<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
INVITROGEN CORPORATION
(Name of Registrant as Specified In Its Charter)
Payment of filing fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which 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 No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LOGO]
March 24, 2000
Dear Stockholder:
This year's annual meeting of stockholders will be held on April 27,
2000 at 10:00 a.m. local time, at our principal offices located at 1600 Faraday
Ave., Carlsbad, California 92008. You are cordially invited to attend.
The Notice of Annual Meeting of Stockholders and a Proxy Statement,
which describe the formal business to be conducted at the meeting, follow this
letter.
After reading the proxy statement, please promptly mark, sign, and
return the enclosed proxy card in the prepaid envelope to assure that your
shares will be represented. Your shares cannot be voted unless you date, sign
and return the enclosed proxy or attend the annual meeting in person. Regardless
of the number of shares you own, your careful consideration of, and vote on, the
matters before our stockholders are important.
A copy of our 1999 Annual Report is also enclosed.
I look forward to seeing you at the annual meeting.
Very truly yours,
Lyle C. Turner
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD OF DIRECTORS
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 2000
-----------------------
TO OUR STOCKHOLDERS:
The Annual Meeting of the Stockholders of Invitrogen Corporation, will
be held on April 27, 2000 at 10:00 a.m. local time, at our principal offices
located at 1600 Faraday Ave., Carlsbad, California 92008 for the following
purposes:
1. To elect two Class I directors, each to hold office for a
three-year term and until his or her respective successor is
elected and qualified. Management has nominated the following
persons for election at the meeting: Donald W. Grimm and James
R. Glynn.
2. To consider a proposal to amend the Invitrogen 1998 Employee
Stock Purchase Plan to increase the share reserve by 100,000
shares.
3. To consider a proposal to ratify the appointment of Arthur
Andersen LLP as Invitrogen's independent public accountants
for the fiscal year ending December 31, 2000.
4. To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on February 28, 2000
are entitled to notice of, and to vote at, this meeting and any adjournments
thereof. For ten days prior to the meeting, a complete list of the stockholders
of record on February 28, 2000 will be available at our principal offices for
examination during ordinary business hours by any stockholder for any purpose
relating to the meeting.
By order of the Board of Directors,
Warner R. Broaddus
GENERAL COUNSEL & SECRETARY
Carlsbad, California
March 24, 2000
- --------------------------------------------------------------------------------
IMPORTANT: Please fill in, date, sign and promptly mail the enclosed proxy card
in the accompanying postpaid envelope to assure that your shares are represented
at the meeting. You may revoke your proxy before it is voted. If you attend the
meeting, you may choose to vote in person even if you have previously sent in
your proxy card.
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <S>
NOTICE OF ANNUAL MEETING..........................................................................................1
PROXY STATEMENT...................................................................................................3
About the Meeting..............................................................................................3
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?..................................................................3
WHO IS ENTITLED TO VOTE AT THE MEETING?.....................................................................3
HOW DO I VOTE?..............................................................................................3
HOW DO I VOTE MY ESOP OR 401(k) SHARES?.....................................................................4
Stock Ownership................................................................................................5
HOW MUCH STOCK IS HELD BY INVITROGEN'S DIRECTORS, EXECUTIVE OFFICERS AND LARGEST STOCKHOLDERS?..............5
Election of Directors..........................................................................................7
NOMINEES FOR ELECTION AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS............................................7
DIRECTORS CONTINUING IN OFFICE..............................................................................7
HOW OFTEN DID THE BOARD MEET DURING 1999?...................................................................8
HOW ARE DIRECTORS COMPENSATED?..............................................................................9
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?..................................................................9
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS...............................................................9
Executive Compensation and Other Matters......................................................................11
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS..............................................................11
WHAT ARE THE COMPENSATION COMMITTEE'S RESPONSIBILITIES?....................................................11
HOW ARE THE COMPANY'S EXECUTIVE OFFICERS COMPENSATED?......................................................11
HOW IS INVITROGEN ADDRESSING THE DEDUCTIBILITY OF EXECUTIVE COMPENSATION?..................................12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION................................................12
EXECUTIVE COMPENSATION SUMMARY TABLE.......................................................................12
1999 OPTION GRANTS.........................................................................................13
YEAR-END OPTION VALUES.....................................................................................14
EMPLOYMENT AND SEVERANCE ARRANGEMENTS......................................................................14
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE....................................................14
Comparison of Stockholder Return..............................................................................15
Items for Stockholder Consideration...........................................................................16
ELECTION OF DIRECTORS......................................................................................16
APPROVAL OF INCREASING THE 1998 EMPLOYEE STOCK PURCHASE PLAN SHARE RESERVE BY 100,000 SHARES...............16
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS..............................................19
Additional Information........................................................................................19
Transaction of Other Business.................................................................................20
</TABLE>
2
<PAGE>
[LOGO]
INVITROGEN CORPORATION
1600 FARADAY AVE.
CARLSBAD, CALIFORNIA 92008
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
The accompanying proxy is being solicited by the Board of Directors of
Invitrogen Corporation and contains information related to the annual meeting of
stockholders to be held April 27, 2000, or any adjournment thereof, for the
purposes described in the accompanying Notice of Annual Meeting. The date of
this Proxy Statement is March 24, 2000, the approximate date on which the Proxy
Statement and the accompanying form of proxy were first sent or given to
stockholders.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At our annual meeting, stockholders will act upon the matters outlined
in the Notice of Meeting on the first page of this proxy statement. These
include the election of directors, ratification of our independent auditors and
consideration of an increase in the number of shares reserved under the
Invitrogen Employee Stock Purchase Plan. In addition, management will report on
the performance of the company during 1999 and will respond to questions from
our stockholders. An annual report for the fiscal year ended December 31, 1999
is enclosed with this proxy statement.
WHO IS ENTITLED TO VOTE AT THE MEETING?
Only stockholders of record as of the close of business on the record
date, February 28, 2000, will be entitled to vote the shares of stock they held
on that date at the meeting. As of the record date, we had only shares of one
class of common stock outstanding.
Stockholders may vote in person or by proxy. Each holder of shares of
common stock is entitled to one vote for each share of stock held on the
proposals presented in this proxy statement. Invitrogen's bylaws provide that a
majority of all of the shares of the stock entitled to vote, whether present in
person or represented by proxy, will be a quorum for the transaction of business
at the meeting. As of the record date 22,895,918 shares of common stock were
outstanding.
HOW DO I VOTE?
If you complete and properly sign the enclosed proxy card and return it
as instructed on the card, it will be voted as you direct. If you are a
registered stockholder and you attend the meeting, you may deliver your
completed proxy card in person. If you hold your shares in "street name" through
a brokerage or other nominee, you will need to obtain a proxy card from the
institution that holds your shares.
