<PAGE>
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
LJL BIOSYSTEMS, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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</TABLE>
<PAGE>
[LOGO]
405 TASMAN DRIVE
SUNNYVALE, CA 94089
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of LJL
BioSystems, Inc., a Delaware corporation (the "Company"), will be held at the
Company's headquarters, located at 405 Tasman Drive, Sunnyvale, California 94089
on Wednesday, June 14, 2000, at 1:00 p.m., local time, for the following
purposes:
1. To elect directors of the Company to serve for a term expiring at the
Annual Meeting of Stockholders held in the second year following the year
of their election or until their respective successors are elected and
qualified;
2. To approve an amendment of the Company's 1997 Stock Plan to increase the
aggregate number of shares of Common Stock authorized for issuance under
such plan by 800,000 shares, to 3,320,750 shares;
3. To ratify the appointment of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the fiscal year ending
December 31, 2000; and
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement which is attached and made a part of
this Notice.
The Board of Directors has fixed the close of business on Tuesday,
April 18, 2000 as the record date for determining the stockholders entitled to
notice of and to vote at the Annual Meeting and any adjournment or postponement
thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
<TABLE>
<S> <C>
By Order of the Board of Directors,
Mark B. Weeks
SECRETARY
</TABLE>
Sunnyvale, California
April 26, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE
ADDED EXPENSE OF RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND
SO DESIRE, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY.
<PAGE>
[LOGO]
405 TASMAN DRIVE
SUNNYVALE, CA 94089
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of LJL BioSystems, Inc. (the "Company"), a
Delaware corporation, of proxies in the enclosed form for use in voting at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held at the
Company's headquarters, located at 405 Tasman Drive, Sunnyvale, California, on
Wednesday, June 14, 2000, at 1:00 p.m., local time, and any adjournment or
postponement thereof.
This Proxy Statement, the enclosed proxy card, the Company's Annual Report
to Stockholders and the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, including consolidated financial statements, were first
mailed to stockholders entitled to vote at the meeting on or about April 26,
2000.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company, Attention:
Robert T. Beggs, a written notice of revocation or a duly executed proxy bearing
a later date, or by attending the Annual Meeting and voting in person.
RECORD DATE; VOTING SECURITIES
The close of business on Tuesday, April 18, 2000 has been fixed as the
record date (the "Record Date") for determining the holders of shares of Common
Stock of the Company entitled to notice of and to vote at the Annual Meeting. At
the close of business on the Record Date, the Company had approximately
14,827,131 shares of Common Stock outstanding and held of record by
approximately 125 stockholders and approximately 2,850 beneficial owners.
VOTING AND SOLICITATION
Each outstanding share of Common Stock on the Record Date is entitled to one
vote on all matters. Shares of Common Stock may not be voted cumulatively.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's transfer agent. The Inspector will also determine whether or not a
quorum is present. The nominees for election as directors at the Annual Meeting
will be elected by a plurality of the votes of the shares of Common Stock
present in person or represented by proxy at the meeting. All other matters
submitted to the stockholders will require the affirmative vote of a majority of
shares present in person or represented by proxy at a duly held meeting at which
a quorum is present as required under Delaware law for approval of proposals
presented to stockholders. In general, Delaware law also provides that a quorum
consists of a majority of the shares entitled to vote and present in person or
represented by proxy. The Inspector will treat abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum and as negative votes for purposes of determining the approval of any
matter submitted to the stockholders for a vote. Any proxy which is returned
using the form of proxy enclosed and which is not marked as to a particular item
will be voted FOR the election of directors, FOR the amendment to the 1997 Stock
Plan, FOR ratification of the appointment of the designated independent auditors
and as the proxy holders deem advisable on other matters that may come before
the meeting, as the case may be with respect to the item not marked. If a broker
indicates on the enclosed proxy or its
<PAGE>
substitute that it does not have discretionary authority as to certain shares to
vote on a particular matter ("broker non-votes"), those shares will not be
considered as present with respect to that matter. The Company believes that the
tabulation procedures to be followed by the Inspector are consistent with the
general statutory requirements in Delaware concerning voting of shares and
determination of a quorum.
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy solicitation materials for the Annual Meeting and reimbursements
paid to brokerage firms and others for their expenses incurred in forwarding
solicitation materials regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation personally,
telephonically or by facsimile through its officers, directors and employees,
none of whom will receive additional compensation for assisting with the
solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The Company currently has authorized seven (7) directors. In accordance with
the terms of the Company's Fourth Amended and Restated Certificate of
Incorporation, and effective at the time the Company became a Listed Corporation
within the meaning of Section 301.5 of the California Corporations Code, the
terms of office of the Board of Directors were divided into two classes:
Class I, whose term will expire at the annual meeting of stockholders to be held
in 2001 and Class II, whose term will expire at the annual meeting of
stockholders to be held in 2000. The Class I Directors (the "Class I Directors")
are Galina Leytes, George W. Dunbar, Jr. and Daniel S. Janney, and the Class II
Directors (the "Class II Directors") are Lev J. Leytes, Michael F. Bigham, John
G. Freund, M.D. and John D. Diekman, Ph.D. Dr. Diekman has informed the Board of
Directors that he does not intend to pursue re-election as a Class II Director
at the Company's Annual Meeting to be held on June 14, 2000. At each annual
meeting of stockholders after the Annual Meeting, the successors to directors
whose terms will then expire will be elected to serve from the time of election
and qualification until the second annual meeting following election. Any
additional directorships resulting from an increase in the number of directors
will be distributed among the two classes so that, as nearly as possible, each
class will consist of one-half of the directors.
NOMINEES
At the Annual Meeting, the stockholders will elect three (3) directors, each
to serve until the next annual meeting at which elections of the class of
directors to which such director belongs are held, or, in each case, until their
respective successors are elected and qualified. Accordingly, the Class II
Directors will be elected to serve until the annual meeting of stockholders to
be held in 2002. In the event any nominee is unable or unwilling to serve as a
director at the time of the Annual Meeting, the proxies may be voted for the
balance of those nominees named and for any substitute nominee designated by the
present Board or the proxy holders to fill such vacancy, or for the balance of
the nominees named without nomination of a substitute, or the size of the Board
may be reduced in accordance with the Bylaws of the Company. Dr. Diekman has
informed the Board of Directors that he does not intend to pursue re-election as
a Class II Director at the Company's Annual Meeting to be held on June 14, 2000.
Any vacancy on the Board of Directors may be filled by the Board of Directors in
accordance with the Company's Articles of Incorporation and Bylaws. Except for
Dr. Diekman, the Board has no reason to believe that any other of the persons
named below will be unable or unwilling to serve as a nominee or as a director
if elected.
Assuming a quorum is present, the Class II nominees receiving the highest
number of affirmative votes of shares entitled to be voted for them will be
elected as Class II Directors of the Company to
2
<PAGE>
serve until the next annual meeting at which elections of Class II Directors are
held or until their respective successors are elected and qualified.
The names of the Directors, their ages as of February 29, 2000, and certain
other information about them are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF DIRECTOR AGE PRINCIPAL OCCUPATION SINCE CLASS
- ---------------- -------- ----------------------------------- -------- --------
<S> <C> <C> <C> <C>
Lev J. Leytes...................... 44 President, Chief Executive Officer 1988 II
and Chairman of the Board of
Directors
Galina Leytes...................... 46 Executive Vice President and 1988 I
Director
Michael F. Bigham(2)............... 41 Director 1997 II
John D. Diekman, Ph.D(3)........... 57 Director 1999 II
George W. Dunbar, Jr.(1)........... 53 Director 1995 I
John G. Freund, M.D.(2)............ 45 Director 1997 II
Daniel S. Janney(1)................ 34 Director 1997 I
</TABLE>
- ------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Dr. Diekman has informed the Board of Directors that he does not intend to
pursue re-election as a Class II Director at the Company's Annual Meeting to
be held on June 14, 2000.
LEV J. LEYTES is one of the co-founders of the Company and has been its
President, Chief Executive Officer and Chairman of the Board of Directors since
inception. Prior to the Company's founding, Mr. Leytes worked in various
technical and management positions at Beckman Instruments, Inc., a life sciences
company, and Molecular Devices Corporation, a bioanalytical instrumentation
company. Mr. Leytes holds an M.S. in engineering from the Moscow Engineering
Institute. Mr. Leytes is the spouse of Galina Leytes.
