<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-
</TABLE>
The Dexter Corporation
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
(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> 2
(DEXTER CORP. LOGO) THE DEXTER CORPORATION
ONE ELM STREET - WINDSOR LOCKS, CONNECTICUT 06096 - 860/292-7675
NOTICE OF ANNUAL MEETING
March 11, 1997
The annual meeting of the shareholders of The Dexter Corporation (the
"Company") will be held at The Hartford Club, 46 Prospect Street, Hartford,
Connecticut, on Thursday, April 24, 1997 at 10:00 A.M., local time, for the
following purposes:
(1) To elect directors;
(2) To ratify the selection by the Company's Board of Directors of the firm
of Coopers & Lybrand, L.L.P. as auditor of the Company for the year
1997; and
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on February 28, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
By order of the Board of Directors,
BRUCE H. BEATT,
Secretary
You are cordially invited to attend the meeting. Whether or not you plan to
attend the meeting, please indicate your votes on the enclosed proxy and date,
sign and return it in the addressed envelope which requires no postage. If you
wish, you may withdraw your proxy at any time prior to the voting.
<PAGE> 3
(DEXTER CORP. LOGO) THE DEXTER CORPORATION
ONE ELM STREET - WINDSOR LOCKS, CONNECTICUT 06096 - 860/292-7675
March 11, 1997
PROXY STATEMENT
This proxy statement is furnished to the shareholders of The Dexter
Corporation (the "Company") in connection with the solicitation of proxies to be
used in voting at the annual meeting of the shareholders of the Company to be
held on Thursday, April 24, 1997. The accompanying proxy is solicited on behalf
of the Board of Directors of the Company. This proxy statement and the
accompanying proxy were first mailed to shareholders on March 11, 1997.
A person giving the accompanying proxy has the power to revoke it at any
time before the voting.
The Company will bear the costs of the solicitation of proxies, which may
include the reasonable expenses of brokerage firms and others for forwarding
proxies and proxy materials to the beneficial owners of the Common Stock of the
Company. In addition, the Company has retained Morrow & Co., Inc., 909 Third
Avenue, 20th Floor, New York, NY 10022, to assist in soliciting proxies, for
which services the Company will pay a fee of $5,000, plus handling, postage and
out-of-pocket expenses. In addition to the use of the mails, proxies may be
solicited by employees of the Company personally or by telephone or telegram. An
additional fee will be paid to Morrow & Co., Inc. if it is engaged to solicit
proxies by telephone.
VOTING SECURITIES
The only outstanding voting securities of the Company are the shares of its
Common Stock, $1 par value, 23,391,400 of which were outstanding as of February
28, 1997, and only shareholders of record at the close of business on that date
will be entitled to vote at the meeting. Each share is entitled to one vote.
SHARE OWNERSHIP
The following table sets forth information, as of December 31, 1996, with
respect to the beneficial ownership of shares of the Common Stock of the Company
by (1) certain major shareholders of the Company, (2) each director and nominee
for director of the Company, (3) each of the executive officers named in the
Summary Compensation Table set forth below, and (4) all directors, nominees and
executive officers of the Company as a group. Such beneficial ownership is
reported in accordance with the rules of the Securities and Exchange Commission,
under which a person may be deemed to be the beneficial owner of shares of such
Common Stock if such person has or shares the power to vote or dispose of such
shares or has the right to acquire beneficial ownership of such shares within 60
days (for example, through the exercise of an option). Accordingly, the shares
shown in the table as beneficially owned by certain individuals may include
shares owned by certain members of their respective families. Because of such
rules, more than one person may be deemed to be the beneficial owner of the same
shares. The inclusion of the shares shown in the table is not necessarily an
admission of beneficial ownership of those shares by the person indicated.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENTAGE OF
BENEFICIALLY COMMON STOCK
SHAREHOLDERS OWNED(1) OUTSTANDING(1)
- -------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
FMR Corp., 82 Devonshire Street, Boston, Massachusetts 02109
(Fidelity Managed Funds).................................... 2,009,400 8.49%(2)
State Farm Mutual Automobile Insurance Company and related
entities, One State Farm Plaza, Bloomington, Illinois
61701....................................................... 1,276,873 5.39%(2)
BK Capital Partners IV, L.P., Stinson Capital Partners, L.P.,
Insurance Company Supported Organizations Pension Plan, The
Carpenters Pension Trust for Southern California, Richard C.
Blum & Associates, L.P., Richard C. Blum & Associates, Inc.,
and Richard C. Blum, c/o Richard C. Blum, 909 Montgomery
Street, Suite 400, San Francisco, California 94133.......... 1,240,800 5.24%(3)
</TABLE>
1
<PAGE> 4
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENTAGE OF
BENEFICIALLY COMMON STOCK
SHAREHOLDERS OWNED(1) OUTSTANDING(1)
- -------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Directors, Nominees and Executive Officers:
K. Grahame Walker............................................. 196,025 *
Kathleen Burdett.............................................. 36,502 *
R. Barry Gettins.............................................. 48,358 *
John D. Thompson.............................................. 19,602 *
David G. Gordon............................................... 12,290 *
Charles H. Curl............................................... 1,481 *
Henrietta Holsman Fore........................................ 2,150 *
Bernard M. Fox................................................ 2,379 *
Robert M. Furek............................................... 1,953 *
Martha Clark Goss............................................. 2,144 *
Edgar G. Hotard............................................... 654 *
Peter G. Kelly................................................ 4,216 *
Jean-Francois Saglio.......................................... 1,215 *
Glen L. Urban................................................. 1,105 *
George M. Whitesides.......................................... 2,617 *
All Directors, Nominees and Executive Officers as a Group (20
persons).................................................... 454,041 1.92%(4)
</TABLE>
- ---------------
(1) The shares reported above as beneficially owned by the following persons
include shares which may be purchased within 60 days following December 31,
1996 by the exercise of stock options granted under the Company's stock
option plans: K. Grahame Walker -- 113,167; Kathleen Burdett -- 17,334; R.
Barry Gettins -- 30,000; John D. Thompson -- 9,000; David G.