All shares represented by a proxy will be voted, and where a
stockholder specifies a choice with respect to any matter to be acted upon, the
shares will be voted in accordance with the specification so made. If no choice
is
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<PAGE>
indicated on the proxy card, the shares will be voted in favor of the
election of the nominees for director contained in this proxy statement, and
in favor of the two other proposals specified in the notice of the meeting,
and in the discretion of the proxy holders on any other matter that comes
before the meeting. A stockholder giving a proxy has the power to revoke his
or her proxy, at any time prior to the time it is voted, by delivering to the
Secretary of Invitrogen either a written document revoking the proxy or a
duly executed proxy with a later date, or by attending the meeting and voting
in person.
HOW DO I VOTE MY ESOP OR 401(k) SHARES?
If you participate in the Invitrogen 401(k) Salary Savings Plan or
in the NOVEX 401(k) Employee Stock Ownership Plan you may vote the shares of
common stock in your account as of the record date. If you wish to vote those
shares, you must give your written instructions to the Plan trustee(s) by
April 24, 2000. For the Invitrogen 401(k) Salary Savings Plan, the trustees
are Lisa G. McCurdy and James R. Glynn. For the NOVEX 401(k) Employee Stock
Ownership Plan, the trustee is Union Bank of California. Participants should
receive a ballot (separate from the proxy card) from the trustees to be
marked and returned. If you do not receive a ballot, contact Invitrogen prior
to the above date.
If you do not give instructions to the trustees, the shares in your
account will be voted by the trustee(s). You may revoke instructions to the
trustees by giving them written notice of revocation or a later dated written
voting instruction by April 24, 2000.
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<PAGE>
STOCK OWNERSHIP
HOW MUCH STOCK IS HELD BY INVITROGEN'S DIRECTORS, EXECUTIVE OFFICERS AND LARGEST
STOCKHOLDERS?
The following table contains certain stockholder information as of
February 29, 2000. Specifically, the table shows beneficial ownership of
Invitrogen's common stock by (i) each director and director-nominee, (ii) each
executive officer named in the Summary Compensation Table, (iii) all persons
known by us to be the beneficial owners of more than 5% of our outstanding
common stock and (iv) all executive officers and directors as a group.
<TABLE>
<CAPTION>
SHARES THAT MAY BE ACQUIRED
WITHIN 60 DAYS OF
SHARES BENEFICIALLY OWNED(1) FEBRUARY 29, 2000
---------------------------- -----------------
NUMBER PERCENT
------ -------
<S> <C> <C> <C>
Lyle C. Turner............................................... 3,878,285 16.8% -
James R. Hudson, Jr.......................................... 2,594,800 11.3 2,800
Putnam Investment Management, Inc............................ 1,391,995 6.0 -
One Post Office Square
Boston, MA 02109
Joseph M. Fernandez(2)....................................... 1,230,869 5.3 34,607
Janus Capital Corporation.................................... 1,164,750 5.1
100 Fillmore Street, Suite 400
Denver, Colorado 80206
TA Associates(3)............................................. 882,942 3.8 -
Kurt R. Jaggers
TA Associates, Inc.
125 High Street Tower, Suite 2500
Boston, Massachusetts 02110
James R. Glynn............................................... 139,101 * 137,499
David E. McCarty(4).......................................... 67,266 * 61,823
Jay M. Short(5).............................................. 67,000 * 42,000
Lewis J. Shuster............................................. 28,332 * 28,332
Donald W. Grimm.............................................. 23,000 * 20,000
Bradley G. Lorimier.......................................... 10,000 * 10,000
All Directors and Executive Officers as a group (8 persons)(6) 5,095,926 21.8 299,654
</TABLE>
- -------------
* Less than 1%.
(1) Percentage of ownership is based on: 23,040,997 shares of common stock
outstanding as of February 29, 2000. Shares of common stock that an
individual or group has the right to acquire within 60 days of February
29, 2000, pursuant to the exercise of options are deemed to be
outstanding for the purposes of computing the percentage ownership of
such individual or group, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown
in the table.
(2) Includes 1,082,841 shares held by J&J Fernandez Ventures, L.P.
(3) Includes 731,215 shares held by TA/Advent VIII L.P., 137,103 shares
held by Advent Atlantic and Pacific III, L.P., and 14,624 shares held
by TA Venture Investors L.P. Advent Atlantic and Pacific III, L.P.,
TA/Advent VIII L.P. and TA Venture Investors L.P. are part of an
affiliated group of investment partnerships referred to collectively as
TA Associates Group. The general partner of TA/Advent VIII, L.P. is TA
Associates VIII LLC. The general partner of Advent Atlantic and Pacific
III, L.P. is TA Associates
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AAP III Partners. TA Associates, Inc. is the general partner of TA
Associates VIII LLC and the manager of TA Associates AAP III
Partners. In such capacity, TA Associates, Inc. exercises sole
voting and investment power with respect to all of the shares held
of record by the named investment partnerships, with the exception
of those shares held by TA Venture Investors, L.P.; individually,
no stockholder, director or officer of TA Associates, Inc., is
deemed to have or share such voting or investment power. Principals
and employees of TA Associates, Inc., including Mr. Jaggers, a
director, comprise the general partners of TA Venture Investors,
L.P. In such capacity, Mr. Jaggers may be deemed to share voting
and investment power with respect to the 28,206 shares held of
record by TA Venture Investors, L.P. Mr. Jaggers disclaims
beneficial ownership of such shares.
(4) Includes 68 shares held of record by NOVEX's ESOP Trust Fund as to
which Mr. McCarty holds a pecuniary interest.
(5) Includes options to purchase 5,000 shares held of record by Dr. Short's
spouse.
(6) Includes 68 shares held of record by NOVEX's ESOP Trust Fund as to
which Mr. McCarty holds a pecuniary interest. Includes options to
purchase 5,000 shares held of record by Dr. Short's spouse.
6
<PAGE>
ELECTION OF DIRECTORS
Invitrogen has a classified Board of Directors currently consisting of
two Class I directors (Donald W. Grimm and James R. Glynn), three Class II
directors (Kurt R. Jaggers, Bradley G. Lorimier and Lyle C. Turner) and three
Class III directors (David E. McCarty, Jay M. Short and Lewis J. Shuster), who
will serve until the annual meetings of stockholders to be held in 2000, 2001
and 2002, respectively, and until their respective successors are duly elected
and qualified. Directors in a class are elected for a term of three years to
succeed the directors in such class whose terms expire at such annual meeting.
The nominees for election at the 2000 Annual Meeting of Stockholders to
fill the Class I positions on the Board of Directors are Donald W. Grimm and
James R. Glynn. If elected, the nominees will serve as directors until the
annual meeting of stockholders in 2003, and until their successors are elected
and qualified. If a nominee declines to serve or becomes unavailable for any
reason, or if a vacancy occurs before the election, the proxies may be voted for
such substitute nominee as the proxy holders may designate.
