SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
BIO-RAD LABORATORIES, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
BIO-RAD LABORATORIES, INC.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
- - - ----------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- - - ----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- - - ----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - - ----------------------------------------------------------------------------
(5) Total fee paid:
- - - ----------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- - - ----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- - - ----------------------------------------------------------------------------
(3) Filing party:
- - - ----------------------------------------------------------------------------
(4) Date filed:
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<PAGE>
BIO-RAD LABORATORIES, INC.
1000 ALFRED NOBEL DRIVE
HERCULES, CALIFORNIA 94547
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
BIO-RAD LABORATORIES, INC.
TO BE HELD APRIL 30, 1996
TO THE STOCKHOLDERS OF BIO-RAD LABORATORIES, INC.:
The annual meeting of the stockholders of Bio-Rad Laboratories, Inc.
("Bio-Rad" or the "Company") will be held at the Company's corporate offices,
1000 Alfred Nobel Drive, Hercules, California on Tuesday, April 30, 1996 at 4:00
p.m., Pacific Daylight Time, to consider and act on:
(1) The election of two directors of the Company by the holders of
outstanding Class A Common stock and five directors of the Company by the
holders of outstanding Class B Common stock;
(2) A proposal to ratify the selection of Arthur Andersen LLP as the
Company's independent auditors; and
(3) Such other matters as may properly come before the meeting.
The Board of Directors of the Company has fixed the close of business on
March 20, 1996, as the record date for the determination of the stockholders
entitled to notice of and to vote at this annual meeting and at any adjournment
or postponement thereof. The stock transfer books of the Company will not be
closed.
All stockholders are invited to attend the annual meeting in person, but
those who are unable to do so are urged to execute and return promptly the
enclosed Proxy in the enclosed postage-paid envelope. Since a majority of the
outstanding shares of each class of common stock of the Company must be present
or represented at the annual meeting to elect directors and conduct the other
business matters referred to above, your promptness in returning the enclosed
Proxy will be greatly appreciated. Your Proxy is revocable and will not affect
your right to vote in person in the event you attend the meeting and revoke your
Proxy.
All stockholders who attend the annual meeting in person are invited to join
the Company for dinner immediately following the meeting.
By order of the Board of Directors,
Bio-Rad Laboratories, Inc.
SANFORD S. WADLER, Secretary
Hercules, California
March 29, 1996
<PAGE>
BIO-RAD LABORATORIES, INC.
1000 ALFRED NOBEL DRIVE
HERCULES, CALIFORNIA 94547
PROXY STATEMENT
INFORMATION REGARDING PROXIES
The enclosed Proxy is solicited on behalf of the Board of Directors of
Bio-Rad Laboratories, Inc., a Delaware corporation ("Bio-Rad" or the "Company"),
in connection with the annual meeting of stockholders of the Company to be held
on Tuesday, April 30, 1996, and at any adjournment or postponement thereof.
Solicitation of Proxies will be by mail at the expense of the Company. Copies of
this Proxy Statement and the accompanying notice and Proxy were mailed to
stockholders on or about March 29, 1996.
Shares for which a properly executed Proxy in the enclosed form is returned
will be voted at the meeting in accordance with the directions on such Proxy. If
no voting instructions are indicated with respect to one or more of the
proposals, the Proxy will be voted in favor of the proposal(s). Any Proxy may be
revoked by the record owner of the shares at any time prior to its exercise by
filing with the Secretary of the Company a written revocation or duly executed
Proxy bearing a later date or by attending the meeting in person and announcing
such revocation.
VOTING SECURITIES
The securities of the Company entitled to vote at the meeting consist of
shares of its Class A Common Stock and Class B Common Stock, both $1.00 par
value (collectively, "Common Stock"). 6,424,261 shares of Class A Common Stock
and 1,753,003 shares of Class B Common Stock were issued and outstanding at the
close of business on March 20, 1996. Only stockholders of record at the close of
business on March 20, 1996 will be entitled to notice of and to vote at the
meeting. The presence, in person or by Proxy, of the holders of a majority of
the voting power will constitute a quorum for the transaction of business. Each
share of Class A Common Stock is entitled to one-tenth of a vote and each share
of Class B Common Stock is entitled to one vote, except in the election of
directors and any other matter requiring the vote of one or both classes of
Common Stock voting separately. The sum of one-tenth the number of shares of
Class A Common Stock and the number of shares of Class B Common Stock
constitutes the "Voting Power" of the Company.
