PRELIMINARY PROXY STATEMENT
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON FEBRUARY 8, 2000
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14 (A) of the
Securities Exchange Act of 1934.
Filed by the Registrant [__]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[__] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6 (e) (2))
[__] Definitive Proxy Statement
[__] Definitive Additional Materials
[__] Soliciting Material Under Rule 14a-12
DEXTER CORPORATION
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
INTERNATIONAL SPECIALTY PRODUCTS INC.
ISP INVESTMENTS INC.
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(NAME OF PERSON (S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(I) (1) and
0-11.
1) Title of each class of securities to which 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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NY2:\862712\14\54104.0016
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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:
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[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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PRELIMINARY PROXY MATERIALS DATED FEBRUARY 8, 2000
SUBJECT TO COMPLETION
[The information included herein is as it is expected to be when the definitive
proxy statement is mailed to shareholders of Dexter Corporation. This proxy
statement will be revised to reflect actual facts at the time of the filing of
the definitive proxy statement.]
No GOLD Proxy Card is included with these materials.
PROXY STATEMENT
OF INTERNATIONAL SPECIALTY PRODUCTS INC.
2000 ANNUAL MEETING OF SHAREHOLDERS
OF DEXTER CORPORATION
We are sending this proxy statement to you as one of the holders of
common stock, par value $1.00 per share, of Dexter Corporation, a Connecticut
corporation, in connection with our solicitation of your proxy for use at the
2000 Annual Meeting of Shareholders of Dexter scheduled for [____], local time,
[___] [_______], 2000, at [_________] and at any adjournments or postponements
thereof. We are International Specialty Products Inc. and its wholly owned
subsidiary ISP Investments Inc., each a Delaware corporation, and beneficially
own 9.98% of Dexter's outstanding shares of common stock.
We have proposed to Dexter a business combination in which all
holders of Dexter common stock would receive $45 per share in cash (the "ISP
Proposal"), subject to the execution of a mutually acceptable merger agreement.
This price represents a 38% premium over Dexter's closing price immediately
prior to our proposal and is higher than the stock has ever traded. Furthermore,
we have expressed our willingness to pay more if Dexter's Board provided
additional information to justify an increased price. Dexter's Board has
rejected our proposal without availing itself of the opportunity to discuss or
negotiate the proposal with us. Dexter then, in an attempt to deter us from a
course of action designed to maximize value for Dexter shareholders, offered to
purchase our shares of Life Technologies, Inc., a majority-owned subsidiary of
Dexter, which offer we promptly rejected. Accordingly, in opposition to the
current Board of Directors of Dexter, we are asking you to approve several
proposals intended to facilitate the ISP Proposal or a superior proposal.
We are proposing to increase the size of Dexter's Board to seventeen
directors and are nominating ten persons for election as directors. Our nominees
are committed to consider and pursue the ISP Proposal or a superior proposal,
and, if elected, will constitute a majority of the Dexter Board. All
determinations made by our nominees, if elected as directors, will be subject to
their fiduciary duties to you, the shareholders of Dexter.
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We believe that the Dexter shareholders - the owners of the
corporation - should be permitted to consider the merits of offers for their
shares. Accordingly, we are also proposing an amendment to the Dexter Bylaws
which will require the Dexter Board to amend Dexter's "poison pill" shareholder
rights plan, or redeem the rights issued thereunder, if the shareholders adopt a
special resolution. Furthermore, we seek your approval of a special resolution
which will require the Board to amend the shareholder rights plan promptly to
make it inapplicable to any offer to purchase all shares of Dexter for at least
$45 per share in cash.
In order to minimize any attempt by the Dexter Board to frustrate the
consideration or implementation of our proposals, we are also proposing to
repeal any Bylaw amendments adopted unilaterally by the Dexter Board between
February 26, 1999 and the date of the 2000 Annual Meeting. Finally, we are
proposing a resolution to set the order in which our proposals will be voted
upon at the 2000 Annual Meeting.
[THIS PROXY STATEMENT AND THE GOLD PROXY CARD ARE FIRST BEING FURNISHED TO
SHAREHOLDERS ON OR ABOUT _____ __, 2000].
WE URGE YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE
ELECTION OF OUR NOMINEES AND THE ADOPTION OF THE PROPOSALS DESCRIBED IN THIS
PROXY STATEMENT.
IF YOU HAVE ALREADY SENT A [COLOR] PROXY CARD TO THE DEXTER DIRECTORS, YOU MAY
REVOKE THAT PROXY AND VOTE AGAINST THE ELECTION OF DEXTER'S NOMINEES [AND
PROPOSALS] BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD. THE
LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS. SEE "VOTING PROCEDURES" ON PAGE
31.
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QUESTIONS AND ANSWERS ABOUT THIS PROXY SOLICITATION
Q: WHO IS SOLICITING YOUR PROXY?
A: We are International Specialty Products Inc. ("ISP") and its wholly
owned subsidiary ISP Investments Inc. As of the date of this proxy
statement, we beneficially owned 2,299,200 shares of Dexter's common
stock, representing approximately 9.98% of the outstanding shares. In
addition, on such date we, together with our reporting "group" for
Schedule 13D purposes, beneficially owned 5,417,991 shares of common
stock of Life Technologies, representing approximately 21.7% of the
outstanding shares of Life Technologies. We are a leading
multinational manufacturer of specialty chemicals and mineral
products. For more information on participants in our proxy
solicitation, please see "Certain Information Concerning the
Participants" on page 35.
Q: WHY ARE WE SOLICITING YOUR PROXY?
A: As one of the largest shareholders of Dexter and an investor in the
company's shares since September 1998, we have been dissatisfied with
the failure of Dexter's Board of Directors to take appropriate action
to maximize shareholder value for Dexter shareholders. Not only has
Dexter rejected our recommendation of a course of action designed to
maximize shareholder value, but it has also taken steps to entrench
Dexter management, contrary to the interests of Dexter shareholders.
Specifically:
(1) On October 4, 1999, one week after we announced that we
had acquired 9.98% of the outstanding common stock of
Dexter, the Dexter Board amended the company's Rights
Agreement (as hereinafter defined) to lower the threshold
of beneficial ownership that will trigger the defensive
provisions of the Rights Agreement from 20% to 11%.
(2) On December 3, 1999, we discussed with representatives of
Dexter our belief that Life Technologies, with its higher
growth and higher margins, can better fulfill its
potential as an independent entity or in combination with
another similarly strategically situated company, rather
than in combination with Dexter. We therefore recommended
that Dexter and Life Technologies be separate corporate
entities - a recommendation which we believed would serve
to maximize shareholder value for Dexter shareholders.
Dexter not only rejected our recommendation, but to date
has shown no evidence of having an alternative, credible
strategy designed to maximize shareholder value.
(3) After Dexter dismissed our recommendation, we proposed a
business combination in which all holders of Dexter common
stock would receive $45 per share in cash, subject to the
execution of a mutually acceptable merger agreement. This
price represents a 38% premium over Dexter's closing price
immediately prior to our proposal and is higher than the
stock has ever traded. Furthermore, we stated that we
would be willing to pay more for the shares if Dexter's
Board provided additional information
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to justify an increased price. Dexter's Board rejected our
proposal without availing itself of the opportunity to
discuss or negotiate the proposal with us. It would be
uneconomical for us or any other person to make an offer
directly to the Dexter shareholders, due to the "poison
pill" rights which would be triggered by a purchase of
shares under such an offer. In addition, under Connecticut
law, in the absence of Board approval, a person who
acquires more than 10% of the outstanding voting stock of
a Connecticut corporation in a tender offer is prohibited
from effecting a merger to acquire the shares not tendered
for a five year period. By not approving the ISP Proposal,
Dexter's Board has effectively deprived you of the right
to consider for yourself whether or not to accept our
acquisition proposal.
We do not believe that the current Dexter Board will consider and
pursue the ISP Proposal or a superior proposal. We believe that the
adoption of our Nominee Election Proposals, Shareholder Rights
Proposals and Voting Rights Proposals described in this document will
remove significant impediments to the realization of value for your
Dexter shares.
Q: WHY ARE WE ASKING YOU TO INCREASE THE SIZE OF DEXTER'S BOARD AND
ELECT OUR NOMINEES?
A: We are soliciting your proxy in favor of our nominees because we
believe the current directors of Dexter are not acting, and will not
act, in your best interest. According to Dexter's 1999 Proxy
Statement, only three of the ten current directors will stand for
election at the 2000 Annual Meeting. In order to elect a sufficient
number of directors to constitute a majority of the Board committed
to consider and pursue the ISP Proposal or a superior proposal, we
are proposing to increase the number of directors from its current
number of ten to seventeen, so that a total of ten directors will be
elected by the shareholders at the 2000 Annual Meeting. We do not
believe that Dexter's current Board will consider and pursue the ISP
Proposal or a superior proposal to maximize the value of your shares.
Our nominees, if elected, will constitute a majority of the Dexter
Board and are committed to doing so.
Q: WHO ARE THE NOMINEES?
A: Our nominees for directorships include eight independent persons who
are not affiliated with ISP and two persons who are affiliates of
ISP. Our nominees include well-respected members of the business and
legal community. All determinations made by our nominees, if elected
as directors, will be subject to their fiduciary duties to you, the
shareholders of Dexter. Two of our nominees, Samuel J. Heyman and
Sunil Kumar, are affiliates of ISP and, if elected to Dexter's Board,
would not participate in any Board action relating to the ISP
Proposal or any other business combination transaction while our
acquisition proposal remains in effect.
Q: WHY SHOULD SHAREHOLDERS DETERMINE IF THE POISON PILL RIGHTS AGREEMENT
SHOULD BE AMENDED OR REDEEMED?
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A: In 1996, the Board of Directors adopted the Rights Agreement, dated
as of August 23, 1996, by and between Dexter and ChaseMellon
Shareholder Services, L.L.C. (as amended, the "Rights Agreement").
One week after our announcement that we had acquired approximately
9.98% of the outstanding common stock of Dexter, the Board amended
the Rights Agreement to lower the threshold of beneficial ownership
that will trigger the defensive provisions of the Rights Agreement
from 20% to 11%, applicable to any shareholder who does not file a
Schedule 13G with the SEC stating that its ownership position has
been acquired without any intent to change or influence control of
Dexter. Currently, any person or group who acquires beneficial
ownership of 11% or more of Dexter's outstanding shares of common
stock without Board approval and cannot, like institutional
investors, investment advisors and certain other parties, file a
Schedule 13G, will experience immediate and substantial economic and
voting power dilution, because the rights issued to each holder of
Dexter common stock (other than the holder of greater than 11% of the
outstanding shares) under the Rights Agreement (the "Rights") would
then become exercisable to purchase additional shares of common stock
for each share then outstanding, at one-half the current market
price. In its current form, we believe that the Rights Agreement is
harmful to your interests as a shareholder because it is a device
that gives the Dexter Board the unilateral power to block a
transaction which would be economically beneficial to you. Dexter's
Rights Agreement makes it impractical to acquire control of Dexter in
a transaction opposed by Dexter's Board, even if a significant
majority of the shareholders were to favor the acquisition. The
Rights Agreement currently gives Dexter's Board the exclusive power
and authority to administer the agreement, including the sole power
to make any determination to redeem or not redeem the Rights or to
amend the Rights Agreement.
Our proposed Bylaw amendment would allow the Dexter shareholders to
protect their own interests, by requiring that the Dexter Board
follow the direction of a majority of the shareholders with respect
to the redemption of the Rights or certain amendments of the Rights
Agreement. In addition, the Dexter Board would be required to seek
shareholder approval prior to adopting a new "poison pill"
shareholder rights plan. Our proposal would not eliminate the Rights
Agreement. The Rights Agreement would remain in effect until the
Dexter Board has acted, on its own or at the direction of Dexter's
shareholders, to amend the Rights Agreement to make it inapplicable
to a proposed offer or transaction or to redeem the Rights. As
discussed below, we also propose that you direct the Dexter Board to
promptly amend the Rights Agreement. We also have commenced
litigation seeking to invalidate the Rights Agreement under
Connecticut law. See "Certain Litigation."
Q: WHY DO WE WANT THE BOARD TO AMEND DEXTER'S POISON PILL RIGHTS
AGREEMENT NOW?
A: On December 14, 1999, we proposed a business combination in which
Dexter shareholders would receive $45 per share in cash, subject to
the execution of a mutually acceptable merger agreement. This price
represents a 38% premium over the closing price of Dexter's common
stock immediately prior to our proposal and is higher than the stock
has ever traded. The Dexter Board has rejected our proposal without
availing itself of the opportunity to discuss or negotiate the
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proposal with us. It would be uneconomical for us or any third party
to make an offer directly to the shareholders over the current
Board's refusal, due to the Rights Agreement. By continuing to refuse
to amend the Rights Agreement or redeem the rights, Dexter's Board is
depriving you of the right to consider for yourself whether or not to
accept any such offer. We believe that the shareholder resolution we
propose, which would require the Board to amend the Rights Agreement
to make it inapplicable to any offer for all outstanding shares of
Dexter for at least $45 per share in cash, is in the best interests
of all shareholders.
Q: IS ISP PREPARED TO ACQUIRE DEXTER?
A: We are prepared to promptly negotiate and execute a mutually
acceptable merger agreement with Dexter. ISP has received from Chase
Securities Inc. a letter dated January 20, 2000 pursuant to which
Chase has informed ISP that, based on the information provided to
Chase and then-current conditions in the bank syndication market,
Chase is highly confident in its ability to arrange senior credit
facilities to, among other things, finance the acquisition of Dexter
and refinance indebtedness of ISP and Dexter following the
acquisition.
Q: WHY ARE YOU PROPOSING TO REPEAL BYLAWS ADOPTED BY THE BOARD?
