<PAGE>
================================================================================
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 [_] 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 Section 240.14a-11(c) or Section 240.14a-12
Bio-Rad Laboratories, Inc.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<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 25, 2000
----------------
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 94547 on Tuesday, April 25, 2000 at
4:00 p.m., Pacific Time, to consider and vote 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,
2000; and
(3) 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
February 28, 2000 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 are invited to join the
Company for a reception and 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, 2000
<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 94547 on Tuesday, April 25, 2000 at 4:00 p.m., and at any
adjournments or postponements thereof. Solicitation of Proxies will be by
Corporate Investor Communications, Inc. via mail at the expense of the
Company, which is anticipated to be approximately $1,025. Copies of this Proxy
Statement and the accompanying notice and Proxy are first being mailed to
stockholders on or about April 1, 2000.
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"). 9,977,862 shares of Class A Common Stock
(9,700,432 net of Treasury shares) and 2,500,266 shares of Class B Common
Stock (2,500,266 net of Treasury shares) were issued and outstanding at the
close of business on February 28, 2000. Only stockholders of record at the
close of business on February 28, 2000 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.
1
<PAGE>
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 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.
2
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table presents certain information as of February 28, 2000,
with respect to Class A Common Stock and Class B Common Stock beneficially
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. The address
for all executive officers and directors is c/o Bio-Rad Laboratories, Inc.,
1000 Alfred Nobel Drive, Hercules, California, 94547.
<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>
Blue Raven Partners, L.P.(3)............ -- 0.0% 2,030,027 81.2%
1000 Alfred Nobel Drive
Hercules, CA 94547
Private Capital Management, Inc. ....... 1,294,982 13.3% -- 0.0%
3003 Tamiami Trail North
Naples, FL 34103
Bernard A. Egan......................... 910,380 9.4% -- 0.0%
1900 Old Dixie Highway
Fort Pierce, FL 34946
Dimensional Fund Advisors, Inc.(4)...... 501,475 5.2% -- 0.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
David and Alice N. Schwartz(5)(6)(9).... 1,607,124 16.6% 2,159,034 83.3%
Bio-Rad Laboratories, Inc.
1000 Alfred Nobel Drive
Hercules, CA 94547
Norman Schwartz(5)(7)(8)(9)............. 108,540 1.1% 2,035,441 81.3%
Bio-Rad Laboratories, Inc.
1000 Alfred Nobel Drive
Hercules, CA 94547
Steven Schwartz(5)(7)(10)............... 82,256 0.8% 2,032,627 81.3%
Bio-Rad Laboratories, Inc.
1000 Alfred Nobel Drive
Hercules, CA 94547
James J. Bennett(9)..................... 77,596 0.8% 23,727 0.9%
George Bers(9).......................... 15,998 0.2% 207 0.0%
Albert J. Hillman(9).................... 4,454 0.0% 4,117 0.2%
Philip L. Padou(9)...................... -- 0.0% -- 0.0%
Sanford S. Wadler(9).................... 20,313 0.2% -- 0.0%
Burton A. Zabin(9)...................... 14,494 0.1% 59,664 2.4%
All directors and executive officers as
a group(9)(12 persons)................. 1,855,452 19.0% 2,252,163 86.8%
</TABLE>
- --------
(l) 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 beneficial ownership of Class A Common Stock: Blue
Raven
3
<PAGE>
Partners 16.6%; Private Capital Management, Inc. 10.6%; Bernard A. Egan
7.5%; Dimensional Fund Advisors 4.1%; David and Alice N. Schwartz 30.6%;
Norman Schwartz 17.6%; Steven Schwartz 17.3%; James J. Bennett 0.8%;
George Bers 0.1%; Albert J. Hillman 0.1%; Philip L. Padou 0.0%; Sanford S.
Wadler 0.2%; Burton A. Zabin 0.6%; and all directors and executive
officers as a group 33.3%. 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. Number of shares is based on the statements of the stockholders
where not identified specifically in the stockholder register.
(3) David Schwartz, Alice N. Schwartz, Norman Schwartz and Steven Schwartz
are general partners of Blue Raven Partners, L.P., a California limited
partnership (the "Partnership"), and, as such, share voting and
dispositive power over the Class B Common Stock held by the Partnership.