The holders of Class A Common Stock, voting as a separate class, are entitled
to elect two directors. The holders of Class B Common Stock, also voting as a
separate class, are entitled to elect the other five directors. The affirmative
vote of the holders of a majority of each class of Common Stock present in
person or represented by Proxy is necessary for the election of directors by
that class. The stockholders do not have any right to vote cumulatively in any
election of directors.
On all other matters submitted to a vote at the annual meeting (except
matters requiring the vote of one or both classes voting separately), the
affirmative vote of the holders of a majority of the Voting Power present in
person or represented by Proxy is necessary for approval. The Board of Directors
is not aware of any matters that might come before the meeting other than those
mentioned in this Proxy Statement. If, however, any other matters properly come
before the annual meeting, it is intended that the proxies will be voted in
accordance with the judgment of the person or persons voting such proxies.
Under the Company's bylaws and Delaware law: (1) shares represented by
proxies that reflect abstentions or "broker non-votes" (i.e., shares held by a
broker or nominee which are represented at the meeting, but with respect to
which such broker or nominee is not empowered to vote on a particular proposal)
will be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum; (2) the director nominees receiving the
highest number of votes, up to the number of directors to be elected, are
elected and, accordingly, abstentions, broker non-votes and withholding of
1
<PAGE>
authority to vote will not affect the election of directors; and (3) proxies
that reflect abstentions as to a particular proposal will be treated as voted
for purposes of determining the approval of that proposal and will have the same
effect as a vote against that proposal, while proxies that reflect broker
non-votes will be treated as unvoted for purposes of determining approval of
that proposal and will not be counted as votes for or against that proposal.
<TABLE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table presents certain information as of March 20, 1996, with
respect to Class A and Class B Common Stock owned by: (i) any person who is
known to the Company to be the beneficial owner of more than five percent of the
outstanding Common Stock of either class, (ii) each director of Bio-Rad, (iii)
certain executive officers of Bio-Rad named in the "Summary Compensation Table"
of this Proxy Statement, and (iv) all directors and executive officers of
Bio-Rad as a group.
<CAPTION>
CLASS A COMMON STOCK(1) CLASS B COMMON STOCK
--------------------------------------- ---------------------------------------
NAME AND, WITH RESPECT TO NUMBER OF SHARES AND PERCENT NUMBER OF SHARES AND PERCENT
OWNER OF 5% OR MORE, ADDRESS NATURE OF OWNERSHIP(2) OF CLASS NATURE OF OWNERSHIP(2) OF CLASS
- - - ----------------------------------- -------------------------- ------------ -------------------------- ------------
<S> <C> <C> <C> <C>
Bernard A. Egan 538,179 of record 8.4% 80,875 of record 4.6 %
1900 Old Dixie Highway and beneficially and beneficially
Fort Pierce, FL 33450
FMR Corporation 418,900 of record 6.5% no shares owned of --
82 Devonshire Street and beneficially record or beneficially
Boston, MA 02109
David and Alice N. Schwartz 1,073,958 of record 16.7% 1,105,385 of record 61.6%
Bio-Rad Laboratories, Inc. and beneficially(3) and beneficially(3)(6)
1000 Alfred Nobel Drive
Hercules, CA 94547
David Schwartz 28,600 in trust(5) 0.4% no shares owned of --
record or beneficially
Norman Schwartz(4) 65,110 of record 1.0% 134,077 of record 7.6%
Bio-Rad Laboratories, Inc. and beneficially(6) and beneficially
1000 Alfred Nobel Drive
Hercules, CA 94547
Steven Schwartz(4) 54,116 of record 0.8% 96,407 of record 5.5%
Bio-Rad Laboratories, Inc. and beneficially and beneficially
1000 Alfred Nobel Drive
Hercules, CA 94547
James J. Bennett 44,553 of record 0.7% 15,818 of record 0.9%
and beneficially(6) and beneficially
Thomas L. Braje 6,717 of record 0.1% no shares owned of --
and beneficially(6) record or beneficially
Albert J. Hillman 2,970 of record 0.0% 2,745 of record 0.2%
and beneficially and beneficially
Philip L. Padou no shares owned of -- no shares owned of --
record or beneficially record or beneficially
Sanford S. Wadler 5,292 of record 0.1% no shares owned of --
and beneficially(6) record or beneficially
Burton A. Zabin 17,953 of record 0.3% 43,678 of record 2.5%
and beneficially(6) and beneficially
All directors and executive 1,216,553 of record 18.9% 1,301,703 of record 72.6%
officers as a group (9 persons) and beneficially(6) and beneficially(6)
28,600 in trust(5) 0.4% no shares owned of --
record or beneficially
<FN>
- - - ---------
(l) Excludes Class A shares that may be acquired on conversion of Class B
shares. Class B shares may be converted to Class A shares on a one for one basis
which, if fully converted, would result in the following percentage ownerships
of Class A shares: Bernard A. Egan, 7.6%; FMR 5.1%; David and Alice N. Schwartz,
26.5%; Norman Schwartz, 2.4%; Steven Schwartz, 1.8%; David Schwartz in trust,
0.3%; James J. Bennett, 0.7%; Thomas L. Braje, 0.1%; Albert J. Hillman, 0.1%;
Sanford S. Wadler, 0.1%; Burton A. Zabin, 0.8% and all directors and executive
officers as a group, 30.6%. Management considers any substantial conversions by
the executive officers or directors listed in the table to be highly unlikely.
