SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ______________)
/x/ Filed by the Registrant
/ / Filed by a party other than the Registrant
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(2) or Rule 14a-12
BIO-RAD LABORATORIES
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/x/ No fee required.
/ / 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 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:
Note: The foregoing changes to the facing page of the proxy statement reflect
revisions to the proxy rules effective as of October 1996. No fee is now
required in connection with the filing of this proxy statement.
<PAGE>
APPENDIX A
CLASS A FRONT OF CARD:
PROXY
CLASS A STOCK
BIO-RAD LABORATORIES, INC.
Proxy is Solicited on Behalf of the Board of Directors for the
Annual Meeting of Stockholders
April 29, 1997
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 29, 1997 at 4:00 P.M., Pacific
Daylight Time, and at any and all adjournments or postponements thereof:
PLEASE VOTE, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on the reverse side.)
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). This proxy confers authority for each of the
persons indicated on the reverse to vote in his discretion on other matters
which may properly come before the meeting. The Board of Directors recommends a
Vote FOR Items 1 and 2.
(1) ELECTION OF DIRECTORS
ALBERT J. HILLMAN, PHILIP L. PADOU
For Withhold For All
All All Except
--- --- ------
/ / / / / /
-------------------------------------
(Instruction: To withhold authority to
vote for any nominee(s) write the
name(s) of such nominee(s) above.)
(2) PROPOSAL to ratify the selection of For Against Abstain
Arthur Andersen LLP to serve as the --- ------- ------
Company's independent auditors. / / / / / /
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,
if held jointly:
--------------------------
<PAGE>
APPENDIX B
CLASS B FRONT OF CARD:
PROXY
CLASS B STOCK
BIO-RAD LABORATORIES, INC.
Proxy is Solicited on Behalf of the Board of Directors for the
Annual Meeting of Stockholders
April 29, 1997
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 29, 1997 at 4:00 P.M., Pacific
Daylight Time, and at any and all adjournments or postponements thereof:
PLEASE VOTE, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on the reverse side.)
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). This proxy confers authority for each of the
persons indicated on the reverse to vote in his discretion on other matters
which may properly come before the meeting. The Board of Directors recommends a
Vote FOR Items 1 and 2.
(1) ELECTION OF DIRECTORS
JAMES J. BENNETT, ALICE N. SCHWARTZ,
DAVID SCHWARTZ, NORMAN SCHWARTZ, BURTON A. ZABIN.
For Withhold For All
All All Except
--- --- ------
/ / / / / /
-------------------------------------
(Instruction: To withhold authority to
vote for any nominee(s). write the
name(s) of such nominee(s) above.)
(2) PROPOSAL to ratify the selection of For Against Abstain
Arthur Andersen LLP to serve as the --- ------- ------
Company's independent auditors. / / / / / /
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,
if held jointly:
--------------------------
<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 29, 1997
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 29, 1997 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 for the fiscal year ending December 31, 1997;
and
(3) Such other matters as may properly come before the meeting and at
any adjourments or postponements thereof.
The Board of Directors of the Company has fixed the close of business on
March 20, 1997, as the record date for the determination of the stockholders
entitled to notice of and to vote at this annual meeting and at any adjournments
or postponements 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 provided 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
April 1, 1997
<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 29, 1997 at 4:00 p.m., and at any adjournments or
postponements 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 are first being mailed to stockholders on or about April 3, 1997.
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"). 9,786,229 shares of Class A Common Stock
and 2,615,803 shares of Class B Common Stock were issued and outstanding at the
close of business on March 20, 1997. Only stockholders of record at the close of
business on March 20, 1997 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.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table presents certain information as of March 20, 1997, with
respect to Class A Common Stock 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.
<TABLE>
CLASS A COMMON STOCK (1) CLASS B COMMON STOCK
--------------------------------------- ---------------------------------------
<CAPTION>
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 789,568 of record 8.1% 121,312 of record 4.7%
1900 Old Dixie Highway and beneficially and beneficially
Fort Pierce, FL 34946
David and Alice N. Schwartz 1,609,687 of record 16.6% 1,690,044 of record 63.8%
Bio-Rad Laboratories, Inc. and beneficially (3) and beneficially (3) (5)
1000 Alfred Nobel Drive
Hercules, CA 94547
Norman Schwartz (4) 101,417 of record 1.0% 205,532 of record 7.9%
Bio-Rad Laboratories, Inc. and beneficially (5) and beneficially
1000 Alfred Nobel Drive
Hercules, CA 94547
Steven Schwartz (4) 81,174 of record 0.8% 146,527 of record 5.7%
Bio-Rad Laboratories, Inc. and beneficially and beneficially
1000 Alfred Nobel Drive
Hercules, CA 94547
James J. Bennett 73,580 of record 0.8% 23,727 of record 0.9%
and beneficially (5) and beneficially
Albert J. Hillman 4,454 of record 0.0% 4,117 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 10,751 of record 0.1% no shares owned of --
and beneficially (5) record or beneficially
Burton A. Zabin 5,122 of record 0.1% 65,517 of record 2.5%
and beneficially (5) and beneficially
All directors and executive 1,811,196 of record 18.6% 1,988,937 of record 75.1%
officers as a group (10 persons) and beneficially (5) and beneficially (5)
<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
ownership of Class A shares: Bernard A. Egan 7.4%; David and Alice N.
