SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
MOLECULAR DEVICES CORPORATION
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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 transactions applies:
- ----------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- ----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
- ----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------------------------
(5) Total fee paid:
- ----------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- ----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
MOLECULAR DEVICES CORPORATION
1311 ORLEANS DRIVE
SUNNYVALE, CALIFORNIA 94089
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 1997
TO THE STOCKHOLDERS OF MOLECULAR DEVICES CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Molecular Devices Corporation, a Delaware corporation (the "Company"), will be
held at the Company's corporate headquarters, located at 1311 Orleans Drive,
Sunnyvale, California 94089 on Friday, May 16, 1997 at 10:30 a.m. local time for
the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for its fiscal year ending December 31,
1997.
3. 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 28,
1997 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
Andrei M. Manoliu
Secretary
Sunnyvale, California
April 15, 1997
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.
<PAGE>
MOLECULAR DEVICES CORPORATION
1311 Orleans Drive
Sunnyvale, California 94089
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 1997
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 (the "Company"), for use
at the Annual Meeting of Stockholders to be held on May 16, 1997 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 headquarters
located at 1311 Orleans Drive, Sunnyvale, California 94089.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy statement,
the proxy 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.
The Company intends to mail this proxy statement and accompanying proxy
card on or about April 15, 1997 to all stockholders entitled to vote at the
Annual Meeting.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on
March 28, 1997 will be entitled to notice of and to vote at the Annual Meeting.
At the close of business on March 28, 1997, the Company had outstanding and
entitled to vote 9,038,124 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. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
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
Proposals of stockholders that are intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received by the Company no
later than December 8, 1997 in order to be included in the proxy statement and
proxy relating to that Annual Meeting. Stockholders are also advised to review
the Company's 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 eight Board positions presently
authorized in the Company's By-laws. 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 previously been elected by the stockholders.
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. Directors are elected by a plurality of the
votes of the holders of Common Stock present in person or represented by proxy
and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR
OF EACH NAMED NOMINEE.
NOMINEES
The following information pertains to the nominees, their principal
occupations for the preceding five-year period, certain directorships, and their
ages as of December 31, 1996.
Principal Occupation/
Positions Held
Name Age with the Company
---- --- ----------------
James P. Iuliano 38 President, Chief Executive Officer
Moshe H. Alafi 67 General Partner, Alafi Capital Company
David L. Anderson 53 General Partner, Sutter Hill Ventures
A. Blaine Bowman 50 President, Chief Executive Officer,
Dionex Corporation
Paul Goddard, Ph.D. 47 Chairman, Chief Executive Officer,
Neurex Corporation
Andre F. Marion 61 Independent Investor
Harden M. McConnell, Ph.D. 69 Robert Eckles Swain Professor of
Physical Chemistry at Stanford
University, Management Consultant
J. Allan Waitz, Ph.D. 61 Independent Investor
James P. Iuliano has served as President of the Company since May 1993,
and as Chief Executive Officer and a director since December 1993. From July
1990 through May 1993, Mr. Iuliano was Vice President and Chief Financial
Officer of the Company and, between April 1990 and July 1990, he served as the
Company's Financial Controller. From 1986 to March 1990, Mr. Iuliano was
employed by VLSI Technology Inc., a semiconductor
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company ("VLSI"), where his most recent position was Controller for VLSI's ASIC
division. Prior to VLSI, Mr. Iuliano held various positions with the general
technology division in International Business Machines Corporation, a computer
company. Mr. Iuliano holds an MBA degree from Harvard Business School.
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.
David L. Anderson has been a director of the Company since 1983. Mr.
Anderson has been a general partner of Sutter Hill Ventures, a California
limited partnership, a venture capital investment partnership, since 1974. Mr.
Anderson is also a director of Cytel Corp., a biotechnology company, Dionex
Corporation, a leading supplier of analytical instrumentation ("Dionex"), and
Neurex Corporation, a company involved in the development of therapeutics to
treat disorders of the brain and central nervous system ("Neurex").