A: We propose to repeal any Bylaw amendments adopted by the Board
between February 26, 1999 and the date of the 2000 Annual Meeting. We
are not aware of any amendments made between February 26 and now. We
believe that any Bylaw amendments adopted by the Board prior to the
2000 Annual Meeting are likely to be aimed at frustrating our
proposals and therefore are not likely to be in the best interests of
the Dexter shareholders. Any Bylaw amendments validly adopted by the
Board prior to the Annual Meeting would remain in effect unless and
until our proposal to repeal such Bylaws is adopted. If the Board
adopts any such Bylaw amendments before the 2000 Annual Meeting, it
will have an opportunity to inform shareholders of the benefits of
these amendments and to attempt to persuade shareholders to vote
against this proposal.
Q: WHO CAN VOTE AT THE 2000 ANNUAL MEETING?
A: If you owned Dexter shares on [____________, 2000] (the "Record
Date"), you have the right to vote at the 2000 Annual Meeting. We
believe that as of the close of business on the Record Date, there
were __________ shares of common stock of Dexter issued and
outstanding and entitled to vote. Shareholders have one vote for each
share of common stock they own with respect to all matters to be
considered at the 2000 Annual Meeting.
Q: HOW MANY SHARES MUST BE VOTED IN FAVOR OF THE PROPOSALS TO EFFECT
THEM?
A: Assuming that a quorum, the holders of not less than a majority of
the shares of Common Stock outstanding and entitled to vote, is
present in person or by proxy at the 2000 Annual Meeting, our
proposals can be adopted by the following votes:
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Nominee Proposals -- Election of our nominees for directorships will
require the affirmative vote of a plurality of the votes cast. The
election of our nominees for seven newly-created directorships will
not be effective unless our proposed Bylaw amendment increasing the
size of Dexter's Board is adopted.
Proposals Requiring Bylaw Amendments -- We believe that our proposals
involving amendments to the Dexter Bylaws will be approved if the
votes cast for the respective proposal exceed the votes cast against
the respective proposal. We have received the opinion of Connecticut
counsel that, to the extent the Dexter Bylaws may require a
two-thirds supermajority shareholder vote for an amendment, such
provision is invalid under Connecticut law. We have also instituted
litigation seeking to have any such supermajority amendment
requirement held ineffective. See "Certain Litigation." If the Bylaws
are held to contain an effective supermajority shareholder voting
requirement, our proposals involving Bylaw amendments would each
require the affirmative vote of the holders of two-thirds of the
issued and outstanding shares of common stock.
Proposals Not Requiring Bylaw Amendments -- Adoption of our
shareholder resolution requiring the Board to amend the Rights
Agreement and our Omnibus Proposal providing the order for voting at
the 2000 Annual Meeting will be approved if the votes cast for the
respective proposals exceed the votes cast against the respective
proposals. The shareholder resolution as to the Rights Agreement will
not be effective unless our related Bylaw amendment is adopted.
Q: WHAT SHOULD YOU DO TO VOTE?
A: Sign, date and return the enclosed GOLD Proxy card TODAY in the
envelope provided. For more information on how to vote your shares,
please see "Voting Procedures" on page 31.
Q: WHO DO YOU CALL IF YOU HAVE QUESTIONS ABOUT THE SOLICITATION?
A: Please call Innisfree M&A Incorporated toll free at (888) 750-5834.
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IMPORTANT
PLEASE REVIEW THIS DOCUMENT AND THE ENCLOSED MATERIALS CAREFULLY.
YOUR VOTE IS VERY IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
1. If your shares are registered in your own name, please sign, date and
mail the enclosed GOLD Proxy Card to Innisfree M&A Incorporated in the
postage-paid envelope provided today.
2. If you have previously signed and returned a [COLOR] proxy card to
Dexter, you have every right to change your vote. Only your latest
dated card will count. You may revoke any [COLOR] proxy card already
sent to Dexter by signing, dating and mailing the enclosed GOLD Proxy
Card in the postage-paid envelope provided.
3. If your shares are held in the name of a brokerage firm, bank nominee
or other institution, only it can sign a GOLD Proxy Card with respect
to your shares and only after receiving your specific instructions.
Accordingly, please sign, date and mail the enclosed GOLD Proxy Card in
the postage-paid envelope provided. To ensure that your shares are
voted, you should also contact the person responsible for your account
and give instructions for a GOLD Proxy Card to be issued representing
your shares.
4. After signing the enclosed GOLD Proxy Card, do not sign or return the
[Dexter's COLOR] proxy card. Do not even use Dexter's [COLOR] proxy
card to indicate your opposition to Dexter's nominees and proposals.
If you have any questions about giving your proxy or require
assistance, please call:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokerage Firms Call Collect: (212) 750-5833
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REASONS FOR THE SOLICITATION
We believe that the current Board of Directors of Dexter has failed
to maximize the value of your investment. The overall purpose of our proposals
is to elect nominees to the Dexter Board who are committed to consider and
pursue the ISP Proposal, in which you would receive $45 per share in cash, or a
superior proposal. Another purpose of our proposals is to permit Dexter
shareholders to consider on their own the merits of offers or transactions for
their shares by issuing instructions to the Board as to the manner in which the
Rights Agreement will be applied to particular offers or transactions and by
directing the Board to make the Rights Agreement inapplicable to offers of at
least $45 per share in cash for all shares.
As one of the largest shareholders of Dexter and an investor in the
company's shares since September 1998, we have been dissatisfied with the
failure of Dexter's Board of Directors to maximize shareholder value for Dexter
shareholders. On December 3, 1999, we discussed with representatives of Dexter
our belief that Life Technologies, with its higher growth and higher margins,
can better fulfill its potential as an independent entity or in combination with
another similarly strategically situated company, rather than in combination
with Dexter. We therefore recommended that Dexter and Life Technologies be
separate corporate entities - a recommendation which we believed would serve to
maximize shareholder value for Dexter shareholders. Dexter has not only rejected
our recommendation, but to date has shown no evidence of having an alternative,
credible strategy designed to maximize shareholder value. Therefore, on December
14, 1999, we proposed a business combination in which Dexter shareholders would
receive $45 per share in cash, subject to the negotiation of a mutually
acceptable merger agreement. This price represents a premium of 38% over
Dexter's closing price on the day immediately prior to our proposal and is
higher than the stock has ever traded. Furthermore, we have expressed our
willingness to pay more if Dexter's Board provided additional information to
justify an increased price. On December 23, 1999, Dexter's Board rejected our
proposal without availing itself of the opportunity to discuss or negotiate the
proposal with us. Then, on January 20, 2000, Dexter, in an attempt to deter us
from a course of action designed to maximize value for Dexter shareholders,
offered to purchase our shares of Life Technologies for $49 per share, which
offer we promptly rejected. We do not believe that the current Dexter Board will
consider and pursue the ISP Proposal or a superior proposal.
Our nominees are committed to consider and pursue the ISP Proposal or
a superior proposal. All determinations made by our nominees, if elected to the
Dexter Board, will be subject to their fiduciary duties to you, the shareholders
of Dexter. Two of our nominees, Samuel J. Heyman and Sunil Kumar, are affiliated
with ISP and, if elected to the Dexter Board, would not participate in any Board
action relating to the ISP Proposal or any other business combination
transaction while our acquisition proposal remains in effect.
We are prepared to promptly negotiate and execute a mutually
acceptable merger agreement with Dexter. ISP has received from Chase Securities
Inc. a letter dated January 20, 2000 pursuant to which Chase has informed ISP
that, based on the information provided to Chase and then-current conditions in
the bank syndication
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market, Chase is highly confident in its ability to arrange senior credit
facilities to, among other things, finance the acquisition of Dexter, refinance
indebtedness of ISP and Dexter, pay anticipated expenses and provide working
capital for the combined companies following the acquisition. We have also
engaged Chase Securities Inc. to serve as our financial advisor in connection
with any business combination transaction involving Dexter.
In connection with our proposals, we have filed a complaint with the
United States District Court for the District of Connecticut in which we are
seeking, among other things, (1) a declaratory judgment that our Nominee
Election Proposals, Shareholder Rights Proposals and Voting Rights Proposals are
valid under Connecticut law, that any supermajority voting requirement contained
in Dexter's Bylaws is invalid, and that the Rights Agreement is invalid, and (2)
an order requiring that the 2000 Annual Meeting be held no later than April 30,
2000. See "Certain Litigation."
We are soliciting your proxy to vote in favor of the following
proposals at the 2000 Annual Meeting:
THE NOMINEE ELECTION PROPOSALS
(1) The election of our slate of nominees to replace the three
directors whose terms expire at the 2000 Annual Meeting (the
"Director Election Proposal");
(2) A Bylaw amendment that would increase the size of Dexter's Board
to permit our nominees for directorships, if elected, to
constitute a majority of Dexter's Board (the "Board Size Bylaw
Proposal");
(3) The election of our slate of nominees to fill the vacancies
created by the increased number of directorships (the "Additional
Directors Election Proposal");
THE SHAREHOLDER RIGHTS PROPOSALS
(4) A Bylaw amendment that would require the Dexter Board to make
certain amendments to Dexter's "Poison Pill" Rights Agreement or
redeem the Rights issued thereunder if the shareholders instruct
the Board to do so by majority vote, and not to adopt a new rights
agreement without shareholder approval (the "Poison Pill Bylaw
Proposal");
(5) A shareholder resolution directing Dexter's Board to amend the
Rights Agreement promptly to make it inapplicable to any offer for
all outstanding shares of Dexter for at least $45 per share in
cash (the "Poison Pill Amendment Proposal");
THE VOTING RIGHTS PROPOSALS
(6) A shareholder resolution repealing any and all amendments made by
the Board of Directors to the Bylaws after February 26, 1999 (the
"Bylaw Repeal Proposal"); and
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(7) A resolution providing the order for voting at the 2000 Annual
Meeting (the "Omnibus Proposal").
EACH OF OUR PROPOSALS IS SEPARATE AND DISTINCT FROM EACH OTHER
PROPOSAL. YOU MAY APPROVE OR VOTE SEPARATELY ON ANY OR ALL OF THE PROPOSALS, BUT
THE ADDITIONAL DIRECTORS ELECTION PROPOSAL WILL NOT BE EFFECTIVE UNLESS THE
BOARD SIZE BYLAW PROPOSAL IS ADOPTED AND THE POISON PILL AMENDMENT PROPOSAL WILL
NOT BE EFFECTIVE UNLESS THE POISON PILL BYLAW PROPOSAL IS ADOPTED.
WE BELIEVE THAT BY ADOPTING OUR PROPOSALS YOU WILL BE GIVEN THE
OPPORTUNITY TO ELECT NOMINEES TO DEXTER'S BOARD WHO WILL TAKE STEPS CONSISTENT
WITH THEIR FIDUCIARY DUTIES TO ENHANCE THE VALUE OF YOUR SHARES, AND YOU WILL BE
GIVEN THE RIGHT TO DECIDE YOUR OWN FATE WITH RESPECT TO PROPOSED TRANSACTIONS.
WE RECOMMEND THAT YOU SIGN, DATE AND RETURN THE GOLD PROXY CARD TODAY IN FAVOR
OF OUR PROPOSALS.
CERTAIN LITIGATION
On January 27, 2000, we commenced a lawsuit against Dexter and
certain members of Dexter's Board of Directors in the United States District
Court for the District of Connecticut. International Specialty Products Inc. and
ISP Investments Inc v. Dexter Corporation, et al., Civil Action No. 3:00 CV 157
(SRU). The Complaint alleges, among other things, that Article X of Dexter's
bylaws (insofar as it may provide for a two-thirds supermajority vote of the
shareholders to amend the bylaws) violates Section 33-807 of the Connecticut
Business Corporation Act and is therefore invalid; that Dexter's poison pill
violates Section 33-665 of the Connecticut Business Corporation Act and is
therefore invalid; that shareholders have the right to vote on the Nominee
Election Proposals, Shareholder Rights Proposals and Voting Rights Proposals at
the 2000 Annual Meeting; and that the directors have breached their fiduciary
obligations to Dexter and its shareholders. The Complaint seeks declaratory and
injunctive relief as well as money damages. The Complaint also asks the Court to
order that the 2000 Annual Meeting be held no later than April 30, 2000.
BACKGROUND AND RECENT EVENTS
We began purchasing shares of Dexter and Life Technologies common
stock in September 1998 because we believed that the shares of both companies
were substantially undervalued. As one of the largest shareholders of Dexter, we
have been dissatisfied with the failure of Dexter's Board of Directors to
maximize shareholder value for Dexter shareholders. We have discussed with
representatives of Dexter a recommendation which we believed would serve to
maximize shareholder value for Dexter shareholders. Dexter has not only rejected
our recommendation, but to date has shown no evidence of having an alternative,
credible strategy designed to maximize shareholder value. Therefore, on December
14, 1999, we proposed a business combination in which Dexter shareholders would
receive $45 per share in cash, subject to
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the negotiation of a mutually acceptable merger agreement. Set forth below is a
summary of events that led to our proposal.
Life Technologies is the surviving corporation of a merger in 1983 of
Bethesda Research Laboratories, Inc. with a Dexter-owned subsidiary. Dexter
owned approximately 52% of the outstanding stock of Life Technologies in 1998.
On July 7, 1998, Dexter proposed to purchase the remaining 48% of the
outstanding shares of Life Technologies that it did not already own, at a
purchase price of $37 per share in cash. The proposal was made subject to, among
other things, the approval of the Board of Directors of Life Technologies, and,
since a majority of the Life Technologies Board was affiliated with Dexter, the
approval of the Life Technologies Board's unaffiliated directors. Following
receipt of Dexter's proposal, Life Technologies's Board of Directors formed a
special committee of independent directors (the "Special Committee") to consider
and respond to the proposal. Thomas H. Adams, Ph.D., Frank F. Samuel, Jr. and
Iain C. Wylie were appointed as the members of the Special Committee, with Dr.
Adams to act as chairman. The Special Committee retained outside counsel and a
nationally recognized investment banking firm to assist in their analysis of
Dexter's proposal.