Gordon -- 9,250; and "All Directors, Nominees and Executive Officers as a
Group" -- 250,784. The shares reported above also include shares issued to
the following persons pursuant to the 1994 Long Term Incentive Plan as more
fully described on page 9 of this proxy statement: K. Grahame
Walker -- 37,800; Kathleen Burdett -- 14,950 ; R. Barry Gettins -- 13,000;
John D. Thompson -- 10,050; David G. Gordon -- 3,000; and "All Directors,
Nominees and Executive Officers as a Group" -- 120,100. Shares issued
pursuant to the 1994 Long Term Incentive Plan are subject to forfeiture, but
may be voted by the holders thereof unless and until forfeited. Percentages
of Common Stock of less than 1% are indicated by an asterisk.
(2) Share holdings as of December 31, 1996, as reported on the Schedule 13G most
recently filed by such shareholder.
(3) The shares shown in the table as beneficially owned by this group were
determined based upon information set forth in a Schedule 13D statement,
dated June 21, 1996.
(4) As of December 31, 1996, "All Directors, Nominees and Executive Officers as
a Group" beneficially owned 69,241 shares of the common stock of Life
Technologies, Inc., an affiliate of the Company ("LTI").
2
<PAGE> 5
(1) ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and Bylaws provide for
three classes of directorships, with the term of one class expiring at each
annual meeting of the shareholders. Pursuant to the Bylaws, the Board of
Directors has determined that effective on the date of the 1997 annual meeting,
the Company shall have eleven directorships, three in the class whose term will
expire in 2000, four in the class whose term will expire in 1999, and four in
the class whose term will expire in 1998. At the 1997 annual meeting, three
directors are to be elected, all of whom shall constitute the class whose term
will expire in 2000. It is intended that the shares represented by the
accompanying proxy will be voted for the election of Charles H. Curl, Peter G.
Kelly and Jean-Francois Saglio, whose terms will expire in 2000, unless the
proxy specifies otherwise.
If for any reason any nominee should be unavailable to serve as a director
at the time of the meeting, a contingency which the Board of Directors does not
expect, the shares represented by the accompanying proxy may be voted for the
election in his stead of such person as may be determined by the holders of the
proxy, unless the proxy withholds authority to vote for all such nominees.
Nominees shall be elected by a majority of the shares represented in person or
by proxy at the meeting. An abstention shall be included in the determination of
the number of shares present and voting, but shall not be counted as a vote in
favor of the election of a nominee. Broker non-votes shall not be counted for
any purpose. The following information relates to the nominees listed above and
to the other directors of the Company.
NOMINEES
<TABLE>
<C> <S>
------------------- CHARLES H. CURL Director
------------------- since 1992
Mr. Curl, age 48, has been president of Curl & Associates
(independent management consulting firm) since prior to 1992.
Mr. Curl is on the Environmental & Safety Committee.
------------------- PETER G. KELLY Director
------------------- since 1994
Mr. Kelly, age 59, has been chairman of Updike, Kelly & Spellacy,
P.C., a Hartford, Connecticut based law firm, since prior to 1992. He
also has been chairman of Black, Manafort, Stone & Kelly (Alexandria,
Virginia), which is a subsidiary of Burson-Marsteller, a worldwide
public relations firm, since prior to 1992. Mr. Kelly became the
managing director of Black, Kelly, Scruggs & Healy (Washington,
D.C.), a public relations firm, in 1996. Mr. Kelly is a director of
Phillips Screw Corp. (manufacturer and licensor).
Mr. Kelly is on the Audit Committee and the Environmental & Safety
Committee.
------------------- JEAN-FRANCOIS SAGLIO Director
------------------- since 1991
Mr. Saglio, age 60, has been president of the French National
Institute for the Environment since 1995 and president of ERSO (a
consulting company in France) since 1994. From 1992 to 1995, he was
senior vice president of CEA Industrie (industrial and financial
holding company of the French Atomic Energy Commission). Mr. Saglio
was a member of the cabinet of M. Pompidou, President of France, and
also was director of the French Administration of Environment
Protection. Mr. Saglio is a director of EEM (a French investment
fund) and IMI (a French industrial holding company).
Mr. Saglio is on the Environmental & Safety Committee.
</TABLE>
3
<PAGE> 6
<TABLE>
<C> <S>
OTHER DIRECTORS
Term Expiring in 1999:
------------------- HENRIETTA HOLSMAN FORE Director
------------------- since 1996
Ms. Holsman Fore, age 48, has been chairman and chief executive
officer of Holsman International (investment and management company)
and chairman and president of Stockton Products, formerly Stockton
Wire Products (manufacturer of steel structural products, cement
additives and wire building materials), since 1993. From prior to
1992 to 1993, Ms. Fore served as an Assistant Administrator of the
U.S. Agency for International Development.
Ms. Fore is on the Compensation & Organization Committee.
------------------- BERNARD M. FOX Director
------------------- since 1990
Mr. Fox, age 54, has been chairman of Northeast Utilities (public
utility holding company) since August 1995, and has been president
and chief executive officer of Northeast Utilities since 1993. From
prior to 1992 to 1993, he was president and chief operating officer
of Northeast Utilities. Mr. Fox is a director of the Fleet Financial
Group, Inc. (financial services) and of CIGNA Corporation (insur-
ance) and is a trustee of Northeast Utilities.
Mr. Fox is Chairman of the Audit Committee and is on the Compensation
& Organization Committee.
------------------- K. GRAHAME WALKER Director
------------------- since 1989
Mr. Walker, age 59, has been chairman, president and chief executive
officer of the Company since April 1993. From prior to 1992 to April
1993, he was president and chief executive officer of the Company. He
is a director of Barnes Group Inc. (manufacturer and distributor of
industrial parts and supplies) and Life Technologies, Inc. (life
science/biotechnology products), an affiliate of the Company.
------------------- GEORGE M. WHITESIDES Director
------------------- since 1985
Dr. Whitesides, age 57, has been a professor of chemistry at Harvard
University since prior to 1992. Dr. Whitesides is a director of
Advanced Magnetics, Inc. (medical diagnostic products), Hyperion
Catalysis, Inc. (medical products) and Geltex, Inc. (physical
research).
Dr. Whitesides is Chairman of the Environmental & Safety Committee
and is on the Audit Committee.
</TABLE>
4
<PAGE> 7
<TABLE>
<C> <S>
Term Expiring in 1998:
------------------- ROBERT M. FUREK Director
------------------- since 1990
Mr. Furek, age 54, retired as president and chief executive officer
of Heublein Inc. (wine and spirits producer) in 1996. Mr. Furek is a
director of Massachusetts Mutual Life Insurance Company.
Mr. Furek is Chairman of the Compensation & Organization Committee
and is on the Audit Committee.