GALINA LEYTES is one of the co-founders and has been its Vice President and
a director since inception, and was promoted to Executive Vice President in
January 1996. Ms. Leytes previously served as the Company's Chief Financial
Officer and Secretary from inception to December 1997. Prior to the Company's
founding, Ms. Leytes managed the information systems group at Stanford
University, was a consultant in management information systems, and was a senior
programmer at Charles Schwab & Co., Inc. Ms. Leytes holds an M.S. in engineering
from the Kiev Engineering Institute. Ms. Leytes is the spouse of Lev J. Leytes.
MICHAEL F. BIGHAM has been one of the Company's directors since June 1997.
Mr. Bigham has been the President, Chief Executive Officer and a director of
Coulter Pharmaceutical, Inc., a drug development company, since July 1996. Prior
to joining Coulter, Mr. Bigham served as Executive Vice President of Operations
from April 1994 to June 1996, Chief Financial Officer from April 1989 to
June 1996, and Vice President of Corporate Development from July 1988 to
March 1992 at Gilead Sciences, Inc., a biotechnology company. Previously,
Mr. Bigham was Co-head of Healthcare Investment Banking for Hambrecht & Quist
LLC, an investment banking firm. Mr. Bigham is also a member of the Board of
Directors of Datron Systems, Inc., an electronics company, and several
privately-held companies. Mr. Bigham received a B.S. degree in commerce with
distinction from the University of Virginia and an M.B.A. from the Stanford
University Graduate School of Business.
JOHN D. DIEKMAN, PH.D has been one of the Company's directors since
January 1999. Dr. Diekman has informed the Board of Directors that he does not
intend to pursue re-election as a Class II Director at the Company's Annual
Meeting to be held on June 14, 2000. Dr. Diekman has been a managing partner of
Bay City Capital, a life sciences merchant bank since 1997 and has also been
Chairman of Affymetrix, Inc., a company developing and marketing DNA chip
technology for the genetic analysis, genomics, clinical diagnostics and research
instrumentation markets since 1995. Until
3
<PAGE>
April 1997, Dr. Diekman was also Chief Executive Officer of Affymetrix. Over the
past ten years, Dr. Diekman has served as Chairman and Managing Director of
Affymax N.V., President of Monoclonal Antibodies Inc., President of Salutar, and
spent sixteen years at Zoecon Corporation, the last three of which as President
and Chief Executive Officer. Dr. Diekman is a director of Quidel Corporation, a
diagnostic company, Metabolex, Inc., a private biotechnology diabetes company,
and Hilltop Laboratories, a consumer testing and clinical research site
management organization. Dr. Diekman is Chairman of the Board of Molecular
Applications Group, a private bioinformatics company. Dr. Diekman holds an A.B.
in chemistry from Princeton University and a Ph.D in chemistry from Stanford
University.
GEORGE W. DUNBAR, JR. has been one of the Company's directors since
February 1995. Mr. Dunbar is the Acting President and CEO of
CytoTherapeutics, Inc. and StemCells, Inc. From 1991 to 1999, Mr. Dunbar was the
President, Chief Executive Officer and a director of Metra BioSystems, Inc.
Metra was acquired by Quidel Corporation in 1999 and Mr. Dunbar now serves on
Quidel's Board of Directors. Mr. Dunbar is also a member of the Board of
Directors of DepoTech Corporation, a drug delivery company, Sonus
Pharmaceuticals, Inc., a medical diagnostic ultrasound company, Competitive
Technologies and The Valley Medical Center Foundation. Mr. Dunbar holds a B.S.
in electrical engineering and an M.B.A. from Auburn University.
JOHN G. FREUND, M.D. has been one of the Company's directors since
June 1997. Dr. Freund has been Managing Director of the General Partner of
Skyline Venture Partners, L.P., a venture capital firm, since October 1997.
Dr. Freund served as Managing Director in the Alternative Assets Group of
Chancellor LGT Asset Management, Inc., now AMVESCAP PLC, from August 1995 to
September 1997. In 1995, Dr. Freund co-founded Intuitive Surgical
Devices, Inc., a privately-held medical device company. From July 1988 through
December 1994, Dr. Freund was employed at Acuson Corporation, a medical
equipment company, where he was Vice President-Corporate Development and later
Executive Vice President. Previously, Dr. Freund was a partner in Morgan Stanley
Venture Partners, a venture capital firm, and co-founded the healthcare group in
the corporate finance department of Morgan Stanley & Co., Inc. Dr. Freund holds
a B.A. from Harvard College, an M.D. from Harvard Medical School and an M.B.A.
from Harvard Business School, where he was a Baker Scholar and won what is now
called the John L. Loeb Fellowship for excellence in finance. Dr. Freund serves
as a director of Allos Therapeutics, Inc. and several private companies.
DANIEL S. JANNEY has been one of the Company's directors since June 1997.
Mr. Janney is a Managing General Partner of Alta Partners, a venture capital
company. Prior to joining Alta Partners, Mr. Janney served as a Vice President
in the health care investment banking group of Montgomery Securities, now Banc
of America Securities LLC, from January 1994 to April 1996. Mr. Janney sits on
the Boards of several private companies. Mr. Janney holds a B.A. from Georgetown
University and an M.B.A. from the Anderson School at the University of
California, Los Angeles.
EXECUTIVE OFFICERS
Set forth below is certain information describing the Company's other
executive officers:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- -------- -----------------------------------------------------
<S> <C> <C>
Richard M. Eglen, Ph.D................. 42 Senior Vice President of Assay Technologies
James S. Richey........................ 46 Senior Vice President of Sales and Marketing
Larry Tannenbaum....................... 48 Senior Vice President and Chief Financial Officer
Anthony H. Bautista.................... 44 Vice President of Manufacturing Operations
Robert T. Beggs........................ 51 Vice President of Finance and Administration
Douglas N. Modlin, Ph.D................ 47 Vice President of Instrumentation Systems and
Research Development
</TABLE>
4
<PAGE>
RICHARD M. EGLEN, PH.D joined the Company in February 2000 as its Senior
Vice President of Assay Technologies. From 1997 to December 1999, Dr. Eglen was
Vice President and Director of Roche Bioscience, a drug discovery company based
in Palo Alto, California and part of Roche Pharmaceuticals. From 1997 to 1999,
Dr. Eglan was the Global Coordinator of High Throughput Screening for Hoffman La
Roche. Previously, Dr. Eglan was Director of Pharmacology at Syntex Research,
also based in Palo Alto, California. Dr. Eglan holds a B.Sc. in Special Honors
Physiology from the University of Sheffield, United Kingdom and a Ph.D in
Pharmacology from Trent University, United Kingdom. Dr. Eglan currently serves
on the editorial board of several industry publications.
JAMES S. RICHEY joined the Company in February of 1998 as its Senior Vice
President of Sales and Marketing. Prior to joining the Company, Mr. Richey was
Vice President, Indirect Channels at PerSeptive BioSystems, Inc, a biotechnology
tools provider, from January 1996 to February 1998. Mr. Richey held various
management positions including his last position of Vice President of Global
Sales and Marketing for Biosensor AB, an analytical research technology provider
from September 1989 to January 1996. Prior to that, Mr. Richey held various
positions in sales, marketing and research and development in various divisions
of Pharmacia Biotech Inc., a subsidiary of Pharmacia Biotech AB. Mr. Richey
holds a B.S. in Biochemistry from Rutgers University.
LARRY TANNENBAUM joined the Company in November 1998 as Senior Vice
President and Chief Financial Officer. From August 1998 to October 1998,
Mr. Tannenbaum served as an independent consultant. Mr. Tannenbaum was Vice
President and Chief Financial Officer at SinoGen, a privately held
pharmaceutical company, from October 1997 to August 1998. From September 1995 to
October 1997, Mr. Tannenbaum was Vice President, Finance and Administration and
Chief Financial Officer at ArthroCare, a medical device company. Mr. Tannenbaum
was Vice President, Finance and Administration and Chief Financial Officer at
Target Therapeutics, a developer of minimally invasive neurological devices,
from May 1992 to May 1995. Prior to that, Mr. Tannenbaum held various financial
management positions at Tandem Computer (Compaq), Alpha Partners, Gould/AMI
(American Microsystem) and Intel Corporation. Mr. Tannenbaum holds a B.S. in
political science from Arizona State University and an M.B.A. in finance from
the University of Utah.
ANTHONY H. BAUTISTA joined the Company in November 1991 as Manufacturing
Operations Manager, and was promoted to Director of Manufacturing Operations in
December 1993 and Vice President of Manufacturing Operations in May 1996. Prior
to joining the Company, Mr. Bautista held various management positions in the
manufacturing divisions of Molecular Devices Corporation, a bioanalytical
instrumentation company, and Hewlett-Packard Company, a computer and electronics
company. Mr. Bautista holds an A.A. in electronic technology from the College of
San Mateo and a B.S. in electrical engineering from San Jose State University.
