SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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._______ )
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 Rule 14a-11(c) or Rule 14a-12
BIO-RAD LABORATORIES, INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
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 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: _____________________________________________________________
___________
<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 28, 1998
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 28, 1998, 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,
1998;
(3) A proposal to amend the 1994 Stock Option Plan; and
(4) Such other matters as may properly come before the meeting and at
any adjournments or postponements thereof.
The Board of Directors of the Company has fixed the close of business on
March 2, 1998, 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 a reception and a light dinner immediately following the
meeting.
By order of the Board of Directors
BIO-RAD LABORATORIES, INC.
SANFORD S. WADLER, Secretary
Hercules, California
April 1, 1998
<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
at the Company's corporate offices, 1000 Alfred Nobel Drive, Hercules,
California on Tuesday, April 28, 1998, 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 1, 1998.
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"). 9,829,009 shares of Class A Common Stock
(9,654,560 net of Treasury shares) and 2,591,569 shares of Class B Common Stock
(2,561,569 net of Treasury shares) were issued and outstanding at the close of
business on March 2, 1998. Only stockholders of record at the close of business
on March 2, 1998 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 matters 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
1
<PAGE>
withholding of 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 2, 1998, 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>
<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>
Private Capital Management, Inc. 1,004,600 of record 10.4% no shares owned --
3003 Tamiami Trail North and beneficially
Naples, FL 34103
Bernard A. Egan 771,982 of record 8.0% 119,812 of record 4.7%
1900 Old Dixie Highway and beneficially and beneficially
Fort Pierce, FL 34946
David and Alice N. Schwartz 1,609,030 of record 16.7% 1,733,701 of record 64.9%
Bio-Rad Laboratories, Inc. and beneficially(3) and beneficially(3)(5)
1000 Alfred Nobel Drive
Hercules, CA 94547
Norman Schwartz(4) 106,104 of record 1.1% 209,132 of record 8.2%
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% 147,727 of record 5.8%
Bio-Rad Laboratories, Inc. and beneficially and beneficially
1000 Alfred Nobel Drive
Hercules, CA 94547
James J. Bennett 82,596 of record 0.9% 23,727 of record 0.9%
and beneficially(5) and beneficially
George Bers 10,498 of record 0.1% no shares of record 0.0%
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 14,313 of record 0.1% no shares owned of --
and beneficially(5) record or beneficially
Burton A. Zabin 9,808 of record 0.1% 59,664 of record 2.3%
and beneficially(5) and beneficially
All directors and executive 1,837,053 of record 18.9% 2,030,341 of record 76.0%
officers as a group (11 persons) and beneficially(5) and beneficially(5)
</TABLE>
- ----------
(1) Excludes Class A Common Stock that may be acquired on conversion of Class B
Common Stock. Class B Common Stock may be converted to Class A Common Stock
on a one-for-one basis and, if fully converted, would result in the
following percentage ownership of Class A Common Stock: Private Capital
Management, Inc. 8.2%; Bernard A. Egan 7.3%; David and Alice N. Schwartz
27.1%; Norman Schwartz 2.6%; Steven Schwartz 1.9%; James J. Bennett 0.9%;
George Bers 0.1%; Albert J. Hillman 0.1%; Philip L. Padou 0.0%; Sanford S.
Wadler 0.1%; Burton A. Zabin 0.6%; and all directors and executive officers
as a group 31.3%. 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 sole voting and investment power with respect to such shares.
(3) 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 right to
acquire beneficial ownership immediately or within sixty days of March 2,
1998, under the Company's employee stock purchase plan and stock option
agreements, as follows: Norman Schwartz, 13,127 Class A shares; James J.
Bennett, 11,251 Class A shares; George Bers, 6,939 Class A shares; Sanford
S. Wadler, 9,750 Class A shares; Burton A. Zabin, 5,626 Class A shares; all
directors and executive officers as a group, 46,943 Class A Common Stock;
and David Schwartz, 109,658 Class B Common Stock.