------------------- MARTHA CLARK GOSS Director
------------------- since 1992
Mrs. Goss, age 47, has been vice president and chief financial
officer of Booz, Allen & Hamilton Inc. since July 1995. From
September 1993 to July 1995, Mrs. Goss was a senior vice president of
The Prudential Insurance Company of America. From August 1994 to July
1995, Mrs. Goss was the enterprise control officer of The Prudential
Insurance Company of America; from March 1992 to August 1994, she was
the president of Prudential Asset Management Company, a subsidiary of
The Prudential Insurance Company of America; and from prior to 1992
to March 1992, she was president and chief executive officer of
Prudential Power Funding Associates. Mrs. Goss is a director of
Foster Wheeler Corporation (engineering, construction and
manufacturing).
Mrs. Goss is on the Compensation & Organization Committee and the
Audit Committee.
------------------- EDGAR G. HOTARD Director
------------------- since 1996
Mr. Hotard, age 53, has been president of Praxair, Inc. (industrial
gases supplier) since June 1992. From prior to 1992 to June 1992, Mr.
Hotard was president of Union Carbide Industrial Gases and vice
president of Union Carbide Corporation. Mr. Hotard is a director of
Praxair, Inc., Aquarion Company (holding company for regulated
utility and non-utility businesses) and Iwatani Industrial Gases
Corp. (industrial gases supplier in Japan).
Mr. Hotard is on the Compensation & Organization Committee and the
Environmental & Safety Committee.
------------------- GLEN L. URBAN Director
------------------- since 1989
Dr. Urban, age 56, has been dean of the Alfred P. Sloan School of
Management at the Massachusetts Institute of Technology since 1993,
and a professor of marketing and management sciences at the Alfred P.
Sloan School of Management since prior to 1992. Dr. Urban is a
director of Information Resources Inc. (develops and maintains
computerized data bases and software).
Dr. Urban is on the Audit Committee and the Environmental & Safety
Committee.
</TABLE>
The Board of Directors currently has eleven members, one of whom is an
officer of the Company.
The Board of Directors had six meetings in 1996, and six meetings have been
scheduled for 1997. The Board of Directors has appointed a Compensation &
Organization Committee, an Audit Committee and an Environmental & Safety
Committee, but has not appointed a nominating committee.
The Compensation & Organization Committee is composed of the following five
members, none of whom is an officer or employee of the Company or its
subsidiaries: Robert M. Furek, Chairman, Bernard M. Fox,
5
<PAGE> 8
Henrietta Holsman Fore, Martha Clark Goss and Edgar G. Hotard. This Committee
monitors the Company's compensation policy, with particular emphasis on officer
remuneration matters. It also serves as a nominating committee for the Board of
Directors, oversees organizational matters for the Company and the Board of
Directors, and administers the granting of restricted stock under the Company's
1994 Long Term Incentive Plan and the granting of stock options under the
Company's stock option plans. Five meetings of the Compensation & Organization
Committee were held in 1996, and five meetings have been scheduled for 1997.
The Audit Committee is composed of the following six members, none of whom
is an officer or employee of the Company or its subsidiaries: Bernard M. Fox,
Chairman, Robert M. Furek, Martha Clark Goss, Peter G. Kelly, Glen L. Urban and
George M. Whitesides. Its meetings include, as a matter of course, private
sessions with the Company's independent certified public accountants and
internal auditors. The Audit Committee recommends the selection of independent
accountants to the Board of Directors and is concerned with the scope and
quality of audit and quarterly reviews performed by the independent accountants
as well as other services provided by them to the Company. The Audit Committee
monitors the Company's policy on ethics and business conduct, the integrity of
officers, accounting policies, internal controls and the quality of accounting
and published financial statements. Three meetings of the Audit Committee were
held in 1996, and three meetings have been scheduled for 1997.
The Environmental & Safety Committee is composed of the following six
members: George M. Whitesides, Chairman, Charles H. Curl, Edgar G. Hotard, Peter
G. Kelly, Jean-Francois Saglio and Glen L. Urban. The Committee monitors and
evaluates the Company's environmental and safety policies and practices and
makes recommendations in respect thereof to the Board of Directors. Three
meetings of the Environmental & Safety Committee were held in 1996, and three
meetings have been scheduled for 1997.
During 1996, each of the directors attended at least 75% of the total
number of the meetings of the Board of Directors and of the committees on which
he or she served, except Mrs. Goss who attended 64% of those meetings.
COMPENSATION OF DIRECTORS
In 1996, each director of the Company who was not an officer of the Company
or a subsidiary received (a) a fee of $1,000 for each meeting of the Board (with
the exception of meetings not held at the Company's headquarters, for which a
fee of $2,000 was paid), and (b) a fee of $1,000 for each meeting of a permanent
committee of the Board. For 1996, the annual retainers for serving on the Board
of Directors of the Company and for serving as Chairman of a permanent committee
were $10,000 and $2,000, respectively. Under the 1996 Non-Employee Directors'
Stock Plan, a director may elect to receive all or a portion of his or her
annual cash retainer in the form of Common Stock. During 1996, five directors
elected to receive shares of the Company's Common Stock in lieu of all or a
portion of his or her cash retainer pursuant to the terms of that plan.
Pursuant to the 1994 Stock Plan for Outside Directors, on December 31,
1996, each outside director, with the exception of Ms. Holsman Fore and Mr.
Hotard, was granted 200 shares of the Company's Common Stock. Ms. Holsman Fore
and Mr. Hotard were each granted 150 shares of the Company's Common Stock under
the 1994 Stock Plan for Outside Directors, which represents 200 shares prorated
for the period of time such individuals served as Outside Directors of the
Company. As of December 31, 1996, the value of 150 and 200 shares of the
Company's Common Stock was $4,796 and $6,395, respectively.
In 1996, Mr. Curl performed certain consulting services on behalf of the
Company for which the Company paid Mr. Curl $11,250 in addition to reimbursement
of expenses in the amount of $411.
CERTAIN TRANSACTIONS AND LEGAL MATTERS
Updike, Kelly & Spellacy, P.C., a law firm of which Mr. Kelly is chairman,
rendered legal services to the Company during 1996. The fees paid by the Company
to Updike, Kelly & Spellacy, P.C. for services rendered in 1996 totaled
approximately $4,600.