A. Blaine Bowman has been 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 currently is, and has been since 1991, the Chairman, Chief
Executive Officer and a director of Neurex. 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 RibiImmunochem Research, Inc.
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, 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 Applied Imaging Corp., a manufacturer of medical computer
systems, and Cygnus, Inc., a developer of drug delivery and diagnostic systems.
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. Dr. McConnell is also a director of Anergen,
Inc., a biotechnology company.
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, 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 also a director of TerraGen Diversity, Inc. of Vancouver, BC.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1996, the Board of Directors
held five meetings. The Board of Directors has two committees, an Audit
Committee and a Compensation Committee. The Audit Committee recommends
engagement of the Company's independent accountants, approves services performed
by such accountants, and reviews and evaluates the Company's accounting system
and its system of internal accounting controls. The Audit Committee, consisting
of Dr. McConnell, Dr. Goddard and Mr. Bowman, held one meeting during the fiscal
year ended December 31, 1996.
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The Compensation Committee consists of Messrs. Anderson and Marion and
Dr. Waitz. The Compensation Committee makes recommendations to the Board
concerning cash and long-term incentive compensation for 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 options under the Company's 1995 Stock Option Plan (the "1995 Plan")
and the number of shares and the timing of offerings of such shares to employees
under the Company's 1995 Employee Stock Purchase Plan. During the fiscal year
ended December 31, 1996, the Compensation Committee held one meeting.
During the fiscal year ended December 31, 1996, each director attended
at least 75% of the aggregate of the meetings of the Board and of the Committees
on which he served, held during the period for which he was a director or
committee member, respectively.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Ernst & Young LLP ("Ernst & Young") has served as the Company's
independent auditors with respect to the Company's books and accounts since the
Company began operations in 1983.
The stockholders are being asked to ratify the approval of Ernst &
Young as independent auditors for the fiscal year ending December 31, 1997.
Although it is not required to do so, the Board of Directors is submitting the
approval of Ernst & Young to the stockholders for ratification as a matter of
good corporate practice. Should the stockholders fail to provide such
ratification, the Board would reconsider its approval of Ernst & Young as
independent auditors for the fiscal year ending December 31, 1997. Even if the
selection is ratified, the Board in its discretion may direct the appointment of
a different independent auditing firm at any time during the year if the Board
determines that such a change would be in the best interests of the Company and
its stockholders.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting of Stockholders. They do not expect to make any statement, but will have
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the Common Stock
present in person or represented by proxy and entitled to vote on the proposal
at the Annual Meeting will be required to ratify the selection of Ernst & Young.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE IN FAVOR OF
PROPOSAL 2
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<PAGE>
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 28, 1997 by (i) each
director and nominee for director, (ii) each Named Executive Officer (as defined
under "Executive Compensation"), (iii) all executive officers and directors 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)
------------------------------
Number Percent
Name of Beneficial Owner of Shares of Class
- ------------------------ --------- ----------
Moshe H. Alafi (2) 728,793 8.0%
Alafi Capital Company
9 Commodore Suite A405
Emeryville, CA 94608
Harden M. McConnell, Ph.D. (3) 690,220 7.6%
421 El Escarpardo
Stanford, CA 94305
Kopp Investment Advisors, Inc. 683,450 7.6%
6600 France Ave South, Ste 672
Edina, MN 55435
Gartmore Investment Limited 570,000 6.3%
Gartmore House, P.O. Box 65
16-18 Monument Street
London EC3R 8QQ England
A. Blaine Bowman (4) 464,665 5.1%
Dionex Corporation
501 Mercury Drive
Sunnyvale, CA 94086
David L. Anderson (5) 219,380 2.4%
Sutter Hill Ventures
755 Page Mill Road
Suite A200
Palo Alto, CA 94306
James P. Iuliano (6) 119,789 1.0%
Gillian M.K. Humphries, Ph.D. (7) 67,958 *
Andrew H. Galligan (8) 20,790 *
Howard D. Goldstein (9) 20,478 *
Robert J. Murray (10) 16,645 *
J. Allan Waitz, Ph.D (11) 22,166 *
Paul Goddard, Ph.D. (12) 5,500 *
Andre F. Marion (13) 5,500 *
All directors and executive officers as a group 2,381,884 26.36%
(12 persons) (14)
- ----------
* Less than one percent
(1) This table is based upon information supplied by officers, directors
and principal stockholders and Schedules 13D and 13G filed with the
Securities and Exchange 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 9,036,541 shares outstanding on February 28,
1997, adjusted as required by rules promulgated by the SEC.