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>
<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 69 Executive Vice President and Chief 1977
Operating Officer of the Company,
since 1993; Vice President and Group
Manager, Clinical Diagnostics of the
Company from 1985 to 1993; Vice
President and Chief Operating Officer of
the Company from 1977 to 1985.
Albert J. Hillman Class A 66 Of Counsel in the law firm of Townsend 1980
and 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 63 Retired since 1991; Vice President and 1980
Chief Financial Officer of Ozier Perry
and Associates (a risk assessment
software and consulting company) from
1987 to 1991.
Alice N. Schwartz Class B 71 Retired since 1979; Research Associate, 1967
University of California, from 1972 to
1978.
David Schwartz Class B 74 President of the Company since 1957. 1957
Norman Schwartz Class B 48 Vice President of the Company since 1989 1995
and Group Manager, Life Science; Group
Manager, Clinical Diagnostics of the
Company from 1993 to 1997.
Burton A. Zabin Class B 62 Vice President of the Company since 1968
1982; Group Manager, Life Science of the
Company from 1982 to 1997.
</TABLE>
3
<PAGE>
In January 1997, the Company entered into a non-competition and employment
continuation agreement with James J. Bennett pursuant to which management of the
Company has agreed to nominate him as director for a period of three years
following his resignation from his present position. See "Executive Compensation
and Other Information."
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 1997: George Bers, Thomas C. Chesterman, Ronald W. Hutton and
Sanford S. Wadler. George Bers (age 47), Vice President and Group Manager of
Clinical Diagnostics, was Group Manager of the Molecular Bioscience Group from
1995 to 1997 and was appointed Vice President in 1996. Previously, he was a
division manager within Bio-Rad from 1991 to 1996. Thomas C. Chesterman (age 38)
was appointed Treasurer in 1996 and 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. Ronald W. Hutton (age
40) was appointed Treasurer in 1997. Previously, he was Director of Treasury at
Kaiser Aluminum & Chemical Corporation from 1993 to 1997. Sanford S. Wadler (age
51) 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 1997, the Board of
Directors held a total of twelve meetings (including regularly scheduled and
special meetings) and no director attended fewer than 92% 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
1997. 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 1997. 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 1997, 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.
4
<PAGE>
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 sixteen per year. Audit
Committee members are paid $625 per month.
The Company has entered into employment and non-compete agreements with
James J. Bennett and Burton A. Zabin. See "Executive Compensation and Other
Information - Other Executive Compensation."
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table presents compensation paid or
accrued by the Company for services rendered during 1997, 1996 and 1995 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 1997.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation(2)
-------------------------------
Annual Compensation(1) Shares
Name and ---------------------------------------- Underlying All Other
Principal Position Year Salary Bonus Options(3) Compensation(4)
- -------------------------------- -------- ----------- ------------ ---------- --------------
<S> <C> <C> <C> <C> <C>
David Schwartz 1997 $525,238 $ 0 35,425 $8,000
President 1996 $519,267 $ 87,200 36,750 $7,500
1995 $494,078 $111,600 36,450 $7,500
James J. Bennett 1997 $437,677 $ 0 7,500 $8,000
Executive Vice President 1996 $419,821 $ 73,468 7,500 $7,500
and Chief Operating Officer 1995 $393,299 $ 91,063 7,500 $7,500
Sanford S. Wadler 1997 $259,374 $ 0 3,000 $8,000
Vice President, 1996 $247,367 $ 36,944 3,000 $7,500
General Counsel 1995 $216,751 $ 67,489 3,000 $7,500
and Secretary
Norman Schwartz 1997 $228,893 $ 12,784 3,750 $8,000
Vice President and 1996 $208,105 $ 56,557 3,750 $7,500
Group Manager 1995 $199,998 $ 23,409 3,750 $7,500
George Bers 1997 $224,003 $ 0 3,750 $8,000
Vice President and 1996 $203,605 $ 7,632 3,750 $7,500
Group Manager 1995 $185,004 $ 31,624 3,750 $7,500
</TABLE>
- ----------
(1) All Other Annual Compensation amounts for each of the Named Executive
Officers were less than the amounts required for separate reporting and are
included in salary.