6
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table contains information concerning compensation paid or to
be paid to the chief executive officer ("CEO") and the other four most highly
compensated executive officers of the Company for services rendered to the
Company and its subsidiaries during the past three completed fiscal years.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------------------ -------------------------------
NAME AND OTHER ANNUAL(2) RESTRICTED STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($) AWARDS($)(3) (#) COMPENSATION($)(4)
- ------------------------ ---- ------------ -------- --------------- ---------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
K. Grahame Walker, 1996 576,250 429,190 8,398 340,625 0 92,086
Chairman, President
and 1995 581,438 280,320 8,295 296,000 0 133,401
Chief Executive
Officer 1994 547,500 400,780 7,805 295,312 18,500 141,250
Kathleen Burdett, 1996 237,000 146,260 742 136,250 0 46,179
Vice President and 1995 237,750 93,910 431 175,750 0 42,894
Chief Financial
Officer 1994 166,250 91,870 275 55,519 3,000 30,778
R. Barry Gettins, 1996 217,250 109,418 2,006 122,625 0 41,799
Senior Vice President, 1995 210,750 59,941 1,939 104,062 0 40,317
Operations Development 1994 199,750 57,486 1,570 94,500 9,000 37,823
John D. Thompson, 1996 193,750 120,400 974 114,450 0 38,410
Senior Vice President, 1995 189,000 71,340 949 80,938 0 35,912
Strategic and Business 1994 156,250 90,650 406 55,959 3,000 30,349
Development
David G. Gordon, 1996 208,903 100,177 105,574 81,750 18,000 21,493
Senior Division
President,
Dexter Nonwovens
Division(5)
</TABLE>
- ---------------
(1) The salaries reported above for Mr. Walker and Ms. Burdett include payments
received by them from Life Technologies, Inc. as directors fees. The amount
of these payments to Mr. Walker were as follows: $4,000 in 1996, $16,000 in
1995, and $15,000 in 1994. Ms. Burdett, who became a director of LTI in
1995, was paid $4,500 in 1996 and $12,500 in 1995. In April, 1996, at their
request, Mr. Walker and Ms. Burdett discontinued receiving directors' fees
from LTI.
(2) The other annual compensation reported above includes the amounts paid by
the Company to the executive officers for reimbursement of income taxes
incurred by the executive officers in connection with the term life
insurance premiums paid by the Company on the executive officer's behalf.
For David G. Gordon, the other annual compensation reported above also
includes $105,224 for relocation expenses.
(3) The restricted stock awards reported above, which were made pursuant to the
1994 Long Term Incentive Plan in 1996, show the dollar value of such awards
on the date of grant. As of December 31, 1996, the aggregate number and
value of restricted shares held by the named executive officers are as
follows: K. Grahame Walker -- 37,800 shares, $1,204,875; Kathleen
Burdett -- 14,950 shares, $476,531; R. Barry Gettins -- 13,000 shares,
$414,375; John D. Thompson -- 10,050 shares, $320,344; and David G.
Gordon -- 3,000 shares, $95,625. Unless and until the restricted shares are
forfeited, dividends will be paid on such shares. Additional information
regarding the restricted shares issued to the named executive officers is
set forth on page 9 of this proxy statement.
(4) The other compensation reported above is composed of three principal
components: (a) the contribution payable to the Employees' Savings and
Profit Sharing Retirement Income Trust, (b) the benefit payable under the
Amended and Restated Retirement Equalization Plan, and (c) term life
insurance premiums. The respective amounts for each of the named executive
officers are as follows: K. Grahame Walker -- $18,709, $63,338 and $10,039;
Kathleen Burdett -- $18,574, $26,768 and $837; R. Barry Gettins -- $18,646,
$20,755 and $2,398; John D. Thompson -- $18,601, $18,645 and $1,164; and
David G. Gordon -- $18,628, $2,380, and $485.
(5) David G. Gordon became an executive officer of the Company in April, 1996.
Prior to that time, he served as President of D&S Plastics International, an
affiliate of the Company. The annual compensation reported above includes
amounts paid to Mr. Gordon for services rendered by him to D&S Plastics
International in 1996.
7
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table discloses information concerning individual grants of
stock options made during the last completed fiscal year to the executive
officers named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
OF
STOCK PRICE
NUMBER OF APPRECIATION
SECURITIES % OF TOTAL OPTIONS FOR OPTION TERM
UNDERLYING GRANTED TO EXERCISE ----------------------
OPTIONS EMPLOYEES PRICE EXPIRATION 5% 10%
NAME GRANTED(#) IN FISCAL YEAR ($/SHARE) DATE ($)(a) ($)(a)
- --------------------------- ---------- ------------------ --------- --------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
K. Grahame Walker.......... -- -- -- -- -- --
Kathleen Burdett........... -- -- -- -- -- --
R. Barry Gettins........... -- -- -- -- -- --
John D. Thompson........... -- -- -- -- -- --
David G. Gordon............ 6,000 12.2% $26.625 April 25, 2002 $54,330 $123,257
6,000 12.2% $26.625 April 25, 2003 $65,034 $151,558
6,000 12.2% $26.625 April 25, 2004 $76,274 $182,688
</TABLE>
- ---------------
(a) The five percent and ten percent rates of appreciation were set by the
Securities and Exchange Commission and are not intended to forecast future
appreciation of the Company's Common Stock.
The option grants described in the foregoing table were made pursuant to
The Dexter Corporation 1988 Stock Option Plan (the "Option Plan"). On April 25,
1996, three grants of stock options were made to David G. Gordon. The first
grant will vest on April 25, 1997, the second grant will vest on April 25, 1998,
and the third grant will vest on April 25, 1999. All grants become exercisable
without regard to any performance-based conditions upon vesting. All options
expire five years after vesting. The exercise price for all options granted in
1996 under the Option Plan is the fair market value per share of the Company's
Common Stock on the date of grant and is not subject to change. The Option Plan
does not permit the grant of stock appreciation rights, or other instruments, in
tandem with options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The table set forth below discloses certain information concerning the
exercise of stock options during the last completed fiscal year by the executive
officers named in the Summary Compensation Table as well as certain information
concerning the number and value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AND SARS OPTIONS AND SARS
AT FY-END(#) AT FY-END($)(a)
SHARES --------------------- ----------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED UNEXERCISABLE UNEXERCISABLE
- ------------------------------ -------------- -------- --------------------- ----------------
<S> <C> <C> <C> <C>
K. Grahame Walker............. 23,583 $ 81,604 107,000/6,167 $866,660/$39,315
Kathleen Burdett.............. 3,783 $ 18,042 16,334/1,000 $131,715/$ 6,375
R. Barry Gettins(b)........... 7,563 $ 81,535 27,000/3,000 $204,190/$19,125
John D. Thompson.............. -- -- 8,000/1,000 $ 56,750/$ 6,375
David G. Gordon............... -- -- 3,250/18,000 $ 30,079/$94,500
</TABLE>
- ---------------
(a) The value of unexercised options was determined using the closing price of
the Company's common stock as of December 31, 1996.