If a quorum is present, the two nominees for the positions as Class I
directors receiving the highest number of votes will be elected. Abstentions and
broker non-votes will have no effect on the vote, except that abstentions will
be counted as shares present for purposes of determining the presence of a
quorum.
NOMINEES FOR ELECTION AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
CLASS I
JAMES R. GLYNN became a Senior Vice President, Corporate Development,
Chief Financial Officer and Director of Invitrogen in June 1998 and previously
served as Director in 1995. In September 1999, Mr. Glynn became an Executive
Vice President of Invitrogen. From July 1995 to May 1997 he served as Senior
Vice President and Chief Financial Officer and from May 1997 to July 1998 as
Chief Operating Officer, Chief Financial Officer and Director of Matrix
Pharmaceutical, Inc., a company focusing on the treatment of cancer. Mr. Glynn
served as Executive Vice President, Chief Financial Officer and Director of
Mycogen Corporation, an agribusiness and biotechnology company, from April 1987
to February 1995. From 1982 to 1987 Mr. Glynn was Vice President, Finance and
Treasurer of Lubrizol Enterprises, Inc., a venture development company. Mr.
Glynn received his B.B.A. in Accounting from Cleveland State University. He is
currently a Director of Matrix Pharmaceutical, Inc.
DONALD W. GRIMM has served as a Director of Invitrogen since June 1998.
From September 1995 to March 1998 Mr. Grimm was Managing Director, West Coast
for Copenhagen Capacity, a Danish trade group focused on biotechnology and
medical devices. Since June 1995 he has served as Chairman of the Board and
President of Strategic Design, a strategic planning and consulting company. He
was a Director of MedNet M.P.C. Corp., a medical services company from November
1997 to December 1997. Mr. Grimm retired from Eli Lilly & Company, a
research-based pharmaceutical company, in 1993 after 23 years of service. Mr.
Grimm held positions at Eli Lilly as Director of Worldwide Pharmaceutical
Pricing, Director of Pharmaceutical Market Research, and Director of Sales. From
September 1987 to December 1993, Mr. Grimm served as President, CEO and Chairman
of Hybritech, Inc., a company involved in physical and biological research. For
the six month period between June 1994 and December 1994, Mr. Grimm served as
President, CEO and Director of Telios Pharmaceuticals, a pharmaceutical and
medical device company. Telios and MedNet filed petitions for bankruptcy after
Mr. Grimm's resignation from those companies. Mr. Grimm received his B.S. in
Pharmacy and M.B.A. from the University of Pittsburgh. Mr. Grimm is currently a
Director of several private companies and non-profit organizations.
DIRECTORS CONTINUING IN OFFICE
CLASS II
KURT R. JAGGERS has served as a Director of Invitrogen since June 1997.
Mr. Jaggers has served as a Managing Director of TA Associates, Inc., an equity
investment firm, since January 1997. He has also served as a Principal for TA
Associates from 1993 to 1996, and as Vice President of that firm from 1990 to
1992. Mr. Jaggers
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attended Stanford University, receiving B.S. and M.S. degrees in Electrical
Engineering, and an M.B.A. He is currently a Director of several private
companies.
BRADLEY G. LORIMIER has served as a Director of Invitrogen since
November 1998. Mr. Lorimier has been retired since July 1997. From March 1994
to June 1997 Mr. Lorimier served as Senior Vice President, Business
Development and Director of Human Genome Sciences, Inc., a biotechnology
company. From July 1991 to March 1994 Mr. Lorimier served as Vice President,
Corporate Development of Ortho-McNeil Pharmaceutical, Inc., a subsidiary of
Johnson & Johnson, a pharmaceutical manufacturing company. Mr. Lorimier
received his B.S. degree in biology from the University of Illinois. He is
currently a Director of Matrix Pharmaceutical, Inc. as well as several
private companies.
LYLE C. TURNER, a founder of Invitrogen, has served as President,
Chief Executive Officer and Chairman of the Board of Directors since February
1988. Previously, Mr. Turner served as Director of Sales and Marketing at
Stratagene, a life science research company, from January 1987 through
February 1988, and as Technical Sales Specialist at Boehringer Mannheim
Corp., a pharmaceutical company, from June 1985 to January 1987. From
September 1981 through May 1985, Mr. Turner worked at Syntro Corporation, an
animal health company, at which his final position was Manager of Business
Development. Mr. Turner received his B.A. in Chemistry from the University of
California, San Diego.
CLASS III
DAVID E. MCCARTY has served as a Director of Invitrogen since August
1999. From August to September 1999 he served as Senior Vice President and in
September 1999 he served as Executive Vice President of Invitrogen.
Previously, Mr. McCarty served as President and Chief Executive Officer of
NOVEX, a position he held from August 1997 through September 1999. Prior to
joining NOVEX, Mr. McCarty was President and CEO of Alexon Biomedical, an
immunoassay diagnostic company which he joined in 1990. Mr. McCarty holds a
B.S. in Chemistry from California State University at Northridge and an
M.B.A. from California State University at Long Beach. Mr. McCarty is serving
as a director of Invitrogen pursuant to our merger agreement with NOVEX. Mr.
McCarty also serves as a director of a privately held company.
JAY M. SHORT has served as a Director of Invitrogen since February
1995. From September 1994 to the present Dr. Short has served as Chief
Executive Officer, President, Chief Technology Officer and Director of
Diversa Corporation, a biotechnology company. From September 1985 to
September 1994 Dr. Short held various positions at Stratagene including Vice
President, Research and Development & Operations and Senior Staff Scientist.
Previously, he was President of Stratacyte Inc., a molecular biology company.
Dr. Short received his Ph.D. in Biochemistry from Case Western Reserve
University. Dr. Short is currently a Director of StressGen Biotechnologies
Corporation, a biopharmaceutical company.
LEWIS J. SHUSTER has served as Chief Operating Officer of Invitrogen
since February 2000 and has served as a Director since June 1998. Mr. Shuster
was a consultant to life sciences companies from December 1999 to February
2000. From February 1999 to December 1999, he was President and Chief
Operating Officer of Pharmacopeia Laboratories, an operating unit of
Pharmacopeia, Inc., a pharmaceutical and biotechnical research company. From
November 1994 to February 1999 Mr. Shuster served as Executive Vice President
and Chief Financial Officer of Pharmacopeia, Inc. From September 1992 to
November 1994 Mr. Shuster served as Executive Vice President, Operations and
Finance of Human Genome Sciences, Inc., a pharmaceutical company. Mr. Shuster
received his M.B.A. from Stanford University Graduate School of Business and
his B.A. from Swarthmore College. He is currently a Director of US
Biomaterials Corporation, a private biomedical company.