ROBERT T. BEGGS joined the Company in November 1992 as Controller, and was
promoted to Director of Finance and Administration in December 1994 and Vice
President of Finance and Administration in May 1996. Prior to joining the
Company, Mr. Beggs was the Controller of Sequoia-Turner Corporation, a medical
instruments company, acquired in 1991 by Abbott Laboratories, a pharmaceutical
and diagnostics company. Mr. Beggs held several financial management positions
at G.D. Searle & Co., a pharmaceutical company and a wholly-owned subsidiary of
Monsanto Company, Siemens AG, a diversified electronics company, and Tandem
Computer (Compaq), a diversified computer and electronics company. Mr. Beggs
holds a B.S. in business administration from Nichols College and an M.B.A. from
the University of Massachusetts, Amherst.
DOUGLAS N. MODLIN, PH.D joined the Company in December 1996 as Senior
Director of Research and Development, and was promoted to Vice President of
Instrumentation Systems Research and Development in October 1997. Prior to
joining the Company, Dr. Modlin was the Manager of Advanced Test Systems
Development at Micro Module Systems, Inc., an electronic integration company,
from November 1995 to December 1996, and was the Associate Technical Director of
Research at Molecular Devices Corporation, a bioanalytical instrumentation
company, from
5
<PAGE>
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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the period from January 1, 1999 through December 31, 1999 (the "last
fiscal year"), the Board met six times and Dr. Diekman attended three of the six
meetings; no other director attended fewer than 75% of the aggregate number of
meetings of the Board and meetings of the committees of the Board on which he or
she serves. The Board has an Audit Committee and a Compensation Committee. The
Board does not have a nominating committee or a committee performing the
functions of a nominating committee. Although there are no formal procedures for
stockholders to nominate persons to serve as directors, the Board will consider
nominations from stockholders, which should be addressed to Robert T. Beggs at
the Company's address set forth above.
The Audit Committee consists of Messrs. Dunbar and Janney, two of the
Company's non-employee directors, and held two separate committee meetings
during the last fiscal year. Its functions are to review the annual audit and
meet with the Company's independent accountants to review the Company's internal
accounting procedures and financial management practices. Final audited results
for the fiscal year ended December 31, 1999, were reviewed and discussed at a
regular board meeting by the Board and the Company's independent accountants,
PricewaterhouseCoopers LLP.
The Compensation Committee consists of Mr. Bigham and Dr. Freund, two of the
Company's non-employee directors, and held four separate committee meetings as
well as additional meetings together with the full Board during the last fiscal
year. Its functions are to recommend compensation and benefits for the Company's
President and Chief Executive Officer and the Company's other executive officers
to the Board of Directors, review general policy relating to compensation and
benefits of employees of the Company, and administer the Company's Stock Plans.
COMPENSATION OF DIRECTORS
Historically, the Company did not provide cash compensation to directors for
services in such capacity, but directors may be reimbursed for certain expenses
in connection with attendance at Board of Directors and committee meetings.
Commencing April 2000, each nonemployee director will receive $3,000 in cash
compensation for each board meeting attended. Directors are eligible to
participate in the Company's Stock Plans and, in 1999, employee directors were
eligible to participate in the Company's 1998 Employee Stock Purchase Plan and
non-employee directors were eligible to participate in the 1998 Directors' Stock
Option Plan (the "Directors' Plan"). The Directors' Plan provides that each
person who first becomes a nonemployee director of the Company after the date of
its initial public offering shall be granted a nonstatutory stock option to
purchase 20,000 shares of Common Stock (the "First Option") on the date on which
the optionee first becomes a nonemployee director of the Company. Dr. Diekman
was granted a First Option in January 1999. On the date of each annual meeting
of the Company's stockholders, including this meeting, each nonemployee director
(including nonemployee directors who were not granted a First Option prior to
the date of such annual meeting) shall be granted an option to purchase 5,000
shares of Common Stock (a "Subsequent Option") if, on such date, he or she has
served on the Company's Board of Directors for at least six months. In addition,
in April 2000 each nonemployee director was granted a one-time option to
purchase 5,000 shares of Common Stock, which will be exercisable one year from
the grant date.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR
THE ELECTION OF ALL NOMINEES NAMED ABOVE.
6
<PAGE>
PROPOSAL NO. 2
AMENDMENT OF THE 1997 STOCK PLAN
At the Annual Meeting, the Company's stockholders are being asked to approve
the amendment of the Company's 1997 Stock Plan (the "1997 Plan") and the
reservation of 800,000 additional shares of Common Stock for issuance
thereunder. The following is a summary of principal features of the 1997 Plan.
The summary, however, does not purport to be a complete description of all the
provisions of the 1997 Plan. Any stockholder of the Company who wishes to obtain
a copy of the actual plan document may do so upon written request to Robert T.
Beggs at the Company's principal offices at 405 Tasman Drive, Sunnyvale,
California 94089.
GENERAL
The Company's 1997 Plan was adopted by the Board of Directors in March,
1997. Under the 1997 Plan, 2,520,750 shares of Common Stock are reserved for
issuance thereunder. In connection with the amendment of the 1997 Plan, the
Board of Directors has reserved 800,000 additional shares of Common Stock for
issuance thereunder. The Board of Directors believes that, in order to attract
qualified employees, officers, consultants and directors to the Company and to
provide incentives to its current employees, officers, consultants and
directors, it is necessary to grant options to purchase Common Stock to such
persons pursuant to the 1997 Plan. Accordingly, the stockholders are being asked
to approve the amendment of the 1997 Plan.
The 1997 Plan provides for the granting to employees of incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and for the granting of nonstatutory stock options to
employees, consultants and directors. See "United States Federal Income Tax
Information" below for information concerning the tax treatment of both
incentive stock options and nonstatutory stock options.
As of December 31, 1999, 72,238 shares had been issued upon exercise of
options granted under the 1997 Plan, options to purchase 1,696,770 shares were
outstanding and 672,064 shares remained available for future grant. The
following table sets forth information with respect to the stock options granted
to the Named Executive Officers, all current executive officers as a group, all
current directors who are not executive officers as a group, and all employees
and consultants (including all current officers who are not executive officers)
as a group under the 1997 Plan as of December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SHARES SUBJECT TO WEIGHTED AVERAGE
OPTIONS GRANTED UNDER EXERCISE PRICE
NAME THE 1997 STOCK PLAN PER SHARE
- ---- --------------------------- ----------------
<S> <C> <C>
Lev J. Leytes............................................... 137,105 $4.92
President, Chief Executive Officer and Chairman of the Board
Galina Leytes............................................... 52,924 $4.38
Executive Vice President and Director
Larry Tannenbaum............................................ 160,000 $2.88
Senior Vice President and Chief Financial Officer
James S. Richey............................................. 147,500 $5.17
Senior Vice President of Sales and Marketing
Doug N. Modlin, Ph.D........................................ 131,597 $3.97
Vice President of Instrumentation Systems Research and
Development
All current executive officers as a group (8 persons)....... 808,225 $4.11
All directors who are not executive officers (5 persons).... 85,000 $2.66
All employees and consultants (including all current
officers who are not executive officers) as a group (84
persons).................................................. 1,259,173 $3.31
</TABLE>
7
<PAGE>
The 1997 Plan is not a qualified deferred compensation plan under
Section 401(a) of the Code, and is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
RESERVATION OF SHARES UNDER THE 1997 PLAN
The Board of Directors believes that in order to attract and retain highly
qualified employees, consultants and directors and to provide such employees,
consultants and directors with adequate incentive through their proprietary
interest in the Company, it is necessary to reserve 800,000 additional shares of
Common Stock for issuance thereunder. At the Annual Meeting of Stockholders, the
stockholders are being asked to approve the amendment of the 1997 Plan and the
reservation of 800,000 additional shares of Common Stock for issuance
thereunder.
PURPOSE
The purposes of the 1997 Plan are to attract and retain the best available
personnel for the Company, to provide additional incentive to the employees,
officers, consultants and directors of the Company, and to promote the success
of the Company's business.
ADMINISTRATION
If permitted by Rule 16b-3 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and by the legal requirements relating to the
administration of incentive stock option plans, if any, of applicable securities
laws and the Code (collectively, the "Applicable Laws"), grants under the 1997
Plan may (but need not) be made by different administrative bodies with respect
to employees or consultants who are also officers or directors and employees who
are neither directors nor officers.