(b) In tandem with the exercise of stock options for 1,563 shares, Mr. Gettins
exercised 1,562 stock appreciation rights. Value realized represents value
realized on options and stock appreciation rights.
8
<PAGE> 11
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The table set forth below discloses certain information concerning the
grant of restricted shares of the Company's Common Stock during the last
completed fiscal year to the executive officers named in the Summary
Compensation Table. The grants were made pursuant to the Company's 1994 Long
Term Incentive Plan.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
NUMBER OF OR OTHER PRICE-BASED PLANS
SHARES, UNITS PERIOD UNTIL -------------------------------------------------
OR OTHER MATURATION OR THRESHOLD(b) TARGET(c) MAXIMUM(c)
NAME RIGHTS PAYOUT(a) (# OF SHARES) (# OF SHARES) (# OF SHARES)
- ------------------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
K. Grahame Walker........ 6,250 May 1, 1999 1,562 6,250 6,250
6,250 May 1, 2002 1,562 6,250 6,250
Kathleen Burdett......... 2,500 May 1, 1999 625 2,500 2,500
2,500 May 1, 2002 625 2,500 2,500
R. Barry Gettins......... 2,250 May 1, 1999 562 2,250 2,250
2,250 May 1, 2002 562 2,250 2,250
John D. Thompson......... 2,100 May 1, 1999 525 2,100 2,100
2,100 May 1, 2002 525 2,100 2,100
David G. Gordon.......... 1,500 May 1, 1999 375 1,500 1,500
1,500 May 1, 2002 375 1,500 1,500
</TABLE>
- ---------------
(a) The restricted shares reported in this table were granted to the named
executive officers on May 1, 1996, and are subject to two types of
restrictions: (a) restrictions based on the achievement by the Company of
certain financial targets during the three year period commencing on January
1, 1996 and ending on December 31, 1998 ("performance target restrictions"),
and (b) restrictions based on continuous employment by the Company over
specified periods of time ("time-lapse restrictions"). Seventy-five percent
of the restricted shares granted to each executive officer are subject to
both performance target restrictions and time-lapse restrictions. The
remaining twenty-five percent are subject solely to time-lapse restrictions,
which will lapse if the executive officer remains in the Company's
employment through the date set forth in this column.
(b) If the Company fails to achieve at least 85% of the financial targets
established for the performance target restrictions, then all the shares
subject to performance target restrictions will be forfeited. Thus, the
"Threshold" amount shown in this column is the number of restricted shares
which are subject solely to time-lapse restrictions.
(c) The "Target" amount reflects the number of shares for which the performance
restrictions will lapse if the Company achieves 100% of the financial
targets. No additional shares will be awarded if the Company achieves more
than 100% of the financial targets. Accordingly, the "Maximum" amount is the
same as the "Target" amount.
PENSION PLANS
The Company maintains The Dexter Pension Plan for the employees of certain
divisions. Employees are eligible to participate in the pension plan after one
year of service and after attaining age 21 and become fully vested after five
years of service. The annual benefit payable upon normal retirement is equal to
the sum of: (i) 1.5% of a participant's average compensation times the
participant's years of service prior to January 1, 1976; (ii) 1% of the
participant's average annual compensation times the participant's years of
service after December 31, 1975; and (iii) .5% of the participant's average
annual compensation in excess of Social Security covered compensation times the
participant's years of service after December 31, 1975. For purposes of
calculating the annual benefit, a participant shall be credited with no more
than 35 years of service. The annual benefit payable upon normal retirement (age
65) is reduced or increased, respectively, if the
9
<PAGE> 12
participant elects an early or postponed retirement. Mr. Walker, while employed
by a division of the Company, participated in the pension plan. The estimated
annual benefits payable under the pension plan to Mr. Walker upon normal
retirement are $47,018. Ms. Burdett, Mr. Gettins, Mr. Thompson and Mr. Gordon
are not participants in the Company's pension plan.
Mr. Thompson, while an employee of LTI, participated in the LTI Pension
Plan. Mr.Thompson is fully vested in the LTI Pension Plan. Under the LTI Pension
Plan, normal retirement age is 65, and actuarially reduced benefits are
available to participants who are age 55 and have ten years of service. In
general, under the LTI Pension Plan the participant accrues an annual retirement
benefit equal to 1% of the participant's final five-year average LTI
compensation times the number of years of service credited after October 31,
1975. Eligible compensation is defined as salary, hourly wages, bonus and
commissions. The estimated annual benefits payable to Mr. Thompson under the LTI
Pension Plan upon normal retirement are $23,201.
The Company has a supplemental retirement plan intended to provide
retirement benefits, supplementing those provided under other plans, to certain
executive officers and key employees. The executive officers named in the
Summary Compensation Table are participants in the supplemental retirement plan.
Upon retirement, participants are entitled to receive an annual benefit equal to
55% of their average final compensation (the annual average of (a) salaries, and
(b) cash incentive payments, during the highest 60 consecutive calendar months
of a participant's last ten years as a participant in the plan) less all other
retirement benefits received (including the full primary Social Security benefit
and all retirement benefits from other Company-related plans and plans of other
employers). Unless otherwise stipulated by the Board of Directors, such annual
benefit will be reduced ratably for employment of less than, and will not be
increased for employment of more than, 20 years of service with the Company.
The following table shows the estimated annual benefit (prior to an offset
for other retirement benefits received) which participants are entitled to
receive under the supplemental retirement plan, on a straight life annuity basis
assuming retirement at age 65 in the indicated compensation classification with
certain years of service. If the annual retirement benefits payable to a
participant under other Company-related plans and plans of other employers (plus
his or her primary Social Security benefit) exceed the annual retirement benefit
shown in the table, the participant will instead receive the benefits payable
under those other plans.
