SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement |_| Confidential, for Use
Only (as permitted by Rule 14a-6(e)(2)) of the Commission
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
INVITROGEN CORPORATION
LIFE TECHNOLOGIES, INC.
DEXTER CORPORATION
--------------------
(Name of Registrants as Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
|_| No fee required.
|X| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(a) Title of each class of securities to which transaction
applies:
Common Stock of Life Technologies, Inc. and Common Stock of Dexter Corporation
(b) Aggregate number of securities to which transaction applies:
7,132,552 shares of Common Stock of Life Technologies and
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24,463,717 shares of Common Stock of Dexter Corporation
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(c) 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):
$53.25 per share for the common stock of Life Technologies, Inc. and $53.16
per share for the common stock of Dexter Corporation (based on the average
of the high and low prices per share of each company's stock as reported on
July 31, 2000)
(d) Proposed maximum aggregate value of transaction:
$1,680,299,589.00
(e) Total fee paid:
$336,061.00
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
(1) Amount Previously Paid:________________________________________
(2) Form, Schedule or Registration Statement No.:__________________
(3) Filing Party: _________________________________________________
(4) Date Filed: ___________________________________________________
As filed with the Commission on August 2, 2000
[INVITROGEN LOGO]
YOUR VOTE ON THE PROPOSED TRANSACTIONS IS VERY IMPORTANT!
To the Stockholders of Invitrogen Corporation:
Invitrogen Corporation has agreed to merge with each of Life
Technologies, Inc., and Dexter Corporation which holds 75 percent of Life
Technologies. If the mergers are approved by the stockholders of the three
companies Dexter and Life Technologies will simultaneously merge into
Invitrogen.
In the Life Technologies merger, each outstanding share of Life
Technologies common stock will be converted into $60.00 in cash or
Invitrogen common stock or both. In the Dexter merger, each outstanding
share of Dexter common stock will be converted into $62.50 in cash or
Invitrogen common stock or both.
In order to complete the mergers, each company must obtain the approval
of its stockholders. We believe that the mergers will benefit Invitrogen's
stockholders, and we ask for your support in voting for the merger proposal
and the other proposals described in the accompanying joint proxy statement
and prospectus at the Invitrogen special meeting. The special meeting of
Invitrogen stockholders will be held at [location], on [day of week],
[month, day], 2000, at [time], local time.
Your board of directors has unanimously approved the mergers with Life
Technologies and Dexter and recommends that Invitrogen stockholders vote
for the merger proposal and the other proposals described in the attached
materials.
Dexter Corporation, which owns approximately 75% of Life Technologies
outstanding common stock, has agreed to vote its Life Technologies shares
in favor of the merger. As a consequence, approval of the merger at the
special meeting is assured.
Your vote is important, regardless of the number of shares you own.
PLEASE VOTE AS SOON AS POSSIBLE TO MAKE SURE THAT YOUR SHARES ARE
REPRESENTED AT THE SPECIAL MEETING. TO VOTE YOUR SHARES, PLEASE COMPLETE
AND RETURN THE ENCLOSED PROXY CARD. YOU ALSO MAY CAST YOUR VOTE IN PERSON
AT THE SPECIAL MEETING.
Sincerely,
Lyle C. Turner
Chairman, President
and Chief Executive Officer
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE COMMON STOCK TO BE ISSUED UNDER THIS JOINT
PROXY STATEMENT AND PROSPECTUS OR DETERMINED IF THIS JOINT PROXY STATEMENT
AND PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This joint proxy statement and prospectus is dated [month, day], 2000,
and is first being mailed to stockholders on or about [month, day], 2000.
[LIFE TECHNOLOGIES LOGO]
YOUR VOTE ON THE PROPOSED MERGER IS VERY IMPORTANT!
To the Stockholders of Life Technologies, Inc.:
Invitrogen Corporation has agreed to merge with Life Technologies, Inc.
and with Dexter Corporation, Life Technologies' 75 percent stockholder. If
the mergers are approved by the stockholders of the three companies, Dexter
and Life Technologies will simultaneously merge into Invitrogen.
In the Life Technologies merger, each outstanding share of Life
Technologies common stock not held by Dexter will be converted into $60.00 in
cash or Invitrogen stock or both. In the Dexter merger, each outstanding share
of Dexter common stock will be converted into $62.50 in cash or Invitrogen
stock or both.
In order to complete the mergers, each company must obtain the approval
of its stockholders. We believe that the mergers will benefit Life
Technologies' stockholders, and we ask for your support in voting for the
merger proposal described in the accompanying joint proxy statement and
prospectus at the Life Technologies special meeting. The special meeting of
Life Technologies stockholders will be held at [location], on [day of
week], [month, day], 2000, at [time], local time.
Based upon, among other things, the unanimous recommendation of the
special committee of directors of Life Technologies who are not affiliated
with Dexter, your board of directors has, by unanimous vote of those
directors present, approved the merger with Invitrogen and recommends that
Life Technologies stockholders vote for the merger proposal described in
the attached materials.
Your vote is important, regardless of the number of shares you own.
PLEASE VOTE AS SOON AS POSSIBLE TO MAKE SURE THAT YOUR SHARES ARE
REPRESENTED AT THE SPECIAL MEETING. TO VOTE YOUR SHARES, PLEASE COMPLETE
AND RETURN THE ENCLOSED PROXY CARD. YOU ALSO MAY CAST YOUR VOTE IN PERSON
AT THE SPECIAL MEETING.
Very truly yours,
J. Stark Thompson
President and Chief Executive Officer
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE COMMON STOCK TO BE ISSUED UNDER THIS JOINT
PROXY STATEMENT AND PROSPECTUS OR DETERMINED IF THIS JOINT PROXY STATEMENT
AND PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This joint proxy statement and prospectus is dated [month, day], 2000,
and is first being mailed to stockholders on or about [month, day], 2000.
[DEXTER LOGO]
YOUR VOTE ON THE PROPOSED MERGER IS VERY IMPORTANT!
To the Stockholders of Dexter Corporation:
Invitrogen Corporation has agreed to merge with each of Dexter
Corporation and Life Technologies, Inc., Dexter's 75 percent owned
subsidiary. If the mergers are approved by the stockholders of the three
companies Dexter and Life Technologies will simultaneously merge into
Invitrogen.
In the Dexter merger, each outstanding share of Dexter common stock
will be converted into $62.50 in cash or Invitrogen common stock or both.
In the Life Technologies merger, each outstanding share of Life
Technologies common stock will be converted into $60.00 in cash or
Invitrogen common stock or both.
In order to complete the mergers, each company must obtain the approval
of its stockholders. We believe that the Dexter merger will benefit our
stockholders, and we ask for your support in voting for the merger proposal
described in the accompanying joint proxy statement and prospectus at the
Dexter special meeting. The special meeting of Dexter stockholders will be
held at [location], on [day of week], [month, day], 2000, at [time], local
time.
Your board of directors has unanimously approved the merger with
Invitrogen and recommends that Dexter stockholders vote for the merger
proposal described in the attached materials.
Your vote is important, regardless of the number of shares you own.
PLEASE VOTE AS SOON AS POSSIBLE TO MAKE SURE THAT YOUR SHARES ARE
REPRESENTED AT THE SPECIAL MEETING. TO VOTE YOUR SHARES, PLEASE COMPLETE
AND RETURN THE ENCLOSED PROXY CARD. YOU ALSO MAY CAST YOUR VOTE IN PERSON
AT THE SPECIAL MEETING.
Very truly yours,
K. Grahame Walker
Chairman and Chief Executive Officer
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE COMMON STOCK TO BE ISSUED UNDER THIS JOINT
PROXY STATEMENT AND PROSPECTUS OR DETERMINED IF THIS JOINT PROXY STATEMENT
AND PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This joint proxy statement and prospectus is dated [month, day], 2000,
and is first being mailed to stockholders on or about [month, day], 2000.
[INVITROGEN LOGO]
NOTICE OF SPECIAL MEETING OF INVITROGEN STOCKHOLDERS
[MONTH, DAY], 2000
Carlsbad, California
[Month, day], 2000
A special meeting of stockholders of Invitrogen Corporation will be
held at [location], on [day of week], [month, day], 2000, at [time], local
time, for the following purposes:
1. To consider and vote on a proposal to approve and adopt each of
the Agreement and Plan of Merger, dated as of July 7, 2000,
between Invitrogen and Life Technologies, and the Agreement and
Plan of Merger, dated as of July 7, 2000, between Invitrogen and
Dexter Corporation. We have included copies of the Life
Technologies merger agreement and the Dexter merger agreement as
Annexes A and B to the attached joint proxy statement and
prospectus.
2. To consider and vote on a proposal to amend Invitrogen
Corporation's Certificate of Incorporation to increase the
authorized capital stock to 131,405,884.
3. To consider and vote on a proposal to increase by [xxx,xxx] the
number of shares Invitrogen may issue under Invitrogen's 1997
Stock Option Plan to [x,xxx,xxx] shares.
4. To consider and vote on a proposal to increase by [xxx,xxx] the
number of shares of Invitrogen common stock that Invitrogen may
issue under Invitrogen's 1998 Employee Stock Purchase Plan to
[x,xxx,xxx] shares.
5. To transact such other business as properly may come before the
Invitrogen special meeting or any adjournment or postponement of
the meeting.
Only stockholders of record at the close of business on [month, day],
2000 will be entitled to vote at the Invitrogen special meeting. To vote
your shares, please complete and return the enclosed proxy card. You also
may cast your vote in person at the Invitrogen special meeting. Please vote
promptly whether or not you expect to attend the Invitrogen special
meeting.
By order of the Board of Directors,
Warner R. Broaddus
Secretary
PLEASE VOTE YOUR SHARES PROMPTLY. YOU CAN FIND INSTRUCTIONS FOR VOTING ON
THE ENCLOSED PROXY CARD.
[LIFE TECHNOLOGIES LOGO]
NOTICE OF SPECIAL MEETING OF LIFE TECHNOLOGIES STOCKHOLDERS
[MONTH, DAY], 2000
Rockville, Maryland
[month, day], 2000
A special meeting of stockholders of Life Technologies Inc., will be
held at [location] on [day of week], [month, day], 2000, at [time], local
time, for the following purposes:
1. To consider and vote on a proposal to approve and adopt the
Agreement and Plan of Merger, dated as of July 7, 2000, between
Life Technologies, Inc. and Invitrogen Corporation. We have
included a copy of the Life Technologies merger agreement as Annex
A to the attached joint proxy statement and prospectus.
2. To transact such other business as properly may come before the
Life Technologies special meeting or any adjournment or
postponement of the meeting.
Only stockholders of record at the close of business on July 20, 2000
will be entitled to vote at the Life Technologies special meeting. To vote
your shares, please complete and return the enclosed proxy card. You also
may cast your vote in person at the Life Technologies special meeting.
Please vote promptly whether or not you expect to attend the Life
Technologies special meeting.
By order of the Board of Directors,
C. Eric Winzer
Secretary
PLEASE VOTE YOUR SHARES PROMPTLY. YOU CAN FIND INSTRUCTIONS FOR VOTING ON
THE ENCLOSED PROXY CARD.
[DEXTER LOGO]
NOTICE OF SPECIAL MEETING OF DEXTER STOCKHOLDERS
[MONTH, DAY], 2000
Windsor Locks, Connecticut
[month, day], 2000
A special meeting of stockholders of Dexter Corporation will be held at
[location], on [day of week], [month, day], 2000, at [time], local time,
for the following purposes:
1. To consider and vote upon a proposal to approve and adopt the
Agreement and Plan of Merger dated as of July 7, 2000 between
Dexter Corporation and Invitrogen Corporation. We have attached a
copy of the Dexter merger agreement as Annex B to the attached
joint proxy statement and prospectus.
2. To transact such other business as properly may come before the
Dexter special meeting or any adjournment of postponement of the
meeting.
Only stockholders of record at the close of business on July 20, 2000
will be entitled to vote at the Dexter special meeting. To vote your
shares, please complete and return the enclosed proxy card. You also may
cast your vote in person at the Dexter special meeting. Please vote
promptly whether or not you expect to attend the Dexter special meeting.
By the order of the Board of Directors
Bruce H. Beatt
Secretary
PLEASE VOTE YOUR SHARES PROMPTLY. YOU CAN FIND INSTRUCTIONS FOR VOTING ON
THE ENCLOSED PROXY CARD.