With respect to grants of options to employees or consultants who are also
officers or directors of the Company, grants under the 1997 Plan shall be made
by (A) the Board of Directors, if the Board of Directors may make grants under
the 1997 Plan in compliance with Rule 16b-3 of the Exchange Act and
Section 162(m) of the Code as the latter applies so as to qualify grants of
options to "covered employees" as performance-based compensation, or (B) a
committee designated by the Board of Directors to make grants under the 1997
Plan, which committee shall be constituted in such a manner as to permit grants
under the 1997 Plan to comply with Rule 16b-3, to qualify grants of options to
"covered employees" as performance-based compensation under Section 162(m) of
the Code and otherwise so as to satisfy the Applicable Laws.
With respect to grants of options to employees or consultants who are
neither directors nor officers of the Company, the 1997 Plan will be
administered by (A) the Board of Directors or (B) a committee designated by the
Board of Directors, which committee will be constituted in such a manner so as
to satisfy the Applicable Laws. The Board of Directors or the committee
designated by the Board of Directors to administer the 1997 Plan is referred to
in this Proxy Statement as the "Administrator." The Administrator receives no
additional compensation for its services in connection with the administration
of the 1997 Plan.
ELIGIBILITY
The 1997 Plan provides that options and rights to purchase Common Stock of
the Company (a "Stock Purchase Right") may be granted to employees (including
officers and directors who are also employees) and consultants of the Company
(including non-employee directors). Incentive stock options may be granted only
to employees. The Administrator, upon the recommendation of management, selects
the optionees and determines the number of shares and the exercise price to be
associated with each option. In making such determination, the Administrator
takes into account the duties and responsibilities of the optionee, the value of
the optionee's services, the optionee's present
8
<PAGE>
and potential contribution to the success of the Company, and other relevant
factors. See also "Stock Purchase Rights" below. As of December 31, 1998, there
were approximately 80 employees, officers, consultants and directors eligible to
participate in the 1997 Plan.
The 1997 Plan provides that the maximum number of shares of Common Stock
which may be granted under options to any one employee under the 1997 Plan
during any fiscal year is 2,000,000, subject to adjustment as provided in the
1997 Plan.
TERMS OF OPTIONS AND STOCK PURCHASE RIGHTS
The terms of options and Stock Purchase Rights granted under the 1997 Plan
are determined by the Administrator. Each option is evidenced by a stock option
agreement and each Stock Purchase Right is evidenced by a restricted stock
purchase agreement between the Company and the optionee or purchaser,
respectively, and is subject to the following additional terms and conditions:
(a) EXERCISE OF THE OPTION. The optionee must earn the right to exercise the
option by continuing to work for the Company. The Administrator determines when
options are exercisable. An option is exercised by giving written notice of
exercise to the Company specifying the number of full shares of Common Stock to
be purchased, and by tendering payment of the purchase price to the Company. The
method of payment of the exercise price of the shares purchased upon exercise of
an option is determined by the Administrator.
(b) EXERCISE PRICE. The exercise price of options granted under the 1997
Plan is determined by the Administrator, and must be at least equal to the fair
market value of the shares on the date of grant, in the case of incentive stock
options, based upon the closing price on the Nasdaq Stock Market on the date of
grant. In the case of nonstatutory stock options, the exercise price of options
granted to any person other than a "covered employee" under the 1997 Plan shall
be such price as is determined by the Administrator on the date of grant.
Incentive stock options granted to stockholders owning more than 10% of the
total combined voting power of all classes of the Company's stock (such holders
are referred to as "10% Stockholders") are subject to the additional restriction
that the exercise price on such options must be at least 110% of the fair market
value on the date of the grant. Nonstatutory stock options granted to a "covered
employee" under Section 162(m) of the Code are subject to the additional
restriction that the exercise price on such options must be at least 100% of the
fair market value on the date of grant.
(c) TERMINATION OF EMPLOYMENT. If the optionee's employment or consulting
relationship with the Company is terminated for any reason other than death or
total and permanent disability, options under the 1997 Plan may be exercised not
later than three (3) months (or such other period of time not less than thirty
(30) days as is determined by the Administrator, with such determination in the
case of an incentive stock option being made at the time of grant and not
exceeding three (3) months) after the date of such termination to the extent the
option was exercisable on the date of such termination. In no event may an
option be exercised by any person after the expiration of its term.
(d) DISABILITY. If an optionee is unable to continue his or her employment
or consulting relationship with the Company as a result of his or her total and
permanent disability, options may be exercised within twelve (12) months after
the date of termination and may be exercised only to the extent the option was
exercisable on the date of termination, but in no event may the option be
exercised after its termination date.
(e) DEATH. In the event of the death of an optionee during the period of
continuous service for the Company since the date of grant of the option, or
within thirty (30) days following termination of optionee's continuous service
for the Company, the option may be exercised, at any time within six (6) months
following the date of death (but in no event later than the expiration date of
the term of such option), by optionee's estate or by a person who acquired the
right to exercise the option by
9
<PAGE>
bequest or inheritance, but only to the extent that the right to exercise had
accrued at the date of death, or, if earlier, the date of termination of
optionee's continuous service for the Company. To the extent that optionee was
not entitled to exercise the option at the date of death or termination, as the
case may be, or if optionee does not exercise such option to the extent so
entitled within the time specified herein, the option shall terminate.
(f) OPTION TERMINATION DATE. Incentive stock options granted under the 1997
Plan expire ten years from the date of grant unless a shorter period is provided
in the option agreement. Incentive stock options granted to 10% Stockholders may
not have a term of more than five years.
(g) STOCK PURCHASE RIGHTS. A Stock Purchase Right may be issued either
alone, in addition to, or in tandem with other awards granted under the 1997
Plan and/or cash awards made outside of the 1997 Plan. After the Administrator
determines that it will offer a Stock Purchase Right under the 1997 Plan, it
shall advise the offeree in writing of the terms, conditions and restrictions
related to the offer, including the number of shares of Common Stock that such
person shall be entitled to purchase, the price to be paid, which price shall be
the price determined by the Administrator on the date of offer (which shall not
be less than 100% of the fair market value of the Common Stock in the case of an
offer to a "covered employee" under Section 162(m) of the Code), and the time
within which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Administrator. Shares purchased pursuant to the grant of a Stock Purchase Right
are referred to herein as "Restricted Stock".
Unless the Administrator determines otherwise, the Restricted Stock purchase
agreement shall grant the Company a repurchase option exercisable upon the
voluntary or involuntary termination of the purchaser's employment with the
Company for any reason (including death or disability). The purchase price for
the Common Stock repurchased pursuant to the Restricted Stock purchase agreement
shall be the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at such rate as the Administrator may determine.
Once the Stock Purchase Right is exercised, the purchaser shall have the
rights equivalent to those of a stockholder, and shall be a stockholder when his
or her purchase is entered upon the records of the duly authorized transfer
agent of the Company.
(h) NONTRANSFERABILITY OF OPTIONS. Stock options and Stock Purchase Rights
are not transferable by the optionee, other than by will or the laws of descent
and distribution, and are exercisable or purchasable only by the optionee or
purchaser, respectively, during his or her lifetime or, in the case of a stock
option, in the event of death, by a person who acquires the right to exercise
the option by bequest or inheritance or by reason of the death of the optionee.
(i) MERGER OR SALE OF ASSETS. In the event of a proposed sale of all or
substantially all of the Company's assets or a merger of the Company with or
into another corporation where the successor corporation issues its securities
to the Company's stockholders, each outstanding option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the successor corporation does not agree to assume the option or Stock
Purchase Right or to substitute an equivalent option or right, in which case
such option or Stock Purchase Right shall terminate upon the consummation of the
merger or sale of assets.
(j) OTHER PROVISIONS. The option agreement and the Restricted Stock purchase
agreement may contain such other terms, provisions and conditions not
inconsistent with the 1997 Plan as may be determined by the Administrator.
10
<PAGE>
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event any change, such as a stock split, reverse stock split, stock
dividend, combination or reclassification, is made in the Company's
capitalization that results in an increase or decrease in the number of
outstanding shares of Common Stock without receipt of consideration by the
Company, appropriate adjustment shall be made in the exercise price of each
outstanding option and Stock Purchase Right, the number of shares subject to
each option and Stock Purchase Right, and the annual limitation on grants to
employees, as well as the number of shares available for issuance under the 1997
Plan. In the event of the proposed dissolution or liquidation of the Company,
each option will terminate unless otherwise provided by the Administrator.
AMENDMENT AND TERMINATION
The Board of Directors may at any time amend, alter, suspend or discontinue
the 1997 Plan, but no amendment, alteration, suspension or discontinuation shall
be made that would impair the rights of any holder of a stock option or Stock
Purchase Right under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 of the
Exchange Act or with Section 422 of the Code (or any other applicable law or
regulation), the Company shall obtain stockholder approval of any 1997 Plan
amendment in such a manner and to such a degree as required.