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
FINAL ------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
125,000 $ 51,563 $ 68,750 $ 68,750 $ 68,750 $ 68,750
150,000 61,875 82,500 82,500 82,500 82,500
175,000 72,188 96,250 96,250 96,250 96,250
200,000 82,500 110,000 110,000 110,000 110,000
225,000 92,813 123,750 123,750 123,750 123,750
250,000 103,125 137,500 137,500 137,500 137,500
300,000 123,750 165,000 165,000 165,000 165,000
350,000 144,375 192,500 192,500 192,500 192,500
400,000 165,000 220,000 220,000 220,000 220,000
450,000 185,625 247,500 247,500 247,500 247,500
500,000 206,250 275,000 275,000 275,000 275,000
</TABLE>
The number of credited years of service as of December 31, 1996 is 31 for
K. Grahame Walker, 15 for Kathleen Burdett, 23 for R. Barry Gettins, 18 for John
D. Thompson and 21 for David G. Gordon.
SEVERANCE AGREEMENTS
The Company has entered into agreements with the executive officers named
in the Summary Compensation Table and with certain other executive officers and
key employees of the Company which, in the event of a change of control, provide
for certain benefits in the following circumstances: (i) involuntary termination
of the individual's employment within 395 days of the change in control for
reasons other than death, permanent disability, attainment of age 65 or cause;
(ii) resignation within 395 days of the change of
10
<PAGE> 13
control for good reason; and (iii) resignation for any reason during the
thirty-day period immediately preceding the expiration of the severance period.
In such circumstances, the employee shall be entitled to a severance payment
equal to a certain percentage (100% in the case of David G. Gordon and 200% in
the case of the other executive officers named in the Summary Compensation
Table) of (i) the employee's base salary at the time of termination or
resignation, and (ii) the highest annual incentive compensation paid in any of
the three full years immediately prior to the change of control. In addition,
the employee will be entitled to a continuation of certain employee welfare
benefits for a certain period (one year in the case of David G. Gordon and two
years in the case of the other executive officers named in the Summary
Compensation Table) provided by the Company on the date of the change in
control, and the employee will be credited with a certain number of additional
years of service (one in the case of David G. Gordon and two in the case of the
other executive officers named in the Summary Compensation Table) for retirement
income plan purposes. The employees are also entitled to receive additional
payments, if necessary, to reimburse the employee for (i) any legal expenses,
plus interest thereon, incurred in enforcing or defending a severance agreement,
and (ii) any excise tax liability that may be imposed by reason of Section 4999
of the Internal Revenue Code. For purposes of the severance agreements, the term
"change of control" means: (i) the Company is merged, consolidated or
reorganized, (ii) the Company sells substantially all of its assets, (iii) a
person acquires beneficial ownership of 19% or more of the Company's Common
Stock, (iv) a contract or transaction is entered into which will result in a
change of control within two years, or (v) the Company's Board of Directors
changes within a two year period such that the directors at the beginning of
such two year period do not constitute a majority of the directors at the end of
such two year period.
REPORT OF COMPENSATION & ORGANIZATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation & Organization Committee ("Compensation Committee") is
responsible for, among other things, establishing the compensation policies
applicable to executive officers of the Company. The Compensation Committee is
composed exclusively of outside directors. There are presently five members:
Robert M. Furek, Chairman, Henrietta Holsman Fore, Bernard M. Fox, Martha Clark
Goss and Edgar G. Hotard.
OVERALL POLICY
The Company's executive compensation program is designed to be linked to
corporate performance and returns to shareholders. Of particular importance to
the Company is its ability to grow and enhance its competitiveness for the rest
of the decade and beyond. Shorter term performance, although scrutinized by the
Compensation Committee, stands behind issues of viability and furtherance of
strategic goals. To this end, the Company has developed an overall compensation
strategy and specific compensation plans that tie a significant portion of
executive compensation to the Company's success in meeting specified performance
goals and to growth of the Company's stock price. The overall objectives of this
strategy are to attract and retain the best possible executive talent, to
motivate these executives to achieve the goals inherent in the Company's
business strategy, to link executive and shareholder interests through
equity-based plans and to provide a compensation package that recognizes
individual contributions as well as overall business results.
Each year the Compensation Committee conducts a full review of the
Company's executive compensation program. This review includes a comprehensive
evaluation, based on compensation surveys prepared by independent compensation
consultants, of the competitiveness of the Company's compensation program and a
comparison of the Company's executive compensation to a peer group of public
corporations (the "Compensation Peer Group") which, in the view of the
Compensation Committee, represent the Company's most direct competitors for
executive talent. There are currently 21 companies in the Compensation Peer
Group, which is subject to occasional change as the Company or its competitors
change their focus, merge or are acquired, or as new competitors emerge. It is
the Compensation Committee's policy to target overall compensation for executive
officers of the Company at a level which is at the median paid for such
positions by the Compensation Peer Group. A variety of other factors, however,
including position and time in position,
11
<PAGE> 14
experience, and both Company performance and individual performance, will have
an impact on individual compensation amounts.
The Compensation Committee believes that the Compensation Peer Group
represents the group of companies for which remuneration data is available that
compete most directly with the Company for executive talent. It should be noted
that, while there are overlaps, the Compensation Peer Group is composed of a
different group of companies than is contained in either of the indices used in
the performance graph contained in this proxy statement.
The Compensation Committee approves the compensation of the executive
officers of the Company, including the individuals whose compensation is
detailed in this proxy statement, and reviews the compensation policies and pay
practices employed with respect to all the Company's other executive-level
employees. This is designed to ensure consistency throughout the executive
compensation program.
The key elements of the Company's executive compensation program in 1996
consisted of base salary, annual incentive compensation and long term incentive
compensation in the form of restricted stock awards and stock options. The
Compensation Committee's policies with respect to each of these elements,
including the basis for the compensation awarded to the CEO, are discussed
below. In addition, while the elements of compensation described below are
considered separately, the Compensation Committee takes into account the full
compensation package afforded by the Company to the individual, including
pension benefits, supplemental retirement benefits, severance plans, insurance
and other benefits, as well as the programs described below.
BASE SALARIES
Base salaries for executive officers are established by evaluating, on an
annual basis, the performance of such individuals (which evaluation involves
management's consideration of such factors as responsibilities of the position
held, contribution toward achievement of the strategic plan, attainment of
specific individual objectives, interpersonal managerial skills and civic
involvement), and by reference to the marketplace for executive talent,
including a comparison to base salaries for comparable positions at companies
within the Compensation Peer Group.