HOW OFTEN DID THE BOARD MEET DURING 1999?
During the fiscal year ended December, 31 1999, the Board of Directors
held six meetings. Each director serving on the Board of Directors in fiscal
year 1999 attended at least 75% of such meetings of the Board of Directors and
the Committees on which he or she served, with the exception of Dr. Short.
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HOW ARE DIRECTORS COMPENSATED?
Invitrogen currently pays its non-officer Directors $1,000 per
meeting. Directors may be reimbursed for certain expenses in connection with
attendance at Board of Directors and committee meetings. Since November 19,
1998, directors who are not employees of Invitrogen received annual grants of
options to purchase 10,000 shares of common stock in accordance with the 1997
Stock Option Plan. Options to purchase 30,000 shares of common stock were
granted to non-employee directors of Invitrogen during the year ended
December 31, 1999.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
The Board of Directors has established an Audit Committee and a
Compensation Committee, and has no standing Nominating Committee. The Audit
Committee, consists of Mr. Jaggers, Mr. Lorimier and Mr. Shuster. The
Compensation Committee consists of Mr. Jaggers, Mr. Lorimier and Dr. Short.
The Audit Committee's function is to review with our independent
accountants and management the annual financial statements and independent
accountants' opinion, review the scope and results of the examination of our
financial statements by the independent accountants, review all professional
services performed and related fees by the independent accountants, recommend
the retention of the independent accountants to the Board of Directors and
periodically review Invitrogen's accounting policies and internal accounting
and financial controls. During the fiscal year ended December 31, 1999, the
Audit Committee held three meetings.
The Compensation Committee's function is to review and approve
salary and bonus levels and stock option grants. During the year ended
December 31, 1999, the Compensation Committee held two meetings jointly with
the full Board.
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
In June 1997, we sold a total of 2,202,942 shares of convertible
preferred stock at $6.8091 per share, for an aggregate purchase price of
approximately $15 million, to three accredited investors, each of which are
affiliates of TA Associates. Kurt R. Jaggers, a director of Invitrogen, is a
Managing Director of TA Associates. Concurrently with the sale of the
convertible preferred stock, we repurchased and retired 1,101,471 shares of
common stock at $6.8091 per share, for an aggregate purchase price of
approximately $7.5 million, from Lyle C. Turner, Joseph M. Fernandez, Anh
Nguyen and Malcolm Finlayson, executive officers and former executive
officers of Invitrogen. In this transaction, the TA Associates affiliates
acquired registration rights with respect to the common stock issued or
issuable upon conversion of the convertible preferred stock.
At the closing of our initial public offering in February 1999, the
convertible preferred stock was converted into an equal number of shares of
common stock and redeemable preferred stock, and such redeemable preferred
stock was redeemed out of proceeds of that offering at a cost of
approximately $13.5 million. Additionally, holders of the convertible
preferred stock received accumulated dividends of approximately $1.5 million.
In December 1998, Invitrogen received a promissory note from Mr.
Turner in the amount of $150,000. The note, which bore interest at a rate of
6.5% and was secured by a pledge of 16,000 shares of Invitrogen common stock,
was paid in full in December 1999.
In connection with our acquisition of Morphagen, Inc., in November
1998 we issued an option to purchase 50,000 shares of our common stock to the
spouse of Dr. Short, one of our directors. See below "Compensation Committee
Interlocks and Insider Participation."
Dr. Short's father, Roy Short, receives royalties of approximately
$100,000 per year from sales relating to Invitrogen's DNA DipStick product
line and electroporation cuvettes.
Invitrogen has entered into indemnification agreements with each of
our officers and directors containing provisions which may require us, among
other things, to indemnify those officers and directors against liabilities
that may arise by reasons of their status or service as officers or directors
and to advance their expenses incurred as
9
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a result of any proceeding against them as to which they could be
indemnified. Invitrogen also intends to execute such agreements with its
future directors and executive officers.
On August 17, 1999 Invitrogen issued to David E. McCarty, a former
executive officer and a current director of Invitrogen, an option to purchase
110,000 shares of our common stock at an exercise price of $28.125 per share
in connection with his employment by Invitrogen following the merger with
NOVEX. His employment terminated on September 20, 1999. In connection with
the acquisition of NOVEX, Invitrogen also assumed NOVEX's obligations under
an employment agreement with Mr. McCarty and options held by Mr. McCarty to
purchase NOVEX common stock, which were converted into options to purchase
139,128 shares of Invitrogen common stock at an exercise price of $4.14 per
share. See below "Employment and Severance Arrangements."
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EXECUTIVE COMPENSATION AND OTHER MATTERS
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
WHAT ARE THE COMPENSATION COMMITTEE'S RESPONSIBILITIES?
In fiscal 1999, the Compensation Committee was responsible for
setting and administering our overall compensation policies and the annual
compensation of the executive officers. These policies are based upon the
philosophy that Invitrogen's long-term success is best achieved through
recruitment and retention of the best people possible. The Compensation
Committee applied this philosophy in determining compensation for our
executive officers in three areas: salary, bonuses and stock options.
HOW ARE THE COMPANY'S EXECUTIVE OFFICERS COMPENSATED?
SALARY. Invitrogen strives to offer salaries to its executive
officers that are competitive in its industry and in its geographic region
for similar positions requiring similar qualifications. In determining
executive officers' salaries, the Compensation Committee considers salary
surveys of companies in similar industries, and of similar size and
geographic location. The three main salary surveys used are: the Biotech
Employee Development Coalition Compensation and Benefit Survey, the Radford
Biotechnology Compensation Report and the Western Management Group
Compensation Survey. Companies or industry groups selected for salary
comparisons are not necessarily the same companies or groups used to compare
stock performance in the chart under the heading "Comparison of Stockholder
Return." In addition to competitive industry salaries, the Compensation
Committee also takes into account a subjective assessment of the nature of
the position; the contribution and experience of the officer, the officer's
expertise and skills and the length of the officer's service.
The Compensation Committee generally evaluates the performance and
sets the salary of our executive officers on an annual basis. In 1999, the
executive officers were Chief Executive Officer, Lyle C. Turner and Chief
Financial Officer, James R. Glynn. Performance evaluations for individual
executive officers are based on individual goals set by the Compensation
Committee. The goals of executive officers are based on company business
objectives, the officers' individual objectives and expected contributions
and the scope of their management responsibilities. In addition to reviewing
the results of the performance evaluations and information concerning
competitive salaries, the Compensation Committee considers the company's
financial condition in evaluating salary adjustments. The salaries are
evaluated by the Compensation Committee, with each member using his personal
judgment and subjective factors to assess performance.