(4) As of December 31, 1999.
(5) Includes 2,030,027 shares of Class B Common Stock held by the
Partnership.
(6) David and Alice N. Schwartz each have a one-half community property
interest in these shares. Includes 20,588 shares of Class B Common Stock
held by DANSA Partners Limited, a California limited partnership, of
which David and Alice N. Schwartz are general partners.
(7) Norman Schwartz and Steven Schwartz are sons of David and Alice N.
Schwartz.
(8) Includes 2,600 shares of Class B Common Stock owned by Norman Schwartz's
wife, as to which Norman Schwartz disclaims any beneficial ownership.
(9) Includes shares with respect to which such persons have the right to
acquire beneficial ownership immediately or within sixty days of February
28, 2000, under the Company's employee stock purchase plan and stock
option agreements, as follows: David Schwartz, 92,194 Class B shares;
Norman Schwartz, 6,563 Class A shares and 2,814 Class B shares; James J.
Bennett, 18,751 Class A shares; George Bers, 9,377 Class A shares;
Sanford S. Wadler, 7,500 Class A shares; Burton A. Zabin, 6,563 Class A
shares; and all directors and executive officers as a group, 55,445 Class
A shares and 95,008 Class B shares.
(10) Includes 2,600 shares of Class B Common Stock owned by Steven Schwartz's
wife, as to which Steven Schwartz disclaims any beneficial ownership.
4
<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 71 Chief Operating Officer of the Company 1977
since 1993 and Executive Vice President of
the Company since 1996; 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 68 Of Counsel to 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 65 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 73 Retired since 1979; Research Associate, 1967
University of California, from 1972 to
1978.
David Schwartz....... Class B 76 President, Chief Executive Officer and 1957
Chairman of the Board of the Company since
1957.
Norman Schwartz...... Class B 50 Vice President of the Company since 1989 1995
and Group Manager, Life Science of the
Company since 1997; Group Manager, Clinical
Diagnostics of the Company from 1993 to
1997.
Burton A. Zabin...... Class B 64 Vice President of the Company since 1982; 1968
Group Manager, Life Science of the Company
from 1982 to 1997.
</TABLE>
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 1999: George Bers, Thomas C. Chesterman,
5
<PAGE>
Rello L. Cristea, Ronald W. Hutton and Sanford S. Wadler. George Bers (age
49), Vice President since 1996 and Group Manager of Clinical Diagnostics since
1997, was Group Manager of the Molecular Bioscience Group from 1995 to 1997.
Previously, he was a division manager within Bio-Rad from 1991 to 1996. Thomas
C. Chesterman (age 40) was appointed Treasurer in 1996 and named Vice
President and 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. Rello L. Cristea (age 56) was appointed Group
Manager of Analytical Instruments in 1997 and Vice President in 1998.
Previously, he was President of Dayton Products Division of Emerson Electric
Company from 1994. Ronald W. Hutton (age 42) was appointed Treasurer in 1997.
Previously, he was Director of Treasury at Kaiser Aluminum & Chemical
Corporation from 1993 to 1997. Sanford S. Wadler (age 53) 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.
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.
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 1999, the Board of
Directors held a total of 13 meetings (including regularly scheduled and
special meetings) and no director attended fewer than 85% 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
1999. 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 1999. 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.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In 1999, Townsend and Townsend and Crew, the patent law firm to 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.
COMPENSATION OF DIRECTORS
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
$1,400 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."