TABLE OF CONTENTS
Page
----
SUMMARY......................................................................5
The Companies............................................................5
Vote Required to Approve the Proposals...................................6
The Mergers..............................................................7
Our Reasons for the Mergers..............................................8
Our Recommendations to Stockholders......................................8
Opinions of Financial Advisors...........................................8
Board of Directors and Management of Invitrogen Following the
Mergers................................................................9
Additional Interests of Our Executive Officers and Boards of
Directors as a Result of the Mergers...................................9
Conditions to the Mergers................................................9
Restrictions on Alternative Transactions................................10
Termination of the Merger Agreements....................................10
Termination Fees........................................................11
Regulatory Matters......................................................11
Material United States Federal Income Tax Consequences of the
Mergers...............................................................11
Accounting Treatment....................................................12
Appraisal Rights........................................................12
Comparative Per Share Market Price Information..........................12
FINANCIAL SUMMARY...........................................................13
Summary of Selected Historical and Unaudited Pro Forma Combined
Financial Information.................................................13
Unaudited Selected Pro Forma Combined Financial Information.............15
Comparative Per Share Information.......................................16
RISK FACTORS................................................................17
Stockholders who make a cash election may receive a form of
consideration different from what they elect..........................17
Value of Invitrogen common stock to be received in the mergers
may fluctuate; all holders may not receive the same value.............17
Failure to successfully integrate Life Technologies into our
operations could reduce Invitrogen's profitability....................17
Failure to manage growth could impair our business......................18
Reduction in research and development budgets and government
funding may affect sales..............................................19
Failure to license new technologies could impair our new product
development...........................................................19
Loss of licenses could hurt our performance.............................20
Our market share depends on new product introductions and
acceptance............................................................20
Loss of key personnel could hurt our business...........................21
Competition in the life sciences research market could reduce
sales.................................................................21
Distributors may force us to use more expensive marketing and
distribution channels.................................................21
We rely on third party manufacturers to manufacture some of our
products and components...............................................21
International unrest or foreign currency fluctuations could
adversely affect our results..........................................21
Inability to protect our technologies could affect our ability
to compete............................................................22
Disclosure of trade secrets could aid our competitors...................23
Intellectual property or other litigation could harm our business.......23
The market price of Invitrogen stock could be volatile, which may
impair your investment................................................23
Our anti-takeover defense provisions may deter potential acquirors
and may depress Invitrogen's stock price..............................24
Accidents related to hazardous materials could adversely affect
our business..........................................................24
Potential product liability claims could affect our earnings and
financial condition...................................................24
Members of the management and board of directors of Invitrogen,
Life Technologies and Dexter may have interests in the mergers
that differ from the interests of their stockholders..................24
Absence of dividends could reduce Invitrogen's attractiveness to
investors.............................................................25
Following the mergers, we may need to obtain additional financing
to support ongoing operations.........................................25
There are other risks related to Life Technologies' and Dexter's
ongoing operations....................................................25
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS..............................................26
THE INVITROGEN SPECIAL MEETING..............................................27
When and where the Invitrogen special meeting will be held..............27
What Will be Voted Upon.................................................27
Only Invitrogen Stockholders of Record as of [month, day] Are
Entitled to Vote......................................................27
Majority of Outstanding Shares Must be Represented For a Vote
to be Taken...........................................................27
Vote Required for Approval..............................................27
Voting Your Shares and Changing Your Vote...............................28
How Proxies Are Counted.................................................28
Confidential Voting.....................................................28
Cost of Solicitation....................................................28
THE LIFE TECHNOLOGIES SPECIAL MEETING.......................................29
When and Where the Life Technologies Special Meeting Will be Held.......29
What Will be Voted Upon.................................................29
Only Life Technologies Common Stockholders of Record as of
July 20, 2000 Are Entitled to Vote....................................29
Majority of Outstanding Shares Must be Represented For a Vote to
be Taken..............................................................29
Vote Required for Approval..............................................29
Voting Your Shares and Changing Your Vote...............................30
How Proxies Are Counted.................................................30
Cost of Solicitation....................................................30
THE DEXTER SPECIAL MEETING..................................................31
When and Where the Dexter Special Meeting Will be Held..................31
What Will be Voted Upon.................................................31
Only Dexter Common Stockholders of Record as of July 20, 2000
Are Entitled to Vote..................................................31
Majority of Outstanding Shares Must be Represented For a Vote
to be Taken...........................................................31
Vote Required for Approval..............................................31
Voting Your Shares and Changing Your Vote...............................31
How Proxies Are Counted.................................................32
Cost of Solicitation....................................................32
THE MERGERS.................................................................33
The Companies...........................................................33
Background of the Mergers...............................................34
Reasons for the Mergers and Recommendations of the Boards...............40
Opinion of Invitrogen's Financial Advisor ..............................46
Opinion of Financial Advisor to the Life Technologies Special
Committee.............................................................50
Opinion of Dexter's Financial Advisor...................................55
Accounting Treatment....................................................62
Material United States Federal Income Tax Consequences of the
Mergers...............................................................63
Certain Litigation......................................................66
Regulatory Matters......................................................68
Federal Securities Laws Consequences; Stock Transfer Restriction
Agreements............................................................68
COMPARATIVE PER SHARE MARKET PRICE
AND DIVIDEND INFORMATION................................................70
INVITROGEN UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS......72
INTERESTS OF CERTAIN PERSONS IN THE MERGER..................................78
Dexter Severance Agreements.............................................78
Dexter Compensation and Benefit Plans...................................79
Life Technologies.......................................................80
Indemnification and Insurance...........................................83
THE MERGER AGREEMENTS.......................................................84
Life Technologies Merger Agreement......................................84
Dexter Merger Agreement.................................................93
APPRAISAL RIGHTS OF STOCKHOLDERS...........................................106
Life Technologies Stockholders' Appraisal Rights.......................106
Dexter Stockholders' Appraisal Rights..................................107
OWNERSHIP OF COMMON STOCK..................................................110
Beneficial Ownership of Invitrogen Common Stock........................110
Beneficial Ownership of Life Technologies Stock........................111
Beneficial Ownership of Dexter Stock...................................114
DESCRIPTION OF INVITROGEN CAPITAL STOCK....................................116
Authorized Capital Stock...............................................116
Invitrogen Common Stock................................................116
Invitrogen Preferred Stock.............................................116
Transfer Agent and Registrar...........................................116
COMPARISON OF STOCKHOLDERS' RIGHTS.........................................117
Comparison of Charter and By-law Provisions............................117
Comparison of Stockholders Rights under the Connecticut Law
and the Delaware Law.................................................120
ADDITIONAL MATTERS FOR CONSIDERATION
OF INVITROGEN STOCKHOLDERS.............................................126
Amendment to Certificate of Incorporation..............................126
Amendment to Invitrogen's Certificate of Incorporation.................126
Amendment of 1997 Stock Option Plan....................................126
Summary of 1997 Stock Option Plan......................................126
Approval of Amendment to the 1998 Employee Stock Purchase Plan
Increasing the Share Reserve By [100,000] Shares.....................130
EXPERTS....................................................................134
LEGAL MATTERS..............................................................134
WHERE YOU CAN FIND MORE INFORMATION........................................135
INDEX TO FINANCIAL STATEMENTS..............................................F-1
ANNEX A - Agreement and Plan of Merger, dated as of July 7, 2000 between
Invitrogen Corporation and Life Technologies, Inc.
ANNEX B - Agreement and Plan of Merger, dated as of July 7, 2000
between Invitrogen Corporation and Dexter Corporation.
ANNEX C - Opinion of Donaldson, Lufkin & Jenrette Securities Corporation
ANNEX D - Opinion of Credit Suisse First Boston Corporation
ANNEX E - Opinion of Lehman Brothers Inc.
ANNEX F - Delaware General Corporation Law - Section 262 - Appraisal Rights
ANNEX G - Connecticut Business Corporate Act - Sections 33 -855 through
33-872 - Dissenters' Rights
ANNEX H - Amendment to Article IV of the Restated Certificate of Incorporation
of Invitrogen Corporation
ANNEX I - 1997 Stock Option Plan of Invitrogen Corporation
ANNEX J - 1998 Employee Stock Purchase Plan of Invitrogen Corporation
Echo(TM) is a trademark of Invitrogen. TOPO(R) and TA Cloning(R) are
Invitrogen trademarks which have been registered with the United States
Patent and Trademark Office. The Invitrogen logo and Invitrogenomics(TM)
are trademarks of Invitrogen for which registration applications have been
filed with the United States Patent and Trademark Office.
Gateway is a trademark of Life Technologies, Inc.
QUESTIONS AND ANSWERS ABOUT THE MERGERS
AND THE SPECIAL MEETINGS
Q: WHY ARE THE COMPANIES PROPOSING THE MERGERS?
A: The simultaneous mergers of each of Life Technologies and Dexter into
Invitrogen creates a leading company in life sciences and genomics
research tools with annual revenues in excess of $500 million and
approximately $100 million in operating cash flow. Invitrogen will be
a premier products provider for molecular biology research,
particularly gene cloning, gene expression, and gene analysis-- key
techniques in deciphering the human genome, the first draft of which
was recently completed.
In addition, the mergers represent the final step in Dexter's
previously announced program to maximize stockholder value in the
short-term.
Q: WHAT WILL A STOCKHOLDER RECEIVE WHEN THE MERGERS OCCUR?
A: HOLDERS OF LIFE TECHNOLOGIES COMMON STOCK
A Life Technologies stockholder will have the choice to elect to
receive in exchange for each of their Life Technologies shares one of
the following:
(1) $60.00 in cash, which will be prorated if necessary so that
Invitrogen will not pay more than approximately $105 million in cash
in the Life Technologies merger;
(2) $16.80 in cash and a number of shares of Invitrogen common stock
equivalent in value to $43.20 determined by a formula set forth in
the Life Technologies merger agreement; or
(3) A number of shares of Invitrogen common stock equivalent in value
to $60.00 (provided that the average price of Invitrogen common stock
during the applicable pricing period is within the range of $60.00 to
$80.00) determined by a formula set forth in the Life Technologies
merger agreement.
HOLDERS OF DEXTER COMMON STOCK
A Dexter stockholder will have the
choice to elect to receive in exchange for each of their Dexter
shares one of the following:
(1) $62.50 in cash, which will be prorated if necessary so that
Invitrogen will not pay more than approximately $410 million in cash
in the Dexter merger;
(2) $17.50 in cash and a number of shares of Invitrogen common stock
equivalent in value to $45 determined by a formula set forth in the
Dexter merger agreement; or
(3) A number of shares of Invitrogen common stock equivalent in value
to $62.50 (provided that the average price of Invitrogen common stock
during the applicable pricing period is within the range of $60.00 to
$80.00) determined by a formula set forth in the Dexter merger
agreement.
An election to receive only cash is called a "cash election;" an
election to receive all stock is called a "stock election;" and an
election to receive a combination of cash and stock is called a
"standard election." Stockholders who do not make an election and who
are not dissenting stockholders, will be deemed to have made a
standard election.
Q: IF I ELECT TO RECEIVE ONLY STOCK OR A COMBINATION OF CASH AND STOCK,
HOW MANY SHARES OF INVITROGEN COMMON STOCK WILL I RECEIVE IN THE
MERGER?
A: HOLDERS OF LIFE TECHNOLOGIES COMMON STOCK
The exchange ratio for determining the number of shares of Invitrogen
common stock you will receive in the Life Technologies merger will be
based on the average closing price of Invitrogen common stock during
the 20 consecutive trading days ending on the third trading day prior
to the Life Technologies special meeting. However, if the average
trading price of Invitrogen common stock during that period is $80 or
more, then the exchange ratio will be fixed at 0.75 of an Invitrogen
share for each Life Technologies share. If the average trading price
during the 20 trading day period is $60 or less, then the exchange
ratio will be fixed at 1.0 Invitrogen share for each Life
Technologies share. As a result of the $60 to $80 "collar" the value
of the consideration you receive in the Life Technologies merger may
be more or less depending on the average trading price of Invitrogen
common stock. For example, the table below shows the value of the per
share merger consideration a stockholder making a stock election
would receive at various prices for Invitrogen common stock:
Average Price of
Invitrogen Implied Value
Common Stock Exchange Ratio of Merger Consideration
---------------- -------------- -----------------------
$90.00 .75 $67.50
$85.00 .75 $63.75
$80.00 .75 $60.00
$70.00 .8571 $60.00
$65.00 .9231 $60.00
$60.00 1.00 $60.00
$55.00 1.00 $55.00
$50.00 1.00 $50.00
HOLDERS OF DEXTER COMMON STOCK
The exchange ratio for determining the number of shares of Invitrogen
common stock you will receive in the Dexter merger will be based on
the average closing price of Invitrogen common stock during the 20
consecutive trading days ending on the third trading day prior to the
Dexter special meeting. However, if the average trading price of
Invitrogen common stock during that period is $80 or more, then the
exchange ratio will be fixed at 0.7813 of an Invitrogen share for
each Dexter share. If the average trading price during the 20 trading
day period is $60 or less, then the exchange ratio will be fixed at
1.0417 Invitrogen shares for each Dexter share. As a result of the
$60 to $80 "collar" the value of the consideration you receive in the
Dexter merger may be more or less depending on the average
trading price of Invitrogen common stock. For example, the table
below shows the value of the per share merger consideration a
stockholder making a stock election would receive at various prices
for Invitrogen common stock:
Average Price of
Invitrogen Implied Value
Common Stock Exchange Ratio of Merger Consideration
---------------- -------------- -----------------------
$90.00 .7813 $70.32
$85.00 .7813 $66.41
$80.00 .7813 $62.50
$70.00 .8923 $62.50
$65.00 .9615 $62.50
$60.00 1.0417 $62.50
$55.00 1.0417 $57.94
$50.00 1.0417 $52.09
Q: WILL THE FINAL EXCHANGE RATIO BE ANNOUNCED PRIOR TO THE SPECIAL
MEETINGS?
A: Yes. The companies intend to issue a press release announcing the
final exchange ratio promptly after it is determined.
Q: IF I ELECT TO RECEIVE ALL OF THE CONSIDERATION OFFERED IN THE MERGER
IN CASH, WILL I BE ASSURED OF RECEIVING ONLY CASH?
A: No. In each of the mergers, Invitrogen will pay no more than 28
percent of the aggregate consideration in cash. Approximately $105
million in cash will be available to be paid to Life Technologies
stockholders in the Life Technologies merger and approximately $410
million in cash will be available to be paid to Dexter stockholders
in the Dexter merger. The amount of cash to be paid to Life
Technologies stockholders will be prorated such that Life
Technologies stockholders who elect to receive cash are assured of
receiving at least $16.80 in cash per Life Technologies share. The
amount of cash to be paid to Dexter stockholders will be prorated
such that Dexter stockholders who elect to receive cash are assured
of receiving at least $17.50 in cash per Dexter share.
Q: IF I ELECT TO RECEIVE ALL OF THE CONSIDERATION OFFERED IN THE MERGER
IN INVITROGEN COMMON STOCK, WILL I BE ASSURED OF RECEIVING ONLY
INVITROGEN COMMON STOCK?
A: Yes. Life Technologies and Dexter stockholders who make a stock
election or a standard election in the Life Technologies merger or
the Dexter merger in Invitrogen common stock are assured of receiving
Invitrogen common stock regardless of the number of stockholders
electing to receive the merger consideration in common stock.
Q: WHEN DO THE COMPANIES EXPECT TO COMPLETE THE MERGERS?
A: We are working to complete the mergers as quickly as possible. In
addition to obtaining the approvals of our stockholders, we must
satisfy the specified waiting periods under the Hart-Scott- Rodino
Antitrust Improvements Act of 1976. We expect to complete the mergers
in the fall of 2000.
Q: WHAT ARE THE MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
OF THE MERGERS?
A: In general, for United States federal income tax purposes: (1) a
stockholder of Dexter or Life Technologies who has exchanged all of
their Dexter common stock or Life Technologies common stock solely
for cash in the Dexter merger or the Life Technologies merger will
recognize gain or loss in an amount equal to the difference between
the cash received and that stockholder's adjusted tax basis in the
shares surrendered, (2) a stockholder of Dexter or Life Technologies
who has exchanged all of their Dexter common stock or Life
Technologies common stock solely for Invitrogen common stock in the
Dexter merger or the Life Technologies merger will not recognize any
gain or loss as a result of the exchange, and (3) a stockholder of
Dexter or Life Technologies who receives a combination of cash and
Invitrogen common stock in the Dexter merger or the Life Technologies
merger will not recognize any loss but will recognize gain, if any,
on the shares so exchanged to the extent of any cash received. DEXTER
STOCKHOLDERS AND LIFE TECHNOLOGIES STOCKHOLDERS SHOULD CONSULT THEIR
TAX ADVISORS FOR A FULL UNDERSTANDING OF THE TAX CONSEQUENCES TO THEM
OF THE MERGERS.
Q: DO STOCKHOLDERS HAVE APPRAISAL RIGHTS?
A: Under applicable law, appraisal rights are available to the holders
of Life Technologies and Dexter common stock in connection with the
mergers. Stockholders wishing to exercise appraisal rights will have
the right to receive an appraisal of the value of their shares in
connection with the mergers. Invitrogen stockholders do not have
appraisal rights in connection with the mergers.
Q: WHAT VOTE IS REQUIRED TO APPROVE THE LIFE TECHNOLOGIES MERGER?
A: For the Life Technologies merger to occur the merger must be approved
by (1) the holders of at least 67 percent of the issued and
outstanding shares of Life Technologies common stock entitled to vote
at the Life Technologies special meeting and (2) the holders of at
least a majority of the issued and outstanding shares of Invitrogen
common stock entitled to vote at the Invitrogen special meeting.
Dexter, which owns approximately 75 percent of the outstanding shares
of common stock of Life Technologies has agreed with Invitrogen in
the Dexter merger agreement that it will vote its shares of Life
Technologies in favor of the Life Technologies merger. As a result,
approval of the Life Technologies merger is assured.
Q: WHAT VOTE IS REQUIRED TO APPROVE THE DEXTER MERGER?
A: For the Dexter merger to occur the merger must be approved by (1) the
holders of at least two- thirds of the issued and outstanding shares
of Dexter common stock entitled to vote at the Dexter special meeting
and (2) the holders of at least a majority of the issued and
outstanding shares of Invitrogen common stock entitled to vote at the
Invitrogen special meeting.
Q: WHAT EFFECT WILL THE MERGERS HAVE ON THE PREVIOUSLY ANNOUNCED SALES
BY DEXTER OF ITS WHOLLY OWNED BUSINESSES?
A: The mergers will not affect the previously announced sale by Dexter
of its nonwovens business to Ahlstrom Paper Group Oy or its sale of
its electronic materials, adhesives and polymer systems businesses to
Loctite Corporation or the sale of its coatings business to Akzo
Nobel Coatings Inc. However, the consummation of the sales to
Ahlstrom Paper Group Oy and Loctite Corporation are conditions to
Invitrogen's obligation to consummate the mergers. The consummation
of the sale of Dexter's coatings business to Akzo Nobel is not a
condition to the completion of the mergers.
Q: WHEN AND WHERE ARE THE SPECIAL MEETINGS?
A: THE INVITROGEN SPECIAL MEETING
The special meeting of Invitrogen stockholders will be held on [day
of week],[month, day], 2000, at [time], local time, at [location].
THE LIFE TECHNOLOGIES SPECIAL MEETING
The special meeting of Life Technologies stockholders will be held on
[day of week], [month, day], 2000 at [time], local time, at
[location].