(2) Includes 402,840 shares beneficially owned by Alafi Capital Company, of
which Mr. Alafi, a director of the Company, is the general partner,
319,628 shares beneficially owned by trusts for the benefit of Mr.
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Alafi's children, of which Mr. Alafi is the trustee, and 5,500 shares
that may be acquired within 60 days after February 28, 1997, pursuant
to outstanding stock options.
(3) Consists of 684,720 shares held by Harden M. McConnell and Sophia G.
McConnell Trust, of which Dr. McConnell is a co-trustee, and 5,500
shares that may be acquired within 60 days after February 28, 1997,
pursuant to outstanding stock options.
(4) Includes 382,166 shares beneficially owned by Dionex, of which Mr.
Bowman, a director of the Company, is President, Chief Executive
Officer and a director and 25,499 shares that may be acquired within 60
days after February 28, 1997 pursuant to outstanding stock options. Mr.
Bowman disclaims beneficial ownership of the Dionex shares.
(5) Includes: (i) 28,086 shares beneficially owned by Sutter Hill Ventures,
a California limited partnership ("Sutter Hill Ventures"), of which Mr.
Anderson, a director of the Company, is a general partner, (ii) 14,661
shares beneficially owned by Anvest, L.P., of which Mr. Anderson is a
general partner, and (iii) 5,500 shares that may be acquired within 60
days after February 28, 1997, pursuant to outstanding stock options.
Mr. Anderson disclaims beneficial ownership of shares held by Sutter
Hill Ventures and Dionex, and individuals and entities associated with
Sutter Hill Ventures and Dionex, 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 119,789 shares that may be acquired within 60 days after
February 28, 1997 pursuant to outstanding stock options.
(7) Includes 52,000 shares beneficially owned by the Humphries 1991 Living
Trust, of which Dr. Humphries is a co-trustee and 20,958 shares that
may be acquired within 60 days after February 28, 1997 pursuant to
outstanding stock options.
(8) Includes 20,790 shares that may be acquired within 60 days after
February 28, 1997 pursuant to outstanding stock options.
(9) Includes 18,957 shares that may be acquired within 60 days after
February 28, 1997 pursuant to outstanding stock options.
(10) Includes 15,999 shares that may be acquired within 60 days after
February 28, 1997 pursuant to outstanding stock options.
(11) Includes 22,166 shares that may be acquired within 60 days after
February 28, 1997 pursuant to outstanding stock options.
(12) Includes 5,500 shares that may be acquired within 60 days after
February 28, 1997 pursuant to outstanding stock options.
(13) Includes 5,500 shares that may be acquired within 60 days after
February 28, 1997 pursuant to outstanding stock options.
(14) Includes 827,773 shares held by entities affiliated with certain
directors and 271,658 shares that certain directors and officers have
the right to acquire within 60 days after February 28, 1997 pursuant to
the exercise of outstanding stock options. See Footnotes (2) - (13).