Schwartz 26.7%; Norman Schwartz 2.5%; Steven Schwartz 1.9%; James J.
Bennett 0.8%; Albert J. Hillman 0.1%; Philip L. Padou 0%; Sanford S. Wadler
0.1%; Burton A. Zabin 0.6%; and all directors and executive officers as a
group 30.7%. 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) Includes shares with respect to which such persons have the vested right to
acquire beneficial ownership under the Company's employee stock purchase
plan and stock option agreements, as follows: Norman Schwartz, 8,440
shares; James J. Bennett, 5,625 shares; Sanford S. Wadler, 6,188 shares;
Burton A. Zabin, 2,813 shares; and all directors and executive officers as
a group, 25,692 Class A Common shares; and David Schwartz, 61,201 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; Norman Schwartz is their son. No other family
relationships exist among the Company's current and nominated directors or
executive officers. As husband and wife, David and Alice N. 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 adjournments or postponements 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>
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 68 Executive Vice President and Chief 1977
Operating Officer of the Company, serving
as Vice President and Chief Operating
Officer 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 65 Of Counsel in the law firm of Townsend and 1980
Townsend and Crew since 1995 and partner in
the firm from 1965 to 1995, which firm
serves as patent counsel for the
Company.
Philip L. Padou Class A 62 Retired since 1991; Vice President and Chief 1980
Financial Officer of Ozier Perry and
Associates (a risk assessment software and
consulting company) from 1987 to 1991.
Alice N. Schwartz Class B 70 Retired since 1979; Research Associate, 1967
University of California, from 1972 to 1978.
David Schwartz Class B 73 President of the Company since 1957. 1957
Norman Schwartz Class B 47 Vice President of the Company since 1989, 1995
and Group Manager, Clinical Diagnostics
since 1993.
Burton A. Zabin Class B 61 Vice President and Group Manager, Life 1968
Science since 1982.
</TABLE>
In addition to James J. Bennett, David Schwartz, Norman Schwartz and
Burton A. Zabin, the following persons were executive officers of the Company
during all or part of 1996: George Bers, Thomas L. Braje, Thomas C.
Chesterman, James L. Viglienzone and Sanford S. Wadler. George Bers (age 46)
has been Group Manager of the Molecular Bioscience Group since 1995, and was
appointed Vice President in 1996. Previously, he was a division manager
within Bio-Rad since 1991. Thomas L. Braje was appointed
3
<PAGE>
Vice President and Chief Financial Officer in 1989; he retired in October 1996.
James L. Viglienzone was appointed Treasurer in 1989; he resigned in February
1996. Thomas C. Chesterman (age 37) was appointed Treasurer in 1996, and then
named Chief Financial Officer in March 1997. Prior to joining Bio-Rad, he was
Vice President and Chief Financial Officer of NordicTel Holdings AB (Sweden)
from 1993 to 1996, and was Managing Director of Finance with AirTouch
Communications from 1990 to 1993. Sanford S. Wadler (age 50) has been General
Counsel and Secretary since 1989 and was appointed Vice President in 1996.
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.
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 1996, the Board of
Directors held a total of 14 meetings (including regularly scheduled and special
meetings) and no director attended fewer than 75% of such meetings and meetings
of any committee on which such director served.