After a comprehensive valuation of Life Technologies and its
prospects by the Special Committee and its advisors, on October 27, 1998, the
Special Committee reported to the Life Technologies Board that it would be
unable to recommend that Life Technologies shareholders accept Dexter's offer of
$37 per share of Life Technologies stock. Among its findings, the Special
Committee reported that:
A. it did not believe that Dexter's proposal adequately reflected the
value of the prospects of Life Technologies; in particular, the
Special Committee noted that Dexter's proposal did not adequately
address the value of Life Technologies's research and development
pipeline;
B. it had received inquiries from a third party interested in
acquiring all of Life Technologies at a price in excess of
Dexter's $37 per share offer, but was unable to respond to such
offer because Dexter had advised that it was not interested in
disposing of its controlling block of Life Technologies shares;
and
C. Dexter's proposed purchase price of $37 per share of Life
Technologies common stock was substantially below the $50+ range
which the Special Committee considered an appropriate price range
for shares of Life Technologies at that time.
In response to the Special Committee's findings, K. Grahame Walker,
Chairman and Chief Executive Officer of Dexter and Chairman of the Board of Life
Technologies, proposed that the Life Technologies Board disband the Special
Committee. Mr. Walker also announced that Dexter was withdrawing its original
proposal and would make an offer directly to the shareholders of Life
Technologies to tender their shares for $37 per share in cash. All five of the
directors affiliated with Dexter, representing a majority of the Life
Technologies Board, voted in favor of a resolution to disband the
14
<PAGE>
Special Committee, while all three members of the Special Committee voted
against the resolution. A few days thereafter, two of the three independent Life
Technologies directors who served on the Special Committee (Messrs. Samuel and
Wylie) resigned as directors of Life Technologies in protest of the disbanding
of the Special Committee.
In his resignation letter, dated November 3, 1998, to the Life
Technologies Board, Frank E. Samuel, Jr. stated that Dexter's proposal "ignored
important components of Life Technologies's overall value, including the value
of the products in Life Technologies's R&D Pipeline." Mr. Samuel further
characterized Dexter's Proposal as "heavyhanded" and as a "coercive attempt to
buy out the [Life Technologies] public stockholders at a price which, I believe,
deprives these stockholders of the significant inherent values to which they are
rightfully entitled." Iain C. Wylie, in his resignation letter to the Life
Technologies Board, echoed Mr. Samuel's concerns with respect to Dexter's
proposal.
Despite the Special Committee's findings, on November 2, 1998, Dexter
commenced a tender offer for the outstanding shares of Life Technologies at $37
per share. Dexter also announced its intention to acquire any shares not
purchased in the tender offer through a second-step merger in which the
remaining shareholders would receive the same share price paid in the tender
offer.
On November 16, 1998, Life Technologies filed a Schedule 14D-9
Solicitation/ Recommendation Statement in which Life Technologies disclosed that
the Life Technologies Board would remain neutral and express no opinion with
respect to Dexter's tender offer, since a majority of the Life Technologies
Board was affiliated with Dexter. However, Life Technologies included in the
Schedule 14D-9 the view of the Special Committee that the shareholders should
reject Dexter's tender offer and not tender their shares, along with the
analysis by the investment banking firm hired by the Special Committee which
detailed its finding that Dexter's offer price was inadequate to Life
Technologies shareholders.
On December 7, 1998, Dexter amended its tender offer by increasing
the purchase price from $37 per share to $39.125 per share and dropping the
condition that Dexter acquire at least 80% of the outstanding shares of Life
Technologies following the consummation of the tender offer. Upon the completion
of the tender offer, Dexter owned approximately 71% of the outstanding shares of
Life Technologies.
Shortly after the commencement of Dexter's tender offer, in November
1998, we filed a Schedule 13D with respect to our beneficial ownership of shares
of Life Technologies. In the Schedule 13D filing, we stated that we had obtained
an equity position in Life Technologies because the shares of Life Technologies
were undervalued. On November 25, 1998, we signed an agreement with certain
other Life Technologies shareholders for a term of six months that provided for,
among other things, each party not to sell or otherwise dispose of its Life
Technologies shares without the consent of the other parties to the agreement.
Thereafter, we, together with such other Life Technologies shareholders, filed
an amendment to our Schedule 13D reporting our group ownership of Life
Technologies shares. Additional Life Technologies shareholders entered into
similar agreements with us (and additional 13D amendments were filed), so that,
as of December 23, 1998 we, together with the other members of the "13D Group",
15
<PAGE>
owned approximately 26.2% of the outstanding shares of Life Technologies. On
that date, ISP individually owned approximately 14.75% of the outstanding shares
of Life Technologies.
On February 1, 1999, the common stock of Life Technologies was
delisted from the Nasdaq Stock market because of Life Technologies's inability
to remain in compliance with certain maintenance standards required for
continued listing, including the number of shareholders and public float
requirements, as a result of Dexter's completed tender offer for Life
Technologies's stock. Life Technologies currently remains a reporting company
under the Securities and Exchange Commissions rules and its common stock is
available for quotation on the OTC Bulletin Board.
On July 26, 1999, Life Technologies announced that its Board had
decided to discontinue regular quarterly dividends on its common stock.
On September 27, 1999, pursuant to an amended Schedule 13D filing, we
disclosed that we beneficially owned approximately 9.98% of the outstanding
common stock of Dexter. Soon thereafter, on October 4, 1999, the Board of
Directors of Dexter amended the Company's Rights Agreement to lower the
threshold of beneficial ownership that will trigger the defensive provisions of
the Rights Agreement from 20% to 11% of the outstanding common stock of Dexter,
applicable to any shareholder who does not file a Schedule 13G with the SEC
stating that its ownership position has been acquired without any intent to
change or influence control of Dexter.
On December 3, 1999, representatives of ISP and Dexter met to discuss
our dissatisfaction with Dexter's failure to maximize shareholder value. At such
meeting, we expressed our belief that Life Technologies, with its higher growth
and higher margins, can better fulfill its potential as an independent entity or
in combination with another similarly strategically situated company, rather
than in combination with Dexter. Our representatives noted that there are no
apparent synergies between Dexter and Life Technologies that would justify
Dexter's continued control of Life Technologies and, as an independent company,
Life Technologies would likely have greater access to the capital markets and
receive a higher level of analyst coverage. We therefore recommended that Dexter
and Life Technologies be separate corporate entities - a recommendation which we
believed would serve to maximize shareholder value for Dexter shareholders.
On December 6, 1999, pursuant to an amended Life Technologies 13D
filing, we disclosed that our initial 13D Group agreement with other Life
Technologies shareholders, which had been renewed and extended on May 10, 1999,
had been further extended until September 30, 2000 by all but one of the
original members of the group. Currently, the continuing members of the 13D
group beneficially own approximately 21.7% of the outstanding shares of Life
Technologies.
After receiving no response to our proposal made during the December
3, 1999 meeting, on December 14, 1999, Samuel J. Heyman, Chairman of the Board
of ISP, sent the following letter to Mr. Walker proposing to acquire all of the
shares of Dexter not owned by ISP for a price of $45 per share:
16
<PAGE>
Dear Grahame:
It was nice meeting with you, John Thompson, and Bruce
Beatt on December 3rd.
As Kumar Shah and I indicated to you, our interest is in
the realization of shareholder values for all Dexter Corporation and
Life Technology shareholders. In this connection, based on our
analysis, we believe that Life Technologies, with its higher growth
and higher margins, can better fulfill its potential as an
independent entity, or in combination with another similarly
strategically situated company, rather than in combination with
Dexter Corporation. We also believe that it will be in the best
interests of both companies and their respective shareholders if
Dexter Corporation and Life Technologies were separate corporate
entities.
The overriding reason for this conclusion stems primarily
from the fact that there are practically no overlaps and the
companies add no value to each other. Specifically, Dexter
Corporation's R&D, product development and manufacturing technology
have no interface, and lack any synergy, with Life Technologies.
Furthermore, we believe that Dexter Corporation has restrained Life
Technologies' growth by limiting Life Technologies' R&D expenditures,
new product development and new product introductions. Marketing,
sales and distribution likewise provide no crossover benefits for the
two companies. In addition to the operational issues, we note that
Dexter Corporation management has little or no experience in the life
science field.
From a financial perspective, as an independent company,
Life Technologies would have much greater access to the capital
markets, without the constraints of Dexter Corporation's financial
profile. Life Technologies, as a pure play on which analysts and
shareholders can more clearly and easily focus, would attract a high
level of Wall Street coverage, providing the opportunity to achieve
P/E multiples similar to those achieved by others, who serve the same
market. This would enable Life Technologies to consummate attractive
stock acquisitions and mergers in the emerging life science field,
which you acknowledge has been constrained under your ownership.
Finally, as an independent company, or as part of a high
technology company serving the biotechnology industry, Life
Technologies would be in a position to provide greater incentives for
its executives. Through making available stock options with a
significant upside potential to all key-operating employees, Life
Technologies would be providing a better opportunity to attract,
hire, and most importantly, retain quality personnel to insure and
maximize its continued profitable growth.
As a substantial shareholder of both Dexter Corporation and
Life Technologies, it is our position that, for the foregoing
reasons, there is value to be realized in the separate corporate
existence of these two entities.
17
<PAGE>
At our meeting, while I was pleased that you appeared to share our
view that there are few, if any, synergies between Dexter Corporation
and Life Technologies, I had hoped that you would be more receptive
to our proposal. However, since that time, by your lack of response
and your recent comments to security analysts, it appears that you
disagree with our approach to maximizing shareholder value nor do you
appear to have in mind any alternative strategy for accomplishing the
same goal.
As long term shareholders of both Dexter and Life
Technologies, we think we have been more than patient. Our Board has
therefore decided to propose acquiring all of the Dexter Corporation
common stock not owned by ISP and its affiliates for a price of
$45.00 per share subject to the execution of a mutually acceptable
merger agreement. Such a price represents a 38% premium over where
Dexter Corporation closed last night (32-9/16), and is higher than
the stock has ever traded. In addition, if you would provide us
additional information on Dexter Corporation and Life Technologies
that justifies an increased price we would be willing to pay more. We
would be willing to enter into a confidentiality agreement in
connection therewith (but not any such agreement that would limit our
rights as shareholders).
We and our advisors are available to move quickly to
consummate this transaction. Grahame, please let me know how you and
your Board would like to proceed.
Sincerely,
/s/ Samuel J. Heyman
On December 14, 1999, Dexter issued a press release indicating that it has
received ISP's December 14 letter and that Dexter's Board would consider ISP's
proposed offer, but noting that the December 14th letter did not mention a
source of funds for ISP's cash offer.
In response to Dexter's press release, on December 16, 1999, Mr. Heyman sent the
following letter to Mr. Walker:
Dear Grahame:
I note from Dexter's news release yesterday your mention
that our letter "contained no information concerning the source of
funds for its proposal."
In this regard, we intend to finance with bank borrowings
and will provide commitments for such financing as appropriate.
As I indicated in yesterday's letter, we stand ready with
our advisors to meet with you as soon as possible regarding all
aspects of the proposed merger agreement.
All the best.
18
<PAGE>
Sincerely,
/s/ Samuel J. Heyman
On December 23, 1999, Mr. Walker sent the following letter to ISP rejecting
ISP's offer to purchase the outstanding shares of Dexter:
Dear Mr. Heyman:
On behalf of Dexter's Board of Directors, I am replying to
your letter of December 14.
The Board has carefully considered your proposal to
negotiate an acquisition of Dexter at a price of $45 per share. It
has discussed the proposal as well as the strategic initiatives
mentioned in your letter with the company's management and its
advisors - Lehman Brothers and Skadden, Arps. The Board has received
an opinion from Lehman Brothers that $45 per share is inadequate from
a financial point of view to the stockholders of Dexter. It is the
unanimous view of the Board of Directors that your proposal is both
inadequate and contrary to the best interests of the stockholders of
Dexter. Accordingly, it is hereby rejected.
We noted with interest the research comment on your
proposal published by Merrill Lynch the same day you made it. Merrill
Lynch said, "... the bid is too low. It appears that ISP could be
just trying to put Dexter in play." The comment also noted:
"Interestingly, ISP's total bid for Dexter is only slightly larger
than Dexter's bid for Life Technologies - an offer that was deemed as
too low by ISP management." New Vernon Associates, an institutional
research firm, was even more definitive in its characterization of
the ISP proposal. "Mr. Heyman is clearly playing the role of
arbitrageur here. There is little or no strategic fit between ISP and
either Dexter or Life Technologies." Yet a third report published by
Schroders on December 15 was to a similar effect.
The Board has thoroughly reviewed the company's present
circumstances in light of your public proposal to acquire Dexter for
an inadequate price, ostensibly to separate Dexter and Life
Technologies. In consequence of that review, they have asked me to
share the following additional thoughts with you.
The Dexter Board is committed to its business strategy of
maximizing the long-term growth of Dexter through its investment in
Life Technologies. It will continue these efforts, despite any
attempt on your part to divert their benefits for ISP's short-term
interests, as you have done in numerous other cases in which you
purchased shares of a company - purporting to espouse stockholder
interests - and subsequently sold out your position at a profit.
Last year, in pursuit of its shareholder value growth
strategy, Dexter decided to strengthen its focus on life sciences.
Among other initiatives, it sought to acquire the public minority
shares of Life Technologies. Your company opportunistically
intervened to frustrate this
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<PAGE>
objective and bought 15% of the outstanding shares in the open
market, while Dexter was proceeding with its tender offer at a price
that was available to every LTI stockholder. Our Board's plan was to
realize synergistic benefits and cost savings from 100% ownership of
LTI, in addition to securing our platform for growth in life
sciences. The Dexter stockholders have been denied those benefits and
the related stockholder value enhancement by your actions, not by any
inadequacy in our basic strategy.