THE DEXTER SPECIAL MEETING
The special meeting of Dexter stockholders will be held on [day of
week], [month, day], 2000 at [time], local time, at [location].
Q: WHO CAN VOTE AT THE SPECIAL MEETINGS?
A: THE INVITROGEN SPECIAL MEETING
Only holders of record of Invitrogen common stock as of the close of
business on [month, day], 2000 will be entitled to notice of and to
vote at the Invitrogen special meeting.
THE LIFE TECHNOLOGIES SPECIAL MEETING
Only holders of record of Life Technologies common stock as of the
close of business on July 20, 2000 will be entitled to notice of and
to vote at the Life Technologies special meeting.
THE DEXTER SPECIAL MEETING
Only holders of record of Dexter common stock as of the close of
business on July 20, 2000 will be entitled to notice of and to vote
at the Dexter special meeting.
Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER
VOTE MY SHARES FOR ME?
A: Your broker will vote your shares only if you provide instructions on
how to vote. You should follow the directions provided by your broker
regarding how to instruct your broker to vote your shares.
Q: MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?
A: Yes. Just send in a written revocation or a later dated, signed proxy
card before the special meetings or simply attend the special meeting
and vote in person.
Q: WHAT DO I NEED TO DO NOW?
A: PLEASE VOTE YOUR SHARES AS SOON AS POSSIBLE, SO THAT YOUR SHARES MAY
BE REPRESENTED AT THE APPROPRIATE SPECIAL MEETING. You may vote by
signing your proxy card and mailing it in the enclosed return
envelope, or you may vote in person at the special meetings.
Q: WHAT DO I NEED TO DO NOW?
A: PLEASE VOTE YOUR SHARES AS SOON AS POSSIBLE, SO THAT YOUR SHARES MAY
BE REPRESENTED AT THE APPROPRIATE SPECIAL MEETING. You may vote by
signing your proxy card and mailing it in the enclosed return
envelope, or you may vote in person at the special meetings.
Q: WHOM SHOULD I CALL IF I HAVE QUESTIONS?
A: Stockholders of Invitrogen who have questions about the proposals
described in this joint proxy statement and prospectus may call [Name
of proxy solicitor] at 800-xxx-xxxx.
Stockholders of Life Technologies or Dexter who have questions about
the proposals described in this joint proxy statement and prospectus
may call MacKenzie Partners, Inc. at 800-322-2885.
SUMMARY
This section summarizes particular selected information about the
mergers from this joint proxy statement and prospectus. To understand the
mergers fully, we strongly encourage you to read carefully this entire
joint proxy statement and prospectus and the documents which we have filed
with the Securities and Exchange Commission. We have included a copy of the
Life Technologies merger agreement and the Dexter merger agreement in this
joint proxy statement and prospectus as Annex A and Annex B, respectively.
For information on how to obtain the documents that we have filed with the
Securities and Exchange Commission, see "Where You Can Find More
Information" on page 135.
In addition to the other information included or incorporated by
reference in this joint proxy statement and prospectus (including the
matters addressed in "Cautionary Statements Concerning Forward-Looking
Statements"), you should consider the following in determining whether to
vote in favor of the mergers.
THE COMPANIES
(See Page 33)
INVITROGEN CORPORATION
1600 Faraday Ave.
Carlsbad, California 92008
760-603-7200
Invitrogen Corporation, a Delaware corporation founded in 1987,
develops, manufactures and markets research tools in kit form and provides
research services to corporate, academic and government entities.
Invitrogen's research kits simplify and improve gene cloning, gene
expression and gene analysis techniques as well as other molecular biology
activities. Our customers use these techniques and activities to study how
a cell is regulated by its genetic material, known as functional genomics,
and to search for drugs that can treat diseases. Invitrogen believes its
products allow researchers to perform these activities more accurately,
efficiently and with greater reproducibility compared to conventional
research methods. Invitrogen is headquartered in Carlsbad, California and
also has operations in Huntsville, Alabama, Groningen, Netherlands, and
Heidelberg, Germany.
For additional information about Invitrogen and its business, see
"The Mergers--The Companies--Invitrogen Corporation" and "Where You Can
Find More Information."
LIFE TECHNOLOGIES, INC.
9800 Medical Center Drive
Rockville, Maryland 20850
301-610-8000
Life Technologies, Inc., a Delaware corporation originally
incorporated in Ohio in 1915 and re-incorporated in Delaware in 1986,
develops, manufactures and supplies products used in life sciences research
and commercial manufacture of genetically engineered products. Life
Technologies' products include sera, other cell growth media, biochemicals
and enzymes and other biological products necessary for recombinant DNA
procedures. These and related products and services provided by Life
Technologies are used in cellular biochemistry and molecular biology
research and in the production of genetically engineered pharmaceuticals
such as interferons, interleukins and tissue plasminogen activator.
Life Technologies' products are sold to customers consisting of
laboratories generally associated with universities, medical research
centers, and government institutions as well as biotechnology,
pharmaceutical, energy, agricultural and chemical companies. Life
Technologies sells its products principally through its own direct sales
organization which is supplemented by a network of distributors.
For additional information about Life Technologies and its
business, see "The Mergers--The Companies--Life Technologies, Inc." and
"Where You Can Find More Information."
DEXTER CORPORATION
One Elm Street
Windsor Locks, Connecticut 06096
860-292-7675
Dexter Corporation, a Connecticut corporation founded in 1767, is a
specialty materials company principally serving the worldwide aerospace,
electronics, food packaging and medical markets with products based on
proprietary technologies. Dexter currently has three operating segments:
Life Sciences, Nonwovens and Specialty Polymers.
On June 20, 2000, Dexter signed definitive agreements to sell its
electronic materials, adhesives and polymer systems businesses to Loctite
Corporation (a member of the Henkel Group) for $400 million in cash and its
nonwoven materials business to Ahlstrom Paper Group Oy for $275 million in
cash. Completion of these assets sales is a condition to Invitrogen's
obligation to effect the mergers. On July 28, 2000, Dexter signed a
definitive agreement to sell its coatings business to Akzo Nobel Coatings,
Inc. Completion of the sale of Dexter's coatings business is not a
condition to the Invitrogen obligation to effect the mergers.
For additional information about Dexter and its business, see "The
Mergers-The Companies-Dexter Corporation" and "Where You Can Find More
Information."
VOTE REQUIRED TO APPROVE THE PROPOSALS
(See Pages 27, 29 and 31)
Invitrogen Stockholders
Invitrogen stockholders will vote on:
o A proposal to approve and adopt the Life Technologies merger
agreement and the Dexter merger agreement and to approve the Life
Technologies merger and the Dexter merger. Approval of this
proposal requires the affirmative vote of the holders of at least a
majority of all shares of Invitrogen common stock that are
outstanding and entitled to vote at the Invitrogen special meeting.
o A proposal to approve and adopt an amendment to Invitrogen's
Certificate of Incorporation to increase the number of shares of
capital stock Invitrogen is authorized to issue to 131,405,884.
Approval of this proposal requires the affirmative vote of the
holders of at least a majority of all shares of Invitrogen common
stock that are outstanding and entitled to vote at the Invitrogen
special meeting.
o A proposal to increase by [xxx,xxx] the number of shares of
Invitrogen common stock that Invitrogen may issue under
Invitrogen's 1997 Stock Option Plan to [x,xxx,xxx] shares. Approval
of this proposal requires the affirmative vote of the holders of a
majority of the votes cast at the Invitrogen special meeting.
o A proposal to increase by [xxx,xxx] the number of shares of
Invitrogen common stock that Invitrogen may issue under
Invitrogen's 1998 Employee Stock Purchase Plan to [x,xxx,xxx]
shares. Approval of this proposal requires the affirmative vote of
the holders of a majority of the votes cast at the Invitrogen
special meeting.
Invitrogen directors and executive officers as a group own and are
entitled to vote approximately [xx.x%] of the outstanding shares of
Invitrogen common stock. Each of the directors and executive officers of
Invitrogen that is entitled to vote at the Invitrogen special meeting has
indicated that he or she intends to vote his or her shares in favor of the
proposals outlined above.
Life Technologies Stockholders
Life Technologies stockholders will vote on a proposal to approve
and adopt the Life Technologies merger agreement and to approve the Life
Technologies merger. Approval of this proposal requires the affirmative
vote of the holders of at least 67 percent of all shares of Life
Technologies common stock that are outstanding and entitled to vote at the
Life Technologies special meeting. Life Technologies has instituted an
action in the Chancery Court in the State of Delaware, seeking a
declaratory judgment that the vote required to approve the Life
Technologies merger is as described in the immediately preceding sentence.
See "The Mergers--Certain Litigation."
Dexter, the owner of approximately 75% of the outstanding shares of
common stock of Life Technologies, has agreed with Invitrogen in the Dexter
merger agreement that it will vote its shares in favor of the Life
Technologies merger proposal. As a result, approval of the Life
Technologies merger is assured.
Life Technologies directors and executive officers as a group own
and are entitled to vote approximately [x.xx%] of the outstanding shares of
Life Technologies common stock. Each of the directors and executive
officers of Life Technologies that is entitled to vote at the Life
Technologies special meeting has indicated that he or she intends to vote
their shares in favor of the Life Technologies merger proposal outlined
above.
Dexter Stockholders
Dexter stockholders will vote on a proposal to approve and adopt
the Dexter merger agreement and to approve the Dexter merger. Approval of
this proposal requires the affirmative vote of the holders of at least
two-thirds of all shares of Dexter common stock that are outstanding and
entitled to vote at the Dexter special meeting.
Dexter directors and executive officers as a group own and are
entitled to vote approximately 3.15% of the outstanding shares of Dexter
common stock. Each of the directors and executive officers of Dexter that
is entitled to vote at the Dexter special meeting has indicated that he or
she intends to vote his or her shares in favor of the Dexter merger
proposal outlined above.
THE MERGERS
(See Page 84)
The Life Technologies Merger
The Life Technologies merger agreement provides for Life
Technologies to be merged with Invitrogen. If the Life Technologies merger
is approved by the Life Technologies and Invitrogen stockholders and the
Dexter merger is approved by the Dexter and Invitrogen stockholders and the
other conditions to the Life Technologies mereger are satisfied or waived,
Life Technologies will be merged with and into Invitrogen simultaneously
with the Dexter merger and Invitrogen will continue as the surviving
company. After the Life Technologies merger, Life Technologies will cease
to exist.
As a result of the Life Technologies merger, each share of Life
Technologies common stock issued and outstanding immediately prior to the
Life Technologies merger will be converted into the right to elect to
receive in exchange for any one of the following:
(1) $60.00 in cash, which will be prorated so that Invitrogen will
not pay more than approximately $105 million in cash in the Life
Technologies merger.
(2) $16.80 in cash and a number of shares of Invitrogen common
stock equivalent in value to $43.20 determined by a formula set forth in
the Life Technologies merger agreement.
(3) A number of shares of Invitrogen common stock equivalent in
value to $60.00 (provided that the average price of Invitrogen common stock
during the applicable pricing period is within the range of $60.00 to
$80.00) determined by a formula set forth in the Life Technologies merger
agreement.
We refer to the consideration payable in the Life Technologies
merger as the "Life Technologies merger consideration." We encourage you to
read the Life Technologies merger agreement carefully because it is the
legal document that governs the merger of Invitrogen and Life Technologies.
The Dexter Merger
The Dexter merger agreement provides for Dexter to be merged with
Invitrogen. If the Dexter merger is approved by the Dexter and Invitrogen
stockholders and the Life Technologies merger is approved by the Life
Technologies and Invitrogen stockholders and the other conditions to the
Dexter merger are satisfied or waived, Dexter will be merged with and into
Invitrogen simultaneously with the Life Technologies merger, and Invitrogen
shall continue as the surviving company. After the Dexter merger, Dexter
will cease to exist.
As a result of the Dexter merger, each share of Dexter common stock
issued and outstanding immediately prior to the Dexter merger will be
converted into the right to elect to receive in exchange for any one of the
following:
(1) $62.50 in cash, which will be prorated so that Invitrogen will
not pay more than approximately $410 million in cash in the Dexter merger.
(2) $17.50 in cash and a number of shares of Invitrogen common
stock equivalent in value to $45 determined by a formula set forth in the
Dexter merger agreement.
(3) A number of shares of Invitrogen common stock equivalent in
value to $62.50 (provided that the average price of Invitrogen common stock
during the applicable pricing period is within the range of $60.00 to
$80.00) determined by a formula set forth in the Dexter merger agreement.
We encourage you to read the Dexter merger agreement carefully
because it is the legal document that governs the merger of Invitrogen and
Dexter.
OUR REASONS FOR THE MERGERS
(See Page 40)
We believe that the merger of Life Technologies into Invitrogen
will combine the resources of Invitrogen and Life Technologies and enable
the surviving corporation to be a stronger competitor in the life sciences
and genomics industries. We believe that the Life Technologies merger will
create significant opportunities to enhance stockholder value. We believe
the Life Technologies merger will, among other things:
o create a company with annual revenues in excess of $500 million and
approximately $100 million in operating cash flow;
o bring together a complementary blend of products, assets and
capabilities and enhance our growth opportunities; and
o make Invitrogen a premier products provider for molecular biology
research, particularly gene cloning, gene expression, and gene
analysis-key techniques in deciphering the human genome.
In addition, Dexter believes that when considered together with the
previously announced sales of Dexter's nonwovens business and its
electronic materials, adhesives and polymer systems businesses, the mergers
constitute the final step in Dexter's program to maximize value for Dexter
stockholders in the short- term.
OUR RECOMMENDATIONS TO STOCKHOLDERS
(See Page 40)
To Invitrogen Stockholders:
The Invitrogen Board of Directors believes that each of the Life
Technologies merger and the Dexter merger is in your best interest and
recommends that Invitrogen stockholders vote FOR each of the merger
proposals, the proposal to amend Invitrogen's certificate of incorporation
to increase the number of shares of capital stock Invitrogen is authorized
to issue, the proposal to increase the number of shares of common stock
that may be issued under Invitrogen's 1997 Stock Option Plan and under
Invitrogen's 1998 Employee Stock Purchase Plan.
To Life Technologies Stockholders:
Based upon, among other things, the recommendation of the special
committee of directors of Life Technologies who are unaffiliated with
Dexter, the Life Technologies Board of Directors unanimously approved and
adopted the Life Technologies merger agreement and recommends that Life
Technologies stockholders vote FOR the Life Technologies merger proposal.
To Dexter Stockholders:
The Dexter Board of Directors believes that the Dexter merger is in
your best interest and recommends that Dexter stockholders vote FOR the
Dexter merger proposal.
OPINIONS OF FINANCIAL ADVISORS
(See Pages 46, 50 and 55)
In connection with the mergers, the boards of directors of
Invitrogen and Dexter and the Life Technologies special committee each
received an opinion from its respective financial advisors. These opinions
are addressed to the Boards of Directors or special committee and do not
constitute recommendations to any stockholder as to the form of
consideration to be elected in the mergers or any other matters relating to
the mergers.
Invitrogen received a written opinion dated July 8, 2000 from its
financial advisor Donaldson, Lufkin & Jenrette Securities Corporation,
substantially to the effect that, as of July 7, 2000 and based upon and
subject to the matters set forth in the opinion, the merger consideration
to be paid by Invitrogen in the Life Technologies merger and the Dexter
merger, taken together, was fair to Invitrogen from a financial point of
view. We have included this opinion in this joint proxy statement and
prospectus as Annex C. INVITROGEN URGES ITS STOCKHOLDERS TO READ THE
OPINION OF DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION IN ITS
ENTIRETY FOR A DESCRIPTION OF THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE,
MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN.