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange 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
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Company. Executive 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, 1996, the
Company's executive officers, directors and greater than 10 percent stockholders
complied with applicable Section 16(a) filing requirements.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers and certain key employees of the Company and
their ages and positions at March 28, 1997 are as follows:
Name Age Position
---- --- --------
James P. Iuliano 38 President, Chief Executive Officer and
Director
Andrew H. Galligan 40 Vice President, and Chief Financial
Officer
Howard D. Goldstein 44 Vice President
David P. Hadfield 38 Vice President
Gillian M.K. Humphries, Ph.D 58 Vice President
Robert J. Murray 48 Vice President
James P. Iuliano has served as President of the Company since May 1993,
and as Chief Executive Officer and a director since December 1993. From July
1990 through May 1993, Mr. Iuliano was Vice President and Chief Financial
Officer of the Company and, between April 1990 and July 1990, he served as the
Company's Financial Controller. From 1986 to March 1990, Mr. Iuliano was
employed by VLSI Technology Inc., a semiconductor company ("VLSI"), where his
most recent position was Controller for VLSI's ASIC division. Prior to VLSI, Mr.
Iuliano held various positions with the general technology division in
International Business Machines Corporation, a computer company. Mr. Iuliano
holds an MBA degree from Harvard Business School.
Andrew H. Galligan has served as Vice President and Chief Financial
Officer of the Company since December 1993. From January 1992 through December
1993, Mr. Galligan was Vice President and Chief Financial Officer of IPS Health
Care, Inc., a medical diagnostic imaging service company. From May 1990 to
January 1992, Mr. Galligan served as Vice President and Chief Financial Officer
of Lumisys, Inc., a medical imaging equipment company. From 1987 to April 1990,
Mr. Galligan was employed by Diasonics, Inc., a medical diagnostic imaging
equipment company, where he held various corporate and divisional finance
positions, including, most recently, the position of Vice President of Finance
for the MRI division and its successor corporation, Toshiba America MRI, Inc.
Mr. Galligan is qualified as a Chartered Accountant and holds a business degree
from Trinity College, Dublin, Ireland.
Howard D. Goldstein has served as a Vice President of the Company since
1993. From April 1988 to November 1993, Mr. Goldstein served in various
positions at Molecular Dynamics Inc., a supplier of imaging instrumentation for
bioanalytical usage, including the positions of Director of North American
Sales, Director of Worldwide Marketing and, most recently, Director of Worldwide
CLSM Sales & Marketing and Director of Worldwide Sales & Marketing Development.
From 1986 to 1988, Mr. Goldstein was District Sales Manager for Applied
Biosystems, Inc., a bioanalytical research instrumentation company. Mr.
Goldstein holds an MBA degree in Organizational Management from Temple
University and an MS degree in Biochemistry from the University of Dayton.
David P. Hadfield has served as a Vice President of the Company since
March 1997. From November 1995 through February 1997, he served as the Company's
Director of International Sales. From February 1991 to March 1995, Mr. Hadfield
served as Vice President of Marketing at Oxford GlycoSystems plc., a
biotechnology and research systems company. From March 1984 to February 1991, he
was employed by Applied Biosystems Inc., a bioanalytical research instrument
company, where he held various senior marketing and sales positions in both the
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United States and Europe. Mr. Hadfield holds a B.Sc. degree in chemistry from
the University of Manchester, England.
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 July 1983. In 1984, Dr. Humphries joined the Company on a
full time basis as a research scientist and, from 1985 to March 1990, she served
as Director of MAXline and Cytosensor Development. Dr. Humphries holds a Ph.D.
degree in Biochemistry from Stanford University and an MS degree in Biochemistry
from San Jose State University.