The second phase of your opportunistic strategy was an
open-market purchase program in Dexter shares which purported to be
"for investment purposes only." Immediately after you assembled a 10%
block, you dropped your pretense of being a passive investor. You
invited yourself to a meeting with management, asserted Dexter and
Life Technologies should be separated, waited 11 days and then made a
public unsolicited acquisition proposal at an inadequate price
benefiting only ISP and not all Dexter stockholders. Your disregard
for the interests - indeed welfare - of Dexter stockholders is
especially exemplified by the fact that both Moody's and Standard &
Poor's have now put Dexter on credit watch with negative implications
expressly as a result of the apprehension that ISP will over-leverage
in order to combine with Dexter.
You have also made some factual assertions about Dexter and
Life Technologies which are simply wrong and which are potentially
damaging to one or both companies. Dexter has not been a restraining
influence on LTI's R&D spending. Indeed, you sought to elicit such a
statement from the Life Technologies management in your meeting with
them but they declined to provide it. Nor is there any basis for your
claim that Dexter's ownership of LTI shares makes it difficult to
attract, hire and retain quality management. Quite simply, that has
not been the case. Your contention further implies that the current
management of LTI is not first rate, a similarly baseless suggestion.
You have mischaracterized the relationship between Dexter
and Life Technologies, and your position is internally inconsistent.
You affirmatively asserted in our conversation on December 3 that
Life Technologies has no place with ISP. We agree. However, it is
illogical and self-contradictory for you to suggest that you wish to
acquire Dexter in order to spin off Life Technologies in some
unspecified transaction likely to have adverse tax consequences to
all participants. Second, and more important by far, we are convinced
that both Dexter and Life Technologies have bright future prospects
which justify a valuation of Dexter shares significantly in excess of
what is reflected in the current market price. We fervently hope (and
strongly recommend) that you return your managerial focus to your own
companies, leaving the stewardship of Dexter and LTI where it belongs
- with their respective Boards.
Sincerely
/s/ K. Grahame Walker
20
<PAGE>
In a complaint dated January 18, 2000, shareholders of Dexter
asserted claims on behalf of a putative class consisting of all Dexter
shareholders against Dexter, Mr.Walker and the directors of Dexter in
Connecticut Superior Court (asserting two separate claims formerly brought in
Delaware). Such shareholders allege, among other things, that "[i]n rejecting
the ISP offer, reducing the threshold for activation of the shareholder rights
plan and failing to make any attempts to negotiate with ISP, [Dexter, Mr. Walker
and the Board] have acted wrongfully to the detriment of Dexter public
stockholders."
On January 20, 2000, Dexter announced that it had sent a letter to
Life Technologies proposing to acquire for $49.00 per share the 28.5% of Life
Technologies that Dexter does not own in a merger transaction. Dexter asked for
"appropriate indications of support" for the merger from ISP and the other
members of the 13D group.
On January 27, 2000, Mr. Heyman sent the following letter to Mr.
Walker:
Dear Grahame:
In view of ISP's $45 all cash offer and our stated
willingness to pay more if additional information justified a higher
price, I was disappointed that your Board did not decide to encourage
negotiations with a view toward increasing shareholder value for
Dexter shareholders. Its refusal to do so leaves us no choice but to
take our proposal directly to our fellow shareholders.
We are today delivering to your Corporate Secretary a
notice of our intention to present a series of resolutions at your
April Annual Meeting. The effect of the resolutions is to elect ten
of our nominees to the Dexter Board, including eight directors
independent of ISP, who are committed to considering and pursuing
ISP's offer or a superior proposal. We are also proposing a by-law
amendment and a resolution requiring Dexter's Board to remove its
"poison pill" in favor of offers for all shares of at least $45 per
share in cash. We intend to solicit proxies in favor of these
resolutions.
Your December 23rd letter questioned the seriousness of
ISP's intent. First, as you know, ISP currently holds a stake in
Dexter which is more than five times that held by Dexter's entire
Board. Second, so that there should be no doubt as to our ability to
finance the acquisition, Chase Securities Inc. advised us, confirmed
in writing, that they are highly confident in their ability to
arrange the credit facilities for this acquisition.
There are so many inaccuracies and mischaracterizations in
your letter that I find it difficult to know where to start. By way
of just one example, your heavy reliance upon security analysts to
defend your rejection of our proposal is misplaced. For instance, in
comparing ISP's offer to Dexter's bid last year for Life
Technologies, the Merrill Lynch report contained an error of almost
$300 million by ignoring the value of the minority interests. Also,
you failed to quote a
21
<PAGE>
relevant section of the New Vernon Associates report you cited, which
states the following: "there is little or no interplay between the
company's [Dexter's] industrial and life sciences businesses," "we do
find merit in his [Mr. Heyman's] initiative to separate the company's
[Dexter's] disparate assets," and "in our view Dexter's ownership of
LTEK is constraining the latter company's ability to recruit and
retain key employees." With regard to the last point, it should be
made clear that we indeed view the management of Life Technologies as
first rate. However, your attempted squeeze-out of the minority
shareholders more than a year ago resulted in the elimination of
meaningful stock incentives for Life Technologies executives, which
ultimately impacts the ability to retain and recruit key personnel.
As you know, Life Technologies' shareholders have rejected
Dexter's recent belated $49 per share offer. Parenthetically, it
should be noted that Dexter's own shareholders appear to have
rejected its business strategy as well, as Dexter's stock price has
declined substantially since the company's rejection of our offer and
its decision to attempt to acquire 100% of Life Technologies. It is
apparent from the timing of Dexter's offer for our Life Technologies
shares, coming on the heels of ISP's $45 per share offer for Dexter,
upon which many of Dexter's shareholders have relied, seeks to divert
ISP from a course of action designed to maximize shareholder values
for all Dexter shareholders. In this connection, we believe that
Dexter's attempt to deter us by providing benefits to ISP not
available to other Dexter shareholders is simply not appropriate.
Grahame, I just do not think it would be productive at this
time to respond to your mischaracterizations and attempts to impugn
our motives - which by the way I do not appreciate. The real issue
here, however, is the maximization of shareholder value for all
Dexter shareholders, and I believe that shareholders will more likely
benefit from a dialogue along this line. In fact, I would be willing
to appear with you before any group of Dexter shareholders to discuss
the merits of Dexter's proposed course of action vs. ISP's offer.
All the best.
Sincerely,
/s/ Samuel J. Heyman
Also on January 27, 2000, we gave formal written notice to Dexter of
our intention to bring our proposals before the 2000 Annual Meeting. On that
same day, we filed a complaint against Dexter and certain members of Dexter's
Board of Directors in the United States District Court for the District of
Connecticut. See "Certain Litigation." These developments were reflected in an
amended 13D filing with respect to our Dexter shares on the same day.
On January 28, 2000, we, together with the other members of our 13D
Group, amended our 13D filing with respect to the 13D Group's Life Technologies
shares reflecting the rejection of Dexter's offer for Life Technologies. Also on
January 28, we demanded a copy of Dexter's shareholder list and certain other
corporate information to which we are entitled under the Connecticut Business
Corporation Act.
22
<PAGE>
THE PROPOSALS
We are soliciting your proxy in favor of adopting the following three
sets of proposals at the 2000 Annual Meeting, in opposition to Dexter's Board of
Directors: (1) the Nominee Election Proposals, (2) the Shareholder Rights
Proposals and (3) the Voting Rights Proposals. The full text of shareholder
resolutions to effect each proposal are contained in the respective Annexes to
this proxy statement.
EACH OF OUR PROPOSALS IS SEPARATE AND DISTINCT FROM EACH OTHER PROPOSAL. YOU MAY
APPROVE OR VOTE SEPARATELY ON ANY OR ALL OF THE PROPOSALS, BUT THE ADDITIONAL
DIRECTORS ELECTION PROPOSAL WILL NOT BE EFFECTIVE UNLESS THE BOARD SIZE BYLAW
PROPOSAL IS ADOPTED, AND THE POISON PILL AMENDMENT PROPOSAL WILL NOT BE
EFFECTIVE UNLESS THE POISON PILL BYLAW PROPOSAL IS ADOPTED.
THE NOMINEE ELECTION PROPOSALS
PROPOSAL NO. 1: THE DIRECTOR ELECTION PROPOSAL
According to publicly available information, Dexter currently has ten
directors, divided into three classes having staggered terms of three years
each. The terms of one class of incumbent directors, consisting of Charles H.
Curl, Peter G. Kelly and Jean Francois Saglio, will expire at the 2000 Annual
Meeting. Accordingly, at the 2000 Annual Meeting, you will be asked to elect
three persons to fill the directorships in this class for a three-year term
continuing until the 2003 Annual Meeting and the election and qualification of
each person's respective successor. The following persons are our nominees for
election as directors in such class:
<TABLE>
<CAPTION>
Name and Business Present Principal Occupation and Five Year
Address Age Employment History Class
- ------- --- ------------------ -----
<S> <C> <C>
Samuel J. Heyman 61 Mr. Heyman has been a director and Chairman of 2003
1361 Alps Road ISP since its formation and served as its Chief
Wayne, New Jersey 07470 Executive Officer from its formation until June
1999. He has also been a director, Chairman and
Chief Executive Officer of GAF Corporation
("GAF"), primarily a holding company, and
certain of its subsidiaries for more than five
years. Mr. Heyman has been a director and
Chairman of Building Materials Corporation of
America ("BMCA"), an indirect, approximately
97%-owned subsidiary of GAF primarily engaged
in the commercial and residential roofing
business, since its formation, and has served
as Chief Executive Officer of BMCA since June
1999, a position he also held from June 1996 to
January 1999. He is also the Chief Executive
Officer, Manager and General Partner of a
number of
23
<PAGE>
closely held real estate development companies
and partnerships whose investments include
commercial real estate and a portfolio of
publicly traded securities.
Sunil Kumar 50 Mr. Kumar has been a director, President and 2003
1361 Alps Road Chief Executive Officer of ISP since June 1999.
Wayne, New Jersey 07470 Mr. Kumar has also been President and Chief
Executive Officer of certain subsidiaries of
ISP, including ISP Investments Inc., since June
1999. Mr. Kumar was a director, President and
Chief Executive Officer of BMCA from May 1995,
July 1996 and January 1999, respectively, until
June 1999. He was Chief Operating Officer of
BMCA from March 1996 to January 1999. Mr. Kumar
also was President, Commercial Roofing Products
Division, and Vice President of BMCA from
February 1995 to March 1996. From 1992 to
February 1995, he was Executive Vice President
of Bridgestone/Firestone, Inc., a retail
distributor and manufacturer of tires and
provider of automobile services.
Philip Peller 60 Prior to his retirement on November 30, 1999, 2003
Mr. Peller was a partner of Andersen Worldwide
S.C. and Arthur Andersen LLP, a role he had
held since 1970. He served as Managing Partner
- Practice Protection and Partner Affairs for
Andersen Worldwide during the period 1998 to
1999 and as Managing Partner - Practice
Protection from 1996 to 1998. During the period
1995 to 1996, he was the Managing Director -
Quality, Risk Management and Professional
Competence for Arthur Andersen's global audit
practice.
</TABLE>
Each of the nominees has consented to serve as a director until the
expiration of his respective term and until such nominee's successor has been
elected and qualified or until the earlier resignation or removal of such
nominee. We have no reason to believe that any of the nominees named above will
be disqualified or unable or unwilling to serve if elected. If any of the
nominees should become unavailable for any reason, proxies may be voted for
another person nominated by ISP to fill the vacancy.
The nominees understand that, if elected as directors of Dexter, each
of them will have an obligation under Connecticut law to discharge his duties as
a director in good faith, consistent with his fiduciary duties to Dexter and its
shareholders.
WE STRONGLY RECOMMEND THAT YOU VOTE
"FOR" THE ELECTION OF OUR NOMINEES
24
<PAGE>
PROPOSAL NO. 2: THE BOARD SIZE BYLAW PROPOSAL
We are proposing a Bylaw amendment that would increase the Dexter
Board from its current size of ten to seventeen directors commencing at the 2000
Annual Meeting. If our Board Size Bylaw Proposal is adopted, the shareholders of
Dexter would be entitled to elect, in addition to the three directors under
Proposal No. 1 above, seven additional directors, for a total of ten directors
at the 2000 Annual Meeting. The Board Size Bylaw Proposal would allow the Dexter
shareholders to elect a majority of the Dexter Board at the 2000 Annual Meeting.
The Board Size Bylaw Proposal provides that the seven additional
directorships proposed will be allocated to the classes with terms expiring at
the 2001 Annual Meeting and the 2002 Annual Meeting, unless the additional
nominees are allocated to the class with a term expiring at the 2003 Annual
Meeting by the Board, consistent with its duties under Connecticut law to
allocate directors among the three classes so that all classes are equal in size
to the extent possible.
The proposed Bylaw amendment, if adopted, cannot be unilaterally
repealed by the Dexter Board. The full text of the Bylaw amendment to effect the
Board Size Bylaw Proposal is contained in Annex I to this proxy statement.
WE STRONGLY RECOMMEND THAT YOU VOTE
"FOR" THE BOARD SIZE BYLAW PROPOSAL
PROPOSAL NO. 3: THE ADDITIONAL DIRECTORS ELECTION PROPOSAL
If the Board Size Bylaw Proposal is adopted, we nominate the
following persons to the Board to fill the newly-created directorships. Our
proposal provides that our nominees will be assigned to classes as indicated
below, unless the additional nominees are allocated to the class with a term
expiring at the 2003 Annual Meeting by the Board, consistent with its duties
under Connecticut law.
<TABLE>
<CAPTION>
Name and Business Present Principal Occupation and Five Year
Address Age Employment History Class
- ------- --- ------------------ -----
<S> <C> <C>
Alan Meckler 54 Mr. Meckler has been the Chairman and Chief 2002
501 Fifth Avenue Executive Officer of Internet.com Corp., a
New York, NY provider of global real-time news and
10017 information resources for the internet
industry, since December 1998. He was Chairman
and Chief Executive Officer of Mecklermedia
Corp., a provider of internet information, from
June 1971 to November 30, 1998.