The Audit Committee is composed of Philip L. Padou and met three times in
1996. 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
1996. 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 1996, Townsend and Townsend and Crew, the patent law firm of which Albert
J. 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 and Crew 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
$1,250 per month plus $100 for any meetings in excess of 16 per year. Audit
Committee members are paid $625 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>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table presents compensation paid or
accrued by the Company for services rendered during 1996, 1995, and 1994 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 1996.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION (2)
----------------------------
SHARES
NAME AND ANNUAL COMPENSATION (1) UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (3) COMPENSATION (4)
- ------------------------ ---- -------- ------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
David Schwartz 1996 $519,267 $ 87,200 36,750 $ 7,500
President 1995 $494,078 $111,600 36,450 $ 7,500
1994 $453,506 $116,887 36,000 $ 9,000
James J. Bennett 1996 $419,821 $ 73,468 7,500 $ 7,500
Executive Vice President 1995 $393,299 $ 91,063 7,500 $ 7,500
and Chief Operating 1994 $350,060 $ 92,481 7,500 $ 9,000
Officer
Sanford S. Wadler 1996 $247,367 $ 36,944 3,000 $ 7,500
Vice President, 1995 $216,751 $ 67,489 3,000 $ 7,500
General Counsel 1994 $206,940 $ 71,032 3,000 $ 9,000
and Secretary
Burton A. Zabin 1996 $238,093 $ 8,925 3,750 $ 7,500
Vice President 1995 $228,518 $ 39,043 3,750 $ 7,500
and Group Manager 1994 $222,066 $ 33,953 3,750 $ 9,000
Norman Schwartz 1996 $208,105 $ 56,557 3,750 $ 7,500
Vice President and 1995 $199,998 $ 23,409 3,750 $ 7,500
Group Manager 1994 $175,992 $ 35,508 3,750 $ 9,000
<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 for 1995 and 1994 have been restated to reflect the 3-for-2
stock split effected in the form of a 50% stock dividend in May 1996.
(4)Amounts reported are contributions made pursuant to the Employees' Deferred
Profit Sharing Retirement 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>
The following table presents certain information regarding stock options
granted to the Named Executive Officers in 1996.
<TABLE>
OPTION GRANTS IN 1996
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
------------------------------------------------------ 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 1996 ($/SHARE) DATE OF 5% OF 10%
- ------------------------ --------------- ------------ ------------- ---------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz 36,750 25.0% $ 25.92 02/07/01 $298,212 $625,760
James J. Bennett 7,500 5.1% $ 26.67 02/07/01 $ 55,235 $122,081
Sanford S. Wadler 3,000 2.0% $ 26.67 02/07/01 $ 22,094 $ 48,832
Burton A. Zabin 3,750 2.6% $ 26.67 02/07/01 $ 27,617 $ 61,041
Norman Schwartz 3,750 2.6% $ 29.33 02/07/01 $ 17,642 $ 51,066
<FN>
(1) All stock options granted in 1996 are incentive stock options with the
exception of a non-qualified stock option for 36,750 shares granted to David
Schwartz. The exercise prices are equal to at least 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 all 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 1996, options to purchase 61,500 shares were
granted to all executive officers as a group, and options to purchase 85,500
shares were granted to all other employees.
(2) Potential realizable value is based on an assumption that the stock price of
the applicable class of 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>
The following table presents the number of shares for which options were
exercised, as well as the number of exercisable and unexercisable options held
by the Named Executive Officers at December 31, 1996.
AGGREGATED OPTION EXERCISES IN 1996 AND
DECEMBER 31, 1996 OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1996 AT DECEMBER 31, 1996 (1)
SHARES ------------------------ ----------------------------
ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- --------------------- --------------- -------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz -- -- 67,276 113,924 $1,226,300 $1,472,550
James J. Bennett -- -- 8,625 18,750 $ 161,768 $ 214,669
Sanford S. Wadler -- -- 5,588 7,312 $ 107,093 $ 82,006
Burton A. Zabin 9,377 $ 178,642 -- 9,373 $ -- $ 107,296
Norman Schwartz -- -- 7,277 9,373 $ 133,171 $ 89,923
<FN>
(1) The market prices of Class A Common Stock and Class B Common Stock at
December 31, 1996 were $30.00 and $28.625 per share, respectively.
</FN>
</TABLE>
OTHER EXECUTIVE COMPENSATION
In January 1997, the Company entered into a non-competition and employment
continuation agreement with James J. Bennett, its Executive Vice President and
Chief Operating Officer. Under the terms
6
<PAGE>
of this Agreement, James Bennett will give the Company six months notice of any
intention to resign from his present position and will not compete with the
Company for two years after the end of his employment with Bio-Rad. Management
has agreed to nominate him as director for a period of three years following his
resignation from his present position. Following his resignation from his
present position, James Bennett will continue to serve as an employee taking on
mutually agreed tasks for six weeks in each twelve-month period for up to five
years from his resignation. For this six weeks, he will be paid his weekly
salary in effect at the time of his resignation plus $2,500 per week. For
mutually agreed assignments extending beyond the six weeks, or if James Bennett
does not remain a director, his compensation would be at his weekly pay rate in
effect at the time of his resignation from his present position. He will be
entitled to exercise his stock options for a period of two years after the end
of his employment with Bio-Rad.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The Compensation Committee is composed of Albert J. Hillman and Philip L.