BONUSES. Invitrogen seeks to provide additional incentives and
rewards to executive officers who make contributions of outstanding value.
For this reason, we may award incentive compensation which can comprise a
substantial portion of the total compensation of executive officers when
earned and paid. Cash bonuses are based on a subjective evaluation of
performance and existing salary, rather than a specific formula.
STOCK OPTIONS. The Compensation Committee believes that equity
ownership provides significant additional incentive to executive officers to
maximize value for Invitrogen's stockholders, and therefore makes periodic
grants of stock options under the Invitrogen 1995 & 1997 Option Plans to
those officers (as well as other employees). Such options are granted at the
prevailing market price, and will only have value if our stock price
increases over the exercise price. Therefore, the Committee believes that
stock options serve to align the interest of executive officers closely with
other stockholders because of the direct benefit executive officers receive
through improved stock performance.
In fiscal year 1999, the Compensation Committee made determinations
concerning the size and frequency of option grants for executive officers,
after consideration of recommendations from the Chief Executive Officer and
the Chief Financial Officer. Option grants were based upon relative position
and responsibilities of each executive officer, historical and expected
contributions of each officer, and previous option grants to such executive
officers. Options were granted with a goal to provide competitive equity
compensation for executive officers compared to executive officers of similar
rank in companies of our industry, geographic location and size. Generally,
these option grants vest over four years. Option grants to executive officers
for fiscal year 1999 are set
11
<PAGE>
forth in the table entitled "Option Grants in Last Fiscal Year" in the
section entitled "Executive Compensation and Other Matters."
HOW IS INVITROGEN ADDRESSING THE DEDUCTIBILITY OF EXECUTIVE COMPENSATION?
The Committee has considered the provisions of the Internal Revenue
Code and the related regulations of the Internal Revenue Service which
restrict deductibility of executive compensation paid to each of the five
most highly compensated executive officers at the end of any fiscal year to
the extent the compensation exceeds $1,000,000 for any of those officers in
any year and does not qualify for an exception under the statute or
regulations. Income from options granted under the 1995 and 1997 Option Plan
should qualify for an exemption from these restrictions. The Compensation
Committee does not believe that other components of Invitrogen's compensation
will be likely to exceed $1,000,000 for any executive officer in the
foreseeable future and therefore concluded that no further action with
respect to qualifying this compensation for deductibility was necessary at
this time. In the future, the compensation committee will continue to
evaluate the advisability of qualifying its executive compensation for
deductibility of such compensation. The compensation committee's policy is to
qualify its executive compensation for deductibility under applicable tax
laws as practicable.
Members of the Compensation Committee
Kurt R. Jaggers
Bradley G. Lorimier
Jay M. Short
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In March 1997 Invitrogen made an initial investment of $500,000 to
acquire shares of preferred stock and a warrant to purchase shares of
preferred stock of Morphagen, Inc., a start-up company engaged in the
business of researching and developing Morphatides, a special type of nucleic
acid. The former President of Morphagen, Heidi Short, is the spouse of Dr.
Short, a member of the Board of Directors of Invitrogen. During 1997,
Invitrogen performed research services for Morphagen for which it was paid
approximately $81,000. In November 1998, Invitrogen acquired all of the
outstanding shares of Morphagen not already owned by Invitrogen in exchange
for a grant of an option to purchase 50,000 shares of Invitrogen common
stock, at an exercise price of $8.50 per share, to Heidi Short, payment of
royalties contingent upon certain milestones, the assumption of outstanding
options of Morphagen employees and the assumption of certain liabilities.
Morphagen was dissolved as a separate corporate entity in 1999.
Dr. Short's father, Roy Short, receives royalties of approximately
$100,000 per year from sales relating to Invitrogen's DNA DipStick product
line and electroporation cuvettes. There were no other interlocks or other
relationships among Invitrogen's executive officers and directors that are
required to be disclosed under applicable executive compensation disclosure
requirements.
EXECUTIVE COMPENSATION SUMMARY TABLE
The following table sets forth information for the fiscal years
ended December 31 1999, 1998 and 1997 concerning the compensation of the
Chief Executive Officer of the Company and each of the other most highly
compensated executive officers (the "Named Executive Officers") as of
December 31, 1999, whose total salary and bonus for the year ended December
31, 1999, exceeded $100,000 for services rendered in all capacities to
Invitrogen. The table also includes information for Lewis J. Shuster who
qualified as a Named Executive Officer when he became our Chief Operations
Officer in February 2000.
12
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-----------------------------------------------------------------
SHARES OF
COMMON STOCK
ISSUABLE UPON EXERCISE ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS($) OF OPTIONS COMPENSATION
- --------------------------- ---- ------ -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Lyle C. Turner 1999 $308,449 $ 250 - -
President and Chief Executive Officer 1998 285,601 270,998 - -
1997 258,405 640,690 - -
James R. Glynn 1999 252,500 25,250 - -
Executive Vice President and Chief 1998 136,146 123,125 250,000 -
Financial Officer 1997 - - - -
Lewis J. Shuster 1999 - - 10,000 -
Chief Operating Officer 1998 - - 10,000 -
1997 - - - -
</TABLE>
1999 OPTION GRANTS
The following table contains information about the stock option
grants in 1999 to the Named Executive Officers described above. The table is
based on an aggregate of 1,151,703 options granted by Invitrogen during 1999
to employees and directors of, and consultants to Invitrogen. The exercise
price per share of each option was equal to the fair market value of the
common stock on the date of grant as determined by the board of directors.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1999
INDIVIDUAL GRANTS
--------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL RATES OF STOCK
SECURITIES % OF TOTAL EXERCISE PRICE APPRECIATION FOR OPTION
UNDERLYING OPTIONS GRANTED TO OR BASE TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------------
NAME GRANTED(1) FISCAL YEAR ($/SH) DATE 5% 10%
- ---- ---------- ----------- ------ -------- --- ---
<S> <C> <C> <C> <C> <C> <C>
Lewis J. Shuster........... 10,000 0.8% $12.00 1/16/09 $75,467 $191,249
</TABLE>
- -----------
(1) Options are granted under Invitrogen's 1995 and 1997 Stock Option Plans.
Such options expire ten years from the date of grant, or earlier upon
termination of employment.
Amounts reported in the Potential Realizable Value column above
represent hypothetical values that may be realized upon exercise of the
options immediately prior to the expiration of their term, assuming that the
stock price on the date of grant appreciates at the specified annual rates of
appreciation, compounded annually over the term of the options. These numbers
are calculated based on rules promulgated by the Securities and Exchange
Commission. Actual gains, if any, on stock option exercises and common stock
holdings are dependent on the time of such exercise and the future
performance of Invitrogen's common stock.