At the outset of 1996, the CEO recommended to the Compensation Committee
that his salary not be increased in 1996. He suggested that any such increase
should be deferred until the benefits of the Company's restructuring, which he
led over the past several years, and the anticipated improvement in the
Company's profitability, resulting from, among other things, a decrease in raw
material costs, were more fully reflected in the Company's financial
performance. Based on the CEO's recommendation, the Compensation Committee
established a base salary of $572,250 for the period commencing April 1, 1996
and ending March 31, 1997, which is the same base salary paid to him during the
immediately preceding 12 month period.
ANNUAL INCENTIVE COMPENSATION
Annual incentive compensation accounts for a significant percentage of each
executive officer's compensation. Executive officers of the Company (other than
the CEO) participate in the Company's Executive Incentive Compensation Plan, and
the CEO participates in the Company's Senior Management Executive Incentive
Plan, which was designed to conform with the requirements of Internal Revenue
Code Section 162(m) and approved by the Company's shareholders in 1996. (These
plans are collectively referred to herein as the "EIC Plans"). The EIC Plans are
designed to compensate executives for performance that increases shareholder
value over time, and are reviewed annually by the Compensation Committee.
Each of the EIC Plans has two performance components: (1) corporate and/or
division financial performance and (2) the assessment by the Company's
management of the executive's individual performance. Each year the Compensation
Committee reviews the specific financial measures to be used and approves the
target payout amounts for all executive officers of the Company. The target
payouts are determined by reference to each executive's job classification as
determined pursuant to a Hay point system. The Hay point system evaluates jobs
according to the knowledge required to do the job, the intensity of thinking
needed to solve the problems commonly faced, and the accountability of the
position. In 1996, the sole financial measure
12
<PAGE> 15
for corporate financial performance, which was approved by the Compensation
Committee, was earnings per share. The financial measures used in 1996 for
individual divisions included a variety of factors such as sales growth, growth
in operating earnings, and return on investment. These factors were weighed
differently for each division to reflect corporate management's assessment of
issues in need of emphasis, all in accordance with the Company's strategic plan.
The four most highly compensated executive officers other than the CEO were
eligible to receive incentive compensation payouts in 1996 of 60% of their base
salaries in the event that financial performance targets were fully achieved.
Such payouts were subject to further adjustment, up or down, based upon
management's assessment of individual performance. In 1996, the Company achieved
the financial measures necessary for a full payout. The assessment of management
as to the performance of these individuals did not result in a significant (over
10%) reduction or increase in the amount of the payout.
The CEO was eligible to receive an incentive compensation payout in 1996
equal to 75% of his base salary, which is the same as last year. The amount of
such payout may be reduced (but not increased) based upon the Compensation
Committee's assessment of the CEO's individual performance. Because earnings per
share met the targeted amount established by the Compensation Committee for
1996, and because the Compensation Committee's assessment of the CEO's
individual performance did not result in a reduction in such payout, the CEO's
actual payout was 75% of his base salary, or $429,190. This represents an
increase from the $280,320 of incentive compensation paid to the CEO in 1995.
Because the purpose of the EIC Plans is to reward performance that
increases shareholder value over time, the Compensation Committee requires that
the return to shareholders, apart from unusual items, exceeds the cost of
capital (10% for 1996) before any executive incentive compensation is paid.
There are also minimum thresholds established for payouts to division employees,
which thresholds vary from division to division.
RESTRICTED STOCK AWARDS
The third component of executive compensation is the Company's 1994 Long
Term Incentive Plan, pursuant to which, in 1996, the Company granted restricted
stock awards to executive officers and other senior management.
A total of 55,200 shares of restricted stock were granted to executive
officers and other senior management in 1996, 12,500 of which were granted to
the CEO and 16,700 of which were granted (in the aggregate) to the four other
executive officers named in the Summary Compensation Table. The number of
restricted stock awards granted in 1996 was based upon the Hay points for each
position and management's assessment of individual performance.
Restricted stock awards are intended to align the interests of executives
with those of the shareholders. The shares of restricted stock issued to
executive officers and other senior management in 1996 are subject to two types
of restrictions: (a) restrictions based on the achievement by the Company of
certain financial performance targets during the three year period commencing on
January 1, 1996 and ending on December 31, 1998 ("performance target
restrictions") and (b) restrictions based on continuous employment of the
recipient over a specified period of time ("time-lapse restrictions").
Seventy-five percent of the restricted shares issued in 1996 are subject to both
performance target restrictions and time-lapse restrictions. The remaining 25
percent of the restricted shares are subject solely to time-lapse restrictions.
This approach is intended to incentivize the creation of shareholder value over
the long term.
In 1995, the Compensation Committee established ownership guidelines of the
Company's Common Stock for executive officers. Under these guidelines, by the
end of 1998, each executive officer is expected to own Common Stock with a value
of between two to four times his or her base salary, depending upon the
individual's position with the Company.
13
<PAGE> 16
STOCK OPTIONS
The final component of executive compensation is the Company's stock option
plan, pursuant to which the Company grants stock options to executive officers
and key employees to purchase shares of its Common Stock. Stock options are
granted with an exercise price equal to the market price of the Common Stock on
the date of grant, vest over three years and expire five years from the date of
vesting.
A total of 18,000 options were granted to David G. Gordon in 1996 at the
time he became an executive officer of the Company. None of the other executive
officers named in the Summary Compensation Table was granted options in 1996.
DEDUCTIBILITY OF COMPENSATION
Internal Revenue Code Section 162(m), which was added to the Internal
Revenue Code by the Omnibus Budget Reconciliation Act of 1993, limits the amount
of compensation a corporation may deduct as a business expense. That limit,
which applies to up to five executives individually, is $1 million per
individual, per year, subject to certain specified exceptions. All compensation
payments in 1996 to the five executive officers named in the Summary
Compensation Table will be fully deductible. The Company has procedures in
place, including an executive incentive plan which conforms to the requirements
of Section 162(m), to assure that compensation paid to executive officers
continues to be fully deductible in the future.
CONCLUSION
Through the programs described above, a very significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance and stock price appreciation over the long term. The Compensation
Committee intends to continue and strengthen the policy of linking executive
compensation to corporate performance and returns to shareholders, recognizing
that the fluctuations of the business cycle from time to time may result in an
imbalance for a particular period.