(2) There were no Restricted Stock awards.
(3) Amounts reported for 1995 have been restated to reflect the 3-for-2 stock
split effected in the form of a 50% stock dividend in May 1996.
(4) Amounts reported are contributions made pursuant to the Employees' Deferred
Profit Sharing Retirement Plan. A more complete discussion is provided in
the section titled "Profit Sharing Plan Contributions" of the "Report of
the Compensation Committee of the Board of Directors" in this Proxy
Statement.
5
<PAGE>
The following table presents certain information regarding stock options
granted to the Named Executive Officers in 1997.
<TABLE>
OPTION GRANTS IN 1997
<CAPTION>
Potential Realizable Value at
Individual Grants Assumed Annual Rates of
------------------------------------------------- Stock Price Appreciation
Number of % of Total for Option Term(2)
Securities Options -----------------------------
Underlying Granted to Exercise Assumed Assumed
Options Employees Price Expiration Appreciation Appreciation
Name Granted(1) in 1997 ($/Share) Date of 5% of 10%
- -------------------------- ---------- --------- --------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz 3,064 2.1% $34.79 02/05/02 $ 20,984 $ 54,395
32,361 22.0% $31.63 02/05/02 $323,891 $676,762
James J. Bennett 3,407 2.3% $32.63 02/05/02 $ 30,693 $ 67,843
4,093 2.3% $32.63 02/05/02 $ 36,873 $ 81,503
Sanford S. Wadler 3,000 2.0% $32.63 02/05/02 $ 27,026 $ 59,739
Norman Schwartz 3,750 2.6% $35.89 02/05/02 $ 21,558 $ 62,448
George Bers 3,750 2.6% $32.63 02/05/02 $ 33,783 $ 74,673
</TABLE>
- ----------
(1) All stock options granted in 1997 are incentive stock options with the
exception of non-qualified stock options for 32,361 shares granted to David
Schwartz and 4,093 shares granted to James J. Bennett. 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 Common Stock with the exception of all of the
options granted to David Schwartz, which were for Class B Common Stock. 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 1997, options to purchase 58,175 shares were granted to all executive
officers as a group, and options to purchase 88,875 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.
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, 1997.
<TABLE>
AGGREGATE OPTION EXERCISES IN 1997 AND
DECEMBER 31, 1997 OPTION VALUES
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-The-Money Options
Shares at December 31, 1997 at December 31, 1997(1)
Acquired Value -------------------------- -----------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz 36,000 $477,838.80 67,576 113,049 $866,722.95 $661,317.82
James J. Bennett 10,500 $203,941.88 5,625 18,750 $ 29,681.25 $ 64,846.88
Sanford S. Wadler 1,650 $ 25,921.50 6,750 7,500 $ 91,567.50 $ 25,938.75
Norman Schwartz 1,650 $ 25,382.49 9,377 9,373 $121,045.60 $ 28,299.28
George Bers 3,559 $ 72,622.68 3,376 9,186 $ 33,989.27 $ 28,898.96
</TABLE>
- ----------
(1) The closing prices of Class A Common Stock and Class B Common Stock at
December 31, 1997 were $26.125 and $29.00 per share, respectively.
6
<PAGE>
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 of this Agreement, James J. 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, he 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 he 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.
In August 1997, the Company entered into an employment and non-compete
agreement with Burton A. Zabin, a Vice President of the Company. Under the terms
of this agreement, he will be employed by the Company until March 18, 2001,
unless he gives the Company six months notice of his intention to resign
earlier, and he will not compete with the Company during the period ending four
years after his scheduled termination of employment with Bio-Rad. During the
term of this agreement, he will make himself available to the Company on a
flexible time basis for an average of one hundred thirty-five days during each
twelve month period (and, in the case of the final period, nine month period) to
undertake reasonable assignments provided to him which utilize his knowledge and
experience in the life science research market. He will receive a salary equal
to one-half of the salary he was receiving just prior to entering into the
agreement. He will not participate in bonus or stock programs of the Company. He
will be entitled to exercise his stock options for a period of two years after
the end of his employment with Bio-Rad. He will remain a director for the
remainder of his current term.