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table presents compensation paid or
accrued by the Company for services rendered during 1999, 1998, and 1997 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 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation(2)
---------------
Annual Compensation(1)
---------------------- Shares
Name and Underlying All Other
Principal Position Year Salary Bonus Options Compensation(3)
------------------ ---- -------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
David Schwartz.......... 1999 $528,673 $249,167 38,500 $594,419(4)
President, CEO and 1998 $525,080 $ 86,537 38,500 $ 8,000
Chairman 1997 $525,238 $ 0 35,425 $ 8,000
James J. Bennett........ 1999 $445,957 $220,287 7,500 $ 8,000
Executive Vice
President and 1998 $445,584 $ 76,507 7,500 $ 8,000
Chief Operating Officer 1997 $437,677 $ 0 7,500 $ 8,000
Sanford S. Wadler....... 1999 $270,418 $123,429 3,000 $ 8,000
Vice President, General
Counsel 1998 $259,200 $ 38,932 3,000 $ 8,000
and Secretary 1997 $259,374 $ 0 3,000 $ 8,000
Norman Schwartz......... 1999 $265,652 $ 97,298 3,750 $ 8,000
Vice President and 1998 $240,241 $ 36,084 3,750 $ 8,000
Group Manager 1997 $228,893 $ 12,784 3,750 $ 8,000
George Bers............. 1999 $260,452 $ 95,394 3,750 $ 8,000
Vice President and 1998 $235,116 $ 30,894 3,750 $ 8,000
Group Manager 1997 $224,003 $ 0 3,750 $ 8,000
</TABLE>
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(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. These amounts include bonus payments made in 1998,
1999 and 2000, respectively, for services rendered in the immediately
preceding year.
(2) There were no restricted stock awards or payouts under long-term incentive
plans.
(3) 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.
(4) The Company is a party to a "split dollar" life insurance agreement with a
trust established by David Schwartz and Alice N. Schwartz under which the
trust is the beneficiary of a life insurance policy insuring the lives of
David Schwartz and Alice N. Schwartz for which the Company pays the
premiums. Upon the death of David Schwartz and Alice N. Schwartz prior to
the termination of the agreement, a portion of the premiums previously
advanced by the Company under the insurance policy will be repaid to the
Company.
7
<PAGE>
The following table presents certain information regarding stock options
granted to the Named Executive Officers in 1999.
OPTION GRANTS IN 1999
<TABLE>
<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 1999 ($/Share) Date of 5% of 10%
- ---- ---------- ---------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz.......... 8,887 5.35% $21.86 02/03/04 $ 29,060 $ 87,545
29,613 17.8% $19.875 02/03/04 $155,615 $350,497
James J. Bennett........ 5,216 3.1% $19.69 02/03/04 $ 28,374 $ 62,701
2,284 1.4% $19.69 02/03/04 $ 12,424 $ 27,455
Sanford S. Wadler....... 3,000 1.8% $19.69 02/03/04 $ 16,319 $ 36,062
Norman Schwartz......... 3,750 2.3% $21.86 02/03/04 $ 12,262 $ 36,941
George Bers............. 3,750 2.3% $19.69 02/03/04 $ 20,399 $ 45,078
</TABLE>
- --------
(1) All stock options granted in 1999 are incentive stock options with the
exception of non-qualified stock options for 29,613 shares granted to
David Schwartz and 2,284 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 shares of Class A Common Stock with the
exception of all of the options granted to David Schwartz and Norman
Schwartz which were for shares of 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 1999,
options to purchase 65,250 shares were granted to all executive officers
as a group, and options to purchase 100,830 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 in 1999, as well as the number of exercisable and unexercisable
options held by the Named Executive Officers at December 31, 1999.
AGGREGATE OPTION EXERCISES IN 1999 AND
DECEMBER 31, 1999 OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Shares Options at December 31, 1999 at December 31, 1999(1)
Acquired Value --------------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David Schwartz.......... 36,000 $418,977.75 91,351 94,274 $185,928.75 $117,109.31
James J. Bennett........ 0 $ 0.00 18,751 18,749 $ 39,196.88 $ 29,015.63
Sanford S. Wadler....... 3,000 $ 37,890.00 7,500 7,500 $ 15,678.75 $ 11,606.25
Norman Schwartz......... 3,750 $ 45,292.50 9,377 9,373 $ 12,543.75 $ 5,681.25
George Bers............. 0 $ 0.00 8,439 9,373 $ 14,753.79 $ 14,507.69
</TABLE>
- --------
(1) The closing prices of Class A Common Stock and Class B Common Stock at
December 31, 1999 were $23.375 and $23.50 per share, respectively.
8
<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 and a Director of the Company. 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, James J. 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 J.
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.
In August 1997, the Company entered into an employment and non-compete
agreement with Burton A. Zabin, a Vice President and Director 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) of the agreement 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. Burton A. Zabin 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.
9
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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 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.