Dan Ogden 52 Mr. Ogden has been the President and Chief 2002
Yokohama Tire Operating Officer of Yokohama Tire Corporation,
25
<PAGE>
Corporation the North American marketing arm of Yokohama
601 S. Acacia Rubber Company, a worldwide tire manufacturer,
Fullerton, CA 92834-4550 since August 1997. From September 1996 until
August 1997, Mr. Ogden was engaged in private
investment activities. He was President and
Chief Operating Officer of EMCO Enterprises,
Inc., a diversified manufacturer primarily of
storm and screen doors, from December 1992
until August 1996.
Morrison DeSoto Webb 52 Mr. Webb has been an attorney in private 2002
120 Rye Ridge Road practice since January 2000. He was Executive
Harrison, NY 10528 Vice President - External Affairs and Corporate
Communications at Bell Atlantic Corporation
from August 1997 until December 1999. From May
1995 until August 1997, Mr. Webb was Executive
Vice President, General Counsel and Secretary
of NYNEX Corporation. He was Vice President -
General Counsel of New England Telephone and
Telegraph Company, a subsidiary of NYNEX
Corporation, from 1991 until 1995 and Vice
President - General Counsel of New York
Telephone Company, a subsidiary of NYNEX
Corporation from 1994 until 1995.
Robert Englander 57 Mr. Englander has been the Chairman of the 2002
75 Holly Hill Lane Board and Chief Executive Officer of Belvoir
Greenwich, CT 06830 Publications, a publisher of aviation, marine,
electronic, equestrian and other special
interest books, videos and publications, since
February 1973.
John Droney 53 Mr. Droney has been an attorney with Levy & 2001
74 Batterson Park Road Droney, P.C. since February 1988. Mr. Droney
Farmington, CT 06032 was also Chairman of the Democratic State
Central Committee of Connecticut and a member
of the Democratic National Committee from 1986
to 1992.
Anthony T. Kronman 54 Mr. Kronman has been Dean and Professor of Law 2001
127 Wall Street at Yale Law School since 1994 and 1978,
New Haven, CT 06511 respectively.
Vincent Tese 56 Mr. Tese has been the Chairman of Wireless 2001
Wireless Cable Cable International Inc., a cable television
International, and wireless communications service provider,
Inc. c/o Bear since April 1995. Mr. Tese was Chairman of
26
<PAGE>
Stearns & Co. Cross Country Wireless Inc., also a cable
Inc. television and wireless communications service
245 Park Avenue provider, from October 1994 to July 1995. Mr.
New York, NY Tese was the Director of Economic Development
10167 for the State of New York from June 1987 to
December 1994 and also served as the Chairman
of the Urban Development Corporation in New
York from 1985 to 1994. Mr. Tese currently
serves as a director of Allied Waste
Industries, Inc., Bear Stearns Companies Inc.,
Bowne & Co., Inc., Cablevision Systems Corp.,
Keyspan Corp. and Maek-Cali Realty Corp.
</TABLE>
Each of the nominees has consented to serve as a director until the
expiration of his respective term and until such nominee's successor has been
elected and qualified or until the earlier resignation or removal of such
nominee. We have no reason to believe that any of the nominees named above will
be disqualified or unable or unwilling to serve if elected. If any of the
nominees should become unavailable for any reason, proxies may be voted for
another person nominated by ISP to fill the vacancy.
The nominees understand that, if elected as directors of Dexter, each
of them will have an obligation under Connecticut law to discharge his duties as
a director in good faith, consistently with his fiduciary duties to Dexter and
its shareholders. The full text of a shareholder resolution to effect the
Additional Directors Election Proposal is contained in Annex II to this proxy
statement.
WE STRONGLY RECOMMEND THAT YOU VOTE
"FOR" THE ELECTION OF OUR ADDITIONAL NOMINEES
TO FILL THE NEWLY-CREATED DIRECTORSHIPS
THE SHAREHOLDER RIGHTS PROPOSALS
PROPOSAL NO. 4: THE POISON PILL BYLAW PROPOSAL
We are proposing an amendment to the Bylaws which would require the
Dexter Board to make certain amendments to the Rights Agreement or redeem the
Rights issued thereunder if shareholders representing a majority of the voting
power of Dexter adopt a special resolution requiring the Board to do so. In
addition, our proposed amendment would require the Dexter Board to obtain
shareholder approval prior to adopting any new shareholder rights plan, rights
agreement or any other form of "poison pill" which is designed to or has the
effect of making acquisitions of large holdings of Dexter's shares of stock more
difficult or expensive. The complete text of our proposed Bylaw amendment to
effect the Poison Pill Bylaw Proposal is included as Annex II to this proxy
statement.
The Rights Agreement currently vests with the Dexter Board the
exclusive power and authority to administer the agreement, including the sole
power to make any determination to redeem or not redeem the rights or to amend
the Rights Agreement.
27
<PAGE>
Our proposal would allow the shareholders to make their own decision with
respect to proposed offers or transactions, by requiring that the Dexter Board
follow the direction of the shareholders with respect to the amendment or
replacement of the Rights Agreement or the redemption of the Rights issued
thereunder.
Poison pills are considered extremely potent corporate takeover
defense mechanisms, and Dexter's existing Rights Agreement may, in some
respects, be aligned with shareholder interests. Proponents of poison pills
assert that rights plans, such as the Rights Agreement, enable the board to
respond in an orderly manner to unsolicited bids by providing sufficient time to
carefully evaluate the fairness of an unsolicited offer and the credibility of
the bidder, and thereby giving the board the flexibility to explore alternative
strategies for maximizing shareholder value. It has been argued that poison
pills deter abusive takeover tactics. Proponents of poison pills also assert
that rights plans provide incentives for a potential bidder to negotiate in good
faith with the board, and that such negotiations are likely to maximize value
for shareholders by soliciting the highest possible price from the bidder.
Our proposed Bylaw amendment does not nullify the Rights Agreement.
If our Poison Pill Bylaw Proposal is adopted, the Rights Agreement will remain
in effect to deter unsolicited, undervalued proposals. In order to make the
Rights inapplicable to a proposed offer or transaction, either the Dexter Board
must act by majority vote, or the shareholders must act. If the shareholders
wish to mandate the Board to redeem the Rights or amend the Rights Agreement,
the shareholders will, in instances where an annual meeting is not pending, face
the procedural necessity of calling a special meeting of shareholders, an action
which requires the written request of the holders of not less than 35% of the
issued and outstanding shares of Dexter common stock. Our proposal will not
leave Dexter defenseless against unsolicited bids.
Dexter's Certificate of Incorporation and Connecticut law provide
additional significant impediments to many forms of unsolicited offers for
Dexter. The Certificate provides that: (1) directors serve staggered terms,
preventing any independent shareholder or group of shareholders from gaining a
majority of the seats on the Board in a single year, absent an amendment to the
Bylaws approved by the shareholders, and (2) Dexter has authorized for issuance
a "blank check" preferred stock that can be used to dilute the ownership or
voting power of a bidder not approved by the Board. Connecticut law provides
that: (a) certain transactions with a beneficial owner of more than 10% of
Dexter's voting stock, including mergers, are subject to approval by the Board,
80% of the voting power of the outstanding shares and 66-2/3% of voting power of
the disinterested shareholders, unless certain "fair price" requirements are met
and (b) business combinations with a beneficial owner of more than 10% of
Dexter's voting stock are prohibited for five years, unless approved by the
Board. In addition, Connecticut law requires directors in exercising their
fiduciary duties to consider, in addition to the interests of shareholders, the
interests of the corporation, its employees, customers, creditors and suppliers,
and the interests of the community and society.
Shareholders have opposed poison pills on the grounds that poison
pills force potential investors to negotiate potential acquisitions with
management, instead of making their offer directly to the shareholders. In
recent years, shareholders have, with increased frequency, taken steps to oppose
the unilateral adoption of such poison pill
28
<PAGE>
rights plans by management. We believe that the entrenchment and consequential
lack of accountability afforded to incumbent management and directors by poison
pills may adversely affect shareholder value, because they provide a board with
veto power over change in control bids, even when shareholders believe that such
bids are in their best interests. We believe that our Poison Pill Bylaw Proposal
will permit you to decide when a change in control offer is in your best
interest, without eliminating the potential beneficial effect of the Rights
Agreement to shareholder value.
We believe that the Bylaw amendment effecting the Poison Pill Bylaw
Proposal is valid under Connecticut law because Connecticut law authorizes
shareholders to adopt bylaws that relate to the powers of the shareholders and
the board of directors. However, we recognize that the Connecticut courts have
not considered the validity of our proposed amendment or any similar bylaw and,
therefore, have not resolved the extent to which shareholder-adopted bylaws may
limit the authority of the board of directors to oppose, or to adopt or employ
defensive measures against, takeover bids favored by a majority of the
shareholders. We anticipate that the current Dexter Board will assert that
shareholders cannot adopt such a Bylaw. We are seeking a declaratory judgment to
establish the validity of the Poison Pill Amendment Proposal. See "Certain
Litigation."
WE STRONGLY RECOMMEND THAT YOU VOTE
"FOR" THE POISON PILL BYLAW PROPOSAL.
PROPOSAL NO. 5: THE POISON PILL AMENDMENT PROPOSAL
In connection with the Bylaw amendment in Proposal No. 4 above, we
are proposing the adoption of a special shareholder resolution. The resolution
will require the Board to amend the Rights Agreement to make it inapplicable to
any offer for all outstanding Dexter shares of common stock at a price of at
least $45 per share in cash. If the Poison Pill Bylaw Proposal is adopted, the
Rights Agreement will remain in full force and effect with respect to all offers
for less than $45 per share in cash or with respect to offers for less than all
shares. The full text of a resolution implementing the Poison Pill Amendment
Proposal is included as Annex IV to this proxy statement.
WE STRONGLY RECOMMEND THAT YOU VOTE
"FOR" THE POISON PILL AMENDMENT PROPOSAL.
THE VOTING RIGHTS PROPOSALS
PROPOSAL NO. 6: THE BYLAW REPEAL PROPOSAL.
Article X of the Dexter Bylaws provides that Bylaws may be repealed
by the shareholders. We propose to repeal any Bylaw amendments adopted by the
Board between February 26, 1999 and the date of the 2000 Annual Meeting. The
purpose of this proposal is to prevent the Board from interfering with the
implementation of the proposals being acted upon by the shareholders pursuant to
this proxy solicitation. The complete text of our proposed shareholder
resolution to effect the Bylaw Repeal Proposal is included as Annex V to this
proxy statement.
29
<PAGE>
We believe that any Bylaw amendments adopted by the Board prior to
the 2000 Annual Meeting are likely to be aimed at frustrating our proposals and
therefore are not likely to be in the best interests of the Dexter shareholders.
We are not aware of any Bylaw amendments adopted by the Board since February 26,
1999. Any Bylaw amendments validly adopted by the Board prior to the Annual
Meeting would remain in effect unless and until our proposal to repeal such
Bylaws is adopted. If the Board adopts any such Bylaw amendments before the 2000
Annual Meeting, it will have an opportunity to inform shareholders of the
benefits of these amendments and to attempt to persuade shareholders to vote
against this proposal.
WE STRONGLY RECOMMEND THAT YOU VOTE
"FOR" THE BYLAW REPEAL PROPOSAL.
PROPOSAL NO. 7: THE OMNIBUS PROPOSAL
In addition, the shareholders will be asked at the 2000 Annual
Meeting to consider the Omnibus Proposal, which sets forth the following order
in which our proposals will be voted upon by the shareholders:
1. The Omnibus Proposal;
2. The Bylaw Repeal Proposal;
3. The Director Election Proposal;
4. The Board Size Bylaw Proposals;
5. The Additional Directors Election Proposal;
6. The Poison Pill Bylaw Proposal; and
7. The Poison Pill Amendment Proposal.
The full text of a shareholder resolution to effect the Omnibus
Proposal is contained in Annex VI to this proxy statement.
WE STRONGLY RECOMMEND THAT YOU
VOTE "FOR" THE OMNIBUS PROPOSAL.
OTHER MATTERS TO BE CONSIDERED
AT THE 2000 ANNUAL MEETING
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
As set forth in Dexter's Proxy Statement, at the 2000 Annual Meeting,
the shareholders will be asked to ratify the appointment by the Dexter Board of
30
<PAGE>
PricewaterhouseCoopers LLP as Dexter's independent auditors for the year 2000.
We are not making any recommendation on this proposal.
OTHER PROPOSALS
Except as set forth above, we are not aware of any proposals to be
brought before the 2000 Annual Meeting. However, we have notified Dexter of our
intention to bring before the 2000 Annual Meeting such business as may be
appropriate, including without limitation nominating additional persons for
directorships, to address any action of the Dexter Board not publicly disclosed
prior to the date of this proxy statement. Should other proposals be brought
before the 2000 Annual Meeting, the persons named as proxies in the enclosed
GOLD proxy card will vote on such matters in their discretion.
VOTING PROCEDURES
In order to ensure that your views on the proposals are heard by
Dexter and your vote represented at the 2000 Annual Meeting, we urge you to sign
and date the enclosed GOLD Proxy Card and return it to Innisfree M&A
Incorporated, 501 Madison Avenue, 20th Floor, New York, New York 10022, in the
enclosed postage paid envelope TODAY. Execution of the GOLD Proxy Card will not
affect your right to attend the 2000 Annual Meeting and to vote in person.
You are eligible to execute a GOLD Proxy only if you owned the Common
Stock on the Record Date. Dexter's Board has set _________, 2000 as the Record
Date for determining those shareholders who will be entitled to notice of and to
vote at the 2000 Annual Meeting. You will retain the right to execute a proxy
card in connection with this proxy solicitation even if you sell your shares
after the Record Date. Accordingly, it is important that you vote the Shares
held by you on the Record Date, or grant a proxy to vote such Shares on the GOLD
proxy card, even if you sell such shares after the Record Date.
We believe that as of the close of business on the Record Date, there
were ___ shares of common stock of Dexter issued and outstanding and entitled to
vote. Shareholders will have one vote for each share of common stock they own
with respect to all matters to be considered at the 2000 Annual Meeting.