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 was formed in December 1993. This report also
refers to decisions made by Philip L. Padou, Albert J. 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.
7
<PAGE>
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 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 1997, the Company
merit increase guideline was 4.5% 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 1997 were awarded in March 1998 and ranged from
0% to 19.5% of base salaries. Bonuses for 1996 were awarded in March 1997 and
ranged from 1.9% to 27.2% 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.
8
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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 J. Hillman and
Philip L. 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 1997, the Company granted
approximately 147,050 options to a group of about 263 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 1997, 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 1997, 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. There was no change to the salary of David Schwartz in
1997. His salary was increased 5% in 1996. There was no change in 1995.
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. No bonus was paid or will be
paid in 1998 based on previously established growth and profitability targets
for 1997.
In 1997, David Schwartz was granted a non-qualified stock option to
purchase 32,361 shares of Class B Common Stock and an incentive stock option for
3,064 shares of Class B Common Stock. The exercise prices of the options were at
least 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
9
<PAGE>
David Schwartz is limited to $100,000 per year which results in vesting at a
slower rate than other optionees. This option grant was comparable with options
granted to CEO's 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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<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, 1992, and reinvestment of dividends:
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
Bio-Rad $100 $ 59 $164 $251 $265 $231
Peer Group (1) $100 $102 $113 $160 $184 $203
Amex Market
Value Index $100 $120 $109 $137 $146 $177
- ----------
(1) The peer group consists of the following public companies: Beckman
Instruments; Becton Dickinson; Diagnostic Products; KLA Tencor; 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 those of Bio-Rad.
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, 1997, all Section 16(a) filing requirements applicable to Insiders were
complied with, with the exceptions that two filings reflecting certain transfers
(Form 4) within the Schwartz family were delayed.
11
<PAGE>
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, 1998. 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, 1998.
- --------------------------------------------------------------------------------
III. APPROVAL OF AMENDMENT TO THE 1994 STOCK OPTION PLAN
In 1994, the stockholders of Bio-Rad approved the 1994 Stock Option Plan
(the "Plan") authorizing grants to key employees (including officers and
directors who are also employees) of incentive stock options and nonqualified
stock options to purchase a maximum of 675,000 shares of Class A Common Stock,
Class B Common Stock or a combination thereof. The persons to whom options are
granted under the Plan, the number of shares subject to such options, the terms
thereof, and any amendments thereto, are determined at the discretion of a
committee consisting of two or more members of the Board of Directors subject to
the limitations of the Plan.
The Amendment
Subject to stockholder approval, the Board has approved an amendment to the
Plan increasing the number of shares available for the grant of options under
the Plan by 500,000 (to a new maximum of 1,175,000). The Board believes that the
increase in the number of shares available for issuance under the Plan will
enable the Company to remain competitive by continuing to provide incentive to
key employees with participation in the Plan and is appropriate, considering the
expansion of the Company and the resulting addition of new key employees who
will be eligible to participate in the Plan. The amendment also makes a
corresponding increase in the maximum number of options which may be granted to
any officer or director of the Company by 250,000 (to a new maximum of options
to purchase 587,500 shares) to keep this limitation proportionate to the amended
total number of shares available for the grant of options.
Description of the Plan
The following is a general summary of the principal provisions of the Plan,
including the amendment described above. A copy of the proposed amendment is set
forth in Appendix A to this Proxy Statement. This summary is not intended to be
complete and reference should be made to the Plan as it is proposed to be
amended for a complete statement of its terms and provisions. Any stockholder
who desires to review the text of the Plan can obtain a copy by writing to the
Company's Secretary.