YEAR-END VALUES
The table below provides information about the number and value of
options held by the Named Executive Officers described above at December 31,
1999. The closing price of our common stock on December 31, 1999 was $60 per
share. No executive officer exercised options during the year ended December 31,
1999.
13
<PAGE>
<TABLE>
<CAPTION>
YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT DECEMBER 31, 1999 OPTIONS AT DECEMBER 31, 1999
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James R. Glynn................................... 120,833 129,167 $6,573,315 $7,026,684
Lewis J. Shuster................................. 17,500 2,500 904,000 120,000
</TABLE>
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
We entered into an agreement with Lewis J. Shuster as of February
2000 in connection with his employment as Chief Operating Officer of
Invitrogen. The agreement calls for an initial base salary of $300,000 per
year, pro rated for part time employment. The agreement also provides that
Mr. Shuster is eligible for an annual bonus of 25% of base salary. The
agreement reflects the grant of an option to purchase 250,000 shares of
common stock at the fair market value on his date of employment. If Mr.
Shuster's employment is terminated by Invitrogen, the agreement calls for a
lump-sum severance payment of one month's salary for every year of service,
but at least 6 months' salary and not more that 12 months' salary. Mr.
Shuster will receive the maximum severance of 12 months salary if his
employment is terminated for any reason due to a change of control of
Invitrogen.
On March 31, 1999 we entered into severance agreements with two of
our former executive officers, Joseph M. Fernandez and Theodore J. DeFrank,
pursuant to their resignations. Under those agreements, each former officer
receives monthly severance pay at their regular salary rate on the date of
the agreements; Mr. DeFrank for six months, Mr. Fernandez for twelve months.
Each former officer additionally entered into consulting agreements with
Invitrogen, for nine months and twelve months respectively. As part of its
merger with NOVEX, in August 1999 Invitrogen assumed an employment agreement
with David E. McCarty, former President and Chief Executive Officer of NOVEX.
Under that agreement Mr. McCarty will receive severance pay totaling $240,000
paid monthly during the twelve month period ending September 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our executive officers, directors and persons who beneficially own
more than 10% of Invitrogen common stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange
Commission ("SEC"). Such persons are required by SEC regulations to furnish
us with copies of all Section 16(a) forms filed by such persons.
Based solely on our review of such forms which were furnished to us
and written representations from certain reporting persons, we believe that
all filing requirements applicable to the executive officers, directors and
more than 10% stockholders were complied with.
14
<PAGE>
COMPARISON OF STOCKHOLDER RETURN
Below is a line graph comparing changes though December 31, 1999 in
the cumulative total return on Invitrogen common stock (traded under the
symbol IVGN), a broad market index, namely the Nasdaq Stock Market-U.S. Index
(the "Nasdaq Index") and an industry index, namely the Nasdaq Pharmaceutical
Stocks index (the "Industry Index"). The Nasdaq Pharmaceutical Stocks Index,
a published industry index, encompasses companies operating under the same
3-digit Standard Industry Code (SIC) as that of Invitrogen. The comparison
assumes that on February 26, 1999 (the first day of public trading for our
common stock) $100 was invested in Invitrogen common stock and in each of the
indices and assumes the reinvestment of dividends, where applicable.
<TABLE>
<CAPTION>
IVGN Nasdaq US Nasdaq Pharmaceutical Stock
<S> <C> <C> <C>
02/26/99 100 100 100
03/31/99 84 107 107
04/30/99 117 110 99
05/28/99 127 108 105
06/30/99 161 117 109
07/30/99 189 116 122
08/31/99 167 120 132
09/30/99 219 120 125
10/29/99 163 129 126
11/30/99 196 143 142
12/31/99 390 173 183
</TABLE>
15
<PAGE>
ITEMS FOR STOCKHOLDER CONSIDERATION
---------------------
PROPOSAL 1
ELECTION OF DIRECTORS
Invitrogen has a classified Board of Directors currently consisting
of two Class I directors (Donald W. Grimm and James R. Glynn), three Class II
directors (Kurt R. Jaggers, Bradley G. Lorimier and Lyle C. Turner) and three
Class III directors (David E. McCarty, Jay M. Short and Lewis J. Shuster).
Directors in these classes will serve until the annual meetings of
stockholders to be held in 2000, 2001 and 2002, respectively, and until their
respective successors are duly elected and qualified. Directors in each class
are elected for a term of three years to succeed the directors in such class
whose terms expire at such annual meeting. Information regarding each
Director can be found above in the section entitled "Election of Directors."
Management's nominees for election at the 2000 Annual Meeting of
Stockholders to fill the Class I positions on the Board of Directors are
Donald W. Grimm and James R. Glynn. If elected, the nominees will serve as
directors until our annual meeting of stockholders in 2003, and until their
successors are elected and qualified. If a nominee declines to serve or
becomes unavailable for any reason, or if a vacancy occurs before the
election, the proxies may be voted for such substitute nominee as the proxy
holders may designate.
If a quorum is present, either in person or by proxy, the two
nominees for the positions as Class I directors receiving the highest number
of votes will be elected. Abstentions and broker non-votes will have no
effect on the vote, except that abstentions will be counted as shares present
for purposes of determining the presence of a quorum. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" THE NOMINEES NAMED ABOVE.
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE
1998 EMPLOYEE STOCK PURCHASE PLAN
INCREASING THE SHARE RESERVE BY 100,000 SHARES
BACKGROUND AND PROPOSAL
On November 20, 1998 the Board of Directors voted to establish the
1998 Employee Stock Purchase Plan (the "Plan") to attract and retain
highly-qualified employees. The Plan was approved by the stockholders at
their annual meeting on January 15, 1999. A total of 250,000 shares of
Invitrogen common stock have been reserved for issuance under the Plan. Of
those, 34,191 had been issued as of December 31, 1999, leaving 215,809
available. The Plan permits eligible employees to purchase common stock at a
discount through payroll deductions, during 24-month offering periods. Unless
the Board of Directors establishes different periods, each offering period is
divided into eight consecutive three-month purchase periods. Unless the Board
of Directors establishes a higher purchase price, the price at which stock is
purchased under the employee stock purchase plan is equal to 85% of the fair
market value of the common stock on the first day of the offering period or
the last day of the purchase period, whichever is lower.
In August of 1999 we merged with NOVEX and in February of 2000 we
merged with Research Genetics, Inc. Primarily because of these mergers and
our recent stock price, management projects that the current share reserve of
250,000 shares will be exhausted before the 2001 Annual Meeting of
Stockholders.
Because benefits under the Plan will depend on employees' elections
to participate and the fair market value of Invitrogen's common stock at
various future dates, it is not possible to determine the dollar value of
benefits that will be received by executive officers and other employees if
the proposed amendment to the Plan is approved by the stockholders.