Robert J. Murray has served as a Vice President of the Company since
July 1995. Mr. Murray served as the Company's Director of Operations from
October 1993 to July 1995. From January 1993 to October 1993, Mr. Murray was a
consultant to Tandem Computers, Incorporated, a computer manufacturer. From
September 1991 to January 1993, Mr. Murray was Vice President of manufacturing
at Electromer Corporation, an electronic component company, and from March 1989
to September 1991, as a Vice President of Comptronix Corp., a contract
manufacturing company. Mr. Murray holds a M.S. degree in Electrical Engineering
from San Jose State University.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
The members of the Company's Board of Directors do not currently
receive any cash compensation from the Company for their services as members of
the Board of Directors or any committee thereof, although they may be reimbursed
for out-of-pocket and travel expenses incurred in connection with attendance at
Board and committee meetings. Since the Company was founded in 1983, 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 currently paid $5,000 per month for such services.
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
247,500.
Pursuant to the terms of the Directors' Plan, each Non-Employee
Director will automatically be 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 will automatically be
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.
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.
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<TABLE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows, for the fiscal years ended December 31,
1994, 1995 and 1996, compensation awarded or paid to, or earned by, the
Company's Chief Executive Officer and the Company's other executive officers who
earned more than $100,000 during the year ended December 31, 1996 (the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Awards
-----------------
Annual Compensation
---------------------------- Securities All Other
Salary Bonus Underlying Compensation
Name and Principal Position Year ($) ($)(1) Options (#) ($)(2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James P. Iuliano 1996 $158,350 $55,000 --- $330
President, Chief Executive Officer 1995 150,000 40,000 133,332 370
1994 150,000 16,500 23,333 330
Andrew H. Galligan 1996 112,518 32,500 --- 218
Vice President, Chief Financial Officer 1995 107,508 25,000 13,333 218
1994 107,090 11,826 36,666 217
Howard D. Goldstein 1996 120,704 40,000 --- 374
Vice President 1995 116,724 23,000 6,666 374
1994 116,438 11,672 36,666 373
Gillian M.K. Humphries, Ph.D. 1996 119,166 40,000 --- 1,620
Vice President 1995 114,996 23,000 10,000 1,620
1994 114,164 9,200 10,000 1,605
Robert J. Murray 1996 112,440 32,500 --- 571
Vice President 1995 107,040 25,000 36,600 571
1994 105,868 7,493 --- 563
<FN>
(1) Represents amounts accrued by the Company in 1994, 1995 and 1996, but
paid in 1995, 1996 and 1997 at the election of the Company.
(2) Represents the taxable portion of group life insurance paid by the
Company.
</FN>
</TABLE>
STOCK OPTION GRANTS AND EXERCISES
The Company has granted options to its executive officers under its
1988 Stock Option Plan (the "1988 Plan") and, in the future, intends to grant
options under its 1995 Stock Option Plan (the "1995 Plan" and collectively with
the 1988 Plan, the "Option Plans"). The 1988 Plan was terminated subsequent to
the establishment of the 1995 Plan. As of February 28, 1997, options to purchase
a total of 873,216 shares were outstanding under the Option Plans and options to
purchase 867,924 shares remained available for grant thereunder.
10
<PAGE>
<TABLE>
The following tables set forth, for the fiscal year ended December 31,
1996, certain information regarding options granted to, exercised by, and held
at year end by the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
There were no options granted to any of the Named Executive Officers
for the fiscal year ended December 31, 1996
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares Acquired FY-End (#) FY-End ($)
on Exercise Value Exercisable/ Exercisable/
Name (#) Realized($) Unexercisable Unexercisable (1)
- --------------------- ---------------- --------------- -------------------------- --------------------------
<S> <C> <C> <C> <C>
Mr. Iuliano 15,000 129,375 119,164/139,166 $1,592,452/$1,534,736
Mr. Galligan 0 0 20,999/29,000 257,801/340,312
Mr. Goldstein 0 0 19,666/23,666 244,055/285,305
Dr. Humphries 0 0 19,666/13,667 258,640/154,539
Mr. Murray 0 0 15,332/34,667 183,608/399,504
<FN>
(1) Represents the fair market value of the underlying shares on the last day
of the fiscal year ($15.5625 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.