The special committee of the Board of Directors of Life
Technologies received a written opinion dated July 7, 2000 from Credit
Suisse First Boston as to the fairness, from a financial point of view, of
the consideration to be received in the Life Technologies mereger by the
holders of Life Technologies common stock, other than Dexter and its
subsidiaries, officers and directors. We have included this opinion in this
joint proxy statement and prospectus as Annex D. LIFE TECHNOLOGIES
ENCOURAGES ITS STOCKHOLDERS TO READ THIS OPINION CAREFULLY IN ITS ENTIRETY
FOR A DESCRIPTION OF THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE, MATTERS
CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN.
The Dexter board of directors received a written opinion dated July
7, 2000 from its financial advisor, Lehman Brothers Inc., substantially to
the effect that, as of that date and based on and subject to the matters
described in Lehman Brothers' opinion, from a financial point of view, the
consideration to be received in the Dexter merger by the stockholders of
Dexter was fair to those stockholders. The full text of Lehman Brothers'
written opinion, dated July 7, 2000, is attached to this joint proxy
statement and prospectus as Annex E. DEXTER ENCOURAGES ITS STOCKHOLDERS TO
READ THIS OPINION CAREFULLY IN ITS ENTIRETY FOR A DESCRIPTION OF THE
PROCEDURES FOLLOWED, ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS
ON THE REVIEW UNDERTAKEN.
BOARD OF DIRECTORS AND MANAGEMENT OF INVITROGEN FOLLOWING THE MERGERS
(See Page78)
The Life Technologies merger agreement provides that two directors
of Life Technologies, J. Stark Thompson, Ph.D., the president and chief
executive officer of Life Technologies and Thomas H. Adams, Ph.D., will
join the board of directors of Invitrogen effective at the effective time
of the Life Technologies merger.
After the Life Technologies merger, Dr. Thompson will continue as
the president and chief executive officer of Life Technologies' operations,
and he will be appointed to a senior executive management position with
Invitrogen. Otherwise, the executive officers of Invitrogen immediately
following the mergers will be the same as those immediately prior to the
mergers.
ADDITIONAL INTERESTS OF OUR EXECUTIVE OFFICERS AND BOARDS OF DIRECTORS AS
A RESULT OF THE MERGERS
(See Page 78)
In addition to their interests as stockholders, the directors and
executive officers of Life Technologies and Dexter have interests in the
mergers that are different from, or in addition to, your interests. These
interests exist because of rights they may have under individual severance
agreements and compensation and benefit plans.
In addition, Invitrogen will indemnify the officers and directors
of Life Technologies and Dexter for events occurring prior to, at, or after
the effective time of the mergers.
The members of the Life Technologies and Dexter boards of directors
and the Life Technologies special committee knew about these additional
interests, and considered them when they approved the mergers.
CONDITIONS TO THE MERGERS
(See Pages 91 and 102)
Conditions to the Life Technologies Merger
Among other things, completion of the Life Technologies merger
requires:
o approval of the Life Technologies merger by the Life Technologies and
Invitrogen stockholders;
o all of the conditions to the effectiveness of the Dexter merger
agreement being satisfied in accordance with the terms of the Dexter
merger agreement and both mergers being effective simultaneously;
o absence of any law or injunction preventing the Life Technologies
merger;
o expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976;
o receipt of legal opinions from Life Technologies' and Invitrogen's
respective counsel stating that the Life Technologies merger will
qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code; and
o absence of breaches of representations and warranties contained in
the Life Technologies merger agreement which have or are reasonably
expected to have a material adverse effect on the representing party.
Other than the conditions pertaining to stockholder approval, the
satisfaction of the conditions to the Dexter merger agreement, the
Hart-Scott-Rodino waiting period, and the legality of the Life Technologies
merger, Invitrogen and Life Technologies could elect to waive conditions to
their own performance and complete the Life Technologies merger. However,
Invitrogen and Life Technologies will not waive the condition relating to
the receipt of the tax opinions from counsel after the Life Technologies
stockholders and the Invitrogen stockholders approve the Life Technologies
merger unless further stockholder approval is obtained with appropriate
disclosure.
Conditions to the Dexter Merger
Among other things, completion of the Dexter merger requires:
o approval of the Dexter merger by the Dexter and Invitrogen
stockholders;
o all of the conditions to the effectiveness of the Life Technologies
merger agreement being satisfied in accordance with the terms of the
Life Technologies merger agreement and both mergers being effective
simultaneously;
o absence of any law or injunction preventing the Dexter merger;
o expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976;
o completion of the sale of Dexter's electronic materials, adhesives
and polymer systems businesses to Loctite Corporation and completion
of the sale of Dexter's nonwovens business to Ahlstrom Paper Group
Oy;
o receipt of legal opinions from Dexter's and Invitrogen's respective
counsel stating that the Dexter merger will qualify as a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code; and
o absence of breaches of representations and warranties contained in
the Dexter merger agreement which have or are reasonably expected to
have a material adverse effect on the representing party.
Other than the conditions pertaining to stockholder approval, the
satisfaction of the conditions to the Life Technologies merger agreement,
the Hart- Scott-Rodino waiting period, and the legality of the Dexter
merger, Invitrogen and Dexter could elect to waive conditions to their own
performance and complete the Dexter merger. However, Invitrogen and Dexter
will not waive the condition relating to the receipt of the tax opinions
from counsel after the Dexter stockholders and the Invitrogen stockholders
approve the Dexter merger unless further stockholder approval is obtained
after appropriate disclosure.
RESTRICTIONS ON ALTERNATIVE TRANSACTIONS
(See Page 100 )
The Dexter merger agreement limits the ability of Dexter or any of
its subsidiaries (including Life Technologies) to initiate, solicit or
encourage discussions with any third party about business combination
transactions as alternatives to the Dexter merger; provided, however,
Dexter may, in response to an alternative proposal that Dexter concludes in
good faith would provide greater aggregate value to Dexter's stockholders,
participate in discussions or negotiations.
TERMINATION OF THE MERGER AGREEMENTS
(See Pages 92 and 103)
We may agree to terminate either merger agreement at any time prior
to the effective time of the mergers, whether before or after obtaining
stockholders' approval from our respective stockholders under specified
circumstances.
We may terminate either merger agreement:
o if the mergers are not completed by October 31, 2000, except that
we will extend this deadline date to not later than December 31,
2000 in order to permit expiration of the waiting period under the
Hart-Scott-Rodino Act so long as neither of Dexter's asset sale
agreements with Loctite or Ahlstrom has been terminated or if the
registration statement to be filed by Invitrogen in connection with
the mergers shall not have been declared effective on or before
September 15, 2000;
o if a court order or other government action prohibits either
merger;
o if Dexter, Life Technologies or Invitrogen fails to obtain
stockholder approval required by law to be given by their
respective stockholders;
o if either the Dexter merger or the Life Technologies merger is
terminated in accordance with its terms;
o if one of the parties materially breaches any of its
representations, warranties or obligations under the respective
merger agreements such breach makes it impossible for the non-
breaching party to satisfy a condition to its obligations; or
o if the deadline date of the merger agreements is extended beyond
October 31, 2000, at any time after the tenth business day after
the termination of either the asset purchase agreement between
Dexter and Loctite or the asset purchase agreement between Dexter
and Ahlstrom.
In addition, Dexter may terminate the Dexter merger agreement in
order to enter into a transaction with a third party which the Dexter board
determines provides greater aggregate value to Dexter's stockholders.
TERMINATION FEES
(See Page 104)
The Dexter merger agreement requires Dexter to pay to Invitrogen a
termination fee of $65 million if the merger agreement terminates due to
Dexter's public announcement of an alternate acquisition proposal or if
Dexter's stockholders do not approve the Dexter merger and Dexter
consummated a sale of all or substantially all of its assets within 12
months .
The Life Technologies merger agreement does not provide for any
termination fees.
REGULATORY MATTERS
(See Page 68)
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, we
cannot complete the mergers until we have furnished certain information and
materials to the Antitrust Division of the Department of Justice and the
Federal Trade Commission and a required waiting period has ended.
As with any U.S. merger, the Department of Justice and the Federal
Trade Commission have the authority to challenge the mergers on antitrust
grounds before or after the mergers are completed.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS
(See Page 63)
No ruling has been or will be sought from the Internal Revenue
Service on the United States federal income tax consequences of the
mergers. Consummation of the Dexter merger is conditioned upon (1) receipt
by Dexter of an opinion from its counsel, Skadden, Arps, Slate, Meagher &
Flom LLP, to the effect that the Dexter merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code and (2)
receipt by Invitrogen of an opinion from its counsel, Gray Cary Ware &
Freidenrich LLP, to the effect that the Dexter merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code.
Consummation of the Life Technologies merger is conditioned upon (1)
receipt by Life Technologies of an opinion from Skadden, Arps, Slate,
Meagher & Flom LLP, to the effect that the Life Technologies merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Code and (2) receipt by Invitrogen of an opinion from its counsel, Gray
Cary Ware & Freidenrich LLP, to the effect that the Life Technologies
merger will qualify as a reorganization within the meaning of Section
368(a) of the Code. The conditions in the Dexter merger agreement and the
Life Technologies merger agreement related to those opinions are not
waivable after receipt of stockholder approval unless further stockholder
approval is received with appropriate disclosure.
In general, assuming the mergers qualify as reorganizations within
the meaning of Section 368(a) and subject to the assumptions and
qualifications set forth under the heading "The Mergers--Material United
States Federal Income Tax Consequences of the Mergers," (1) a stockholder
of Dexter or Life Technologies who has exchanged all of their Dexter common
stock or Life Technologies common stock solely for cash in the Dexter
merger or the Life Technologies merger will recognize gain or loss in an
amount equal to the difference between the cash received and that
stockholder's adjusted tax basis in the shares surrendered, (2) a
stockholder of Dexter or Life Technologies who exchanged all of their
Dexter common stock or Life Technologies common stock solely for Invitrogen
common stock in the Dexter merger or the Life Technologies merger will not
recognize any gain or loss as a result of the exchange, and (3) a
stockholder of Dexter or Life Technologies who receives a combination of
cash and Invitrogen common stock in the Dexter merger or the Life
Technologies merger will not recognize any loss but will recognize gain, if
any, on the shares so exchanged to the extent of any cash received. See
"The Mergers-Material United States Federal Income Tax Consequences of the
Mergers." TAX MATTERS ARE VERY COMPLICATED AND THE TAX CONSEQUENCES OF THE
MERGERS TO STOCKHOLDERS WILL DEPEND ON THEIR INDIVIDUAL CIRCUMSTANCES.
STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS FOR A FULL UNDERSTANDING OF
THE TAX CONSEQUENCES TO THEM OF THE MERGER.
ACCOUNTING TREATMENT
(See Page 62)
The mergers will be accounted for using the purchase method of
accounting as such term is used under U.S. generally accepted accounting
principles. The purchase method accounts for a merger as an acquisition of
one company by another. See "Pro Forma Condensed Combined Financial
Information" and "The Mergers -- Accounting Treatment."
APPRAISAL RIGHTS
(See Page 106)
Under the law of Delaware, where Invitrogen is incorporated,
holders of Invitrogen common stock do not have the right to receive an
appraisal of the value of their shares of Invitrogen common stock in
connection with either of the mergers.
Under the law of Delaware, where Life Technologies is incorporated,
holders of Life Technologies common stock who comply with the applicable
requirements of Delaware law will have the right to receive an appraisal of
the value of their shares in connection with the Life Technologies merger.
Under the law of Connecticut, where Dexter is incorporated, holders
of Dexter common stock who comply with the applicable requirements of
Connecticut law will have the right to receive an appraisal of the value of
their Dexter shares in connection with the Dexter merger.
COMPARATIVE PER SHARE MARKET PRICE INFORMATION
(See Page 70)
Invitrogen common stock is traded on the Nasdaq National Market
System under the symbol "IVGN." Life Technologies common stock is traded on
the over-the-counter bulletin board under the symbol "LTEK.OB." Dexter
common stock is traded on the New York Stock Exchange under the symbol
"DEX."
Set forth below are the closing stock prices of Invitrogen common
stock, Life Technologies common stock and Dexter common stock as listed on
July 7, 2000, the last full trading day before the public announcement of
the merger, and on [month, date], 2000.
LIFE
INVITROGEN TECHNOLOGIES DEXTER
COMMON COMMON COMMON
STOCK STOCK STOCK
(NASDAQ) (OTC) (NYSE)
---------- ------------ -------
July 7, 2000 $ 77.13 $ 49.00 $ 48.00
[month, day], 2000 $ xx.xx $ xx.xx $ xx.xx
FINANCIAL SUMMARY
SUMMARY OF SELECTED HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL
INFORMATION
We are providing the following selected historical financial
information to help you in analyzing the financial aspects of the mergers.
This information is only a summary and you should read it in conjunction
with Invitrogen's, Life Technologies' and Dexter's historical financial
statements (and related notes) contained in the reports that have been
filed with the Securities and Exchange Commission. See "Where You Can Find
More Information."
<TABLE>
<CAPTION>
INVITROGEN-SELECTED HISTORICAL FINANCIAL INFORMATION
AT OR FOR THE THREE
MONTHS ENDED MARCH
31, AT OR FOR THE YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---------- ---------- -------- -------- -------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues....................... $ 27,286 $ 21,585 $ 92,880 $ 70,567 $ 55,334 $ 44,606 $ 33,705
Net income (loss).............. (1,760) 1,894 9,060 5,519 3,417 2,924 2,106
Net income (loss) applicable
to common shares............. (1,760) 2,660(1) 9,808(1) 4,415 (12,233)(2) 2,753 1,996
Earnings (loss) per share:
Basic...................... $(0.08) $ 0.16 $ 0.51 $ 0.29 $ (0.83) $ 0.20 $ 0.13
Diluted.................... $(0.08) $ 0.14 $ 0.45 $ 0.26 $ (0.83) $ 0.17 $ 0.13
Cash, cash equivalents and
short-term investments....... 265,411 39,381 102,221 6,543 9,333 1,820 875
Total assets................... 335,665 81,927 156,675 45,622 34,192 22,435 18,258
Long-term obligations, less
current portion.............. 3,024 8,054 7,256 8,033 5,656 5,797 6,026
Non-voting redeemable common
stock of Invitrogen B.V...... -- 1,526 -- 1,599 1,295 1,306 1,143
Convertible preferred stock -- -- 16,141 15,242 -- --
5.5% Convertible subordinated
notes........................ 172,500 -- -- -- -- -- --
Total stockholders' equity..... 149,051 58,917 131,192 8,219 3,690 8,617 2,992
</TABLE>
-------------------------
(1) 1999 includes a $1.0 million credit to equity for an adjustment to
the beneficial conversion feature related to convertible preferred
stock.
(2) 1997 includes a $15 million charge to equity for an adjustment to
the beneficial conversion features related to convertible preferred
stock.