In order for your views on the above-described proposals to be
represented at the 2000 Annual Meeting, please sign and date the enclosed GOLD
proxy card and return it to Innisfree M&A Incorporated in the enclosed prepaid
envelope TODAY. Execution of the GOLD proxy card will not affect your right to
attend the 2000 Annual Meeting and to vote in person. Any proxy may be revoked
at any time prior to the 2000 Annual Meeting by delivering a written notice of
revocation or a later dated proxy for the 2000 Annual Meeting to Innisfree M&A
Incorporated or the Secretary of Dexter, or by voting in person at the 2000
Annual Meeting. ONLY YOUR LATEST DATED PROXY WILL COUNT.
Unless otherwise indicated, the GOLD Proxy authorizes the persons
named in the proxy to vote, and such persons will vote, properly executed and
duly returned proxies FOR the Nominee Election Proposals, FOR the Shareholder
Rights
31
<PAGE>
Proposals and FOR the Voting Rights Proposals, all of which are described in
this proxy statement. If no marking is made on your GOLD Proxy with respect to
the ratification of the appointment of Dexter's independent auditors, you will
be deemed to have given a direction to abstain from voting on such matter.
VOTE REQUIRED
Based on currently available public information, a quorum will exist
at the 2000 Annual Meeting if holders of not less than a majority of the shares
of Dexter common stock outstanding and entitled to vote at the 2000 Annual
Meeting are present in person or by proxy. If a quorum is present, our proposals
can be adopted by the following vote:
o NOMINEE PROPOSALS: Election of nominees for directorships will
require the affirmative vote of a plurality of the votes cast.
Consequently, only shares that are voted in favor of a particular
nominee will be counted toward such nominee's attaining a plurality
of votes. The election of our nominees for the seven newly-created
directorships will not be effective unless our Board Size Bylaw
Proposal is adopted.
o PROPOSALS REQUIRING BYLAW AMENDMENTS: We believe that our proposals
involving amendments to the Dexter Bylaws, namely our Board Size
Bylaw Proposal, Poison Pill Bylaw Proposal and Bylaw Repeal Proposal,
will be approved if the votes cast for the respective proposal exceed
the votes cast against the respective proposal. We have received the
opinion of Levett Rockwood P.C., our Connecticut counsel, that, to
the extent the Dexter Bylaws may require a supermajority shareholder
vote for an amendment, such provision is invalid under Connecticut
law. We have also instituted litigation seeking to have any such
supermajority amendment requirement held ineffective. See "Certain
Litigation." If the Dexter Bylaws are held to contain an effective
supermajority provision, our Board Size Bylaw Proposal, Poison Pill
Bylaw Proposal and Bylaw Repeal Proposal would each require the
affirmative vote of the holders of two-thirds of the issued and
outstanding shares of common stock
o PROPOSALS NOT REQUIRING BYLAW AMENDMENTS: Adoption of our Poison Pill
Amendment Proposal and Omnibus Proposal will be approved if the votes
cast for the respective proposal exceed the votes cast against the
respective proposal at the 2000 Annual Meeting. Our Poison Pill
Amendment Proposal will not be effective unless our Poison Pill Bylaw
Proposal is adopted.
WE STRONGLY RECOMMEND THAT YOU
VOTE IN FAVOR OF EACH OF THE PROPOSALS DESCRIBED
IN THIS PROXY STATEMENT.
32
<PAGE>
METHOD OF COUNTING VOTES
The holders of not less than a majority of the number of shares of
Dexter common stock outstanding and entitled to vote at the 2000 Annual Meeting
must be represented in person or by proxy in order to constitute a quorum for
the transaction of business. Abstentions will be included for purposes of
determining whether a quorum exists, but broker non-votes will not. After a
quorum is determined to exist at the 2000 Annual Meeting, abstentions or broker
non-votes with respect to particular proposals brought to a vote or nominees
proposed for election will have no effect on the outcome of the vote on such
proposal or election. Broker non-votes occur when brokers do not receive voting
instructions from their customers on non-routine matters and consequently have
no discretion to vote on those matters. Accordingly, if your Dexter shares are
held in the name of a brokerage firm, bank nominee or other institution, you
should contact the person responsible for your account and give instructions for
a proxy card to be issued so that your shares will be represented at the 2000
Annual Meeting.
ADDITIONAL INFORMATION
The principal executive offices of Dexter Corporation are at One Elm
Street, Windsor Locks, Connecticut 06096-2334. Dexter is a global specialty
materials supplier, principally serving the worldwide aerospace, electronics,
food packaging and medical markets. Except as otherwise noted herein, the
information concerning Dexter has been taken from or is based upon documents and
records on file with the SEC and other publicly available information. Although
we do not have any knowledge that would indicate that any statement contained
herein based upon such documents and records is untrue, we do not take any
responsibility for the accuracy or completeness of the information contained in
such documents and records, or for any failure by Dexter to disclose events that
may affect the significance or accuracy of such information.
The principal executive offices of ISP are at 300 Delaware Avenue,
Wilmington, Delaware 19801. We are a leading manufacturer of specialty chemicals
and mineral products.
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance with
the Exchange Act, file reports, proxy statements and other documents with the
SEC relating to our business, financial condition and other matters. These
reports, proxy statements and other documents can be inspected and copied at the
public reference facilities of the SEC at 450 Fifth Street, N.W., Washington, DC
20549, and at the regional offices of the SEC located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of ISP's filings
with the SEC can also be obtained by mail for a fee by writing to the SEC's
principal office at 450 Fifth Street, N.W., Washington, DC 20549. You can also
get electronic copies of our filings with the SEC for free on the SEC's Internet
web site at http://www.sec.gov. Copies of our filings with the SEC are also be
available for inspection at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
33
<PAGE>
PROXY SOLICITATION; EXPENSES
This proxy statement and the accompanying GOLD Proxy Card are first
being furnished to shareholders on or about [____________]. Executed proxies may
be solicited in person, by mail, advertisement, telephone, telecopier, telegraph
or similar means. Solicitation may be made by directors, officers, investor
relations personnel and other employees of ISP and their affiliates, none of
whom will receive additional compensation for such solicitation. Proxies will be
solicited from individuals, brokers, banks, bank nominees and other
institutional holders. We have requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to
the beneficial owners of the shares they hold of record. We will reimburse these
record holders for their reasonable out-of-pocket expenses.
In addition, ISP has retained Innisfree M&A Incorporated to provide
consulting and analytic services in connection with any proposal by us to
acquire Dexter in opposition to Dexter's Board. Among other things, Innisfree
has agreed to solicit proxies on our behalf in connection with the 2000 Annual
Meeting. Innisfree will employ approximately 75 people in its efforts. We have
agreed to reimburse Innisfree for its reasonable expenses and to pay to
Innisfree fees not to exceed $130,000.
Chase Securities, Inc. is acting as our financial advisor in
connection with any proposed business combination transaction involving Dexter,
and is assisting us in connection with the financing of any such transaction.
For such services, Chase Securities will receive from ISP customary compensation
and reimbursement of its reasonable and documented expenses. In addition, ISP
has agreed to indemnify Chase Securities and related persons against certain
liabilities arising out of the engagement. In its capacity as our financial
advisor, Chase Securities has agreed, among other things, to assist us at our
request in contacting (in person, by telephone or otherwise) shareholders of
Dexter identified to Chase Securities by us and in soliciting their proxies in
favor of such a transaction on our behalf. Chase Securities will not receive any
separate or additional fee for, or in connection with, any such solicitation
activities. Chase Securities and its affiliates are engaged in providing a full
range of banking, securities trading, market making and brokerage services to
institutional and individual clients. In the normal course of its business Chase
Securities and its affiliates may have provided, and may in the future provide,
subject to certain contractual and conflict of interest limitations, financial
advisory, investment banking or other such services to Dexter, ISP or their
respective affiliates, and may trade securities of Dexter, ISP or their
respective affiliates for its own account and the accounts of its customers and,
accordingly, may at any time hold a long or short position in such securities.
The entire expense of our proxy solicitation is being borne by ISP.
In the event that our nominees are elected to the Board, we may seek
reimbursement of such expenses from Dexter. In addition to the engagement of
Innisfree and Chase Securities described above, costs related to the
solicitation of proxies include expenditures for printing, postage, legal and
related expenses and are expected to be approximately $___. Total payment of
costs to date in furtherance of our proxy solicitation is approximately $___.
34
<PAGE>
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
ISP, ISP Investments, and certain of their affiliates, as well as our
nominees for directorships, may be deemed to be "participants" (as defined in
Instruction 3 to Item 4 of Rule 14a-101 of the Exchange Act) in this proxy
solicitation. Information relating to the beneficial ownership of common stock
of Dexter by the participants in this solicitation and certain other information
relating to the participants is contained in Annex VII to this proxy statement
and is incorporated in this proxy statement by reference. In addition, see
"Certain Litigation" for a description of legal proceedings in which the
participants in this solicitation have a material interest adverse to Dexter.
None of the participants in this solicitation are party to any commercial
dealings with Dexter or its subsidiaries required to be discussed pursuant to
Schedule 14A promulgated under the Exchange Act, which governs the disclosure
contained in this proxy statement. As described below under "Certain Interests
in the Proposals and with Respect to Securities of Dexter", ISP and its
affiliates beneficially own shares of Life Technologies, Dexter's majority owned
subsidiary. We have no knowledge of any commercial dealings between Life
Technologies and Dexter, other than information that may be disclosed in the
public filings of Life Technologies and Dexter.
35
<PAGE>
CERTAIN INTERESTS IN THE PROPOSALS AND
WITH RESPECT TO SECURITIES OF DEXTER
To the knowledge of ISP, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among ISP or its associates
with respect to any securities of Dexter.
On November 25, 1998, ISP entered into an agreement (the "Group
Agreement") with certain other persons with respect to such parties' ownership
of common stock of Life Technologies, a majority owned subsidiary of Dexter.
Pursuant to the terms of the Group Agreement, ISP and the other parties thereto
agreed (i) not to sell or otherwise dispose of any shares of Life Technologies
common stock unless all of the parties mutually agreed (subject to certain
exceptions), (ii) to bear its own costs and expenses incurred in connection with
its ownership of Life Technologies shares, the Group Agreement or any
transactions entered into pursuant to the Group Agreement (subject to certain
exceptions for expenses incurred for the benefit of all the parties thereto),
(iii) to join with ISP in a Schedule 13D filing and any required amendments
thereto and (iv) not to enter into any other contract, arrangement,
understanding or relationship with any other person with respect to the equity
securities of Life Technologies. The initial Group Agreement provided for a term
of six months, but subsequent agreements were entered into ultimately extending
the term through September 30, 2000 for all but one of the original members of
the group. As of January 27, 2000, ISP owned beneficially 3,506,270 Life
Technologies shares which represented approximately 14.05% of the outstanding
shares of common stock of Life Technologies. As of such date, the continuing
parties to the Group Agreement (including ISP) beneficially owned, in the
aggregate, 5,417,991 Life Technologies shares, representing approximately 21.7%
of the outstanding shares of common stock of Life Technologies.
Each of our nominees (other than Messrs. Heyman and Kumar) will
receive a stipend of $50,000 from ISP for his service as a nominee. This stipend
is not refundable in any manner in connection with the outcome of our proxy
solicitation or otherwise. The Nominees are each party to an indemnity agreement
with ISP (the "Director Indemnity Agreements"). In accordance with the terms of
the Director Indemnity Agreements, ISP has agreed to indemnify and hold harmless
each of the nominees from and against, among other things, all expenses,
liabilities and losses, including reasonable attorney's fees, related to any
action, suit or proceeding to which such nominee is made a party or threatened
to be made a party by reason of such nominee's action or inaction while serving
as a nominee.
36
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS
AND MANAGEMENT OF DEXTER
The following table presents, as of March 9, 1999, based solely on
information contained in the Dexter's 1999 Proxy Statement, the common stock
beneficially owned (as that term is defined by the SEC) by all directors,
nominees and named executive officers of the Dexter, and the directors, nominees
and executive officers of the Dexter as a group. This beneficially owned common
stock includes shares of common stock which they had a right to acquire within
60 days of such date by the exercise of options granted under the Dexter's stock
option plans.
Except as otherwise noted in a footnote below, each director, nominee
and executive officer has sole voting and investment power with respect to the
number of shares of common stock set forth opposite his or her name in the
table.
<TABLE>
<CAPTION>
SHARES OF PERCENTAGE OF
COMMON STOCK COMMON
BENEFICIALLY STOCK
SHAREHOLDERS OWNED(1) OUTSTANDING(1)
- ------------ -------- --------------
<S> <C>
K. Grahame Walker.............................................. 196,675 *
Kathleen Burdett............................................... 49,522 *
Jeffrey W. McClelland.......................................... 18,721 *
R. Barry Gettins............................................... 54,036 *
David G. Gordon................................................ 26,500 *
Charles H. Curl................................................ 3,143 *
Henrietta Holsman Fore......................................... 3,690 *
Bernard Fox.................................................... 3,928 *
Robert M. Furek................................................ 3,536 *
Martha Clark Goss.............................................. 3,625 *
Edgar G. Hotard................................................ 2,211 *
Peter G. Kelly................................................. 6,036 *
Jean-Francois Saglio........................................... 2,541 *
George M. Whitesides........................................... 3,743 *
All Directors, Nominees and Executive Officers as a Group (22
persons)....................................................... 568,872 2.4
</TABLE>
- ----------
(1) The shares reported above as beneficially owned by the following persons
include vested stock options granted under the Dexter's stock option plans.
The shares reported above also include shares of restricted stock issued to
the following persons pursuant to the 1994 Long Term Incentive Plan (the
"1994 Plan"): K. Grahame Walker - 44,334: Kathleen Burdett - 19,142; Jeffrey
W. McClelland - 6,236: R. Barry Gettins - 11,584; David G. Gordon - 10,000;
and "All Directors, Nominees and Executive Officers as a Group" 168,310.