Objectives and Overview
The overall objectives of the Company's executive compensation programs are
to:
. Attract, retain and motivate key executive talent;
. Reward key executives based on business performance;
. Align executive incentives with the interests of stockholders; and
. 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
1999, the Company merit increase guideline was 4.25% 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. In 1999, the
performance factors used in calculating bonuses included sales volume, direct
contribution and inventory turns, 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. Incentive bonuses may be awarded in
cash and/or stock.
Bonuses for performance in 1999 were awarded in February 2000 and ranged
from 0.31% to 49.4% of base salaries. Bonuses for 1998 were awarded in
February 1999 and ranged from 1.75% to 25.0% of base salaries. Bonuses for
1997 were awarded in March 1998 and ranged from 0.0% to 19.50% of base
salaries. Because
10
<PAGE>
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 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 1999, the
Company granted approximately 166,080 options to a group of 279 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 1999, the Board of Directors
approved a contribution of 5% of eligible compensation. Participants are
vested 100.0% 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 1999, the Compensation Committee was primarily responsible for
determining and approving the President's compensation. The President's
compensation was compared with compensation of other CEO's 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, 1998 or 1999.
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. A bonus was paid
in 2000 based on performance against previously established growth and
profitability targets for 1999.
In 1999, David Schwartz was granted a non-qualified stock option to
purchase 29,613 shares of Class B Common Stock and an incentive stock option
for 8,887 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
11
<PAGE>
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. This option grant was comparable with options
granted to CEO's of similar size companies.
In addition, in 1999, Mr. Schwartz received split dollar life insurance
benefits from the Company. The Board of Directors of the Company has
determined that in the event of the demise of David Schwartz and Alice N.
Schwartz, their heirs might be required to sell a significant amount of their
holdings in the Company in order to satisfy estate taxes. As the Board
believes that such event might result in a major disruption in the trading of
the stock, it has determined that it is in the best interest of all
shareholders to procure a life insurance policy which would provide proceeds
to the heirs for the payment of such taxes. The Company is a party to a "split
dollar" life insurance agreement with a trust established by David Schwartz
and Alice N. Schwartz for their heirs under which the trust is the beneficiary
of a life insurance policy insuring the lives of David Schwartz and Alice N.
Schwartz for which the Company pays the premiums. Upon the death of David
Schwartz and Alice N. Schwartz prior to the termination of the agreement, a
portion of the premiums previously advanced by the Company under the insurance
policy will be repaid to the Company. Included in the amounts shown for David
Schwartz in fiscal year 1999 is $595,067, representing the premium payment by
the Company in such year.
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
12
<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, 1994, and reinvestment of dividends:
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG COMPETITOR AVERAGE, BIO-RAD
AND AMEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period COMPETITOR
(Fiscal Year Covered) AVERAGE BIO-RAD AMEX
- --------------------- ---------- ------- ----
<S> <C> <C> <C>
Measurement Pt-1994 $100.0000 $100.0000 $100.0000
FYE 1995 $147.0153 $153.1514 $126.4164
FYE 1996 $196.8682 $162.1622 $134.4986
FYE 1997 $170.9235 $141.2162 $157.8620
FYE 1998 $212.1839 $113.5135 $158.8743
FYE 1999 $227.3426 $126.3514 $202.2206
</TABLE>
- --------
(1) The peer group consists of the following public companies: Beckman
Coulter; Becton Dickinson; Diagnostic Products; KLA-Tencor; Life
Technologies; Millipore; and PerkinElmer. Companies in the peer group
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 the fiscal year ended
December 31, 1999 all Section 16(a) filing requirements applicable to Insiders
were complied with, with the following exception: one filing reflecting one
transaction (Form 4) for Ronald W. Hutton was delayed.
13
<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, 2000. 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, 2000.
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, 1999,
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 February 28, 2000 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, California 94547
http://www.bio-rad.com
STOCKHOLDER PROPOSALS
Proposals intended to be presented by stockholders at the 2001 annual
meeting must be received by the Company for inclusion in the 2001 Proxy
Statement not later than December 30, 2000.
By order of the Board of Directors
Bio-Rad Laboratories, Inc.
SANFORD S. WADLER, Secretary
Hercules, California
April 1, 2000
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<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 25, 2000
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 25, 2000 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 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 Against 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 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 25, 2000
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 25, 2000 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 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 Against 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:---------------------------------