Nonemployee directors are not eligible to participate in the Plan.
16
<PAGE>
Accordingly, management requested, and on January 21, 2000 the Board
of Directors approved, an amendment to the Plan to increase the number of
shares reserved under the Plan by 100,000 for a total of 350,000 shares,
subject to stockholder approval.
The affirmative vote of a majority of the votes cast at the annual
meeting of stockholders, at which a quorum is present and voting, either in
person or by proxy, is required for approval of this proposal. Abstentions
will have the same effect as a negative vote. Broker non-votes will have no
effect on the outcome of the vote.
The Board of Directors believes that the approval of the amendment
to the Plan, increasing the share reserve by 100,000 shares is in the best
interests of the stockholders and Invitrogen for the reasons stated above.
THEREFORE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE PLAN, INCREASING THE SHARE RESERVE BY 100,000 SHARES.
SUMMARY OF THE EMPLOYEE STOCK PURCHASE PLAN
The following is a summary of the Plan, which is provided for your
information. The Plan is ultimately controlled by the specific language of
the Plan itself, a copy of which is available to any stockholder upon request.
GENERAL. The Plan is intended to qualify as an "employee stock
purchase plan" under section 423 of the Internal Revenue Code. Each
participant in the Plan is granted at the beginning of each offering under
the plan the right to purchase through accumulated payroll deductions up to a
number of shares of our common stock determined on the first day of the
offering. This right to purchase stock is automatically exercised on the last
day of each purchase period within the offering unless the participant has
withdrawn from participation in the offering or in the Plan prior to that
date.
SHARES SUBJECT TO THE PLAN. Currently, a maximum of 250,000 of our
authorized but unissued or reacquired shares of common stock may be issued
under the Plan, subject to appropriate adjustment in the event of a stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in our capital structure or in the event
of any merger, sale of assets or other reorganization of Invitrogen. If any
right to purchase stock expires or terminates, the shares subject to the
unexercised portion of that right will again be available for issuance under
the Plan.
ADMINISTRATION. The Plan is administered by our board of directors.
Subject to the provisions of the Plan, the board determines the terms and
conditions of the rights to purchase stock granted under the plan. The board
will interpret the Plan and the rights granted thereunder, and all
determinations of the board will be final and binding on all persons having
an interest in the Plan or any rights to buy stock under the Plan. The Plan
provides, subject to certain limitations, that Invitrogen will indemnify any
director, officer or employee against all reasonable expenses, including
attorney's fees, incurred in connection with any legal action arising from
that person's action or failure to act in administering the plan.
ELIGIBILITY. Any employee of Invitrogen or of any present or future
parent or subsidiary corporation of Invitrogen designated by the board for
inclusion in the Plan is eligible to participate in an offering to purchase
stock under the Plan so long as the employee is customarily employed for at
least 20 hours per week and 5 months per calendar year. However, no employee
who owns or holds options to purchase, or as a result of participation in the
Plan would own or hold options to purchase, five percent or more of the total
combined voting power or value of all classes of stock of Invitrogen or of
any parent or subsidiary corporation of Invitrogen is entitled to participate
in the Plan.
OFFERINGS. Generally, each offering of common stock under the Plan
is for a period of twenty-four months. Offering periods under the Plan are
overlapping, with a new offering period beginning every three months.
However, employees may only participate in one offering at a time. Offering
periods generally commence on the first days of February, May, August and
November of each year and end on the last day of January, April, July and
October. However, the first offering period commenced on February 26, 1999,
the effective date of the Company's registration of its common stock with the
Securities and Exchange Commission and will end on January 31, 2001.
17
<PAGE>
Shares are purchased on the last day of each purchase period. The board may
establish a different term for one or more offerings or purchase periods or
different commencement or ending dates for an offering or a purchase period.
PARTICIPATION AND PURCHASE OF SHARES. Participation in the Plan is
limited to eligible employees who authorize payroll deductions prior to the
start of an offering period. Payroll deductions may not exceed 15% (or such
other rate as the board determines) of an employee's compensation for any pay
period during the offering period. Once an employee becomes a participant in
the Plan, that employee will automatically participate in each successive
offering period until such time as that employee withdraws from the Plan,
becomes ineligible to participate in the Plan, or terminates employment.
Subject to certain limitations, each participant in an offering has
a purchase right equal to the lesser of that number of whole shares
determined by dividing $50,000 by the fair market value of a share of common
stock on the first day of the offering period or 5,000 shares, provided that
these dollar and share amounts will be prorated for any offering period that
is other than 24 months in duration. No participant may purchase under the
Plan shares of Invitrogen's common stock having a fair market value exceeding
$25,000 in any calendar year. This dollar amount is measured using the fair
market value of Invitrogen's common stock on the first day of the offering
period in which the shares are purchased.
At the end of each purchase period, Invitrogen issues to each
participant the number of shares of common stock determined by dividing the
amount of payroll deductions accumulated for the participant during that
purchase period by the purchase price, limited in any case by the number of
shares subject to the participant's Purchase Right for that Offering. The
price per share at which shares are sold at the end of a purchase period
generally equals 85% of the lesser of the fair market value per share of
Invitrogen's common stock on the first day of the offering period or the
purchase date. The fair market value of the common stock on any relevant date
generally will be the closing price per share on such date as reported on the
Nasdaq National Market. Any payroll deductions under the Plan not applied to
the purchase of shares will be returned to the participant, unless the amount
remaining is less than the amount necessary to purchase a whole share of
common stock, in which case the remaining amount may be applied to the next
purchase period or offering period.
A participant may withdraw from an offering at any time without
affecting his or her eligibility to participate in future offerings. However,
once a participant withdraws from an offering, that participant may not again
participate in the same offering.
CHANGE IN CONTROL. The Plan provides that in the event of a change
in control, the acquiring or successor corporation may assume Invitrogen's
rights and obligations under the Plan or substitute substantially equivalent
purchase rights for such corporation's stock. If the acquiring or successor
corporation elects not to assume or substitute for the outstanding purchase
rights, the board may adjust the last day of the offering period to a date on
or before the date of the change in control. Any purchase rights that are not
assumed, substituted for, or exercised prior to the change in control will
terminate.
TERMINATION OR AMENDMENT. The Plan will continue until terminated by
the board or until all of the shares reserved for issuance under the plan
have been issued. The board may at any time amend or terminate the Plan.
However, the approval of Invitrogen's stockholders is required within twelve
months of the adoption of any amendment that increases the number of shares
authorized for issuance under the Plan or changes the definition of the
corporations which may be designated by the board as corporations whose
employees may participate in the Plan.
SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The following summary is intended only as a general guide as to the
United States federal income tax consequences under current law of
participation in the Plan and does not attempt to describe all possible
federal or other tax consequences of such participation or tax consequences
based on particular circumstances.