(2) Except as otherwise indicated and subject to applicable community property
and similar statutes, the persons listed as beneficial owners of the shares have
voting and investment power with respect to such shares.
(3) As spouses, David and Alice N. Schwartz, each have a one-half community
property interest in these shares.
(4) Norman Schwartz and Steven Schwartz are sons of David and Alice N. Schwartz.
(5) These shares are owned by the Company's profit sharing plan for which David
Schwartz as co-trustee shares the power to vote but does not exercise any
dispositive powers.
(6) Includes shares with respect to which such persons have the right to acquire
beneficial ownership under the Company's employee stock purchase plan and stock
option agreements, as follows: James J. Bennett, 4,500 shares; Thomas L. Braje,
3,350 shares; Norman Schwartz, 4,225 shares; Sanford S. Wadler, 3,350 shares;
Burton A. Zabin, 5,625 shares; and all directors and executive officers as a
group, 21,050 Class A Common shares; and David Schwartz, 40,600 Class B Common
shares.
</FN>
</TABLE>
2
<PAGE>
I. ELECTION OF DIRECTORS
The Board of Directors has seven members. Management has nominated the seven
persons listed in the following table as the candidates of the respective class
of Common Stock indicated. All are currently directors of the Company, with
terms expiring as of the date of the annual meeting of stockholders or on
election and qualification of their successors. David Schwartz and Alice N.
Schwartz are husband and wife; and Norman Schwartz is their son. No other family
relationships exist. As husband and wife, David and Alice Schwartz share equally
in all remuneration and other benefits accorded to either of them by the
Company.
The directors elected at this meeting will serve until the next annual
meeting of stockholders or until their respective successors are elected and
qualified. It is the intention of the persons named in the Proxy to vote the
shares subject to such Proxy for the election as directors of the persons listed
in the following table. Although it is not contemplated that any nominee will
decline or be unable to serve as a director, in the event that at the meeting or
any adjournment or postponement thereof any nominee declines or is unable to
serve, the persons named in the enclosed Proxy will, in their discretion, vote
the shares subject to such Proxy for another person selected by them for
director.
<TABLE>
<CAPTION>
CLASS OF
COMMON STOCK PRESENT PRINCIPAL EMPLOYMENT DIRECTOR
NAME TO ELECT AGE AND PRIOR BUSINESS EXPERIENCE SINCE
- - - ----------------- -------------- ----- -------------------------------------------- ----------
<S> <C> <C> <C> <C>
James J. Bennett Class B 67 Vice President and Chief Operating Officer 1977
of the Company since 1993; Vice President
and Group Manager, Clinical Diagnostics from
1985 to 1993; Vice President and Chief
Operating Officer of the Company from 1977
to 1985.
Albert J. Hillman Class A 64 Of counsel in the law firm of Townsend and 1980
Townsend and Crew ("Townsend and Townsend")
since 1965, which firm serves as patent
counsel for the Company.
Philip L. Padou Class A 61 Retired since 1991; Vice President and Chief 1980
Financial Officer of Ozier Perry and
Associates from 1987 to 1991.
Alice N. Schwartz Class B 69 Retired since 1979; Research Associate, 1967
University of California, from 1972 to 1978.
David Schwartz Class B 72 President of the Company since 1957. 1957
Norman Schwartz Class B 46 Vice President of the Company since 1989, 1995
and Group Manager, Clinical Diagnostics
since 1993.
Burton A. Zabin Class B 60 Vice President of the Company and Group 1968
Manager, Life Science since 1982.