UNITED STATES FEDERAL INCOME TAX INFORMATION
The following is a brief summary of the U.S. federal income tax consequences
of transactions under the 1997 Plan based on federal income tax laws in effect
on the date of this Proxy Statement. This summary is not intended to be
exhaustive and does not address all matters which may be relevant to a
particular optionee based on his or her specific circumstances. The summary
addresses only current U.S. federal income tax law and expressly does not
discuss the income tax laws of any state, municipality, non-U.S. taxing
jurisdiction or gift, estate or other tax laws other than federal income tax
law. The Company advises all optionees to consult their own tax advisor
concerning the tax implications of option grants and exercises and the
disposition of stock acquired upon such exercises, under the 1997 Plan.
Options granted under the 1997 Plan may be either incentive stock options,
which are intended to qualify for the special tax treatment provided by
Section 422 of the Code, or nonstatutory stock options, which will not so
qualify. If an option granted under the 1997 Plan is an incentive stock option,
the optionee will recognize no income upon grant of the incentive stock option
and will incur no tax liability due to the exercise, except to the extent that
such exercise causes the optionee to incur alternative minimum tax. (See
discussion below.) The Company will not be allowed a deduction for federal
income tax purposes as a result of the exercise of an incentive stock option
regardless of the applicability of the alternative minimum tax. Upon the sale or
exchange of the shares more than two years after grant of the option and one
year after exercise of the option by the optionee, any gain will be treated as a
long-term capital gain. If both of these holding periods are not satisfied, the
optionee will recognize ordinary income equal to the difference between the
exercise price and the lower of the fair market value of the Common Stock on the
date of the option exercise or the sale price of the Common Stock. The Company
will be entitled to a deduction in the same amount as the ordinary income
recognized by the optionee. Any gain or loss recognized on a disposition of the
shares prior to completion of both of the above holding periods in excess of the
amount treated as ordinary income will be characterized as long-term capital
gain if the sale occurs more than one year after exercise of the option or as
short-term capital gain if the sale is made earlier. For individual taxpayers,
the current U.S. federal income tax rate on long-term capital gains is 20% (in
the case of shares held more than one year after exercise) whereas the maximum
rate on other income is 39.6%. Capital losses for individual taxpayers are
allowed in full against capital gains plus $3,000 of other income.
11
<PAGE>
All other options which do not qualify as incentive stock options are
referred to as nonstatutory stock options. An optionee will not recognize any
taxable income at the time he or she is granted a nonstatutory stock option.
However, upon its exercise, the optionee will recognize ordinary income for tax
purposes measured by the excess of the fair market value of the shares over the
exercise price. The income recognized by an optionee who is also an employee of
the Company will be subject to income and employment tax withholding by the
Company by payment in cash by the optionee or out of the optionee's current
earnings. Upon the sale of such shares by the optionee, any difference between
the sale price and the fair market value of the shares as of the date of
exercise of the option will be treated as capital gain or loss, and will qualify
for long-term capital gain or loss treatment if the shares have been held for
more than one year from date of exercise.
ALTERNATIVE MINIMUM TAX
The exercise of an incentive stock option may subject the optionee to the
alternative minimum tax under Section 55 of the Code. The alternative minimum
tax is calculated by applying a tax rate of 26% to alternative minimum taxable
income of joint filers up to $175,000 ($87,500 for married taxpayers filing
separately) and 28% to alternative minimum taxable income above that amount.
Alternative minimum taxable income is equal to (i) taxable income adjusted for
certain items, plus (ii) items of tax preference less (iii) an exemption amount
of $45,000 for joint returns, $33,750 for unmarried individual returns and
$22,500 in the case of married taxpayers filing separately (which exemption
amounts are phased out for upper income taxpayers). Alternative minimum tax will
be due if the tax determined under the foregoing formula exceeds the regular tax
of the taxpayer for the year.
In computing alternative minimum taxable income, shares purchased upon
exercise of an incentive stock option are treated as if they had been acquired
by the optionee pursuant to exercise of a nonstatutory stock option. As a
result, the optionee recognizes alternative minimum taxable income equal to the
excess of the fair market value of the Common Stock on the date of exercise over
the option exercise price. Because the alternative minimum tax calculation may
be complex, optionees should consult their own tax advisors prior to exercising
incentive stock options.
If an optionee pays alternative minimum tax, the amount of such tax may be
carried forward as a credit against any subsequent year's regular tax in excess
of the alternative minimum tax for such year.
REQUIRED VOTE
The approval of the amendment of the 1997 Plan and the reservation of
800,000 additional shares for issuance thereunder requires the affirmative vote
of the holders of a majority of the shares of the Company's Common Stock present
at the Annual Meeting in person or by proxy and entitled to vote.
RECOMMENDATION OF THE BOARD:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
AMENDMENT OF THE 1997 PLAN AND THE RESERVATION OF 800,000 ADDITIONAL
SHARES OF COMMON STOCK FOR ISSUANCE THEREUNDER.
12
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has served as the Company's independent
accountants since 1993 and has been appointed by the Board to continue as the
Company's independent accountants for the fiscal year ending December 31, 2000.
In the event that ratification of this selection of independent accountants is
not approved by a majority of the shares of Common Stock voting at the Annual
Meeting in person or by proxy, the Board will reconsider its selection of
independent accountants.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the Annual Meeting. This representative will have an opportunity to make a
statement and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2000.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information that has been provided to the
Company with respect to beneficial ownership of shares of the Company's Common
Stock as of February 29, 2000 for (i) each person who is known by the Company to
own beneficially more than five percent of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) each of the executive officers
named in the Summary Compensation Table of this Proxy Statement (the "Named
Executive Officers"), and (iv) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
OWNED(1)
----------------------
OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS NUMBER PERCENT(2)
- ---------------------------------------------- --------- ----------
<S> <C> <C>
Entities affiliated with AMVESCAP PLC(3).................... 1,538,462 10.2%
11 Devonshire Square
London EC2M 4YR
England
The Kaufmann Fund, Inc...................................... 1,074,643 7.1%
140 E. 45th Street, 43rd Floor
New York, NY 10017
Entities affiliated with Hambrecht & Quist Capital 969,232 6.4%
Management, Inc.(4).......................................
50 Rowes Wharf
Boston, MA 02110
Lev J. Leytes(5)............................................ 4,034,496 26.7%
Galina Leytes(6)............................................ 4,014,453 26.6%
James S. Richey(7).......................................... 38,907 0.3%
Larry Tannenbaum(8)......................................... 41,534 0.3%
Douglas N. Modlin, Ph.D(9).................................. 33,308 0.2%
Michael F. Bigham(10)....................................... 5,000 *
750 Forest Avenue
Palo Alto, CA 94301
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
OWNED(1)
----------------------
OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS NUMBER PERCENT(2)
- ---------------------------------------------- --------- ----------
<S> <C> <C>
John D. Diekman, Ph.D(11)................................... 5,000 *
The Bay City Capital Fund I, L.P.
750 Battery Street, Suite 600
San Francisco, CA 94111
George W. Dunbar, Jr.(12)................................... 5,000 *
Metra BioSystems, Inc.
265 North Whisman Road
Mountain View, CA 94043
John G. Freund, M.D.(13).................................... 20,000 0.1%
Skyline Venture Partners, L.P.
525 University Avenue, Suite 701
Palo Alto, CA 94301
Daniel S. Janney(14)........................................ 20,000 0.1%
Alta Partners
One Embarcadero Center
Suite 4050
San Francisco, CA 94111
All directors and executive officers as a group (13 4,318,197 28.6%
persons)(15)..............................................
</TABLE>
- ------------------------
* Less than 0.1%
(1) Except pursuant to applicable community property laws or as indicated in the
footnotes to this table, to the Company's knowledge, each stockholder
identified in the table possesses sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by such
stockholder.
(2) Applicable percentage of ownership for each stockholder is based on
14,747,391 shares of Common Stock outstanding as of February 29, 2000,
together with applicable options for such stockholders. Beneficial ownership
is determined in accordance with the rules of the Securities and Exchange
Commission (the "SEC"). The number of shares beneficially owned by a person
includes shares of Common Stock subject to options held by that person that
are currently exercisable or exercisable within 60 days of February 29,
2000. Such shares issuable pursuant to such options are deemed outstanding
for computing the percentage ownership of the person holding such options
but are not deemed outstanding for the purposes of computing the percentage
ownership of each other person. Unless otherwise indicated, the address of
each of the individuals named above is: c/o LJL BioSystems, Inc., 405 Tasman
Drive, Sunnyvale, CA 94089.