Shares of restricted stock issued pursuant to the 1994 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.
37
<PAGE>
PRINCIPAL SHAREHOLDERS OF DEXTER
The following table sets forth, based solely, except as otherwise
described herein, on information contained in the Dexter's 1999 Proxy Statement,
the number and percentage of outstanding shares of common stock beneficially
owned by each person known to ISP (other than ISP) as of such date to be the
beneficial owner of more than five percent of the outstanding shares of common
stock. The information with respect to ISP has been provided by the members
thereof as of ____ __, 2000.
<TABLE>
<CAPTION>
SHARES OF PERCENTAGE OF
COMMON STOCK COMMON
BENEFICIALLY STOCK
SHAREHOLDERS OWNED OUTSTANDING
- ------------ ----- -----------
<S> <C> <C>
ISP
ISP Investments Inc.
ISP Opco Holdings Inc.
c/o ISP Management Company, Inc.
1361 Alps Road, Wayne, New Jersey 07470........................ 2,299,200 9.98(1)
FMR Corp., 82 Devonshire Street Boston, Massachusetts 02109
(Fidelity Managed Funds)....................................... 2,290,600 9.8(2)
Mary K Coffin, c/o Dexter Corporation, One Elm Street, Windsor
Locks, Connecticut 06096....................................... 1,300,000 5.6(3)
</TABLE>
(1) ISP Investments Inc. (through ISP Investments Grantor Trust) has the sole
power to vote, direct the voting of, dispose of and direct the
disposition of the shares. ISP Opco Holdings Inc., by virtue of its
indirect ownership of all of the outstanding capital stock of ISP
Investments Inc., may be deemed to own beneficially (solely for purposes
of Rule 13d-3) the shares. ISP, by virtue of its ownership of all of the
outstanding common stock of ISP Opco Holdings Inc., may be deemed to own
beneficially (solely for purposes of Rule 13d-3) the shares. Samuel J.
Heyman, by virtue of his beneficial ownership (as defined in Rule 13d-3)
of approximately 76% of the capital stock of ISP, may be deemed to own
beneficially (solely for purposes of Rule 13d-3) the shares.
(2) Share holdings as of December 31, 1998, as reported on the Schedule 13G
most recently filed by such shareholder.
(3) Of the 1,300,000 shares shown in the table as owned by Mary K. Coffin,
1,000,000 are held by Fleet Bank, N.A., trustee of a trust the
beneficiary of which is Dexter D. Coffin, Jr. Mary K Coffin is a trustee
of this trust and shares the power to vote and dispose of shares owned by
the trust. The power to vote and dispose of the shares owned by this
trust is held by a majority of its three individual trustees. The
remaining shares show in the table are held by Mary K. Coffin through a
living trust.
38
<PAGE>
SHAREHOLDERS' PROPOSALS IN DEXTER'S PROXY STATEMENT
The Dexter's Bylaws require that notice of nominations to the Board of
Directors proposed by shareholders be received by the Secretary of the Dexter,
along with certain other specified material, not less than 75 nor more than 125
days prior to the first anniversary of the prior year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than seventy five days from such anniversary date, notice by
the shareholder to be timely must be so delivered not later than the fifteenth
day following the day on which public announcement of the date of such meeting
is first made. Any shareholder who wishes to nominate a candidate for election
to the Board should obtain a copy of the relevant section of the Bylaws from the
Secretary of the Dexter.
Pursuant to Rule 14a-8(e)(2) under the Exchange Act, any proposal by a
shareholder at the 2000 Annual Meeting, to be included in the Dexter's proxy
statement, must be received in writing at the Dexter's principal executive
offices not less than 120 calendar days in advance of the date of the Dexter's
proxy statement was released to security holders in connection with its 1999
Annual Meeting of Shareholders. However, if the date of the meeting is changed
by more than 30 days from the date of the previous year's meeting, then the
deadline is a reasonable time before the Dexter begins to print and mail its
proxy materials.
Proposals should be addressed to the Corporate Secretary, Dexter
Corporation, One Elm Street, Windsor Locks, Connecticut 06096.
WE URGE YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE
ELECTION OF OUR NOMINEES AND THE ADOPTION OF THE PROPOSALS DESCRIBED IN THIS
PROXY STATEMENT.
Dated: __________ __, 2000
Sincerely,
Your Fellow Shareholders:
INTERNATIONAL SPECIALTY PRODUCTS INC.
ISP INVESTMENTS INC.
39
<PAGE>
ANNEX I
BOARD SIZE BYLAW PROPOSAL
RESOLVED, that the Bylaws of Dexter Corporation be, and they hereby
are, amended, effective at the time this resolution is approved by the
shareholders of Dexter Corporation, by:
(i) deleting the fourth sentence of Article III, Section 1, which
reads "[e]ach class of directorships shall consist of not less
than one nor more than five directorships", in its entirety;
(ii) adding a new fourth sentence of Article III, Section 1 as follows:
"At the annual meeting of the shareholders of the corporation held
in 2000, additional directors shall be elected so that the Board
of Directors shall consist of seventeen directorships. The
additional directorships thereby created shall be allocated to the
classes with terms expiring at the annual meeting of the
shareholders of the corporation to be held in 2001 or 2002, unless
otherwise allocated by the Board of Directors consistent with
Section 33-740 of the Connecticut Business Corporation Act"; and
(iii) adding a new final sentence of Article III, Section 1 as follows:
"The fourth sentence of this Section 1 may be altered, amended or
repealed only with the approval of the shareholders of the
corporation entitled to vote thereon in the manner set forth in
Section 33-709(c) of the Connecticut Business Corporation Act."
A-1
<PAGE>
ANNEX II
THE ADDITIONAL DIRECTORS ELECTION PROPOSAL
RESOLVED, that each of the following persons be elected a director of
Dexter Corporation to fill the new directorships on the Board of Directors of
Dexter Corporation resulting from the adoption of the resolution amending
Article III, Section 1 of the Bylaws to increase the size of the Board, for a
term commencing at the time this resolution is adopted by the shareholders of
Dexter Corporation and shall be allocated into classes with terms continuing
until the annual meeting of the shareholders of Dexter Corporation to be held in
the year indicated below, and until the election and qualification of his
respective successor or until his earlier resignation or removal:
Alan Meckler 2002
Dan Ogden 2002
Morrison DeSoto Webb 2002
Robert Englander 2002
John Droney 2001
Anthony T. Kronman 2001
Vincent Tese 2001
; provided, that the Board of Directors may instead allocate certain of such
directorships to a different class, consistent with Section 33-740 of the
Connecticut Business Corporation Act.
A-2
<PAGE>
ANNEX III
THE POISON PILL BYLAW PROPOSAL
RESOLVED, that the Bylaws of Dexter Corporation be, and they hereby
are, amended, effective at the time this resolution is approved by the
shareholders of Dexter Corporation, by adding the following Section 7 to the end
of Article II:
"Section 7. Rights Agreements.
The Board of Directors, in exercising its rights and
duties with respect to the administration of the Rights Agreement,
dated as of August 23, 1996, as amended, by and between the
corporation and Chase Mellon Shareholder Services L.L.C., as Rights
Agent (the "Rights Agreement") will carry out a resolution
authorizing (i) the partial or complete redemption of the rights
issued pursuant to the Rights Agreement (the "Rights"), or (ii) an
amendment to the Rights Agreement making the Rights inapplicable to
offers or transactions or types of offers or transactions specified
in such resolution, if such resolution is authorized and approved by
the shareholders of the corporation entitled to vote thereon in the
manner set forth in Section 33-709(c) of the Connecticut Business
Corporation Act. In addition, the Board of Directors shall not adopt
any new shareholder rights plan, rights agreement or any other form
of "poison pill" which is designed to or has the effect of making
acquisitions of large holdings of the corporation's shares of stock
more difficult or expensive, unless such plan is first approved by
the shareholders of the corporation entitled to vote thereon in the
manner set forth in Section 33-709(c) of the Connecticut Business
Corporation Act. This Section 7 may be altered, amended or repealed
only with the approval of the shareholders of the corporation
entitled to vote thereon in the manner set forth in Section 33-709(c)
of the Connecticut Business Corporation Act."
A-3
<PAGE>
ANNEX IV
THE POISON PILL AMENDMENT PROPOSAL
RESOLVED, that the shareholders of Dexter Corporation hereby exercise
their right under Article II, Section 7 of the Bylaws of Dexter Corporation, as
amended on the date hereof, to require the Board of Directors to promptly amend
the Rights Agreement, dated as of August 23, 1996, as amended, by and between
Dexter Corporation and ChaseMellon Shareholder Services, L.L.C. (the "Rights
Agreement") to provide that the acquisition of beneficial ownership of shares of
common stock, par value $1.00 per share, of Dexter Corporation ("Common Stock")
pursuant to any offer for all outstanding shares of Common Stock for
consideration of at least $45 per share net to the seller in cash shall
constitute a "Qualifying Offer" within the meaning of Sections 11(a)(ii) and
13(d) of the Rights Agreement.
A-4
<PAGE>
ANNEX V
THE BYLAW REPEAL PROPOSAL
RESOLVED, that any and all amendments made by the Board of Directors
of Dexter Corporation to the Bylaws of Dexter Corporation on or after February
26, 1999, be, and the same hereby are, repealed, and that, without the approval
of the shareholders of Dexter Corporation, the Board of Directors may not
thereafter amend any section of the Bylaws affected by such repeal or adopt any
new Bylaw provision which serves to reinstate any repealed provisions or any
similar provisions.
A-5
<PAGE>
ANNEX VI
THE OMNIBUS PROPOSAL
RESOLVED, that each of the proposals of International Specialty
Products Inc. and ISP Investments Inc. shall be voted upon by the shareholders
of Dexter Corporation at the 2000 Annual Meeting in the following order:
1. This Omnibus Proposal;
2. The Bylaw Repeal Proposal;
3. The Director Election Proposal;
4. The Board Size Bylaw Proposals;
5. The Additional Directors Election Proposal;
6. The Poison Pill Bylaw Proposal; and
7. The Poison Pill Amendment Proposal.
A-6
<PAGE>
ANNEX VII
INFORMATION CONCERNING INTERNATIONAL SPECIALTY
PRODUCTS INC. AND OTHER PARTICIPANTS
IN THE SOLICITATION
Information is being given herein for (i) International Specialty
Products Inc., a Delaware corporation ("ISP"), (ii) ISP Investments Inc., a
Delaware corporation ("ISP Investments"), (iii) Samuel J. Heyman, a natural
person and nominee for the Board of Directors of the Company, (iv) Sunil Kumar,
a natural person and nominee for the Board of Directors of the Company, (v)
Philip Peller, a natural person and nominee for the Board of Directors of the
Company, (vi) Alan Meckler, a natural person and nominee for the Board of
Directors of the Company, (vii) Dan Ogden, a natural person and nominee for the
Board of Directors of the Company, (viii) Morrison DeSoto Webb, a natural person
and nominee for the Board of Directors of the Company, (ix) Robert Englander, a
natural person and nominee for the Board of Directors of the Company, (x) John
Droney, a natural person and nominee for the Board of Directors of the Company,
(xi) Anthony T. Kronman, a natural person and nominee for the Board of Directors
of the Company, and (xii) Vincent Tese, a natural person and nominee for the
Board of Directors of the Company, who are each a "participant in a
solicitation" as defined under the proxy rules (collectively, the
"Participants").
Information is also given for each of the entities listed on Schedule
A to this Annex VII, each of which is an "associate", as defined under the proxy
rules, of the Proponents.
Each of ISP and ISP Investments is a Delaware corporation. Each of
ISP and ISP Investments has its principal place of business at 300 Delaware
Avenue, Wilmington, Delaware 19801. The address of each of the entities listed
on Schedule A to this Annex VII is c/o ISP Management Company, Inc., 1361 Alps
Road, Wayne, New Jersey 07470.
The Participants may be deemed to have beneficial ownership of the
Company's Common Stock and the common stock, par value $.01 per share ("LTI
Common Stock"), of Life Technologies, Inc. ("LTI") as set forth immediately
below. Except as set forth below, no associates of any of the Participants owns
any Common Stock or LTI Common Stock.
A-7
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE MARGIN
NUMBER OF SHARES OF THE NUMBER OF SHARES DEBTEDNESS WITH RESPECT
NAME COMPANY'S COMMON STOCK OF LTI'S COMMON STOCK TO COMMON STOCK
- ---- ---------------------- --------------------- ---------------
<S> <C> <C> <C>
ISP Investments Inc. 2,299,200 3,384,600 (5)
(direct ownership)(1) (direct/indirect ownership)(2)(3)
ISP Opco Holdings Inc. 2,299,200 3,384,600 (5)
(indirect ownership)(1) (indirect ownership)(2)(3)
ISP Ireland 0 452,000 (5)
(direct ownership)(3)
International Specialty 2,299,200 3,506,270 (5)
Products Inc. (indirect ownership)(1) (direct/indirect ownership)(2)(3)(4)
Samuel J. Heyman 2,299,200 3,506,270 (5)
(indirect ownership)(1) (indirect ownership)(2)(3)(4)
Sunil Kumar 0 0 $ 0
Philip Peller 0 0 $ 0
Alan Meckler 0 0 $ 0
Dan Ogden 0 0 $ 0
Morrison DeSoto Webb 0 0 $ 0
Robert Englander 0 0 $ 0
John Droney 0 0 $ 0
Anthony T. Kronman 0 0 $ 0
Vincent Tese 0 0 $ 0
</TABLE>
A-7-1
<PAGE>
(1) ISP Investments (through ISP Investments Grantor Trust) has the sole
power to vote, direct the voting of, dispose of and direct the
disposition of the Common Stock. ISP Opco Holdings Inc. ("ISP Opco"),
by virtue of its indirect ownership of all of the outstanding capital
stock of ISP Investments, may be deemed to own beneficially (solely
for purposes of Rule 13d-3) the Common Stock owned by ISP
Investments. International Specialty Products Inc. ("ISP"), by virtue
of its ownership of all of the outstanding common stock of ISP Opco,
may be deemed to own beneficially (solely for purposes of Rule 13d-3)
the Common Stock owned by ISP Investments. Mr. Heyman, by virtue of
his beneficial ownership (as defined in Rule 13d-3) of approximately
76% of the capital stock of ISP, may be deemed to own beneficially
(solely for purposes of Rule 13d-3) the Common Stock owned by ISP
Investments.