</TABLE>
In addition to Messrs. James J. Bennett, David Schwartz, Norman Schwartz and
Burton A. Zabin, the following persons were executive officers of the Company:
Thomas L. Braje, James L. Viglienzone and Sanford S. Wadler. Thomas L. Braje
(age 52) has been Vice President and Chief Financial Officer since 1989. James
L. Viglienzone (age 42) was appointed Treasurer in 1989; he resigned in February
1996. Sanford S. Wadler (age 49) has been General Counsel and Secretary since
1989. Compensation and options awarded to James L. Viglienzone in 1995 were
considered in determining information presented in the section titled "Executive
Compensation and Other Information" in this Proxy Statement.
The above named individuals also serve in various management capacities with
wholly-owned subsidiaries of Bio-Rad. David Schwartz, by virtue of his Common
Stock ownership (see "Principal and Management Stockholders") and his position
as a director and the President of Bio-Rad, may be deemed to be a control person
of the Company.
3
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Audit Committee and a
Compensation Committee. The Board of Directors has no nominating committee or
other committees performing similar functions. During 1995, the Board of
Directors held a total of 12 meetings (including regularly scheduled and special
meetings) and no director attended fewer than 83% of such meetings.
The Audit Committee is composed of Philip L. Padou and met three times in
1995. The Audit Committee recommends to the Board of Directors the firm to be
employed by the Company as its independent auditors and is primarily responsible
for approving the services performed by the Company's independent auditors and
for reviewing and evaluating the Company's accounting policies and its system of
internal accounting controls.
The Compensation Committee, consisting of two non-employee directors, Albert
J. Hillman and Philip L. Padou, met two times in 1995. The Compensation
Committee reviews and approves the Company's executive compensation policies. A
more complete discussion is provided in the "Report of the Compensation
Committee of the Board of Directors" of this Proxy Statement.
COMPENSATION OF DIRECTORS
In 1995, Townsend and Townsend, the patent law firm of which Mr. Hillman is
of counsel, rendered legal services to the Company. The Board of Directors has
relied upon the Company's General Counsel to determine that the services of
Townsend and Townsend were provided on terms at least as fair to the Company as
if they had been provided by a non-affiliate. The General Counsel is responsible
for the management of all of the Company's relationships with providers of legal
services.
Pursuant to the policy of the Board of Directors of Bio-Rad, directors who
are not also employees of Bio-Rad are paid for serving as directors a fee of
$1,000 per month plus $100 for any meetings in excess of 16 per year. Audit
Committee members are paid $500 per month.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ABOVE-NAMED DIRECTOR
NOMINEES FOR THE CLASS OR CLASSES OF COMMON STOCK THAT YOU HOLD.
4
<PAGE>
<TABLE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table presents compensation paid or
accrued by the Company for services rendered during 1995, 1994 and 1993 for the
CEO and the four other most highly compensated executive officers of the Company
("Named Executive Officers") whose total annual salary and bonus exceeded
$100,000 in 1995.
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPENSATION(2)
---------------
SECURITIES
ANNUAL
NAME AND COMPENSATION(1) UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION(3)
- - - ----------------------- ------ ----------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
David Schwartz 1995 $ 494,078 $ 111,600 24,300 $ 7,500
President 1994 $ 453,506 $ 116,887 24,000 $ 9,000
1993 $ 417,605 $ 0 24,000 $ 9,400
James J. Bennett 1995 $ 393,299 $ 91,063 5,000 $ 7,500
Vice President and 1994 $ 350,060 $ 92,481 5,000 $ 9,000
Chief Operating Officer 1993 $ 296,692 $ 0 5,000 $ 9,400
Burton A. Zabin 1995 $ 228,518 $ 39,043 2,500 $ 7,500
Vice President and 1994 $ 222,066 $ 33,953 2,500 $ 9,000
Group Manager, 1993 $ 219,620 $ 0 2,500 $ 8,800
Life Science
Sanford S. Wadler 1995 $ 216,751 $ 67,489 2,000 $ 7,500
General Counsel and 1994 $ 206,940 $ 71,032 2,000 $ 9,000
Secretary 1993 $ 200,034 $ 35,400 1,500 $ 9,400
Thomas L. Braje 1995 $ 216,612 $ 42,390 2,000 $ 7,500
Vice President and 1994 $ 219,768 $ 48,861 2,000 $ 9,000
Chief Financial Officer 1993 $ 205,332 $ 0 1,500 $ 8,200
<FN>
- - - ----------
(1) All Other Annual Compensation amounts for each of the Named Executive
Officers were less than the amounts required for separate reporting and are
included in salary.
(2) There were no Restricted Stock awards.
(3) Amounts reported are contributions made pursuant to the Company's profit
sharing plan. A more complete discussion is provided in the section titled
"Profit Sharing Plan Contributions" of the "Report of the Compensation Committee
of the Board of Directors" in this Proxy Statement.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
The following table presents certain information regarding stock options
granted to the Named Executive Officers in 1995.