<TABLE>
<CAPTION>
LIFE TECHNOLOGIES- SELECTED HISTORICAL FINANCIAL INFORMATION
AT OR FOR THE
THREE MONTHS
ENDED
MARCH 31, AT OR FOR THE YEAR ENDED DECEMBER 31,
---------------------- -------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
----------- --------- ------------ ---------- ---------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues.......................... $ 109,289 $ 99,984 $ 409,609 $ 364,206 $ 332,808 $ 310,339 $ 272,299
Research and development expenses. 6,148 5,837 23,836 21,880 21,281 19,084 15,871
Provision for contract settlement. -- -- 3,870 - - - -
Stockholder acquisition expenses.. -- -- - 5,335 - - -
Gain on product line disposal..... -- -- - - - 2,569 -
Operating income.................. 17,282 17,290 56,441 50,509 50,934 46,101 34,152
Net income........................ 10,983 10,492 38,277 31,303 32,235 28,700 22,277
Additions to property, plant and
equipment....................... $ 3,939 $ 10,658 $ $29,170 $ $18,024 $ $23,386 $ $42,151 $ 11,159
Average shares outstanding:
Basic.......................... 25,015 24,944 24,954 23,687 23,171 22,881 22,601
Diluted........................ 25,231 25,014 25,040 24,204 23,945 23,504 22,929
Cash and cash equivalents......... $ 53,131 $ 49,290 $ 51,489 $ 56,047 $ 19,076 $ 15,326 $ 23,201
Working capital................... 181,698 161,963 171,760 160,403 100,927 84,196 96,761
Total assets...................... 413,764 362,616 402,971 353,587 280,274 253,931 208,744
Long-term debt.................... 3,057 - 3,699 - 4,564 4,668 1,451
Stockholders' equity.............. 319,313 283,379 310,095 276,108 208,724 182,919 153,925
Per share...................... $ 12.75 $ 11.36 $ 12.40 $ 11.07 $ 8.94 $ 7.97 $ 6.76
Shares outstanding................ 25,039 24,947 25,004 24,941 23,351 22,951 22,773
Net income per share:
Basic.......................... $ 0.44 $ 0.42 $ 1.53 $ 1.32 $ 1.39 $ 1.25 $ 0.99
Diluted........................ $ 0.44 $ 0.42 $ 1.53 $ 1.29 $ 1.35 $ 1.22 0.97
Cash dividend declared per share.. $ - $ 0.05 $ 0.10 $ 0.20 $ 0.18 $ 0.15 1/3 0.13 1/3
</TABLE>
<TABLE>
<CAPTION>
DEXTER-SELECTED HISTORICAL FINANCIAL INFORMATION
AT OR FOR THE
SIX MONTHS
ENDED
JUNE 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
--------- ---------- ----------- ----------- ---------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
OPERATING RESULTS
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales..............................$ 530,007 $ 535,989 $ 1,041,673 $ 1,168,037 $ 1,147,055 $ 1,100,185 $ 1,088,905
Gross Profit........................... 209,302 206,046 405,849 426,749 411,688 379,205 346,699
Marketing and Administrative
Expenses............................. 125,894 126,395 251,244 246,911 238,401 223,848 206,708
Research and Development
Expenses............................. 25,021 26,179 49,711 56,656 54,021 51,504 49,375
Interest Expense....................... 11,252 11,086 20,910 18,210 20,192 20,500 20,931
Income Before Taxes.................... 54,595 138,270 181,178 86,547 111,085 98,252 79,824
Income (Loss) Before Minority
Interests............................ 36,033 88,962 119,573 46,400 71,094 63,372 51,847
Income (Loss) Before Change in
Accounting Principles................ 29,827 29,827 107,499 31,704 56,427 48,722 40,578
Cumulative Effect of Change in
Accounting Principles
Net Income (Loss)...................... 29,827 29,827 107,499 31,704 56,427 48,722 40,578
Income (Loss) Per Share - Diluted:
Before Change in Accounting
Principles.......................... $ 1.29 $ 3.58 $ 4.67 $ 1.35 $ 2.41 $ 2.03 $ 1.66
Cumulative Effect on Change in
Accounting Principles.................. $ 1.29 $ 3.58
Net Income (Loss) - Diluted......... $ 4.67 $ 1.35 $ 2.41 $ 2.03 $ 1.66
Cash Dividends Declared Per Share...... $ 0.52 $ 0.52 $ 1.04 $ 1.02 $ 0.96 $ 0.88 $ 0.88
</TABLE>
UNAUDITED SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION
We have presented below unaudited selected pro forma combined
financial data that reflect both the Life Technologies merger and the
Dexter merger using the purchase method of accounting. For a more detailed
description of the purchase method of accounting, see "The
Mergers--Accounting Treatment." The pro forma adjustments are preliminary
and based on management's estimates of the fair value of the assets
acquired and liabilities assumed. Consequently, the amounts reflected in
the unaudited selected pro forma combined financial information are subject
to change, and the final amounts may differ substantially. In addition, the
managements of Invitrogen, Life Technologies and Dexter are in the process
of assessing and formulating their integration plans to capture synergies
which are expected to result in employee separations, elimination of
duplicative facilities, employee relocations and other restructuring
actions. The final result of these plans could result in material revisions
to the estimated liabilities reflected in the accompanying unaudited
selected pro forma combined financial information.
The unaudited selected pro forma combined income statement data for
the three-month period ended March 31, 2000 and for the year ended December
31, 1999 gives effect to the mergers as if they were completed on January
1, 1999. The unaudited selected pro forma combined balance sheet data as of
March 31, 2000 gives effect to the mergers as if they were completed on
that date. The Invitrogen pro forma combined financial information has been
adjusted to exclude the operating results of Dexter's electronic materials,
adhesives and polymer systems; nonwoven materials; and coatings businesses
due to their expected sales.
<TABLE>
<CAPTION>
AT OR FOR THE THREE MONTHS FOR THE YEAR ENDED
ENDED MARCH 31, 2000 DECEMBER 31, 1999
-------------------------- ---------------------
(in thousands except per share data)
<S> <C> <C>
Revenues...................................... $ 136,477 $ 501,942
Net loss...................................... (24,768) (77,471)
Net loss applicable to common shares.......... (24,768) (76,723)
Loss per share:
Basic..................................... $ (0.59) $ (2.00)
Diluted................................... $ (0.59) $ (2.00)
Cash, cash equivalents and short-term
investments................................. 97,939
Total assets.................................. 1,864,804
Long-term obligations, less current portion... 6,081
5.5% Convertible subordinated notes........... 172,500
Total stockholders' equity.................... 1,470,167
</TABLE>
COMPARATIVE PER SHARE INFORMATION
We have summarized below the per share information for our
respective companies on a historical, and equivalent combined pro forma
basis. You should read the comparative per share information below in
conjunction with the selected historical financial data on pages 13 and 14
and the unaudited pro forma condensed combined financial statements
appearing on pages 72 through 77 of this joint proxy statement and
prospectus. The equivalent pro forma per share data for Life Technologies and
Dexter stockholders has been determined assuming an exchange ratio of .8950.
<TABLE>
<CAPTION>
AT OR FOR THE THREE AT OR FOR THE YEAR
MONTHS ENDED ENDED DECEMBER 31,
MARCH 31, 2000 1999
-------------------- ------------------
(UNAUDITED)
INVITROGEN -- HISTORICAL
Earnings (loss) per common share:
<S> <C> <C>
Basic........................................... $ (0.08) $ 0.51
Diluted......................................... $ (0.08) $ 0.45
Cash dividends declared per share.............................. $ -- $ --
Book value per share at period end............................. $ 6.40 $ 5.89
LIFE TECHNOLOGIES -- HISTORICAL
Earnings per common share:
Basic........................................... $ .44 $ 1.53
Diluted......................................... $ .44 $ 1.50
Cash dividends declared per share.............................. $ - $ .10
Book value per share at period end............................. $ 12.75 $ 12.40
DEXTER -- HISTORICAL
Earnings (loss) per common share:
Basic........................................... $ .54 $ 4.71
Diluted......................................... $ .54 $ 4.67
Cash dividends declared per share.............................. $ .26 $ 1.04
Book value per share at period end............................. $ 20.46 $ 20.29
INVITROGEN -- PRO FORMA
Earnings (loss) per common share:
Basic........................................... $ (0.59) $ (2.00)
Diluted......................................... $ (0.59) $ (2.00)
Cash dividends declared per share.............................. $ -- --
Book value per share at period end............................. $ 34.57 --
EQUIVALENT PRO FORMA PER SHARE FOR LIFE TECHNOLOGIES STOCKHOLDERS
(STOCK ELECTION)
Earnings per common share:
Basic........................................... $ 0.49 $ 1.71
Diluted......................................... $ 0.49 $ 1.68
Cash dividends declared per share.............................. -- $ 0.11
Book value per share at period end............................. $ 14.25 $ 13.85
EQUIVALENT PRO FORMA PER SHARE FOR DEXTER STOCKHOLDERS
(STOCK ELECTION)
Earnings per common share:
Basic........................................... $ 0.60 $ 5.26
Diluted......................................... $ 0.60 $ 5.22
Cash dividends declared per share.............................. $ 0.29 $ 1.16
Book value per share at period end............................. $ 22.86 $ 22.67
</TABLE>
RISK FACTORS
In addition to the other information included or incorporated by
reference in this joint proxy statement and prospectus (including the
matters addressed in "Cautionary Statement Concerning Forward-Looking
Statements"), you should consider the following in determining whether to
vote in favor of the mergers. In this "Risk Factors" section, the terms
"we," "our," "us" and similar terms refer to Invitrogen either before or
after the mergers.
The operations of Invitrogen after the mergers will be subject to a
number of risks and hazards, some inherent to the life sciences industry,
which may materially and adversely affect the company's financial condition
or results of operations. The following list outlines some, but not all, of
these risks and hazards.
STOCKHOLDERS WHO MAKE A CASH ELECTION MAY RECEIVE A FORM OF CONSIDERATION
DIFFERENT FROM WHAT THEY ELECT.
Because of possible proration, holders of Dexter common stock and
Life Technologies common stock who make cash elections may not receive the
entire amount of the merger consideration in cash. If a holder elects all
cash and the available cash is oversubscribed, then the holder will receive
a portion of the merger consideration in Invitrogen common stock.
VALUE OF INVITROGEN COMMON STOCK TO BE RECEIVED IN THE MERGERS MAY
FLUCTUATE; ALL HOLDERS MAY NOT RECEIVE THE SAME VALUE.
Upon consummation of the mergers, all outstanding shares of Dexter
common stock and Life Technologies common stock will be converted into
cash, Invitrogen common stock or a combination of cash and Invitrogen
common stock. Because cash elections will be prorated if necessary so that
Invitrogen will not issue more than $410 million in cash for the Dexter
merger and $105 million for the Life Technologies merger, it is likely that
all stockholders will receive some Invitrogen common stock in the merger.
If the average closing price of Invitrogen common stock during the pricing
period (the 20-trading day period ending on the third day prior to the
Dexter stockholder meeting) is less than $60, the exchange ratio of
Invitrogen shares for Dexter shares (assuming a stock election) will be
fixed at 1.0417 and the exchange ratio of Invitrogen shares for Life
Technologies shares (assuming a stock election) will be fixed at 1.0. If
the average closing price of Invitrogen during the pricing period is more
than $80, the Invitrogen/Dexter exchange ratio will be fixed at 0.7813, and
the Invitrogen/Life Technologies exchange ratio will be fixed at 0.75. In
either of those circumstances, because it is likely that all stockholders
will receive some Invitrogen common stock, it would be likely that
stockholders would receive more than $62.50 for Dexter shares and $60.00
for Life Technologies share if the ratios become fixed at 0.7813 and 0.75,
respectively, and for similar reasons they would likely receive less than
$62.50 and $60.00, respectively, if the ratios become fixed at 1.0417 and
1.0, respectively. In either of those circumstances, since the total value
received would depend upon exactly what portion of the merger consideration
consisted of Invitrogen common stock, it is likely that stockholders of
Dexter and Life Technologies, respectively, would be receiving
consideration of different values depending upon whether they had made a
stock election, a cash election or a standard election and upon precisely
what the cash proration factor is for cash elections, if any.
The mergers are likely to occur at a date later than the date of
the stockholder meetings and there can be no assurance that the market
price of Invitrogen common stock on the date of the stockholders' meetings
will reflect the market price of Invitrogen affected by various factors
including those we discuss under "Cautionary Statement Concerning
Forward-Looking Statements." For historical and current market prices of
Invitrogen, Life Technologies and Dexter common stock, see "Comparative Per
Share Market Price and Dividend Information."
FAILURE TO SUCCESSFULLY INTEGRATE LIFE TECHNOLOGIES INTO OUR OPERATIONS
COULD REDUCE INVITROGEN'S PROFITABILITY.
Invitrogen signed the merger agreement with Life Technologies on
July 7, 2000. Our integration of the operations of Life Technologies will
require significant efforts from each company, including the coordination
of research and development and sales and marketing efforts. We may find it
difficult to integrate the operations of these acquired companies.
Personnel may leave or be terminated because of the mergers. Such employee
terminations or resignations or facility closures may require us to make
severance or other payments and may result in related litigation.
Life Technologies' headquarters is located in Rockville, Maryland
with other U.S. operations in Frederick, Maryland and Grand Island, New
York, while Invitrogen's U.S. headquarters and the bulk of Invitrogen's
other operations are located in Carlsbad, California. This physical
separation of facilities could make it difficult for us to communicate
effectively with, manage and integrate Life Technologies' staff and
operations with the rest of Invitrogen. Such difficulties could
significantly hurt our operations and consequently our financial results.
Invitrogen's management may have its attention diverted while
trying to integrate Life Technologies. Such diversion of management's
attention or difficulties in the transition process could have a material
adverse impact on us. If we are not able to successfully integrate the
operations of Life Technologies, our expectations of future results of
operations may not be met. Factors which will determine the success of the
mergers include:
o changes in the favorable market reaction to Invitrogen's and Life
Technologies' significant products;
o competitive factors, including technological advances attained by
competitors and patents granted to, or contested by competitors,
which would result in their ability to compete against us more
effectively;
o the ability of the combined company to increase sales of both
companies' products; and
o the ability of the combined company to operate efficiently and
achieve cost savings.
Even if the companies are able to integrate operations, there can
be no assurance that synergies will be achieved. The failure to achieve
synergies could have a material adverse effect on the business results of
operations and financial condition of the combined company.
FAILURE TO MANAGE GROWTH COULD IMPAIR OUR BUSINESS.
Our business has grown rapidly. Our net revenues increased from
$41.2 million in 1997 to $68.3 million in 1999. During that same period we
significantly expanded our operations in the United States and in Europe.
The number of our employees has increased from approximately 220 at
December 31, 1996 to approximately 376 at December 31, 1999. Following the
proposed mergers, the combined companies will have approximately [______]
employees and approximately $502 million in pro forma 1999 revenues.
It is very difficult to manage this rapid growth, and our future
success depends on our ability to implement:
o research and product development;
o sales and marketing programs;
o customer support programs;
o operational and financial control systems; and
o recruiting and training of new personnel.
Our ability to offer successfully products and services and
implement our business plan in a rapidly evolving market requires an
effective planning and management process. We expect that we will need to
continue to improve our financial and managerial controls, reporting
systems and procedures, and to expand and train our workforce worldwide.
We have developed a high-throughput gene cloning and expression
system by scaling up our TOPO TA Cloning technology. We are commercializing
this technology under the name Invitrogenomics. Our future business growth
depends in part on the success of our Invitrogenomics products and
services. In order to succeed in this business we may need to hire
additional senior managers. Moreover, operation of Invitrogenomics may
present unfamiliar management challenges that we might not successfully
address. We may not be able to locate or hire the necessary managers or
successfully address the potentially unfamiliar management issues that may
occur in Invitrogenomics or other areas of our business.
Invitrogen's mergers with Life Technologies and Dexter will require
additional investments in operations, product research and development,
administration and sales and marketing which are significant expenses.
Failure to manage successfully and coordinate the growth of the combined
company could adversely impact our revenue and profits.
REDUCTION IN RESEARCH AND DEVELOPMENT BUDGETS AND GOVERNMENT FUNDING MAY
AFFECT SALES.
Our customers include researchers at pharmaceutical and
biotechnology companies, academic institutions and government and private
laboratories. Fluctuations in the research and development budgets of these
researchers and their organizations could have a significant effect on the
demand for our products. Research and development budgets fluctuate due to
changes in available resources, spending priorities and institutional
budgetary policies. Our business could be seriously damaged by any
significant decrease in life sciences research and development expenditures
by pharmaceutical and biotechnology companies, academic institutions or
government and private laboratories.
In recent years, the United States pharmaceutical industry has
undergone substantial downsizing and consolidation. Further mergers or
corporate consolidations in the pharmaceutical industry could cause us to
lose existing customers and potential future customers, which could have a
material adverse effect on our business, financial condition and results of
operations.
A significant portion of our sales have been to researchers,
universities, government laboratories and private foundations whose funding
is dependent upon grants from government agencies such as the U.S. National
Institutes of Health (NIH) and similar domestic and international agencies.