(3) This information is based on a Schedule 13G/A filed on February 4, 2000.
AMVESCAP PLC refers herein to the following persons: AMVESCAP PLC,
AVZ, Inc., AIM Management Group Inc., AMVESCAP Group Services, Inc.,
INVESCO, Inc., INVESCO North American Holdings, Inc., INVESCO Capital
Management, Inc., INVESCO Funds Group, Inc., INVESCO Management &
Research, Inc., INVESCO Realty Advisors, Inc., INVESCO (NY) Asset
Management, Inc., all of which are organized under the laws of England and
all of which share voting and dispositive power over all shares held by
AMVESCAP PLC.
(4) Based on information provided by Hambrecht & Quist Capital
Management, Inc., the total number consists of 581,539 shares held by H&Q
Healthcare Investors and 387,693 shares held by H&Q Life Sciences Investors.
14
<PAGE>
(5) Consists of 3,413,468 shares jointly held by Lev J. Leytes and Galina
Leytes, 500,000 shares held by Yalta Investments, L.P., 37,064 shares held
by the Dina L. Leytes Irrevocable Trust and 37,064 shares held by the Mary
E. Leytes Irrevocable Trust and 46,900 shares issuable upon exercise of
options exercisable within 60 days of February 29, 2000. Mr. Leytes
disclaims beneficial ownership of the shares held in each trust except to
the extent of his pecuniary interest therein.
(6) Consists of 3,413,468 shares jointly held by Lev J. Leytes and Galina
Leytes, 500,000 shares held by Yalta Investments, L.P., 37,064 shares held
by the Dina L. Leytes Irrevocable Trust and 37,064 shares held by the Mary
E. Leytes Irrevocable Trust and 26,857 shares issuable upon exercise of
options exercisable within 60 days of February 29, 2000. Ms. Leytes
disclaims beneficial ownership of the shares held in each trust except to
the extent of her pecuniary interest therein.
(7) Consists of 38,907 shares issuable upon exercise of options exercisable
within 60 days of February 29, 2000.
(8) Includes 26,200 shares issuable upon exercise of options exercisable within
60 days of February 29, 2000.
(9) Includes 23,598 shares issuable upon exercise of options exercisable within
60 days of February 29, 2000.
(10) Includes 5,000 shares of restricted stock held by Mr. Bigham, a director of
the Company and 12,000 shares issuable upon exercise of options exercisable
within 60 days of February 29, 2000.
(11) Consists of 5,000 shares issuable upon exercise of options exercisable
within 60 days of February 29, 2000.
(12) Consists of 5,000 shares issuable upon exercise of options exercisable
within 60 days of February 29, 2000.
(13) Includes 20,000 shares of restricted stock held by Mr. Janney, a director
of the Company.
(14) Includes 20,000 shares of restricted stock held by Dr. Freund, a director
of the Company.
(15) Includes 204,868 shares subject to options exercisable within 60 days of
February 29, 2000.
15
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by (a) the individual who
served as the Company's Chief Executive Officer during the fiscal year ended
December 31, 1999; (b) the four other most highly compensated individuals who
served as an executive officer of the Company during the fiscal year ended
December 31, 1999 (collectively, the "Named Executive Officers"); and (c) the
compensation received by each such individual for the Company's preceding two
fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION(1) SECURITIES
----------------------- UNDERLYING
NAME AND PRINCIPAL POSITION SALARY($) BONUS($) OPTIONS(#) OTHER
- --------------------------- --------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
Lev J. Leytes(2)......................... 1999 $278,920(5) $ -- 60,000 $ 64(4)
President, Chief Executive Officer and 1998 $250,000 $ -- 64,800 $ --
Chairman of the Board of Directors 1997 $250,000 $75,000 12,305 $ --
Galina Leytes(2)......................... 1999 $158,041(5) $ -- 48,100 $ 103(4)
Executive Vice President and Director 1998 $148,619 $ -- -- $ --
1997 $140,000 $ -- 4,824 $ --
James S. Richey.......................... 1999 $197,020 $ -- -- $ 103(4)
Senior Vice President of Sales and 1998 $160,723 $20,000 147,500 $20,678(3)
Marketing 1997 $ -- $ -- -- $ --
Larry Tannenbaum......................... 1999 $192,718 $ -- -- $ 103(4)
Senior Vice President and Chief Financial 1998 $ 24,423 $ -- -- $ --
Officer 1997 $ $ -- 160,000 $ --
Doug N. Modlin, Ph.D..................... 1999 $161,977 $ -- 27,000 $ 103(4)
Vice President of Instrumentation Systems 1998 $136,168 $10,000 71,616 $ --
Research and Development 1997 $108,935 $ -- 70,481 $ --
</TABLE>
- ------------------------
(1) In accordance with SEC rules, other annual compensation in the form of
perquisites and other personal benefits has been omitted where the aggregate
amount of such perquisites and other personal benefits constitutes less than
the lesser of $50,000 or 10% of the total annual salary and bonus for the
Named Executive Officer for the fiscal year.
(2) Prior to June 1997, the Company had been taxed as an S corporation for
federal and state income tax purposes. Under the Internal Revenue Code
regulations regarding S corporations, the Company had not been subject to
federal income taxes but had been subject to state income taxes at a reduced
rate. As an S corporation, the Company's stockholders paid taxes on their
share of the Company's taxable income on their individual tax returns. In
June 1997, in connection with the Company's preferred stock financing, the
Company became subject to the provisions of subchapter C of the Internal
Revenue Code pursuant to which the Company's earnings are taxed for federal
and state income tax purposes at the corporate level. Amounts exclude S
corporation dividends declared and paid in the aggregate amount of
$1,075,000 to Lev J. Leytes and Galina Leytes for the period from January 1
through June 5, 1997 during which the Company operated as a subchapter S
corporation for federal and state income tax purposes.
(3) Represents relocation expenses paid by the Company.
(4) Represents group term life insurance premiums paid by the Company.
(5) Includes retroactive salary earned in fiscal 1999 but not paid until fiscal
2000 of $25,344 and $7,518 for Mr. Leytes and Ms. Leytes, respectively.
16
<PAGE>
EMPLOYMENT AGREEMENTS
In December 1995, the Company entered into an agreement with Mr. Leytes
providing that, in the case of involuntary termination other than for cause,
salary and benefits will continue to be paid for a period of one year from the
date of termination, all stock options and restricted stock then held by
Mr. Leytes will immediately vest, and a bonus equal to the greater of the actual
bonus owing to Mr. Leytes in the year of termination or 100% of the base salary
Mr. Leytes received for the preceding twelve calendar months will be paid.
In January 1998, the Company entered into an employment agreement with
Mr. Richey providing that in the case of termination by the Company or its
successor within two years from his start date for any reason other than cause,
(i) he would be entitled to receive continuation of his base salary for up to
twelve months following the date of termination of his employment (the
"Severance Period"), provided that if he commenced full-time employment during
the Severance Period, the Company's obligation to pay any severance shall cease
at the time of such employment, and (ii) 15,000 shares of stock subject to his
outstanding options shall immediately vest in full. In connection therewith the
Company extended a home loan in the amount of $190,000 to Mr. Richey. The loan
is secured by the officer's home and shares of the Company's Common Stock. The
loan bears interest at 5.83% per annum and is to be repaid in full on the
earliest of February 15, 2008 or the dates of certain other conditions of the
note. The loan and the interest may be forgiven at a rate of 20% per year
starting on the sixth anniversary of Mr. Richey's employment with the Company,
provided he is still employed by the Company.
In November 1998, the Company entered into an agreement with Mr. Tannenbaum
providing that, in the case of involuntary termination by any
successor-in-interest of the Company for any reason other than cause within
three years of his start date, his base salary would continue until the earlier
of six months or commencement of full-time employment with another employer, and
100% of his unvested outstanding initial option grant of 100,000 shares will
immediately vest.
In February 2000, the Company entered into an agreement with Mr. Eglen
providing that, in the case of termination of his employment within twelve
months following a change of control of the Company, (i) he would be entitled to
receive continuation of his base salary for up to twelve months following the
date of termination of his employment (the Severance Period), provided that if
he commenced full-time employment during the Severance Period, the Company's
obligation to pay any severance shall cease at the time of such employment, and
(ii) 20,000 shares of stock subject to his unvested outstanding initial grant
shares shall immediately vest in full.