OPTION GRANTS IN 1995
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL RATES OF
----------------------------------------------- STOCK PRICE APPRECIATION
NUMBER OF % OF TOTAL FOR OPTION TERM(2)
SECURITIES OPTIONS -------------------------------
UNDERLYING GRANTED TO EXERCISE ASSUMED ASSUMED
OPTIONS EMPLOYEES PRICE EXPIRATION APPRECIATION APPRECIATION
NAME GRANTED(1) IN 1995 ($/SHARE) DATE OF 5% OF 10%
- - - ----------------- ------------ ------------ ---------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz 20,600 21.2 % $ 27.00 02/08/00 $ 153,511 $ 339,838
3,700 3.8% $ 29.70 02/08/00 $ 30,330 $ 67,143
James J. Bennett 5,000 5.1% $ 27.31 02/08/00 $ 37,688 $ 83,432
Burton A. Zabin 2,500 2.6% $ 27.31 02/08/00 $ 18,844 $ 41,716
Sanford S. Wadler 2,000 2.1% $ 27.31 02/08/00 $ 15,075 $ 33,373
Thomas L. Braje 2,000 2.1% $ 27.31 02/08/00 $ 15,075 $ 33,373
<FN>
- - - ----------
(1) All stock options granted in 1995 are incentive stock options with the
exception of a nonqualified stock option for 20,600 shares granted to David
Schwartz. The exercise price reflects not less than 100% of the fair market
value of the underlying securities at the time such options were granted. All
shares subject to the above options are Class A shares with the exception of the
options granted to David Schwartz which were for Class B shares. All stock
options have a term of five years and become exercisable at a rate not greater
than 25% per annum commencing one year after the date of grant. In 1995, options
to purchase 39,300 shares were granted to all executive officers as a group, and
options to purchase 57,900 shares were granted to all other employees.
(2) Potential realizable value is based on an assumption that the stock price of
the Common Stock appreciates at the annual rate shown (compounded annually) from
the date of grant until the end of the five year option term. These numbers are
calculated based on the requirements promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth.
</FN>
</TABLE>
<TABLE>
The following table presents the number of shares for which options were
exercised, as well as the number of exercisable and unexercisable options at
December 31, 1995 for the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN 1995 AND
DECEMBER 31, 1995 OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1995 AT DECEMBER 31, 1995(1)
ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - - ----------------- ------------- ---------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz -- -- 26,775 69,525 $ 693,071 $ 1,639,164
James J. Bennett 4,750 $48,927 1,250 12,000 $ 35,837 $ 282,955
Burton A. Zabin -- -- 1,875 5,625 $ 100,863 $ 147,588
Sanford S. Wadler -- -- 2,075 4,525 $ 57,115 $ 105,493
Thomas L. Braje -- -- 2,075 4,525 $ 57,115 $ 105,493
<FN>
- - - ----------
(1) The market prices of Class A and Class B Common Stock at December 31, 1995
were $42.50 and $42.75 per share, respectively.
</FN>
</TABLE>
6
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION IN COMPENSATION DECISIONS
The Compensation Committee is composed of Messrs. Hillman and Padou. The
Company currently has no interlocking relationships involving any of its
Compensation Committee members and no executive officer of the Company serves on
the Compensation Committee. Messrs. Bennett, D. Schwartz, N. Schwartz and Zabin
participate in general Board of Directors' discussions of compensation, bonuses
and stock options. David, Norman and Alice Schwartz were absent from and did not
participate in the discussions or decisions concerning the President's
compensation.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation. The Compensation Committee was
formed in December, 1993. The report also refers to decisions made by Mr. Padou,
Mr. Hillman and other members of the Board of Directors prior to the formation
of the Compensation Committee. The function of the Compensation Committee is to
review and approve the compensation arrangements for the Company's senior
management and any compensation plans in which the executive officers and
directors are eligible to participate.
OBJECTIVES AND OVERVIEW
The overall objectives of the Company's executive compensation programs are
to:
o Attract, retain and motivate key executive talent;
o Reward key executives based on business performance;
o Align executive incentives with the interests of stockholders; and
o Encourage the achievement of Company objectives.
Executive compensation consists of four components: 1) base salary; 2) annual
and special incentive bonus payments; 3) long-term incentives in the form of
stock options; and 4) contributions to the Company's profit sharing plan. The
Company strives to provide a competitive total compensation package to senior
management based on professionally compiled surveys of broad groups of companies
of com- parable size within related industries.