Compensation & Organization Committee
Robert M. Furek, Chairman
Henrietta Holsman Fore
Bernard M. Fox
Martha Clark Goss
Edgar G. Hotard
14
<PAGE> 17
PERFORMANCE GRAPH
The following graph shows how an initial investment of $100 in the
Company's Common Stock would have compared to an equal investment in the S&P 500
Index or in the S&P Specialty Chemicals Index over the five-year period
beginning December 31, 1991 and ending December 31, 1996. The graph reflects
reinvestment of all dividends.
NOTE: The total shareholder return shown on the graph below is not
necessarily indicative of future returns on the Company's Common Stock.
COMPARISON OF FIVE YEAR
CUMULATIVE TOTAL SHAREHOLDER RETURN
(ASSUMING AN INVESTMENT OF $100 ON DECEMBER 31, 1991)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD THE DEXTER CORPO- S&P SPECIALTY
(FISCAL YEAR COVERED) RATION S&P 500 INDEX CHEMICALS INDEX
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 123.86 107.62 105.94
1993 116.84 118.46 120.79
1994 112.30 120.03 105.45
1995 126.60 165.13 138.60
1996 175.98 203.05 142.16
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of five members: Robert M. Furek,
Chairman, Henrietta Holsman Fore, Bernard M. Fox, Martha Clark Goss and Edgar G.
Hotard. None of the members of the Compensation Committee is an officer,
employee or former officer or employee of the Company or its subsidiaries. In
1996, none of the members of the Compensation Committee had any relationship
requiring disclosure pursuant to Item 402(j)(3) of Regulation S-K of the
Securities and Exchange Commission.
(2) RATIFICATION OF SELECTION OF AUDITOR
The Board of Directors, upon recommendation of its Audit Committee, has
selected the firm of Coopers & Lybrand, L.L.P. ("Coopers & Lybrand"),
independent certified public accountants, to audit the accounts of the Company
for the year 1997, and it is proposed that the selection of such firm be
ratified by the shareholders at the meeting.
Coopers & Lybrand audited the accounts of the Company and certain employee
benefit plans for the year 1996. In connection with its audit function, Coopers
& Lybrand reviewed the Company's 1996 quarterly and annual reports to its
shareholders and certain filings with the Securities and Exchange Commission. In
addition, during 1996, Coopers & Lybrand provided other professional services to
the Company.
15
<PAGE> 18
The Audit Committee approved in advance the nature of the professional
services for which the Company retained the firm of Coopers & Lybrand,
considering the possible effect of such retention on the independence of such
firm, and has determined that the services provided were within the scope of
such approval.
Representatives of Coopers & Lybrand are expected to be present at the
meeting and will have an opportunity to make a statement if they desire to do so
and will be available to respond to questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE SELECTION OF COOPERS & LYBRAND AS AUDITOR OF THE ACCOUNTS
OF THE COMPANY FOR THE YEAR 1997.
(3) OTHER MATTERS
The Board of Directors does not know of any matters which will be presented
for action at the meeting other than those described above and matters incident
to the conduct of the meeting. If, however, any other matters should come before
the meeting, it is intended that the shares represented by the accompanying
proxy will be voted on such matters in accordance with the discretion of the
holders of such proxy.
PROPOSALS OF SHAREHOLDERS
In order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to next year's annual meeting of shareholders,
proposals of shareholders intended to be presented for action at that meeting
must be received at the principal executive offices of The Dexter Corporation,
One Elm Street, Windsor Locks, Connecticut 06096, marked for the attention of
the Secretary, by November 10, 1997.
Under the Company's Bylaws, notice of any other matter intended to be
presented by a shareholder for action at next year's annual meeting must be
addressed to the principal executive offices of The Dexter Corporation, One Elm
Street, Windsor Locks, Connecticut 06096, marked for the attention of the
Secretary, and must contain the information required by the Bylaws. The notice
must be received at the principal executive offices during the period from
December 22, 1997, through February 6, 1998, unless next year's annual meeting
is called for a date prior to February 6, 1998, in which case notice must be
received within fifteen days of when notice of the annual meeting is given.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K to the Securities and Exchange
Commission for 1996 will be sent without charge after March 31, 1997, to any
shareholder upon written request directed to:
The Dexter Corporation
Attention: Secretary
One Elm Street
Windsor Locks, CT 06096
By order of the Board of Directors,
BRUCE H. BEATT,
Secretary
16
<PAGE> 19
PROXY THE DEXTER CORPORATION PROXY
WINDSOR LOCKS, CONNECTICUT, U.S.A.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints K. Grahame Walker, Bernard M. Fox, and George
M. Whitesides, or any one or more of them, with power of substitution,
attorneys and proxies to represent the undersigned at the annual meeting of the
shareholders of The Dexter Corporation (the "Company") to be held on April 24,
1997, and at any adjournments thereof, with all powers which the undersigned
would possess if personally present, and to vote, as and to the extent
indicated below all shares of stock which the undersigned may be entitled to
vote at said meeting or any adjournments thereof, upon all matters that may
properly come before the meeting, including the matters listed on the reverse
side of this card which are more fully described in the Notice of Annual
Meeting and Proxy Statement relating to said meeting. The shares represented
by this proxy will be voted as and to the extent directed on the reverse side
hereof. If no directions are given, the proxies will vote (a) FOR the election
of all listed director nominees, (b) FOR the ratification of auditors, and (c)
at their discretion on any other matter that may properly come before the
meeting.
If you do not sign and return a proxy, or attend the meeting, your shares
cannot be voted.
(Continued and to be signed on other side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 20
Please mark
your votes /X/
as in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
ITEM 1. ELECTION OF ALL DIRECTOR NOMINEES: Charles H. Curl, Peter G. Kelly
and Jean-Fancois Saglio (Page 3)
FOR all nominees listed WITHHOLD AUTHORITY
above (accept as to vote for all
marked to the contrary.) nominees listed above.
/ / / /
EXCEPTIONS
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
ITEM 2 RATIFICATION OF AUDITORS
FOR AGAINST ABSTAIN
/ / / / / /
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
IF YOU DO NOT SIGN AND RETURN A PROXY, OR ATTEND
THE MEETING, YOUR SHARES CANNOT BE VOTED.
Signature____________________Signature________________________Date______________
Please sign this proxy and return it promptly whether or not you plan to attend
this meeting. If signing for a corporation or partnership or as agent,
attorney or fiduciary, indicate the capacity in which you are signing. If you
do attend the meeting and decide to vote by ballot, such vote will supersede
this proxy.
- --------------------------------------------------------------------------------
*FOLD AND DETACH HERE*
