws of the Company, as in effect from time to time, and to Section 311 of
the California General Corporation Law. The Committee shall have the full power
and authority to carry out the following responsibilities:
1. To recommend annually to the full Board the firm of certified
public accountants to be held atemployed by the Company's
corporate headquarters, located at 1311 Orleans Drive, Sunnyvale, California
94089 on Thursday, May 25, 2000 at 10:30 a.m., local time, and at any and all
postponements, continuations and adjournments thereof, with all powers thatCompany as its independent auditors for
the undersigned would possess if personally present, upon and in respectensuing year.
2. To review the engagement of the following mattersindependent auditors,
including the scope, extent and in accordance withprocedures of the following instructions, with
discretionary authority asaudit and the compensation to
anybe paid therefore, and all other matters that may properly come
before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2, AS MORE SPECIFICALLY DESCRIBED
IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL
BE VOTED IN ACCORDANCE THEREWITH.
- ----------- -----------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ----------- -----------
21
DETACH HERE
PLEASE MARK
[ ] VOTES AS IN
EXAMPLE.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW:
Proposal 1.Committee deems appropriate.
3. To elect directors to hold office untilhave familiarity, through the next Annual Meetingindividual efforts of Stockholdersits
members, with the accounting and until their successors are elected.
NOMINEES: Joseph D. Keegan, Ph.D., Moshe H. Alafi, David L. Anderson,
A. Blaine Bowman, Paul Goddard, Ph.D., Andre F. Marion,
Harden M. McConnell, Ph.D., J. Allan Waltz, Ph.D.
FOR ALL NOMINEES [ ] [ ] WITHHOLD
LISTED ABOVE (EXCEPT AUTHORITY TO VOTE
AS MARKED TO THE FOR ALL NOMINEES
CONTRARY) LISTED ABOVE
[ ]
-----------------------------------------------------------------------------reporting principles and practices applied by
the Company in preparing its financial statements, including, without
limitation, the policies for recognition of revenues in financial statements.
4. To withhold authority to vote for any nominee(s), write such nominee(s)'
name(s) above.
MANAGEMENT RECOMMENDS A VOTE
FOR PROPOSAL 2.
FOR AGAINST ABSTAIN
2. To ratifyreview with management and the selection of Ernst & Young LLP as [ ] [ ] [ ] independent auditors, upon
completion of their audit, financial results for the year, as reported in the
Company's financial statements, or other disclosures.
5. To assist and interact with the independent auditors in order
that they may carry out their duties in the most efficient and cost effective
manner.
6. To evaluate the cooperation received by the independent
auditors during their audit examination, including their access to all requested
records, data and information, and elicit the comments of management regarding
the responsiveness of the independent auditors to the Company's needs.
7. To review the Company's balance sheet, profit and loss
statement and statements of cash flows and stockholders' equity for each interim
period, and any changes in accounting policy that have occurred during the
interim period.
8. To review and approve all professional services provided to
the Company by its independent auditors and consider the possible effect of such
services on the independence of such auditors.
9. To consult with the independent auditors and discuss with
Company management the scope and quality of internal accounting and financial
reporting controls in effect.
10. To investigate, review and report to the Board the propriety
and ethical implications of any transactions, as reported or disclosed to the
Committee by the independent auditors, employees, officers, members of the Board
or otherwise, between (a) the Company and (b) any employee, officer or member of
the Board of the Company, for its fiscal
year ending December 31, 2000.
Please sign exactlyor any affiliates of the foregoing.
11. To perform such other functions and have such power as your name appears
hereon. If the stock is registeredmay be
necessary or convenient in the namesefficient and lawful discharge of twothe foregoing.
MEETINGS:
The Committee will hold at least one regular meeting per year and
additional meetings as the Chairman or more persons,Committee deem appropriate. The President
and Chief Executive Officer, Vice President and Chief Financial Officer may
attend any meeting of the Committee, except for portions of the meetings where
his, her or their presence would be inappropriate, as determined by the
Committee Chairman.
MINUTES AND REPORTS:
Minutes of each should sign. Executors, administrators,
trustees, guardiansmeeting shall be kept and attorney-in-fact
should add their titles. If signer is a
corporation, please give full corporate
namedistributed to each member of
the Committee, members of the Board who are not members of the Committee and have a duly authorized officer
sign, stating title. If signer is a
partnership, please sign in partnership
namethe
Secretary of the Company. The Chairman of the Committee shall report to the
Board from time to time, or whenever so requested by authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN
THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES.
Signature: Date:
-------------------------------------------- --------------------
Signature: Date:
-------------------------------------------- --------------------the Board.