BASE SALARY
Each year, the Company obtains studies of compensation trends, practices and
levels from at least four independent compensation surveys in order to determine
the competitiveness of the pay structure for its senior managers. Within the
comparative groups of companies surveyed, the Company sets executive base
salaries and total compensation near the arithmetic mean of the surveys. Each
executive's base salary is determined by an assessment of the executive's job
description and current salary in relation to the salary range designated for
the position in the compensation surveys. Adjustments are made when necessary to
reflect changes in responsibilities or competitive industry pressures. Each
executive's performance is evaluated annually to determine individual merit
increases within the overall guidelines established in each year's budget
process. For 1995, the Company merit increase guideline was 5.0% and was based
on the compensation surveys.
INCENTIVE BONUS PAYMENTS
Executive officers of the Company, including the President, are eligible for
an annual incentive bonus and special bonuses, determined as a percentage of the
officers' eligible wages. Annual bonuses are awarded to executive officers,
including the President and other key employees of the Company and its operating
units, who meet certain annual Company and operating unit goals which are
previously established by senior management. The performance factors used in
calculating bonuses include: sales growth rates, operating profitability and
return on assets as measured against annual objectives. Performance
7
<PAGE>
goals have been established for the Company as a whole and for each operating
unit. Bonuses are determined using these performance factors and comparisons to
industry competitive standards. The bonus calculation is weighted between
Company performance and operating unit performance according to the
responsibilities of each executive. In addition to the annual incentive bonuses,
special bonuses are awarded by the Board of Directors in recognition of other
specific business actions taken during the year which contributed to the
strategic growth, profitability or competitiveness of the Company. In the past,
these bonuses have been awarded for special achievements such as successfully
completing acquisitions or divestitures and settling legal disputes. Such
bonuses may be distributed over several years. Incentive bonuses may be awarded
in cash and/or stock.
Bonuses for performance in 1995 were awarded in March, 1996 and ranged from
6.3% to 50.0% of base salaries. Bonuses for performance in 1994 ranged from 7.6%
to 31.5% of base salaries. Because bonuses are based on growth and
profitability, trends in bonus awards generally track operating unit and Company
performance. Special bonuses are awarded only on completion of specific projects
or transactions.
LONG-TERM INCENTIVES
The Company provides its executive officers and other key employees with
long-term incentive compensation through the granting of stock options. The
Company believes that stock options provide the Company's key employees with the
opportunity to purchase and maintain an equity interest in the Company and to
share in the appreciation of the value of the stock. Stock options are intended
to align executive interests with the interests of stockholders and therefore
directly motivate senior management to maximize long-term stockholder value. The
stock options also create an incentive to remain with the Company for the
long-term because the options are vested over a four-year period. Because all
options are granted at no less than the fair market value of the underlying
stock on the date of grant, stock options provide value to the recipients only
when the price of Bio-Rad Common Stock increases over time.
The Board of Directors has delegated certain responsibilities of
administration of the Company's stock option plans to the Stock Option Award
Committee in order for the option plans to comply with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended. The Stock Option Award Committee is
composed of Messrs. Hillman and Padou and is responsible for determining the
timing and distribution of grants subject to the terms of the current option
plans. The Stock Option Award Committee also determines the total number of
shares granted and the allocation of shares to individual executive officers and
key employees. Recommendations from senior management and other factors are
considered including: the responsibility level, individual performance and
contribution to the Company's business of each officer and key employee. Except
as may be otherwise required by Rule 16b-3, the option grants are submitted to
the Board of Directors for ratification and the date of grant is the date of the
Board of Directors meeting. In 1995, the Company granted approximately 97,200
options to a group of about 215 executive officers and key employees.
PROFIT SHARING PLAN CONTRIBUTIONS
The Company's employees who are directors or officers are entitled to
participate in the Bio-Rad Laboratories, Inc. Employees' Deferred Profit Sharing
Retirement Plan ("Profit Sharing Plan") on the same basis as all other Company
employees. The Profit Sharing Plan covers all full-time employees of the
Company, or any of its participating subsidiaries, who have completed one year
of service. Contributions to the Profit Sharing Plan are determined each year by
the Board of Directors in its sole discretion and are allocated among each
participant based on the ratio his or her compensation bears to the aggregate
compensation of all participants. For 1995, the Board of Directors approved a
contribution of 5% of eligible compensation. Participants are vested 100% after
five years of service, but funds are not distributed until retirement or
termination of employment with the Company.