</FN>
</TABLE>
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
is comprised of Messrs. Anderson and Marion and Dr. Waitz, none of whom has been
an 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. 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. 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 1996, these goals were related to (i)
specific increases in revenue and operating income over the prior years and (ii)
successful introduction of new products.
Stock Options. The Option Plans maintained by the Company have been
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 Plans generally vest over a 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.
Guidelines for the number of stock options for each participant under
the Option Plans 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 Code 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 1995 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. The Committee used the same procedures described
above in setting the annual salary, bonus and stock option awards for the CEO.
The CEO's salary is determined based on comparisons with companies with a
capitalization similar to that of the Company. As described above, since the
Company achieved all of its corporate and financial objectives, most noticeably
the significant increase in revenues for 1996, the Committee rated Mr. Iuliano's
performance as above average and awarded him a bonus of $55,000.
12
<PAGE>
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.
13
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON (1)
The following chart shows total stockholder return of an investment of $100 in
cash on December 13, 1995 for the Nasdaq Stock Index, a peer group index
comprised of all public companies using SIC Code 3826 (Laboratory Analytical
Instruments) (the "Peer Group")(2) and for the Company:
COMPARISON OF CUMULATIVE TOTAL RETURN(3)
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
12/13/95 12/31/95 12/31/96
MOLECULAR DEVICES CORP. 100 92.31 136.81
PEER GROUP 100 108.68 130.06
NASDAQ STOCK INDEX 100 99.63 123.81
- ----------
(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 or the Exchange Act, 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.
OTHER MATTERS
The Board of Directors does not know of any other matters that may come
before the meeting. If any other matters are properly presented to the meeting,
it is the intention of the persons named in the accompanying proxy to vote, or
otherwise to act in accordance with their best judgment on such matters.
By Order of the Board of Directors
Andrei M. Manoliu
Secretary
April 15, 1997
14
<PAGE>
APPENDIX A
MOLECULAR DEVICES CORPORATION
Proxy Solicited on Behalf of the Board of Directors of
P the Company for Annual Meeting, May 16, 1997
R
O The undersigned hereby constitutes and appoints James P. Iuliano,
X Andrew H. Galligan and Andrei M. Manoliu, and each of them, his or her true
Y and lawful agents and proxies with full power of substitution in each, to
represent the undersigned at the Annual Meeting of Shareholders of Molecular
Devices Corporation, to be held at the Company's corporate headquarters,
located at 1311 Orleans Drive, Sunnyvale, California on Friday, May 16, 1997,
and at any adjournment thereof, on all matters coming before said meeting.
You are encouraged to specify your choice by marking the appropriate
box, SEE REVERSE SIDE, but you need not mark any box if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxies cannot
vote your shares unless you sign and return this card.
-----------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-----------
<PAGE>
<TABLE>
[X] Please mark
votes as in
this example.
This proxy, when properly executed, will be voted in the manner directed herein
and authorizes the Proxies to take action in their discretion upon other matters
that may properly come before the meeting. If no direction is made, this proxy
will be voted FOR the election of all nominees listed below and FOR proposal 2.
<S> <C>
1. Election of Directors 2. To ratify the selection of Ernst & FOR AGAINST ABSTAIN
Nominees: James P. Iuliano, Moshe Young LLP as independent auditors [ ] [ ] [ ]
H. Alafi, David L. Anderson, A. of the Company for its fiscal year
Blaine Bowman, Paul Goddard, Ph.D., ending December 31, 1997.
Andre F. Marion, Harden M.
McConnell, Ph.D., J. Allen Waitz,
Ph.D.
[ ] FOR ALL [ ] WITHHELD
NOMINEES FROM ALL
NOMINEES
[ ] _______________________
For all nominees except
as noted above
MARK HERE [ ]
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
Please sign exactly as your name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as
such.
Signature:_______________________________ Date:__________ Signature:______________________________ Date:___________
</TABLE>