17
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information regarding stock options
granted to the Named Executive Officers during the fiscal year ended
December 31, 1999. In addition, as required by SEC rules, the table sets forth
the hypothetical gains that would exist for the options based on assumed rates
of annual compound stock price appreciation during the option term.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENTAGE OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(5)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(#) FISCAL YEAR(3) ($/SH)(4) DATE 5%($) 10%($)
- ---- ---------- -------------- ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lev J. Leytes.................. 60,000(1) 8.6% $4.68 2/28/04 $77,497 $171,248
Galina Leytes.................. 40,000(1) 5.8% $4.68 2/28/04 $51,665 $114,165
Galina Leytes.................. 8,100(2) 1.2% $4.68 2/28/04 $10,462 $ 23,118
Doug N. Modlin, Ph.D........... 27,000(1) 3.9% $4.25 2/28/09 $72,166 $182,882
</TABLE>
- ------------------------
(1) One hundred percent (100%) of such options granted vest in five years from
the vesting commencement date. Such options expire 10 years (5 years in the
case of Mr. Leytes and Ms. Leytes) from the date of grant, or earlier upon
termination of employment. These options may be vested on an accelerated
basis based on milestones set by the Company's Compensation Committee.
(2) One hundred percent (100%) of such options granted vest immediately on the
vesting commencement date. Such options expire 5 years from the date of
grant, or earlier upon termination of employment.
(3) Based on an aggregate of 696,640 options granted to employees, consultants
and directors during the fiscal year ended December 31, 1999.
(4) The exercise price per share of each option was equal to the estimated fair
value of the Common Stock (110% of the estimated fair value in the case of
Mr. Leytes and Ms. Leytes) on the date of grant as determined by the Board
of Directors.
(5) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the rules of the SEC. There can be no assurance that the
actual stock price appreciation over the option term will be at the assumed
5% and 10% levels or at any other defined level. Unless the market price of
the Common Stock appreciates over the option term, no value will be realized
from the option grants made to the Named Executive Officers.
18
<PAGE>
AGGREGATE OPTION EXERCISES IN FISCAL 1999 AND YEAR-END OPTION HOLDINGS AND
VALUES
The following table sets forth for each of the Named Executive Officers the
shares acquired and the value realized on exercise of stock options during the
fiscal year ended December 31, 1999 and the number and value of securities
underlying unexercised options held by each of the Named Executive Officers as
of December 31, 1999:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT FISCAL
SHARES FISCAL YEAR-END YEAR-END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lev J. Leytes............. -- $ -- 30,881 106,224 $103,732 $276,359
Galina Leytes............. -- -- 32,000 20,924 102,400 78,896
James S. Richey........... -- -- 36,690 110,810 105,334 293,729
Larry Tannenbaum.......... 10,000 12,500 20,000 130,000 100,000 650,000
Doug N. Modlin, Ph.D...... -- -- 28,775 114,841 128,129 488,209
</TABLE>
- ------------------------
(1) "Value Realized" represents the fair market value of the shares of the
Company's Common Stock underlying the option on the date of exercise less
the aggregate exercise price of the option and does not indicate that the
optionee sold such stock.
(2) These values, unlike the amounts set forth in the column entitled "Value
Realized," have not been, and may never be, realized and are based on the
positive spread between the respective exercise prices of outstanding
options and $7.875, which was the closing price of the Company's Common
Stock on December 31, 1999, the last day of trading for the fiscal year.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
that might incorporate future filings, including this Proxy Statement, in whole
or in part, the following report and the Stock Performance Graph which follows
shall not be deemed to be incorporated by reference into any such filings.
19
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is a report of the Compensation Committee of the Board of
Directors (the "Committee") describing the compensation policies applicable to
the Company's executive officers during the fiscal year ended December 31, 1999.
The Committee is responsible for establishing and monitoring the general
compensation policies and compensation plans of the Company, as well as the
specific compensation levels for executive officers. Executive officers who are
also directors have not participated in deliberations or decisions involving
their own compensation.
GENERAL COMPENSATION POLICY
Under the supervision of the Board of Directors, the Company's compensation
policy is designed to attract and retain qualified key executives critical to
the Company's growth and long-term success. It is the objective of the Board of
Directors to have a portion of each executive's compensation contingent upon the
Company's performance as well as upon the individual's personal performance.
Accordingly, each executive officer's compensation package is comprised of three
elements: (i) base salary which reflects individual performance and expertise,
(ii) variable bonus awards payable in cash and tied to the achievement of
certain performance goals that the Board of Directors establishes from time to
time for the Company and (iii) long-term stock-based incentive awards which are
designed to strengthen the mutuality of interests between the executive officers
and the Company's stockholders.
The summary below describes in more detail the factors which the Board of
Directors considers in establishing each of the three primary components of the
compensation package provided to the executive officers.
BASE SALARY
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies which
compete with the Company for business and executive talent, and the incentives
necessary to attract and retain qualified management. Base salary is adjusted
each year to take into account the individual's performance and to maintain a
competitive salary structure. Company performance does not play a significant
role in the determination of base salary.
CASH-BASED INCENTIVE COMPENSATION
Cash bonuses are awarded on a discretionary basis to executive officers on
the basis of their success in achieving designated individual goals and the
Company's success in achieving specific company-wide goals, such as customer
satisfaction, revenue and earnings targets, expense control and new product
introductions. For 1999, the Company did not pay any cash bonuses to executive
officers. The Company determined that payment of cash bonuses to executive
officers would be deferred until the Company achieved certain goals.
LONG-TERM INCENTIVE COMPENSATION
The Company has utilized its stock option plans to provide executives and
other key employees with incentives to maximize long-term stockholder values.
Awards under this plan by the Board of Directors take the form of stock options
designed to give the recipient a significant equity stake in the Company and
thereby closely align his or her interests with those of the Company's
stockholders. Factors considered in making such awards include the individual's
position in the Company, his or her performance and responsibilities, and
internal comparability considerations.
Each option grant allows the executive officer to acquire shares of Common
Stock at a fixed price per share (at least the fair market value on the date of
grant) over a specified period of time (up to
20
<PAGE>
10 years). The options typically vest over five years. Certain of these options
may vest on an accelerated basis based on milestones set by the Company's
Compensation Committee. Accordingly, the option will provide a return to the
executive officer only if he or she remains in the Company's service, and then
only if the market price of the Common Stock appreciates over the option term.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Lev J. Leytes has served as the Company's President, Chief Executive Officer
and Chairman of the Board of Directors since the Company's inception. His base
salary for fiscal 1999 was $275,000.
The factors discussed above in "Base Salaries" and "Cash-Based Incentive
Compensation" were also applied in establishing the amount of Mr. Leytes'
salary. Significant factors in establishing Mr. Leytes' compensation were the
Company's rate and amount of revenue growth, the Company's ability to hire and
retain key employees, the Company's achievement of certain of its goals relative
to the introduction of new products and expansion into new markets.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee has considered the impact of Section 162(m) of the Internal
Revenue Code adopted under the Omnibus Budget Reconciliation Act of 1993, which
disallows a deduction for any publicly held corporation for individual
compensation exceeding $1 million in any taxable year for the Chief Executive
Officer and four other most highly compensated executive officers, respectively,
unless such compensation meets the requirements for the "performance-based"
exception to Section 162(m). As the cash compensation paid by the Company to
each of its executive officers is expected to be below $1 million and the
Committee believes that options granted under the Company's 1994 Equity
Incentive Plan, 1997 Stock Plan, 1998 Employee Stock Purchase Plan, or 1998
Directors' Stock Option Plan to such officers will meet the requirements for
qualifying as performance-based, the Committee believes that Section 162(m) will
not affect the tax deductions available to the Company with respect to the
compensation of its executive officers. It is the Committee's policy to qualify,
to the extent reasonable, its executive officers' compensation for deductibility
under applicable tax law. The Company, however, may from time to time pay
compensation to its executive officers that may not be deductible.
Compensation Committee:
Michael F. Bigham
John G. Freund, M.D.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee of the Board is currently
or has been, at any time since the formation of the Company, an officer or
employee of the Company. No executive officer of the Company serves as a member
of the Board of Directors or compensation committee of any entity that has one
or more executive officers serving on the Company's Board or Compensation
Committee.
21
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February 2000, the Company issued, in a private placement transaction, an
aggregate of approximately 1.76 million shares of Common Stock at a purchase
price of $11.00 per share. The purchasers of the Common Stock included The
Kaufmann Fund, Inc. which along with persons or entities associated with them,
is a 5% stockholder of the Company.
In January 1999, the Company issued, in a private placement transaction, an
aggregate of 2,000,000 shares of Common Stock at a purchase price of $3.50 per
share. The purchasers of the Common Stock included the following 5% stockholders
of the Company and persons and entities associated with them:
<TABLE>
<CAPTION>
SHARES OF
COMMON
INVESTOR(1) STOCK
- ----------- ---------
<S> <C>
The Bay City Capital Fund I, L.P.(3)........................ 857,143
The Kaufmann Fund, Inc.(2).................................. 857,143
Skyline Venture Partners, L.P.(4)........................... 285,714
</TABLE>
- ------------------------
(1) Shares held by affiliated persons and entities have been aggregated.