PRESIDENT'S COMPENSATION
For 1995, the Compensation Committee was primarily responsible for
determining and approving the President's compensation. The President's
compensation was compared with compensation of other
8
<PAGE>
CEOs in the above mentioned surveys and proxy statements for comparable
companies. The salary of David Schwartz is normally set near the arithmetic mean
of the salaries surveyed for comparable companies. The salary of Mr. Schwartz
was not changed in 1995. In July 1994, the salary of Mr. Schwartz was increased
by 19%. There was no increase to his salary in 1993.
The President's annual bonus is based on the achievement of the Company's
financial goals. The same performance criteria are used to calculate his annual
bonus as those established for other eligible executive officers. These criteria
are discussed above under Incentive Bonus Payments. In March 1996, Mr. Schwartz
received a bonus of 23.3% of base salary based on achievement of previously
established growth and profitability targets for 1995. The bonus awarded to Mr.
Schwartz was in the mid-range of bonuses awarded to CEOs of other comparable
companies.
In 1995, Mr. Schwartz was granted an incentive stock option to purchase 3,700
shares of Class B Common Stock and a nonqualified stock option to purchase
20,600 shares of Class B Common Stock. As a holder of more than 10% of the
Company's Common Stock, the exercise price of the shares underlying the
incentive stock option was fixed at 110% of the market price on the date of
grant. The exercise price of the nonqualified option was 100% of the market
price on the date of grant. Pursuant to the general restrictions of the Option
Plan, vesting of incentive stock options granted to Mr. Schwartz is limited to
$100,000 per year which results in vesting at a slower rate than other
optionees. These option grants were comparable with options granted to CEOs of
similar size companies.
Compensation Committee,
Albert J. Hillman
Philip L. Padou
9
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative stockholder returns over the past
five years for the Company's Class A Common Stock, the American Stock Exchange
Market Value Index and a selected peer group, assuming $100 invested on December
31, 1990 and reinvestment of dividends:
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Bio-Rad $100.00 $106.76 $ 92.57 $ 54.05 $150.00 $229.73
Peer Group(1) $100.00 $106.79 $119.24 $123.94 $149.40 $224.92
Amex Market
Value Index $100.00 $128.22 $129.57 $154.86 $140.75 $177.93
- - - ----------
(1) The peer group consists of the following public companies: Beckman
Instruments; Becton Dickinson; Bio-Rad; Diagnostic Products; KLA Instruments;
Life Technologies; Millipore; and Perkin-Elmer. Companies in the peer group were
chosen to reflect Bio-Rad's participation in three different markets: life
science research products, analytical instruments and clinical diagnostics. No
single public or private company has a comparable mix of products which serve
the same markets. In many cases, only one division of a peer group company
competes in the same markets as Bio-Rad. Collectively, the peer group reflects
products and markets similar to Bio-Rad's.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities
("Insiders"), to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of Common Stock
of the Company. Insiders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) reports which they file.
To the Company's knowledge, based solely upon its review of the copies of
such reports furnished to the Company and written representations from certain
Insiders that no other reports were required, during fiscal year ended December
31, 1995 all Section 16(a) filing requirements applicable to Insiders were
complied with.
10
<PAGE>
II. RATIFICATION OF SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP, independent public
accountants, to serve as Bio-Rad's auditors for the fiscal year ending December
31, 1996. A representative of Arthur Andersen LLP is expected to be present at
the annual meeting of stockholders to make a statement if he or she desires to
do so and to respond to appropriate questions.
Although it is not required to do so, Bio-Rad wishes to provide stockholders
with the opportunity to express their opinion on the selection of auditors, and
accordingly is submitting a proposal to ratify the selection of Arthur Andersen
LLP. If the stockholders should fail to ratify this proposal, the Board of
Directors will consider the selection of another auditing firm.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF ARTHUR
ANDERSEN LLP TO SERVE AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1996.
III. OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors does not know of
any business to be presented for consideration at the meeting other than that
described above. If any other business should properly come before the meeting,
the shares represented by Proxies will be voted in accordance with the judgment
of the persons named in such Proxies.
The annual report of the Company for the year ended December 31, 1995,
including financial statements, has been mailed, or is being mailed concurrently
with this Proxy Statement, to all stockholders of the Company as of the record
date for the annual meeting.
STOCKHOLDERS OF RECORD ON MARCH 20, 1996 MAY OBTAIN COPIES OF THE COMPANY'S
ANNUAL REPORT ON FORM 10K (EXCLUDING EXHIBITS) FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION BY WRITING TO BIO-RAD LABORATORIES, INC., CORPORATE
SECRETARY, 1000 ALFRED NOBEL DRIVE, HERCULES, CA 94547.