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. James J. Bennett, David Schwartz, Norman
Schwartz and Burton A. Zabin participate in general Board of Directors'
discussions of compensation, bonuses and stock options. David, Norman and Alice
N. 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 Philip
Padou, Albert 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 comparable size within related industries.
BASE SALARY
Each year, the Company obtains studies of compensation trends, practices and
levels from a variety of nationally recognized 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 and below the arithmetic
mean of the surveys, respectively. Each executive's base salary is determined by
an assessment of the executive's job
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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 1996, the Company merit increase guideline was 4.0% 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 volume and return on controllable assets, as
measured against annual objectives. Performance 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 competitive industry 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 significant
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 1996 were awarded in March 1997 and ranged from
1.9% to 27.2% of base salaries. Bonuses for performance in 1995 ranged from 6.3%
to 50.0% 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. The Stock Option Award Committee is composed of Albert Hillman and
Philip 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. 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 1996, the Company granted approximately 147,000
options to a group of about 216 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
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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 1996, 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, termination of employment with the Company or as required by
regulation or law.
PRESIDENT'S COMPENSATION
For 1996, the Compensation Committee was primarily responsible for
determining and approving the President's compensation. The President's
compensation was compared with compensation of other CEOs in the above mentioned
surveys and proxy statements for comparable companies. The salary of David
Schwartz is typically set within the mid-range of CEO's salaries surveyed for
comparable companies. The salary of David Schwartz was increased 5% in 1996.
There was no change in 1995. In July 1994, the salary of David Schwartz was
increased by 19%.
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 1997, David
Schwartz received a bonus of 17.5% of base salary based on achievement of
previously established growth and profitability targets for 1996. The bonus
awarded to Mr. Schwartz was in the mid-range of bonuses awarded to CEOs of other
comparable companies.
In 1996, David Schwartz was granted a non-qualified stock option to purchase
36,750 shares of Class B Common Stock. The exercise price of the non-qualified
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 David 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.
To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Compensation Committee considers the
anticipated tax consequences to the Company and to its executives of various
payments and benefits. Some types of compensation payments and their
deductibility (e.g., the spread on exercise of non-qualified options) depend
upon the timing of an executive's vesting or exercise of previously granted
rights. Further, interpretations of and changes in the tax laws and other
factors beyond the Compensation Committee's control also affect the
deductibility of compensation. For these and other reasons, the Compensation
Committee will not necessarily limit executive compensation to that deductible
under Section 162(m) of the Internal Revenue Code. The Compensation Committee
will consider various alternatives to preserving the deductibility of
compensation payments and benefits to the extent reasonably practicable and to
the extent consistent with its other compensation objectives.
The Compensation Committee
Albert J. Hillman
Philip L. Padou
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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, 1991 and reinvestment of dividends:
IMAGE OMITTED
(See table below)
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Bio-Rad $100 $ 86 $ 51 $140 $215 $227
Peer Group(1) $100 $106 $107 $120 $169 $194
Amex Market
Value Index $100 $101 $121 $110 $139 $148
- ----------
(1) The peer group consists of the following public companies: Beckman
Instruments; Becton Dickinson; 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, clinical diagnostics and analytical instruments.
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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1996 all Section 16(a) filing requirements applicable to Insiders were
complied with, with the exceptions that George Bers' filing of initial ownership
(Form 3) was delayed, as was James J. Bennett's filing of Form 5 (covering one
transaction) for his year-end position.
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II. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
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, 1997. 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, 1997.
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, 1996,
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, 1997 MAY OBTAIN COPIES WITHOUT CHARGE OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K (EXCLUDING EXHIBITS) FILED WITH THE SEC BY
WRITING TO:
BIO-RAD LABORATORIES, INC.
ATTN.: CORPORATE SECRETARY
1000 ALFRED NOBEL DRIVE
HERCULES, CA 94547
STOCKHOLDER PROPOSALS
Proposals intended to be presented by stockholders at the 1998 annual
meeting must be received by the Company for inclusion in the 1998 Proxy
Statement not later than December 30, 1997.
By order of the Board of Directors
BIO-RAD LABORATORIES, INC.
SANFORD S. WADLER, Secretary
Hercules, California
April 1, 1997
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