Also, a portion of our direct revenues comes from NIH Small Business
Innovation Research grant funds. Although the level of research funding has
increased during the past several years, we cannot assure you that this
trend will continue. Government funding of research and development is
subject to the political process, which is inherently fluid and
unpredictable. Our revenues may be adversely affected if our customers
delay purchases as a result of uncertainties surrounding the approval of
government budget proposals. Also, government proposals to reduce or
eliminate budgetary deficits have sometimes included reduced allocations to
the NIH and other government agencies that fund research and development
activities. A reduction in government funding for the NIH or other
government research agencies could seriously damage our business.
Our customers generally receive funds from approved grants at
particular times of the year, as determined by the federal government. In
the past, grants have been frozen for extended periods or have otherwise
become unavailable to various institutions without advance notice. The
timing of the receipt of grant funds affects the timing of purchase
decisions by our customers and, as a result, can cause fluctuations in our
sales and operating results.
FAILURE TO LICENSE NEW TECHNOLOGIES COULD IMPAIR OUR NEW PRODUCT
DEVELOPMENT.
Our business model of providing products to researchers working on
a variety of genetic projects requires us to develop a wide spectrum of
products. To generate broad product lines it is advantageous to sometimes
license technologies from the scientific community at large rather than
depending exclusively on our own employees. As a result, we believe our
ability to in-license new technologies from third parties is and will
continue to be critical to our ability to offer new products. More than 40%
of our current revenues are from products manufactured or sold under
licenses from third parties.
From time to time we are notified or become aware of patents held
by third parties which are related to technologies we are selling or may
sell in the future. After a review of these patents, we may decide to
obtain a license for these technologies from such third parties. We are
currently in the process of negotiating several such licenses and expect
that we will also negotiate these types of licenses in the future. There
can be no assurances that we will be able to negotiate such licenses on
favorable terms, or at all.
Our ability to gain access to technologies needed for new products
and services depends in part on our ability to convince inventors that we
can successfully commercialize their inventions. We cannot assure you that
we will be able to continue to identify new technologies developed by
others. Even if we are able to identify new technologies of interest, we
may not be able to negotiate a license on favorable terms, or at all.
LOSS OF LICENSES COULD HURT OUR PERFORMANCE.
Some of our licenses do not run for the length of the underlying
patent. We may not be able to renew our existing licenses on favorable
terms, or at all. If we lose the rights to a patented technology, we may
need to stop selling certain of our products, redesign our products or lose
a competitive advantage. Potential competitors could in-license
technologies that we fail to license and potentially erode our market share
for certain products.
Our licenses typically subject us to various commercialization,
sublicensing and other obligations. If we fail to comply with these
requirements we could lose important rights under a license, such as the
right to exclusivity in a certain market. In some cases, we could also lose
all rights under a license. In addition, certain rights granted under the
license could be lost for reasons out of our control. For example, the
licensor could lose patent protection for a number of reasons, including
invalidity of the licensed patent. We typically do not receive significant
indemnification from a licensor against third party claims of intellectual
property infringement.
OUR MARKET SHARE DEPENDS ON NEW PRODUCT INTRODUCTIONS AND ACCEPTANCE.
The market for our products and services is only about fifteen
years old. Rapid technological change and frequent new product
introductions are typical for the market. For example, prepackaged kits to
perform research in particular cell lines and already-isolated genetic
material are only now coming into widespread use among researchers. Our
future success will depend in part on continuous, timely development and
introduction of new products that address evolving market requirements. We
believe successful new product introductions provide a significant
competitive advantage because customers make an investment of time in
selecting and learning to use a new product, and are reluctant to switch
thereafter. To the extent we fail to introduce new and innovative products,
we may lose market share to our competitors, which will be difficult or
impossible to regain. An inability, for technological or other reasons, to
develop successfully and introduce new products could reduce our growth
rate or damage our business.
We have made a substantial investment in developing the technology
underlying Invitrogenomics products and services. The products portion of
Invitrogenomics was launched commercially in 1998, and has not achieved
significant revenues. We cannot be sure that Invitrogenomics will achieve
any commercial success or that revenues will equal or exceed the cost of
our investment.
In the past we have experienced, and are likely to experience in
the future, delays in the development and introduction of products. We
cannot assure you that we will keep pace with the rapid rate of change in
life sciences research, or that our new products will adequately meet the
requirements of the marketplace or achieve market acceptance. Some of the
factors affecting market acceptance of new products include:
o availability, quality and price relative to competitive products;
o the timing of introduction of the product relative to competitive
products;
o scientists' opinion of the product's utility;
o citation of the product in published research; and
o general trends in life sciences research.
The expenses or losses associated with unsuccessful product
development activities or lack of market acceptance of our new products
could materially adversely affect our business, operating results and
financial condition.
LOSS OF KEY PERSONNEL COULD HURT OUR BUSINESS.
Our products and services are highly technical in nature. In
general only highly qualified and trained scientists have the necessary
skills to develop and market our products and provide our services. We face
intense competition for these professionals from our competitors and our
customers, marketing partners and companies throughout our industry. Any
failure on our part to hire, train and retain a sufficient number of
qualified professionals would seriously damage our business. We do not
generally enter into employment agreements requiring these employees to
continue in our employment for any period of time.
COMPETITION IN THE LIFE SCIENCES RESEARCH MARKET COULD REDUCE SALES.
The markets for our products are very competitive and price
sensitive. Many other life science research product suppliers have greater
financial, operational, sales and marketing resources, and more experience
in research and development than we do. These and other companies may have
developed or could in the future develop new technologies that compete with
our products or even render our products obsolete. If a competitor develops
superior technology or cost-effective alternatives to our kits and other
products, our business, operating results and financial condition could be
materially adversely affected.
The market for our electrophoresis products is also subject to
specific competitive risks. This market is highly price competitive. Our
competitors have in the past and may in the future compete by lowering
prices on certain products. In certain cases, we may respond by lowering
our prices which would reduce revenues and profits. Conversely, failure to
anticipate and respond to price competition may hurt our market share.
We believe that customers in our markets display a significant
amount of loyalty to their initial supplier of a particular product.
Therefore, it may be difficult to generate sales to customers who have
purchased products from competitors. To the extent we are unable to be the
first to develop and supply new products, our competitive position will
suffer.
DISTRIBUTORS MAY FORCE US TO USE MORE EXPENSIVE MARKETING AND DISTRIBUTION
CHANNELS.
Certain of our customers have developed purchasing initiatives to
reduce the number of vendors from which they purchase in order to lower
their supply costs. In some cases these accounts have established
agreements with large distributors, which include discounts and the
distributors' direct involvement with the purchasing process. These
activities may force us to supply the large distributors with our products
at a discount to reach those customers. For similar reasons many larger
customers, including the U.S. government, have requested and may in the
future request, special pricing arrangements, including blanket purchase
agreements. These agreements may limit our pricing flexibility, especially
with respect to our electrophoresis products, which could adversely impact
our business, financial condition and results of operations. Currently, we
do not have the capability to accept and process orders through our
website. Accordingly, we may implement sales through Internet vendors.
Internet sales through third parties may negatively impact our gross
margins as the commission paid on Internet sales would be an additional
cost not incurred through the use of non-Internet vendors.
WE RELY ON THIRD PARTY MANUFACTURERS TO MANUFACTURE SOME OF OUR PRODUCTS
AND COMPONENTS.
We rely on third party manufacturers to supply many of our raw
materials, product components and, in some cases, entire products. In
particular, we purchase all of the cassettes used in our pre-cast
electrophoresis gels from a single third party manufacturer. Also, we
recently contracted with an outside vendor for the production of our
PowerEase instrument products. Manufacturing problems may occur with these
and other outside sources. If such problems occur, there can be no
assurance that we will be able to manufacture our products profitably or on
time.
INTERNATIONAL UNREST OR FOREIGN CURRENCY FLUCTUATIONS COULD ADVERSELY
AFFECT OUR RESULTS.
Including subsidiaries and distributors, our products are currently
marketed in more than 30 countries throughout the world. Our international
revenues, which include revenues from our Netherlands and Germany
subsidiaries and export sales, represented 35% of our product revenues in
1999 and 1998, and 29% in 1997. We expect that international revenues will
continue to account for a significant percentage of our revenues for the
foreseeable future, in part because we intend to expand our international
operations.
There are a number of risks arising from our international
business, including:
o general economic and political conditions in the markets in which
we operate, including fluctuations in significant currency exchange
rates;
o potential increased costs associated with overlapping tax structures;
o potential trade restrictions and exchange controls;
o more limited protection for intellectual property rights in some
countries;
o difficulties and costs associated with staffing and managing
foreign operations;
o uncertain effects of the movement in Europe to a unified currency;
o slower growth in the European market until the unified currency is
fully adopted;
o unexpected changes in regulatory requirements;
o the difficulties of compliance with a wide variety of foreign laws
and regulations;
o longer accounts receivable cycles in certain foreign countries; and
o import and export licensing requirements.
A significant portion of our business is conducted in currencies
other than the U.S. dollar, which is our reporting currency. We recognize
foreign currency gains or losses arising from our operations in the period
incurred. As a result, currency fluctuations among the U.S. dollar and the
currencies in which we do business have caused and will continue to cause
foreign currency transaction gains and losses. We cannot predict the
effects of exchange rate fluctuations upon our future operating results
because of the number of currencies involved, the variability of currency
exposures and the potential volatility of currency exchange rates. We
engage in foreign exchange hedging transactions to manage our foreign
currency exposure, but we cannot assure you that our strategies will
adequately protect our operating results from the effects of exchange rate
fluctuations.
The Asia/Pacific region in the past has experienced unstable
economic conditions and significant devaluation in its currencies. The
economic situation in the region may result in slower payments of
outstanding receivable balances. To date, this region has not represented a
significant portion of our revenues. However, to the extent the
Asia/Pacific region becomes increasingly important, or to the extent the
factors affecting the region begin to affect other geographic locations,
our business could be damaged.
INABILITY TO PROTECT OUR TECHNOLOGIES COULD AFFECT OUR ABILITY TO COMPETE.
Our success depends to a significant degree upon our ability to
develop proprietary products and technologies. However, we cannot assure
you that patents will be granted on any of our patent applications. We also
cannot assure you that the scope of any of our issued patents will be
sufficiently broad to offer meaningful protection. We only have patents
issued in selected countries. Therefore, third parties can make, use and
sell products covered by our patents in any country in which we do not have
patent protection. In addition, our issued patents or patents we license
could be successfully challenged, invalidated or circumvented so that our
patent rights would not create an effective competitive barrier. The right
to use our products is given to our customers under label licenses that are
for research purposes only. These licenses could be contested and we cannot
assure you that we would either be aware of an unauthorized use or be able
to enforce the restrictions in a cost-effective manner.
DISCLOSURE OF TRADE SECRETS COULD AID OUR COMPETITORS.
We attempt to protect our trade secrets by entering into
confidentiality agreements with third parties, our employees and
consultants. However, these agreements can be breached and, if they are,
there may not be an adequate remedy available to us. If our trade secrets
become known we may lose our competitive position.
INTELLECTUAL PROPERTY OR OTHER LITIGATION COULD HARM OUR BUSINESS.
Litigation regarding patents and other intellectual property rights
is extensive in the biotechnology industry. We are aware that patents have
been applied for and, in some cases, issued to others claiming technologies
which are closely related to ours. As a result, and in part due to the
ambiguities and evolving nature of intellectual property law, we
periodically receive notices of potential infringement of patents held by
others. Although we have to date successfully resolved these types of
claims, we may not be able to do so in the future.
In the event of an intellectual property dispute we may be forced
to litigate. Such litigation could involve proceedings declared by the U.S.
Patent and Trademark Office or the International Trade Commission, as well
as proceedings brought by affected third parties. Intellectual property
litigation can be extremely expensive, and such expense, as well as the
consequences should we not prevail, could seriously harm our business.
If a third party claimed an intellectual property right to
technology we use, we might need to discontinue an important product or
product line, alter our products and processes, pay license fees or cease
certain activities. Although we might under these circumstances attempt to
obtain a license to such intellectual property, we may not be able to do so
on favorable terms, or at all.
In addition to intellectual property litigation, other substantial,
complex or extended litigation could result in large expenditures by us and
distraction of our management. For example, lawsuits by employees,
stockholders, collaborators or distributors could be very costly and
substantially disrupt our business. Disputes from time to time with such
companies or individuals are not uncommon and we cannot assure you that we
will always be able to resolve them out of court.
THE MARKET PRICE OF INVITROGEN STOCK COULD BE VOLATILE, WHICH MAY IMPAIR
YOUR INVESTMENT.
The market price of Invitrogen common stock has been subject to
volatility and, in the future, the market price of our common stock may
fluctuate substantially due to a variety of factors, including:
o quarterly fluctuations in our operating and earnings per share results;
o technological innovations or new product introductions by us or our
competitors;
o economic conditions;
o disputes concerning patents or proprietary rights,
o changes in earnings estimates by market research analysts;
o sales of common stock by existing holders;
o loss of key personnel; and
o securities class action or other litigation.
The market price for Invitrogen common stock may also be affected
by our ability to meet analysts' expectations. Any failure to meet such
expectations, even slightly, could have an adverse effect on the market
price of Invitrogen common stock. In addition, the stock market is subject
to extreme price and volume fluctuations. This volatility has had a
significant effect on the market prices of securities issued by many
companies for reasons unrelated to the operating performance of these
companies. In the past, following periods of volatility in the market
price of a company's securities, securities class action litigation has
often been instituted against that company. If similar litigation were
instituted against us, it could result in substantial costs and a diversion
of our management's attention and resources, which could have an adverse
effect on our business, results of operations and financial condition.
OUR ANTI-TAKEOVER DEFENSE PROVISIONS MAY DETER POTENTIAL ACQUIRORS AND MAY
DEPRESS INVITROGEN'S STOCK PRICE.
Certain provisions of our certificate of incorporation, bylaws and
Delaware law could be used by our incumbent management to make it
substantially more difficult for a third party to acquire control of
Invitrogen. These provisions include the following:
o we may issue preferred stock with rights senior to those of our
common stock;
o we have a classified board of directors;
o our by-laws prohibit action by written consent by stockholders; and
o we require advance notice for nomination of directors and for
stockholder proposals.
These provisions could discourage potential takeover attempts and
could adversely affect the market price of Invitrogen common stock.
ACCIDENTS RELATED TO HAZARDOUS MATERIALS COULD ADVERSELY AFFECT OUR
BUSINESS.
Portions of our operations require the controlled use of hazardous
and radioactive materials. Although we believe our safety procedures comply
with the standards prescribed by federal, state and local regulations, the
risk of accidental contamination of property or injury to individuals from
these materials cannot be completely eliminated. In the event of such an
accident, we could be liable for any damages that result, which could
seriously damage our business. Additionally, any accident could partially
or completely shut down our research and manufacturing facilities and
operations.
We generate waste that must be transported to approved landfills.
The transportation and disposal of such waste meets applicable state and
federal guidelines. However, the disposal of such waste puts the company at
risk for environmental liability if, in the future, the landfills leak and
are proved to have damaged the environment.
Furthermore, in acquiring Dexter, we are assuming Dexter's
environmental liabilities. While we believe that Dexter has adequately
reserved and/or has insurance for the cost of such liabilities, we
anticipate purchasing additional insurance to safeguard the company's
assets. However, unexpected costs could exceed stated reserves and
insurance. This may require us to allocate additional funds and other
resources to address Dexter's environmental liabilities.
POTENTIAL PRODUCT LIABILITY CLAIMS COULD AFFECT OUR EARNINGS AND FINANCIAL
CONDITION.
We face a potential risk of liability claims based on our products
or services. We carry product liability insurance coverage which is limited
in scope and amount but which we believe to be adequate. We cannot assure
you, however, that we will be able to maintain this insurance at reasonable
cost and on reasonable terms. We also cannot assure you that this insurance
will be adequate to protect us against a product liability claim, should
one arise.