A participant recognizes no taxable income either as a result of
commencing to participate in the Plan or purchasing shares of the common
stock under the terms of the Plan.
18
<PAGE>
If a participant disposes of shares purchased under the Plan within
two years from the first day of the applicable offering period or within one
year from the purchase date, known as a disqualifying disposition, the
participant will realize ordinary income in the year of such disposition
equal to the amount by which the fair market value of the shares on the
purchase date exceeds the purchase price. The amount of the ordinary income
will be added to the participant's basis in the shares, and any additional
gain or resulting loss recognized on the disposition of the shares will be a
capital gain or loss. A capital gain or loss will be long-term if the
participant's holding period is more than twelve months.
If the participant disposes of shares purchased under the Plan at
least two years after the first day of the applicable offering period and at
least one year after the purchase date, the participant will realize ordinary
income in the year of disposition equal to the lesser of (i) the excess of
the fair market value of the shares on the date of disposition over the
purchase price or (ii) 15% of the fair market value of the shares on the
first day of the applicable offering period. The amount of any ordinary
income will be added to the participant's basis in the shares, and any
additional gain recognized upon the disposition after such basis adjustment
will be a long-term capital gain. If the fair market value of the shares on
the date of disposition is less than the purchase price, there will be no
ordinary income and any loss recognized will be a long-term capital loss.
If the participant still owns the shares at the time of death, the
lesser of the excess of the fair market value of the shares on the date of
death over the purchase price or 15% of the fair market value of the shares
on the first day of the offering period in which the shares were purchased
will constitute ordinary income in the year of death.
Invitrogen should be entitled to a deduction in the year of a
disqualifying disposition equal to the amount of ordinary income recognized
by the participant as a result of the disposition, except to the extent such
deduction is limited by applicable provisions of the Internal Revenue Code or
the regulations thereunder. In all other cases, no deduction is allowed to
Invitrogen.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as its
independent public accountants to audit our financial statements for the
fiscal year ended December 31, 2000. Arthur Andersen LLP has acted in such
capacity since its appointment in July 1997. A representative of Arthur
Andersen LLP is expected to be present at the annual meeting of stockholders
with the opportunity to make a statement if the representative desires to do
so, and is expected to be available to respond to appropriate questions.
The affirmative vote of a majority of the votes cast at the annual
meeting of stockholders at which a quorum is present and voting, either in
person or by proxy, is required for approval of this proposal. Abstentions
will have the same effect as a negative vote. Broker non-votes will have no
effect on the outcome of the vote. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
ADDITIONAL INFORMATION
ADVANCE NOTICE PROCEDURES. Our bylaws require that, for business to
be properly brought by a stockholder before an annual meeting, notice must be
delivered to or mailed by the stockholder and received at Invitrogen not less
than 120 days prior to the anniversary of the prior year's proxy statement,
except if we did not hold a an annual meeting the previous year, or if the
date of this year's annual meeting has been changed by more than 30 days from
the date of the previous year's meeting, then the deadline is a reasonable
time before we begin to print and mail our proxy materials.
19
<PAGE>
STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING. Proposals of
stockholders intended to be presented at the next annual meeting of the
stockholders of Invitrogen must be received at our offices at 1600 Faraday,
Carlsbad, California 92008 ATTN: Corporate Secretary, (including proposals
made under Rule 14a-8 of the Securities and Exchange Act of 1934, as amended)
by November 24, 2000.
SOLICITATION OF PROXIES. The cost of soliciting proxies will be
borne by Invitrogen. We may solicit stockholder proxies by mail through our
regular employees, and may request banks and brokers, and other custodians,
nominees and fiduciaries, to solicit their customers who have Invitrogen
stock registered in their names and will reimburse them for their reasonable,
out-of-pocket costs. We may use the services of our officers, directors, and
others to solicit proxies, personally or by telephone, without additional
compensation.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the
Board of Directors intends to present or knows that others will present at
the annual meeting is as set forth above. If any other matter or matters are
properly brought before the meeting, or any adjournment thereof, it is the
intention of the persons named in the accompanying form of proxy to vote the
proxy on such matters in accordance with their best judgment.
By Order of the Board of Directors
Warner R. Broaddus
GENERAL COUNSEL & SECRETARY
March 24, 2000
Carlsbad, California
20
<PAGE>
DETACH HERE
PROXY
INVITROGEN CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 2000
The undersigned hereby appoints LYLE C. TURNER, JAMES R. GLYNN and WARNER R.
BROADDUS, and each of them, as attorneys and proxies of the undersigned, with
full power of substitution, to vote all shares of common stock of Invitrogen
Corporation which the undersigned may be entitled to vote at the Annual
Meeting of Stockholders to be held at Invitrogen's offices at 1600 Faraday
Avenue, Carlsbad, California, on April 27, 2000 at 10:00 a.m local time, and
at any and all postponements, continuations and adjournments thereof, with
all powers that the undersigned would possess if personally present, such
proxies being directed to vote on the proposals as specified on the reverse
side.
- ------------ -----------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ------------ ------------
<PAGE>
DETACH HERE
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE
LISTED NOMINEES FOR DIRECTOR AND "FOR" THE PROPOSALS LISTED BELOW AND IN THE
DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE MEETING. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE
TIME IT IS VOTED BY ANY MEANS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
1. TO ELECT THE FOLLOWING DIRECTORS TO SERVE FOR THREE-YEAR TERMS AND UNTIL
THEIR SUCCESSORS ARE ELECTED AND QUALIFIED:
NOMINEES: (01) JAMES R. GLYNN AND (02) DONALD W. GRIMM
FOR WITHHELD
ALL / / FROM ALL / /
NOMINEES NOMINEES
/ /______________________________________
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
FOR AGAINST ABSTAIN
2. TO AMEND INVITROGEN'S 1998 EMPLOYEE
STOCK PURCHASE PLAN TO INCREASE THE
NUMBER OF SHARES RESERVED FOR ISSUANCE / / / / / /
UNDER THE PLAN BY 100,000 SHARES FOR A
TOTAL OF 350,000 SHARES OF COMMON STOCK.
3. TO RATIFY THE APPOINTMENT OF ARTHUR FOR AGAINST ABSTAIN
ANDERSEN LLP AS THE INDEPENDENT
ACCOUNTANTS OF THE COMPANY FOR THE YEAR / / / / / /
ENDING DECEMBER 31, 2000.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) HEREON. IF THE STOCK IS
REGISTERED IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN. PLEASE
GIVE FULL TITLE AS CAPACITY IN WHICH SIGNING IF NOT SIGNING AS AN INDIVIDUAL.
SIGNATURE:____________________________________________ DATE:_________________
SIGNATURE:____________________________________________ DATE:_________________