Under the Plan, options may be granted to key employees (including
employees who are officers or directors) of the Company and its subsidiaries
selected from time to time by the Board or a committee of the Board. Through
1997, options have been granted for a total of approximately 582,837 shares to a
12
<PAGE>
group of approximately 275 key employees. As of December 31, 1997, there were
options authorized and available for grant covering approximately 285,122
shares. Employees may receive either incentive stock options ("ISOs"), or
non-qualified stock options ("NSOs") but no officer or director of Bio-Rad may
be granted options under the Plan representing in excess of the individual
limitation set forth in the Plan. Currently, the limitation is options to
purchase 337,500 shares in the aggregate and the proposed amendment would
increase that to options to purchase 587,500 shares in the aggregate. The Plan
provides that no option may be granted after March 1, 2004.
The Plan provides that the option exercise price per share shall be set on
the date of grant and shall not be less than the fair market value of the Common
Stock on the date of grant. In the case of any holder of 10% or more of the
total combined voting power of the Company, the exercise price of an ISO must be
at least 110% of the fair market value of the stock on the date of grant.
Beginning one year after the date of grant, options become exercisable
according to a vesting schedule. Vesting is generally at the rate of 25% per
year. The Plan limits the vesting of an ISO for any individual optionee to
$100,000 per year (measured at the time of the option grant).
Options expire five years from the date of grant or upon termination of
employment with the Company. Options are typically exercisable (to the extent
vested) for a specified period after an employee's death, or retirement but in
no case beyond the original term of the option.
No optionee, as such, will have any rights as a stockholder of Bio-Rad
except with respect to shares of Class A or Class B Common Stock received on any
exercise of an option. The options are not transferable or assignable except by
will or the laws of descent and distribution.
Federal Income Tax Consequences
The following is a general summary of the current material U.S. federal
income tax consequences to U.S. participants in the Plan. The summary does not
discuss all aspects of federal income taxation that may be relevant to a
particular participant in light of such participant's personal investment
circumstances, nor does it describe state or other tax consequences.
Incentive Stock Option ("ISO"). There is no taxable income recognized by an
optionee when an ISO is granted to him. Under Sections 421 and 422 of the Code,
recipients of ISOs generally are not taxable on their receipt of stock upon
exercise of the ISO if the ISO and the option stock are held for two years after
the date of grant and one year after the date the shares were transferred to the
optionee upon exercise. If the shares disposed of before the expiration of the
shares on the date of the option's exercise will be taxed at ordinary income
rates, the balance of the gain, if any, measured from the exercise date, will be
taxed as capital gain. In that event, the Company will be entitled to a
corresponding tax deduction equal to the ordinary income, if any, realized by an
optionee.
Nonqualified Stock Option ("NSO"). The recipient of NSOs granted under the
Plan will not have taxable income upon the grant of the option, nor will the
Company be entitled to any deduction. Generally, upon exercise of a NSO, the
optionee will realize ordinary income and the Company will be entitled to a
deduction in an amount equal to the amount by which the fair market value of the
stock at the date of exercise exceeds the option exercise price. The Company
will be required to withhold taxes on ordinary income realized by an optionee
upon the exercise of a NSO.
- --------------------------------------------------------------------------------
The Board of Directors recommends that you vote FOR the proposed
amendment to the 1994 Stock Option Plan.
- --------------------------------------------------------------------------------
13
<PAGE>
IV. 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, 1997,
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 2, 1998 may obtain copies without charge of
the Company's annual report on Form 10-K (excluding exhibits) filed with the SEC
by contacting:
Bio-Rad Laboratories, Inc.
Attn.: Corporate Secretary
1000 Alfred Nobel Drive
Hercules, CA 94547
http://www.bio-rad.com
STOCKHOLDER PROPOSALS
Proposals intended to be presented by stockholders at the 1999 annual
meeting must be received by the Company for inclusion in the 1999 Proxy
Statement not later than December 30, 1998.