MEMBERS OF THE MANAGEMENT AND BOARD OF DIRECTORS OF INVITROGEN, LIFE
TECHNOLOGIES AND DEXTER MAY HAVE INTERESTS IN THE MERGERS THAT DIFFER FROM
THE INTERESTS OF THEIR STOCKHOLDERS.
Certain members of Invitrogen's, Life Technologies' and Dexter's
management and boards of directors have interests in the mergers that may
be different from the interests of Invitrogen, Life Technologies and Dexter
stockholders. The mergers will give rise to entitlements and benefits for
some members of management and the boards of directors of Invitrogen, Life
Technologies and Dexter. See "Interests of Certain Persons in the Merger."
ABSENCE OF DIVIDENDS COULD REDUCE INVITROGEN'S ATTRACTIVENESS TO INVESTORS.
Some investors favor companies that pay dividends, particularly in
market downturns. We have never declared or paid any cash dividends on our
common stock. We currently intend to retain any future earnings for funding
growth and, therefore, we do not currently anticipate paying cash dividends
on our common stock in the foreseeable future.
FOLLOWING THE MERGERS, WE MAY NEED TO OBTAIN ADDITIONAL FINANCING TO
SUPPORT ONGOING OPERATIONS.
In order to consummate the mergers, we will deplete our cash
reserves. In order to support ongoing operations, we may need to raise
additional funds. Such funds may not be available on favorable terms or at
all. If we are unable to raise additional funds we may be required to scale
back operations which could adversely impact our business.
THERE ARE OTHER RISKS RELATED TO LIFE TECHNOLOGIES' AND DEXTER'S ONGOING
OPERATIONS.
There are additional risks related to the ongoing operation of Life
Technologies and Dexter that differ in some respects from the risks we have
faced previously. These risks include:
o changes in pricing or availability of fetal bovine serum,
o the possibility of adverse rulings by or adverse developments in
negotiations with the government,
o litigation risks,
o potential environmental liabilities, and
o other risks detailed in the filings by Dexter and Life
Technologies with the Securities and Exchange Commission.
We can not assure you that we will be able to manage these risks in
such a manner as will not adversely affect our business.
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
In this document (and in documents that are incorporated by
reference), we have made forward-looking statements. These statements are
based on our estimates and assumptions and are subject to a number of risks
and uncertainties. Forward-looking statements include the information
concerning possible or assumed future results of operations of each of our
companies (see the following captions: "Summary," "The Mergers--Reasons for
the Mergers; Recommendations of the Boards," "--Opinion of Invitrogen's
Financial Advisor" and "--Opinion of the Financial Advisor to the Special
Committee of the Board of Directors of Life Technologies" and "--Opinion of
Dexter's Financial Advisor"). Forward-looking statements also include those
preceded or followed by the words "anticipates," "believes," "estimates,"
"expects," "hopes," "targets" or similar expressions. For each of these
statements, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995.
The future results of Invitrogen could be affected by subsequent
events and could differ materially from those expressed in the
forward-looking statements. If future events and actual performance differ
from our assumptions, our actual results could vary significantly from the
performance projected in the forward-looking statements.
You should understand that the following important factors, along
with those discussed elsewhere in this joint proxy statement and prospectus
and in the documents which we incorporate by reference, could affect the
future results of Invitrogen and could cause those results to differ
materially from those expressed in the forward- looking statements:
o The risks and other factors described under the caption "Risk
Factors" in this joint proxy statement and prospectus;
o General economic and business conditions;
o Industry trends;
o Our assumptions about customer acceptance, overall market
penetration and competition from providers of alternative
products and services;
o Our actual funding requirements; and
o Availability, terms and development of capital.
Because the risk factors referred to above could cause actual
results or outcomes to differ materially from those expressed in any
forward-looking statements made by us, you should not place undue reliance
on any such forward-looking statements. Further, any forward-looking
statement speaks only as of the date on which it is made and we undertake
no obligation to update any forward-looking statement or statement to
reflect events or circumstances after the date on which such statement is
made or to reflect the occurrence of unanticipated events. New factors
emerge from time to time, and it is not possible for us to predict which
will arise. In addition, we cannot assess the impact of each factor on our
business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statement.
THE INVITROGEN SPECIAL MEETING
This joint proxy statement and prospectus is being furnished in
connection with the solicitation of proxies from the holders of Invitrogen
common stock by the Invitrogen board of directors relating to the Life
Technologies merger proposal, the Dexter merger proposal and other matters
to be voted upon at the Invitrogen special meeting and at any adjournment
or postponement of the meeting. This joint proxy statement and prospectus
is also a prospectus for shares of Invitrogen common stock to be issued in
the Life Technologies merger and the Dexter merger. We mailed this joint
proxy statement and prospectus to stockholders beginning [month, day],
2000. You should read this joint proxy statement and prospectus carefully
before voting your shares.
WHEN AND WHERE THE INVITROGEN SPECIAL MEETING WILL BE HELD.
The Invitrogen special meeting will be held at [location, city,
state], on [month, day], 2000 starting at [time], local time.
WHAT WILL BE VOTED UPON
At the Invitrogen special meeting, you will be asked to consider
and vote upon the following items:
o to approve and adopt each of the Agreement and Plan of Merger
dated as of July 7, 2000 between Invitrogen Corporation and Life
Technologies, and the Agreement and Plan of Merger dated as of
July 7, 2000 between Invitrogen Corporation and Dexter
Corporation and to approve the Life Technologies merger and the
Dexter merger and the other transactions described in the
respective merger agreements;
o to consider and vote on a proposal to amend Invitrogen
Corporation's Certificate of Incorporation to increase the
authorized capital stock to 131,405,884;
o to consider and vote on a proposal to increase by [xxx,xxx] the
number of shares Invitrogen may issue under Invitrogen's 1997
Stock Option Plan to [x,xxx,xxx];
o a proposal to increase by [xxx,xxx] the number of shares of
Invitrogen common stock that Invitrogen may issue under
Invitrogen's 1998 Employee Stock Purchase Plan to [x,xxx,xxx];
and
o such other business as properly may come before the Invitrogen
special meeting, or any adjournment or postponement of the
meeting.
ONLY INVITROGEN STOCKHOLDERS OF RECORD AS OF [MONTH, DAY] ARE ENTITLED TO VOTE
Invitrogen stockholders who hold their shares of record as of the
close of business on [month, day], are entitled to notice of and to vote at
the Invitrogen special meeting. On the record date, there were
approximately [xx] million shares of Invitrogen common stock outstanding
and entitled to vote at the Invitrogen special meeting.
MAJORITY OF OUTSTANDING SHARES MUST BE REPRESENTED FOR A VOTE TO BE TAKEN
In order to have a quorum, a majority of the shares of Invitrogen
common stock that are outstanding and entitled to vote at the Invitrogen
special meeting must be represented in person or by proxy. If a quorum is
not present, a majority of shares that are represented may adjourn or
postpone the Invitrogen special meeting.
VOTE REQUIRED FOR APPROVAL
The proposal relating to the Life Technologies merger and the
Dexter merger and the proposal to amend Invitrogen's certificate of
incorporation to increase the number of shares of common stock Invitrogen
may issue must be approved by the affirmative vote of at least a majority
of the shares of the issued and outstanding shares of Invitrogen common
stock that are voted at the Invitrogen special meeting. The proposals to
approve the amendment to increase the number of shares of Invitrogen common
stock which may be issued under Invitrogen's 1997 Stock Option Plan and its
1998 Employee Stock Purchase Plan must be approved by the holders of a
majority of the votes cast at the Invitrogen special meeting. Each share of
Invitrogen common stock is entitled to cast one vote. As of the Invitrogen
record date, Invitrogen directors and executive officers owned and were
entitled to vote xx.x million shares (or x.x%) of Invitrogen common stock.
VOTING YOUR SHARES AND CHANGING YOUR VOTE
VOTING YOUR SHARES
The Invitrogen Board of Directors is soliciting proxies from the
Invitrogen stockholders. This will give you the opportunity to vote at the
Invitrogen special meeting. When you deliver a valid proxy, the shares
represented by that proxy will be voted in accordance with your
instructions.
To grant your proxy by mail, please complete your proxy card, sign,
date and return it in the enclosed envelope. To be valid, a returned proxy
card must be signed and dated by [month, day], 2000. If you attend the
Invitrogen special meeting in person, you may vote your shares by
completing a ballot at the meeting.
CHANGING YOUR VOTE BY REVOKING YOUR PROXY
You may revoke your proxy at any time before the polls close at the
Invitrogen special meeting. You may revoke your proxy by delivering notice
in writing to the Secretary of Invitrogen, granting a later-dated proxy or
appearing in person at the Invitrogen special meeting. You will not revoke
your proxy by simply attending the Invitrogen special meeting unless you
complete a ballot.
HOW PROXIES ARE COUNTED
If you return a signed and dated proxy card but do not indicate how
the shares are to be voted, those shares represented by your proxy card
will be voted as recommended by the Invitrogen Board of Directors. A valid
proxy also gives the individuals named as proxies authority to vote in
their discretion when voting the shares on any other matters that are
properly presented for action at the Invitrogen special meeting. A properly
executed proxy marked "ABSTAIN" will not be voted. However, it may be
counted to determine whether there is a quorum present at the Invitrogen
special meeting. Broker non-votes (i.e., shares held by brokers or nominees
which are represented at a meeting but with respect to which the broker or
nominee is not empowered to vote on a particular proposal) will be counted
for purposes of determining whether there is a quorum at the Invitrogen
special meeting. Abstentions and broker non-votes will not be counted as
votes cast FOR or AGAINST the Dexter and Life Technologies merger
proposals.
CONFIDENTIAL VOTING
Invitrogen keeps all proxies, ballots and tabulations that identify
the vote of individual stockholders confidential if a stockholder elects on
the proxy to have such vote kept confidential, except as necessary to meet
legal requirements, in a contested proxy solicitation or where stockholders
submit consents with their proxies.
COST OF SOLICITATION
Invitrogen will pay the cost of soliciting Invitrogen proxies.
However, Invitrogen, Life Technologies and Dexter will share equally the
cost of printing this joint proxy statement and prospectus. In addition to
solicitation by mail, telephone or other means, Invitrogen will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxy material to beneficial owners. Invitrogen will,
upon request, reimburse these institutions for their reasonable expenses.
Invitrogen has retained, for a fee of $[xx] plus expenses, [Name of proxy
solicitor] to aid in the solicitation of proxies and to verify certain
records related to the solicitation.
THE LIFE TECHNOLOGIES SPECIAL MEETING
This joint proxy statement and prospectus is being furnished in
connection with the solicitation of proxies from the holders of Life
Technologies common stock by the Life Technologies board of directors
relating to the Life Technologies merger proposal and other matters to be
voted upon at the Life Technologies special meeting and at any adjournment
or postponement of the meeting. This joint proxy statement and prospectus
is also a prospectus for shares of Invitrogen common stock to be issued in
the Life Technologies merger. Life Technologies mailed this joint proxy
statement and prospectus to stockholders beginning [month, day], 2000. You
should read this joint proxy statement and prospectus carefully before
voting your shares.
WHEN AND WHERE THE LIFE TECHNOLOGIES SPECIAL MEETING WILL BE HELD
The Life Technologies special meeting will be held at [location,
city, state], on [month, day], 2000, starting at [time], local time.
WHAT WILL BE VOTED UPON
At the Life Technologies special meeting, you will be asked to
consider and vote upon the following items:
o to consider and vote on a proposal to approve and adopt the
Agreement and Plan of Merger, dated as of July 7, 2000, between
Life Technologies and Invitrogen Corporation; and
o such other business as properly may come before the Life
Technologies special meeting, or any adjournment or postponement
of the meeting.
ONLY LIFE TECHNOLOGIES COMMON STOCKHOLDERS OF RECORD AS OF JULY 20, 2000 ARE
ENTITLED TO VOTE
Life Technologies common stockholders who hold their shares of
record as of the close of business on July 20, 2000, are entitled to notice
of and to vote at the Life Technologies special meeting. On the record
date, there were approximately [xx] million shares of Life Technologies
common stock outstanding and entitled to vote at the Life Technologies
special meeting.
MAJORITY OF OUTSTANDING SHARES MUST BE REPRESENTED FOR A VOTE TO BE TAKEN
In order to have a quorum, a majority of Life Technologies common
stock that are outstanding and entitled to vote at the Life Technologies
special meeting must be represented in person or by proxy. If a quorum is
not present, a majority of shares that are represented may adjourn or
postpone the Life Technologies special meeting.
VOTE REQUIRED FOR APPROVAL
The Life Technologies merger proposal must be approved by the
affirmative vote of at least 67 percent of the shares of common stock that
are outstanding and entitled to vote at the Life Technologies special
meeting. Each share of Life Technologies common stock is entitled to cast
one vote. As of the Life Technologies record date, Life Technologies
directors and executive officers owned and were entitled to vote xx.x
million shares (or x.x%) of Life Technologies common stock. Dexter owns
approximately 75% of the outstanding Life Technologies shares and has
agreed to vote all of those shares in favor of the approval and adoption of
the Life Technologies merger agreement. As a result, the approval of the
Life Technologies merger is assured. Life Technologies has instituted an
action in the Chancery Court in the State of Delaware seeking a declaratory
judgment that the vote required to approve the Life Technologies merger is
as described in the first sentence of this paragraph. See "The
Mergers--Certain Litigation."
VOTING YOUR SHARES AND CHANGING YOUR VOTE
VOTING YOUR SHARES
The Life Technologies board of directors is soliciting proxies from
the Life Technologies stockholders. This will give you the opportunity to
vote at the Life Technologies special meeting. When you deliver a valid
proxy, the shares represented by that proxy will be voted in accordance
with your instructions. If you do not vote by proxy or attend the Life
Technologies special meeting and vote in person, it will have the same
effect as voting against the Life Technologies merger proposal.
To grant your proxy by mail, please complete your proxy card, sign,
date and return it in the enclosed envelope by [month, day], 2000. To be
valid, a returned proxy card must be signed and dated. If you attend the
Life Technologies special meeting in person, you may vote your shares by
completing a ballot at the meeting.
CHANGING YOUR VOTE BY REVOKING YOUR PROXY
You may revoke your proxy at any time before the polls close at the
Life Technologies special meeting. You may revoke your proxy by delivering
notice in writing to the Secretary of Life Technologies, granting a later-
dated proxy or appearing in person at the Life Technologies special
meeting. You will not revoke your proxy by simply attending the Life
Technologies special meeting unless you complete a ballot.
HOW PROXIES ARE COUNTED
If you return a signed and dated proxy card but do not indicate how
the shares are to be voted, those shares represented by your proxy card
will be voted as recommended by the Life Technologies board of directors. A
valid proxy also gives the individuals named as proxies authority to vote
in their discretion when voting the shares on any other matters that are
properly presented for action at the Life Technologies special meeting. A
properly executed proxy marked "ABSTAIN" will not be voted. However, it may
be counted to determine whether there is a quorum present at the Life
Technologies special meeting. Accordingly, since the affirmative vote of 67
percent of the shares outstanding and entitled to vote at the Life
Technologies special meeting is required to approve the Life Technologies
merger proposal, a proxy marked "ABSTAIN" will have the effect of a vote
against this proposal. Broker non-votes (i.e., shares held by brokers or
nominees which are represented at a meeting but with respect to which the
broker or nominee is not empowered to vote on a particular proposal) will
be counted for purposes of determining whether there is a quorum at the
Life Technologies special meeting.
COST OF SOLICITATION
Life Technologies will pay the cost of soliciting Life Technologies
proxies. However, Dexter, Life Technologies and Invitrogen will share
equally the cost of printing this joint proxy statement and prospectus. In
addition to solicitation by mail, telephone or other means, Life
Technologies will make arrangements with brokerage houses and other
custodians, nominees and fiduciaries to send proxy material to beneficial
owners. Life Technologies will, upon request, reimburse these institutions
for their reasonable expenses. MacKenzie Partners will aid in the
solicitation of proxies and will verify certain records related to the
solicitation.