(2) ISP Investments (directly and through ISP Investments Grantor Trust)
has the sole power to vote, direct the voting of, dispose of and
direct the disposition of 2,932,600 shares of LTI Common Stock. ISP
Opco, by virtue of its indirect ownership of all of the outstanding
capital stock of ISP Investments, may be deemed to own beneficially
(solely for purposes of Rule 13d-3) all of the LTI Common Stock owned
by ISP Investments. ISP, by virtue of its ownership of all of the
outstanding common stock of ISP Opco, may be deemed to own
beneficially (solely for purposes of Rule 13d-3) the LTI Common Stock
owned by ISP Investments. Mr. Heyman, by virtue of his beneficial
ownership (as defined in Rule 13d-3) of approximately 76% of the
capital stock of ISP, may be deemed to own beneficially (solely for
purposes of Rule 13d-3) the LTI Common Stock owned by ISP
Investments.
(3) ISP Ireland has the sole power to vote, direct the voting of, dispose
of and direct the disposition of 452,000 shares of LTI Common Stock.
ISP Investments, by virtue of its indirect ownership of all of the
outstanding capital stock of ISP Ireland, may be deemed to own
beneficially (solely for purposes of Rule 13d-3) all of the LTI
Common Stock owned by ISP Ireland. ISP Opco, by virtue of its
indirect ownership of all of the outstanding capital stock of ISP
Investments, may be deemed to own beneficially (solely for purposes
of Rule 13d-3) all of the LTI Common Stock owned by ISP Ireland. ISP,
by virtue of its ownership of all of the outstanding common stock of
ISP Opco, may be deemed to own beneficially (solely for purposes of
Rule 13d-3) the LTI Common Stock owned by ISP Ireland. Mr. Heyman, by
virtue of his beneficial ownership (as defined in Rule 13d-3) of
approximately 76% of the capital stock of ISP, may be deemed to own
beneficially (solely for purposes of Rule 13d-3) the LTI Common Stock
owned by ISP Ireland.
(4) ISP has the sole power to vote, direct the voting of, dispose of and
direct the disposition of 121,670 shares of LTI Common Stock. Mr.
Heyman, by virtue of his beneficial ownership (as defined in Rule
13d-3) of approximately 76% of the capital stock of ISP, may be
deemed to own beneficially (solely for purposes of Rule 13d-3) the
LTI Common Stock owned by ISP.
(5) In the ordinary course of its business, ISP Investments Inc.
purchases securities for its investment portfolio with funds obtained
from the working capital of ISP Investments, loans from affiliates
and borrowings pursuant to standard margin arrangements.
Other than as set forth immediately below, to the best of the
knowledge of the Participants and their associates, none has been, within the
past year, a party to any contract, arrangement or understanding with any person
with respect to any securities of the Company, including but not limited to
joint ventures, loan or option arrangements, puts or calls, guarantees against
loss or guarantees of profits, division of losses or profits, or the giving or
withholding of proxies:
A-7-2
<PAGE>
On November 25, 1998, ISP entered into an agreement (the "Group
Agreement") with certain other persons with respect to such parties' ownership
of LTI Common Stock. Pursuant to the terms of the Group Agreement, ISP and the
other parties thereto agreed (i) not to sell or otherwise dispose of any shares
of LTI Common Stock unless all of the parties mutually agreed (subject to
certain exceptions), (ii) to bear its own costs and expenses incurred in
connection with its ownership of LTI Common Stock, the Group Agreement or any
transactions entered into pursuant to the Group Agreement (subject to certain
exceptions for expenses incurred for the benefit of all the parties thereto),
(iii) to join with ISP in a Schedule 13D filing and any required amendments
thereto and (iv) not to enter into any other contract, arrangement,
understanding or relationship with any other person with respect to the equity
securities of LTI. The initial Group Agreement provided for a term of six
months, but subsequent agreements were entered into ultimately extending the
term through September 30, 2000 for all but one of the original members of the
group.
No Participant or Associate owns any securities of the Company of
record but not beneficially.
None of the Participants and none of their associates has any
arrangement or understanding with any person with respect to (i) any future
employment with the Company or (ii) any future transactions to which the Company
or any of its affiliates may be a party, except as set forth in the letter,
dated December 14, 1999, from Mr. Heyman to the Company's Chairman and Chief
Executive Officer, in which ISP proposed to purchase all of the Company's
outstanding Common Stock for $45 per share in a merger transaction, which
proposal was subsequently rejected by the Company's Board by correspondence
dated December 23, 1999. No family relationships exist among the Proponent's
Nominees or between any Company director or executive officer and any of the
Proponent's Nominees.
The following is a summary of all transactions in Company securities
by the Participants over the last two years.
DATE OF TRANSACTION NATURE OF TRANSACTION NUMBER OF SHARES
- -------------------------------------------------------------------------------
09/15/98 Buy 37,000
09/17/98 Buy 440,000
09/21/98 Buy 64,700
09/23/98 Buy 5,400
09/25/98 Buy 10,000
09/30/98 Buy 10,600
10/01/98 Buy 100
10/02/98 Buy 25,000
10/05/98 Buy 600
10/06/98 Buy 14,200
10/07/98 Buy 18,400
10/09/98 Buy 55,500
A-7-3
<PAGE>
10/16/98 Buy 169,100
10/19/98 Buy 75,000
11/11/98 Buy 47,500
11/12/98 Buy 69,600
12/01/98 Sell (50,000)
12/02/98 Sell (25,000)
12/04/98 Buy 106,500
12/09/98 Buy 11,600
12/10/98 Buy 15,600
12/11/98 Buy 18,500
12/14/98 Buy 14,000
12/15/98 Buy 6,000
02/17/99 Buy 5,000
03/31/99 Buy 7,500
05/07/99 Sell (25,000)
05/13/99 Buy 10,000
05/14/99 Buy 20,000
05/17/99 Buy 17,100
05/18/99 Buy 21,600
05/19/99 Buy 2,500
05/21/99 Buy 10,000
05/24/99 Buy 11,400
05/25/99 Buy 20,500
05/26/99 Buy 20,000
05/27/99 Buy 19,000
05/28/99 Buy 2,000
06/01/99 Buy 19,000
06/02/99 Buy 22,500
06/03/99 Buy 6,200
06/07/99 Buy 5,500
06/08/99 Buy 1,900
06/09/99 Buy 31,500
06/10/99 Buy 1,300
06/15/99 Buy 10,000
06/24/99 Sell (25,000)
07/13/99 Sell (2,900)
07/22/99 Buy 9,600
07/23/99 Buy 5,000
07/26/99 Buy 4,700
07/28/99 Buy 7,700
08/03/99 Sell (6,300)
08/05/99 Buy 3,500
08/06/99 Sell (3,500)
08/09/99 Buy 248,400
08/10/99 Buy 11,400
A-7-4
<PAGE>
08/11/99 Buy 12,700
08/19/99 Sell (5,300)
08/20/99 Buy 56,000
08/23/99 Buy 94,900
08/24/99 Buy 28,900
08/25/99 Buy 12,300
08/27/99 Buy 12,000
08/30/99 Buy 13,000
08/31/99 Buy 7,500
09/03/99 Buy 84,300
09/07/99 Buy 48,600
09/08/99 Buy 9,900
09/13/99 Sell (1,000)
09/14/99 Sell (1,400)
09/15/99 Sell (2,000)
09/17/99 Buy 46,300
09/20/99 Buy 76,000
09/21/99 Buy 31,400
09/22/99 Buy 15,000
09/23/99 Buy 34,000
09/24/99 Buy 47,600
09/27/99 Buy 46,500
-----------------
2,299,200
=================
A-7-5
<PAGE>
SCHEDULE A TO ANNEX VII
Associates of International Specialty Products Inc.
---------------------------------------------------
ISP Opco Holdings Inc.
Belleville Realty Corp.
ISP Alginates Inc.
ISP Management Company, Inc.
ISP Chemicals Inc.
ISP Minerals Inc.
ISP Technologies Inc.
ISP Mineral Products Inc.
ISP Environmental Services Inc.
Bluehall Incorporated
ISP Realty Corporation
ISP Real Estate Company, Inc.
International Specialty Products Funding Corporation
ISP Newark Inc.
ISP Van Dyk Inc.
ISP Fine Chemicals Inc.
ISP Freetown Fine Chemicals Inc.
Verona Inc.
ISP Global Technologies Inc.
ISP International Corp.
ISP Marl Holdings Gmbh
ISP Holdings (U.K.) Ltd.
ISP Ireland
ISP (Puerto Rico) Inc.
ISP Marl Gmbh
ISP Acetylene Gmbh
ISP Alginates (U.K.) Ltd.
ISP (Great Britain) Co. Ltd.
ISP Andina, C.A.
ISP Argentina S.A.
ISP Asia Pacific Pte Ltd.
ISP (Australasia) Pte Ltd.
ISP (Belgium) N.V.
ISP (Belgium) International N.V.
ISP do Brasil Ltda.
ISP (Canada) Inc.
ISP Ceska Republika Spol S.R.O.
ISP (China) Limited
ISP Colombia Ltda.
ISP Freight Service N.V.
A-7-6
<PAGE>
ISP Global Operations (Barbados) Inc.
ISP Global Technologies (Belgium) S.A.
ISP Global Technologies (Germany) Holding Gmbh
ISP Customer Service Gmbh
ISP Global Technologies Deutschland Gmbh
International Specialty Products ISP (France) S.A.
ISP (Hong Kong) Limited
ISP (Italia) S.r.l.
ISP (Japan) Ltd.
ISP (Korea) Limited
ISP Mexico, S.A. de C.V.
ISP (Norden) A.B.
ISP (Osterreich) G.m.b.h.
ISP (Polska) Sp.z. o.p.
ISP Sales (Barbados) Inc.
ISP Sales (U.K.) Limited
ISP (Singapore) Pte Ltd.
ISP (Switzerland) A.G.
ISP (Thailand) Co., Ltd.
Chemfields Pharmaceuticals Private Limited
A-7-7
<PAGE>
[PRELIMINARY COPY]
PROXY
DEXTER CORPORATION
PROXY SOLICITED ON BEHALF OF INTERNATIONAL SPECIALTY
PRODUCTS INC., ISP INVESTMENTS INC. AND THE OTHER PARTICIPANTS IDENTIFIED IN THE
PROXY STATEMENT FURNISHED HEREWITH ("ISP") FOR THE ANNUAL MEETING
OF SHAREHOLDERS, _____ __, 2000 AT ___ .
The undersigned shareholder of Dexter Corporation ("Dexter") hereby appoints
____________ and ______________ and each of them, as attorneys and proxies, each
with power of substitution and revocation, to represent the undersigned at the
Annual Meeting of Shareholders of Dexter Corporation to be held at
________________, _______________, __________ on ______ __, 2000 at _____, local
time, and at any adjournment or postponement thereof, with authority to vote all
shares held or owned by the undersigned in accordance with the directions
indicated herein.
Receipt of the Proxy Statement furnished herewith is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. ON MATTERS FOR WHICH YOU DO NOT SPECIFY
A CHOICE, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF
ISP.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
ISP RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED BELOW.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of Directors
FOR all nominees listed on the right (except WITHHOLD AUTHORITY to vote for NOMINEES: Samuel J. Heyman, Sunil
as marked to the contrary hereon). all nominees listed to the Kumar, Philip Peller (Instructions:
right. To withhold authority to vote for
any individual nominee, write that
nominee's name in the space provided
below.)
[_] [_]
------------------------------------
ISP RECOMMENDS A VOTE "FOR" PROPOSAL 2.
FOR AGAINST ABSTAIN
2. THE BOARD SIZE BYLAW PROPOSAL [_] [_] [_]
ISP RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED BELOW.
3. Election of ADDITIONAL Directors TO FILL VACANCIES FROM INCREASED BOARD SIZE
FOR all nominees listed on the right (except WITHHOLD AUTHORITY to vote for NOMINEES: Alan Meckler, Dan Ogden,
as marked to the contrary hereon). all nominees listed to the Morrison DeSoto Webb, Robert
right. Englander, John Droney, Anthony T.
Kronman, Vincent Tese.
(Instructions: To withhold authority
to vote for any individual nominee,
write that nominee's name in the
space provided below.)
[_] [_]
-----------------------------------
ISP RECOMMENDS A VOTE "FOR" PROPOSALS 4, 5, 6 and 7.
FOR AGAINST ABSTAIN
4. THE POISON PILL RIGHTS PROPOSAL [_] [_] [_]
FOR AGAINST ABSTAIN
5. THE POISON PILL REDEMPTION PROPOSAL [_] [_] [_]
FOR AGAINST ABSTAIN
6. THE BYLAW REPEAL PROPOSAL [_] [_] [_]
FOR AGAINST ABSTAIN
7. THE OMNIBUS PROPOSAL [_] [_] [_]
ISP MAKES NO RECOMMENDATION ON
THE FOLLOWING MATTERS TO BE VOTED ON
AT THE 2000 ANNUAL MEETING
<PAGE>
FOR AGAINST ABSTAIN
A. RATIFICATION OF INDEPENDENT AUDITORS [_] [_] [_]
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY BE PRESENTED TO THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
P Dated: _____________, 2000
R ----------------------------------------
(Signature)
O
----------------------------------------
(Signature if held jointly)
X
----------------------------------------
Title:
Y
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee, or guardian,
please give full title as such. If a
corporation, please sign in full corporate name
by president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
</TABLE>