By order of the Board
of Directors BIO-RAD
LABORATORIES, INC.
SANFORD S. WADLER, Secretary
Hercules, California
April 1, 1998
14
<PAGE>
APPENDIX A
AMENDMENT TO THE BIO-RAD LABORATORIES, INC.
1994 STOCK OPTION PLAN
This Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan
(the "Amendment") is adopted by Bio-Rad Laboratories, Inc., a Delaware
corporation (the "Company"), effective as of _______________, 1998.
RECITALS:
A. The Company's 1994 Stock Option Plan (the "Stock Option Plan") was
adopted by the Board of Directors (the "Board") on February 2, 1994,
and approved by the stockholders of the Company on April 26, 1994.
B. The Stock Option Plan currently states that shares of the Company's
Class A common stock or Class B common stock (the "Common Stock")
subject to the Stock Option Plan shall not exceed 675,000. This
amendment increases the aggregate number of shares of Common Stock
subject to the Stock Option Plan from 675,000 to 1,175,000.
C. The Stock Option Plan currently states that no officer or director of
the Company shall be granted options to purchase more than 337,500
shares of Common Stock. To keep this limitation proportionate to the
amended number of shares subject to the Stock Option Plan, this
amendment increases the individual limitation to options to purchase
587,500 shares of Common Stock in the aggregate.
D. Section 9 of the Stock Option Plan provides that the Board may amend
the Stock Option Plan, subject in certain instances to receipt of
approval of the stockholders of the Company.
E. Effective March 11, 1998, the Board unanimously recommended and the
Board unanimously adopted this Amendment in the form given below (the
"Amendment").
F. The Amendment was approved by the stockholders of the Company at its
Annual Meeting of Stockholders held on April 28, 1998.
AMENDMENT
1. Section 4 of the Stock Option Plan is hereby amended to read in its
entirety as follows:
4 Shares Subject to Plan
Options may be granted by the Company from time to time to Key
Employees to purchase an aggregate of up to 1,175,000 shares of Stock,
which shares may be shares of either Class A or Class B Common Stock, and
that number of shares of each such Class shall be reserved for options
granted under the Plan (subject to adjustment as provided in paragraph
7(g)); provided, that no officer or director of the Company shall be
granted options to purchase an aggregate of more than 587,500 shares of
Stock. If any option granted under the Plan terminates, expires or, with
the consent of the optionee, is canceled, new options may thereafter be
granted covering such shares.
The undersigned, Sanford S. Wadler, Secretary of the Company, hereby
certifies that the Board and the stockholders of the Company adopted the
foregoing Amendment as stated above.
Executed at Hercules, California this _______ day of __________, 1998.
-------------------------------------
Sanford S. Wadler, Secretary
15
<PAGE>
APPENDIX B
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 28, 1998
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 28, 1998 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, 2 and 3.
(1) ELECTION OF DIRECTORS For Withhold For All
ALBERT J. HILLMAN, PHILIP L. PADOU 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 Arthur Andersen LLP to serve as the
Company's independent auditors.
For Withhold Abstain
|_| |_| |_|
(3) PROPOSAL to amend the 1994 Stock Option Plan to increase the number of
shares available by 500,000.
For Withhold Abstain
|_| |_| |_|
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 C
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 28, 1998
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 28, 1998 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, 2 and 3.
(1) ELECTION OF DIRECTORS For Withhold For All
JAMES J. BENNETT, ALICE N. SCHWARTZ, All All Except
DAVID SCHWARTZ, NORMAN SCHWARTZ, |_| |_| |_|
BURTON A. ZABIN
- -----------------------------------------
(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 Arthur Andersen LLP to serve as the
Company's independent auditors.
For Withhold Abstain
|_| |_| |_|
(3) PROPOSAL to amend the 1994 Stock Option Plan to increase the number of
shares available by 500,000.
For Withhold Abstain
|_| |_| |_|
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:---------------------------------