(2) Holder is a 5% stockholder.
(3) John D. Diekman, Ph.D., a director of the Company, is a limited partner of
the general partner of The Bay City Capital Fund I, L.P., does not share
voting and dispositive power with respect to the shares held by such entity,
and disclaims beneficial ownership of such shares in which he has no
pecuniary interest.
(4) John G. Freund, M.D., a director of the Company, is the Managing Director of
Skyline Venture Management LLC, the general partner of Skyline Venture
Partners, L.P. ("Skyline"). Dr. Freund disclaims beneficial ownership of
shares held by Skyline, except to the extent of any indirect pecuniary
interest in his distributive shares therein.
In December 1995, the Company entered into an agreement with Mr. Leytes
providing that, in the case of involuntary termination other than for cause,
salary and benefits will continue to be paid for a period of one year from the
date of termination, all stock options and restricted stock then held by
Mr. Leytes will immediately vest, and a bonus equal to the greater of the actual
bonus owing to Mr. Leytes in the year of termination or 100% of the base salary
Mr. Leytes received for the preceding twelve calendar months will be paid.
During the fiscal year ended December 31, 1999, Joseph Leytes, the father of
Lev J. Leytes, received total compensation of $67,910, of which $63,935 was
salary, $3,767 was paid in the form of a bonus and $208 was in the form of
Company paid group term life insurance premiums, in connection with services
provided to the Company in his capacity as a senior mechanical engineer.
In January 1998, the Company entered into an employment agreement with
Mr. Richey providing that in the case of termination by the Company or its
successor within two years from his start date for any reason other than cause,
(i) he would be entitled to receive continuation of his base salary for up to
twelve months following the date of termination of his employment (the
"Severance Period"), provided that if he commenced full-time employment during
the Severance Period, the Company's obligation to pay any severance shall cease
at the time of such employment, and (ii) 15,000 shares of stock subject to his
outstanding options shall immediately vest in full. In connection therewith the
Company extended a home loan in the amount of $190,000 to Mr. Richey. The loan
is secured by the officer's home and shares of the Company's Common Stock. The
loan bears interest at 5.83% per annum and is to be repaid in full on the
earliest of February 15, 2008 or the dates of certain other conditions of the
note. The loan and the interest may be forgiven at a rate of 20% per year
starting on
22
<PAGE>
the sixth anniversary of Mr. Richey's employment with the Company, provided he
is still employed by the Company.
In November 1998, the Company entered into an agreement with Mr. Tannenbaum
providing that, in the case of involuntary termination by any
successor-in-interest of the Company for any reason other than cause within
three years of his start date, his base salary would continue until the earlier
of six months or commencement of full-time employment with another employer, and
100% of his unvested outstanding initial option grant of 100,000 shares will
immediately vest.
In February 2000, the Company entered into an agreement with Mr. Eglen
providing that, in the case of termination of his employment within twelve
months following a change of control of the Company, (i) he would be entitled to
receive continuation of his base salary for up to twelve months following the
date of termination of his employment (the Severance Period), provided that if
he commenced full-time employment during the Severance Period, the Company's
obligation to pay any severance shall cease at the time of such employment, and
(ii) 20,000 shares of stock subject to his unvested outstanding initial grant
shares shall immediately vest in full.
The Company has entered into indemnification agreements with its officers
and directors containing provisions which may require the Company, among other
things, to indemnify its officers and directors against certain liabilities that
may arise by reason of their status or service as officers or directors and to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified. The Company also intends to execute such
agreements with its future directors and executive officers.
The Company believes that all of the transactions set forth above were in
its best interests. As a matter of policy, the transactions were, and all future
transactions between the Company and its officers, directors, principal
stockholders and affiliates will be approved by a majority of the Board of
Directors, including a majority of the independent and disinterested directors
on the Board of Directors, and will generally be on terms no less favorable to
the Company than could be obtained from unaffiliated third parties.
23
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return data
for the Company's stock for the period from March 13, 1998 (the date on which
the Company's stock was first registered under Section 12 of the Securities
Exchange Act of 1934, as amended) through December 31, 1999 to the cumulative
return over such period of (i) the Nasdaq National Market Composite Index and
(ii) the Hambrecht & Quist Healthcare (Excluding Biotechnology) Index. The graph
assumes that $100 was invested on March 13, 1998, the date on which the Company
completed the initial public offering of its Common Stock, in the Common Stock
of the Company and in each of the comparative indices. The graph further assumes
that such amount was initially invested in the Common Stock of the Company at a
per share price of $7.00, the price at which such stock was first offered to the
public by the Company on the date of its initial public offering, and
reinvestment of any dividends. The stock price performance on the following
graph is not necessarily indicative of future stock price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HEALTHCARE
<S> <C> <C> <C>
(Excluding
The Nasdaq Stock Biotechnology)
LJL BioSystems, Inc. Market - U.S. Index Index
3/13/98 $100.00 $100.00 $100.00
3/31/98 $100.90 $103.75 $100.38
6/30/98 $69.64 $106.75 $102.28
9/30/98 $35.71 $96.64 $90.28
12/31/98 $44.64 $124.64 $107.27
3/31/99 $60.71 $139.73 $102.20
6/30/99 $64.29 $152.88 $104.88
9/30/99 $47.32 $156.36 $90.59
12/31/99 $112.50 $225.67 $93.72
</TABLE>
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the Company's next
Annual Meeting of Stockholders must be received by Robert T. Beggs, LJL
BioSystems, Inc., 405 Tasman Drive, Sunnyvale, California 94089, no later than
December 21, 2000. If the Company is not notified of a stockholder proposal by
March 5, 2001, then the proxies held by management of the Company provide
discretionary authority to vote against such stockholder proposal, even though
such proposal is not discussed in the Proxy Statement.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file with the SEC initial reports
of ownership and changes in ownership of the Company's Common Stock. Reporting
Persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) reports they file. To the Company's knowledge, based solely on
its review of the copies of
24
<PAGE>
such reports received or written representations from certain Reporting Persons
that no other reports were required, the Company believes that during its fiscal
year ended December 31, 1999, all Reporting Persons complied with all applicable
filing requirements.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, proxies in the enclosed form will be voted in respect thereof as the
proxy holders deem advisable.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
Mark B. Weeks
SECRETARY
April 26, 2000
Sunnyvale, California
25
<PAGE>
FORM OF PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF LJL BIOSYSTEMS, INC. FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 14, 2000
The undersigned stockholder of LJL BioSystems, Inc., a Delaware corporation
(the "Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 26, 2000, and hereby appoints
Lev J. Leytes, Larry Tannenbaum and Robert T. Beggs and each of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the Annual Meeting
of Stockholders of LJL BioSystems, Inc. to be held at the Company's
headquarters, located at 405 Tasman Drive, Sunnyvale, California on Wednesday,
June 14, 2000, at 1:00 p.m. and at any adjournment or postponement thereof, and
to vote all shares of Common Stock which the undersigned would be entitled to
vote if then and there personally present, on the matters set forth below:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS: FOR all nominees listed below
(EXCEPT AS INDICATED). / /
<S> <C>
1. WITHHOLD authority to vote for all nominees
listed below. / /
</TABLE>
If you wish to withhold authority to vote for any individual nominee, strike
a line through that nominee's name in the list below:
Lev J. Leytes Michael F. Bigham John G. Freund, M.D.
- --------------------------------------------------------------------------------
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1997 STOCK PLAN TO
INCREASE THE AGGREGATE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR
ISSUANCE UNDER SUCH PLAN BY 800,000 SHARES:
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER
31, 2000:
/ / FOR / / AGAINST / / ABSTAIN
and, in their discretion, upon such other matter or matters that may properly
come before the meeting and any postponement(s) or adjournment(s) thereof.
PLEASE SIGN ON REVERSE SIDE AND RETURN IMMEDIATELY
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF DIRECTORS; (2) FOR
THE AMENDMENT TO THE 1997 STOCK PLAN; (3) FOR THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2000; AND AS SAID PROXY HOLDERS DEEM ADVISABLE
ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
Date: _______________________
_____________________________
Signature
Date: _______________________
_____________________________
Signature
(This Proxy should be marked,
dated, signed by the
stockholder(s) exactly as his
or her name appears hereon,
and returned promptly in the
enclosed envelope. Persons
signing in a fiduciary
capacity should so indicate.
If shares are held by joint
tenants or as community
property, both should sign.)