STOCKHOLDER PROPOSALS
Proposals intended to be presented by stockholders at the 1997 annual meeting
must be received by the Company for inclusion in the 1997 Proxy Statement not
later than November 29, 1996.
By order of the Board of Directors,
Bio-Rad Laboratories, Inc.
SANFORD S. WADLER, Secretary
Hercules, California
March 29, 1996
11
<PAGE>
CLASS A FRONT OF CARD:
APPENDIX A
P CLASS A STOCK
R BIO-RAD LABORATORIES, INC.
O Proxy is Solicited on Behalf of the Board of Directors for the
X Annual Meeting of Stockholders
Y
April 30, 1996
The undersigned does hereby appoint DAVID SCHWARTZ and SANFORD S. WADLER and
each of them, attorneys-in-fact and agents with full powers of substitution, for
and in the name, place and stead of the undersigned, to vote as proxies or proxy
all the shares of Class A Common Stock of Bio-Rad Laboratories, Inc.
("Bio-Rad"), to be held at the Company's corporate offices, 1000 Alfred Nobel
Drive, Hercules, California, on Tuesday, April 30, 1996 at 4:00 P.M., Pacific
Daylight Time, and at any and all adjournments or postponements thereof:
CLASS A BACK OF CARD:
Bio-Rad Laboratories, Inc.
Please mark votes as in this example using dark ink only. / /
This proxy will be voted as specified below. If no voting instructions are
indicated with respect to one or more of the proposals, the proxy will be voted
in favor of the proposal(s). The Board of Directors recommends a Vote FOR items
1, 2 and 3.
1. ELECTION OF DIRECTORS 2. PROPOSAL to ratify the selection of
Arthur Andersen LLP to serve as the
ALBERT J. HILLMAN, Company's Independent auditors.
PHILIP L. PADOU
3. In their discretion as to such other
------------------------------- matters as properly may come before
(Instruction: To withhold the meeting or any adjournment or
authority to vote for any postponement thereof.
nominee(s), write the name(s)
of such nominee(s) above.)
Receipt of the Notice of Annual
Meeting of Stockholders and proxy
statement is hereby confirmed.
Please sign exactly as your name
appears hereon or on the stock
certificate. Executors,
administrators or trustees should
indicate their capacities. If stock
is held in joint names, both
registered holders should sign. No
witness or notarization is
necessary.
Date: _____________________________
Signature:_________________________
Signature:_________________________
<PAGE>
CLASS B FRONT OF CARD:
APPENDIX B
P CLASS B STOCK
R BIO-RAD LABORATORIES, INC.
O Proxy is Solicited on Behalf of the Board of Directors for the
X Annual Meeting of Stockholders
Y
April 30, 1996
The undersigned does hereby appoint DAVID SCHWARTZ and SANFORD S. WADLER and
each of them, attorneys-in-fact and agents with full powers of substitution, for
and in the name, place and stead of the undersigned, to vote as proxies or proxy
all the shares of Class B Common Stock of Bio-Rad Laboratories, Inc.
("Bio-Rad"), to be held at the Company's corporate offices, 1000 Alfred Nobel
Drive, Hercules, California, on Tuesday, April 30, 1996 at 4:00 P.M., Pacific
Daylight Time, and at any and all adjournments or postponements thereof:
CLASS B BACK OF CARD:
Bio-Rad Laboratories, Inc.
Please mark votes as in this example using dark ink only. / /
This proxy will be voted as specified below. If no voting instructions are
indicated with respect to one or more of the proposals, the proxy will be voted
in favor of the proposal(s). The Board of Directors recommends a Vote FOR items
1, 2 and 3.
1. ELECTION OF DIRECTORS 2. PROPOSAL to ratify the selection of
Arthur Andersen LLP to serve as the
JAMES J. BENNETT, ALICE N. Company's Independent auditors.
SCHWARTZ, DAVID SCHWARTZ,
NORMAN SCHWARTZ, BURTON A. ZABIN
3. In their discretion as to such other
------------------------------- matters as properly may come before
(Instruction: To withhold the meeting or any adjournment or
authority to vote for any postponement thereof.
nominee(s), write the name(s)
of such nominee(s) above.)
Receipt of the Notice of Annual
Meeting of Stockholders and proxy
statement is hereby confirmed.
Please sign exactly as your name
appears hereon or on the stock
certificate. Executors,
administrators or trustees should
indicate their capacities. If
stock is held in joint names, both
registered holders should sign. No
witness or notarization is
necessary.
Date: _____________________________
Signature:_________________________
Signature:_________________________