LIFE TECHNOLOGIES STOCKHOLDERS SHOULD NOT SEND IN THEIR STOCK
CERTIFICATES WITH THE PROXY CARDS. SOON AFTER THE MERGERS ARE COMPLETED, IF
YOU ELECT TO RECEIVE INVITROGEN SHARES AND/OR CASH AS PART OF YOUR
CONSIDERATION FOR THE YOUR LIFE TECHNOLOGIES SHARES, YOU WILL RECEIVE
WRITTEN INSTRUCTIONS ON HOW TO EXCHANGE YOUR LIFE TECHNOLOGIES STOCK
CERTIFICATES FOR SHARES OF INVITROGEN AND/OR CASH.
THE DEXTER SPECIAL MEETING
This joint proxy statement and prospectus is being furnished in
connection with the solicitation of proxies from the holders of Dexter
common stock by the Dexter board of directors relating to the Dexter merger
proposal and other matters to be voted upon at the Dexter special meeting
and at any adjournment or postponement of the meeting. This joint proxy
statement and prospectus is also a prospectus for shares of Invitrogen
common stock to be issued in the Dexter merger. Dexter mailed this joint
proxy statement and prospectus to stockholders beginning [month, day],
2000. You should read this joint proxy statement and prospectus carefully
before voting your shares.
WHEN AND WHERE THE DEXTER SPECIAL MEETING WILL BE HELD
The Dexter special meeting will be held at [location, city, state],
on [month, day], 2000, starting at [time], local time.
WHAT WILL BE VOTED UPON
At the Dexter special meeting, you will be asked to consider and
vote upon the following items:
o to consider and vote upon a proposal to approve and adopt an
Agreement and Plan of Merger dated as of July 7, 2000, between
Dexter Corporation and Invitrogen Corporation and to approve the
merger with Invitrogen and the other transactions described in
the Dexter merger agreement; and
o such other matters as properly may come before the Dexter
special meeting or any adjournment or postponement of the
meeting.
ONLY DEXTER COMMON STOCKHOLDERS OF RECORD AS OF JULY 20, 2000 ARE ENTITLED
TO VOTE
Dexter common stockholders who hold their shares of record as of
the close of business on July 20, 2000, are entitled to notice of and to
vote at the Dexter special meeting. On the record date, there were
approximately 23,200, 715 million shares of Dexter common stock outstanding
and entitled to vote at the Dexter special meeting.
MAJORITY OF OUTSTANDING SHARES MUST BE REPRESENTED FOR A VOTE TO BE TAKEN
In order to have a quorum, a majority of Dexter common stock that
are outstanding and entitled to vote at the Dexter special meeting must be
represented in person or by proxy. If a quorum is not present, a majority
of shares that are represented may adjourn or postpone the Dexter special
meeting.
VOTE REQUIRED FOR APPROVAL
The Dexter merger proposal must be approved by the affirmative vote
of the holders of at least two-thirds of Dexter common stock that are
outstanding and entitled to vote at the Dexter special meeting. Each share
of Dexter common stock is entitled to cast one vote. As of the Dexter
record date, Dexter directors and executive officers owned and were
entitled to vote [xx.x] million shares (or x.x%) of Dexter common stock.
VOTING YOUR SHARES AND CHANGING YOUR VOTE
VOTING YOUR SHARES
The Dexter board of directors is soliciting proxies from the Dexter
stockholders. This will give you the opportunity to vote at the Dexter
special meeting. When you deliver a valid proxy, the shares represented by
that proxy will be voted in accordance with your instructions. If you do
not vote by proxy or attend the Dexter special meeting and vote in person,
it will have the same effect as voting against the Dexter merger proposal.
To grant your proxy by mail, please complete your proxy card, sign,
date and return it in the enclosed envelope by [month, day], 2000. To be
valid, a returned proxy card must be signed and dated. If you attend the
Dexter special meeting in person, you may vote your shares by completing a
ballot at the meeting.
CHANGING YOUR VOTE BY REVOKING YOUR PROXY
You may revoke your proxy at any time before the polls close at the
Dexter special meeting. You may revoke your proxy by delivering notice in
writing to the Secretary of Dexter, granting a later-dated proxy or
appearing in person at the Dexter special meeting. You will not revoke your
proxy by simply attending the Dexter special meeting unless you complete a
ballot.
HOW PROXIES ARE COUNTED
If you return a signed and dated proxy card but do not indicate how
the shares are to be voted, those shares represented by your proxy card
will be voted as recommended by the Dexter board of directors. A valid
proxy also gives the individuals named as proxies authority to vote in
their discretion when voting the shares on any other matters that are
properly presented for action at the Dexter special meeting. A properly
executed proxy marked "ABSTAIN" will not be voted. However, it may be
counted to determine whether there is a quorum present at the Dexter
special meeting. Accordingly, since the affirmative vote of two-thirds of
the shares outstanding and entitled to vote at the Dexter special meeting
is required to approve the Dexter merger proposal, a proxy marked "ABSTAIN"
will have the effect of a vote against this proposal. Broker non-votes
(i.e., shares held by brokers or nominees which are represented at a
meeting but with respect to which the broker or nominee is not empowered to
vote on a particular proposal) will be counted for purposes of determining
whether there is a quorum at the Dexter special meeting. The New York Stock
Exchange rules do not permit brokers and nominees to vote the shares that
they hold beneficially either for or against the Dexter proposal without
specific instructions from the person who beneficially owns those shares.
Therefore, if your shares are held by a broker or other nominee and you do
not give them instructions on how to vote your shares, this will have the
same effect as voting against the Dexter merger proposal.
COST OF SOLICITATION
Dexter will pay the cost of soliciting Dexter proxies. However,
Dexter, Life Technologies and Invitrogen will share equally the cost of
printing this joint proxy statement and prospectus. In addition to
solicitation by mail, telephone or other means, Dexter will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxy material to beneficial owners. Dexter will, upon
request, reimburse these institutions for their reasonable expenses. Dexter
has retained MacKenzie Partners to aid in the solicitation of proxies and
to verify certain records related to the solicitation.
DEXTER STOCKHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES
WITH THE PROXY CARDS. SOON AFTER THE MERGERS ARE COMPLETED, IF YOU SO ELECT
TO RECEIVE INVITROGEN SHARES AND/OR CASH AS PART OF YOUR CONSIDERATION FOR
YOUR DEXTER SHARES, YOU WILL RECEIVE WRITTEN INSTRUCTIONS ON HOW TO
EXCHANGE YOUR DEXTER STOCK CERTIFICATES FOR SHARES OF INVITROGEN AND/OR
CASH.
THE MERGERS
THE COMPANIES
INVITROGEN CORPORATION
Invitrogen Corporation, a Delaware corporation, founded in 1987,
develops, manufactures and markets research tools in kit form and provides
research services to corporate, academic and government entities.
Invitrogen's research kits simplify and improve gene cloning, gene
expression and gene analysis techniques as well as other molecular biology
activities. These techniques and activities are used to study how a cell is
regulated by its genetic material, known as functional genomics and to
search for drugs that can treat diseases. Invitrogen believes its products
allow researchers to perform these activities more accurately, efficiently
and with greater reproducibility compared to conventional research methods.
Invitrogen is headquartered in Carlsbad, California and also has operations
in Huntsville, Alabama, Groningen, Netherlands, and Heidelberg, Germany.
Invitrogen has its principal executive offices at 1600 Faraday
Ave., Carlsbad, California (telephone number 760-603-7200).
LIFE TECHNOLOGIES, INC.
Life Technologies, Inc., a Delaware corporation, originally
incorporated in Ohio in 1915, re-incorporated in Delaware in 1986,
develops, manufactures and supplies more than 3,000 products used in life
sciences research and commercial manufacture of genetically engineered
products. Life Technologies' products include sera, other cell growth
media, biochemicals and enzymes and other biological products necessary for
recombinant DNA procedures. These and related products and services
provided by Life Technologies are used in cellular biochemistry and
molecular biology research and in the production of genetically engineered
pharmaceuticals such as interferons, interleukins and tissue plasminogen
activator.
Life Technologies' products are sold to more than 20,000 customers
consisting of laboratories generally associated with universities, medical
research centers and government institutions as well as biotechnology,
pharmaceutical, energy, agricultural and chemical companies. Life
Technologies sells its products principally through its own direct sales
organization which is supplemented by a network of distributors.
Life Technologies has its principal executive offices at 9800
Medical Center Drive, Rockville, Maryland (telephone number 301-610-8000).
DEXTER CORPORATION
Dexter Corporation, a Connecticut corporation founded in 1767, is a
specialty materials company principally serving the worldwide aerospace,
electronics, food packaging and medial markets with products based on
proprietary technologies. Dexter has three operating segments: Life
Sciences, Nonwovens and Specialty Polymers.
On June 20, 2000 Dexter signed binding, definitive agreements to
sell its electronic materials, adhesives and polymer systems businesses to
Loctite Corporation (a member of the Henkel Group) for $400 million in cash
and its nonwoven materials business to Ahlstrom Paper Group Oy for $275
million in cash. Completion of these assets sales is a condition to the
closing of the Invitrogen mergers. On July 28, 2000 Dexter signed a binding
definitive agreement to sell its coatings business to Akzo Nobel Coatings
Inc. Completion of this asset sale is not a condition to the closing of the
mergers.
Dexter has its principal executive offices at One Elm Street,
Windsor Locks, Connecticut (telephone number 860-292-7675).
BACKGROUND OF THE MERGERS
In mid-December 1999, International Specialty Products Inc. began a
unilateral, unsolicited effort to acquire control of Dexter. On December
14, 1999, ISP sent a letter to Dexter proposing to acquire Dexter for $45
per share in cash, subject to execution of a mutually acceptable definitive
acquisition agreement. ISP's proposal stated that ISP would be willing to
pay more if Dexter were to provide ISP with information that justified an
increased price. Following careful consideration of ISP's $45 per share
proposal with its financial and legal advisors, on December 23, 1999, the
Dexter Board of Directors unanimously concluded that ISP's proposal was
both inadequate and contrary to the best interests of the stockholders of
Dexter. Accordingly, the Dexter Board rejected ISP's proposal.
On January 19, 2000, Dexter wrote a letter to Life Technologies
with copies to each member of ISP's 13D Group which included ISP. Dexter's
letter stated that: "We propose a merger with Life Technologies, Inc. for
the purpose of making Life Technologies a wholly owned subsidiary of
Dexter. In the merger Dexter will pay every stockholder $49.00 in cash for
each of their LTI shares." In response to this proposal, a representative
of ISP's legal advisor requested a meeting with a representative of
Dexter's legal advisor, and such meeting occurred on January 20. ISP's
legal representative stated that ISP would only be willing to sell its Life
Technologies shares at a "substantially higher price" than Dexter's
proposed $49 per share. ISP's representative further stated that it would
not be interested in such a transaction unless it also created a means for
ISP to dispose of its nearly 10% position in Dexter. Dexter's
representative replied that such an arrangement was not part of the
proposal and never could be. ISP's representative inquired whether Dexter
planned to dispose of Dexter's wholly owned chemical businesses and whether
such a disposition could furnish a means for dealing with ISP's ownership
position in Dexter. Dexter's representative declined to comment on this
inquiry but did state generally that ISP was free to make any proposal it
wished to make. The meeting concluded with Dexter's representative stating
that if ISP were unwilling to accept $49 per share for its Life
Technologies shares it should make a counterproposal to Dexter. ISP's
representative stated that such a counterproposal would be difficult to
develop since it would require concurrence of all the members of ISP's 13D
Group. In light of ISP's rejection of Dexter's proposal, Life Technologies
took no action with respect to Dexter's proposal.
On January 27, 2000, ISP announced its intention to present a
series of proposals at Dexter's 2000 Annual Meeting (including a slate of 3
nominees to replace Dexter's nominees for election to the Board, proposals
to increase the size of Dexter's Board and additional nominees to fill the
vacancies, and proposals with respect to Dexter's rights plan) and to
solicit proxies in favor of its proposals.
Following a special meeting of the Dexter Board of Directors on
February 8, 2000, Dexter offered both ISP and its financial advisor, Chase
Securities Inc., the opportunity to review confidential business
information for the purpose of determining whether ISP would be willing to
increase its $45 per share proposal to acquire Dexter.
Shortly thereafter, representatives of Lehman Brothers Inc.,
Dexter's financial advisor, contacted Invitrogen to discuss the possibility
of Invitrogen's making a bid to acquire all of Dexter on a preemptive
basis. In the course of the discussion, Invitrogen indicated that it was
primarily interested in Dexter's life sciences assets, specifically
Dexter's 75% ownership interest in Life Technologies, and that it had
itself identified Life Technologies as an attractive growth initiative and
had already begun to consider how a business combination could proceed in
light of its desire not to acquire Dexter's chemical assets.
Dexter subsequently entered into confidentiality agreements with
ISP and Invitrogen to permit those entities to commence due diligence
investigations of Dexter and Life Technologies. On February 26, 2000,
Dexter's management made a presentation regarding Dexter's businesses to
representatives of Invitrogen and representatives of Donaldson, Lufkin &
Jenrette Securities Corporation (referred to in this joint proxy statement
and prospectus as DLJ), Invitrogen's financial advisor. DLJ indicated that
Invitrogen had preliminarily identified a possible partner to assist it
with making a joint bid which would provide for the partner's simultaneous
acquisition of Dexter's wholly owned chemical assets.
On February 28, 2000, the Dexter Board of Directors authorized
management, together with its financial advisor, Lehman Brothers, to
explore all strategic alternatives available to Dexter to maximize
stockholder value in the short-term, including a merger or sale of the
company, a financial restructuring or a spin-off or sale of one or
more of Dexter's businesses. As part of this process, representatives of
Lehman Brothers contacted numerous third parties who might be potentially
interested in acquiring the entire company or one or more of its
constituent businesses.
Shortly after Dexter's February 28 announcement, Lehman Brothers
provided Invitrogen and numerous other potential interested parties that
entered into confidentiality agreements with Dexter various due diligence
materials to enable them to make preliminary indications of interest.
Invitrogen and the other parties interested in participating in Dexter's
sale process were advised by Lehman Brothers that preliminary indications
of interest were to be submitted on March 24, 2000 and that indications of
interest for the purchase of Dexter as a whole would be given preference to
those contemplating the purchase of one more or more of Dexter's
businesses.
On March 23, 2000, after the close of business, ISP delivered a
letter to Dexter stating, the following:
"Based upon our evaluation to date, ISP's Board has authorized
an increase in the price of ISP's cash merger proposal to $50
per share. If we receive the proper cooperation from Dexter in
connection with the balance of the due diligence process and
Dexter can demonstrate that the value of the Company would
justify a higher price, we would consider increasing this price
as well.
"You should know that ISP has, on this date, executed a
commitment letter in which Chase has committed to raise all the
financing necessary for the acquisition, a copy of which I have
attached. You should note that Chase's commitment for $1.825
billion contains provision for a tender facility so that Dexter
stockholders can receive cash payments promptly. "
On March 24, 2000, Dexter received several indications of interest
in acquiring the entire company, including an indication of interest from
Invitrogen. Dexter also received multiple indications of interest in
Dexter's constituent businesses. In light of the strong indications of
interest in acquiring all of Dexter, Dexter's Board of Directors determined
that Dexter should devote its resources and attention to those bids, in the
first instance.
During the course of the next six weeks, Dexter and its advisors
worked with each of the prospective bidders for the whole company to
develop definitive acquisition proposals for Dexter as well as the
outstanding public minority shares of Life Technologies on mutually
acceptable terms and conditions. Except for ISP, these bidders were
principally life sciences-oriented companies that were interested in a
tax-free stock merger transaction. The decline in the public equity markets
in the weeks following March 24 adversely affected the trading prices of
the bidders' equity securities and, accordingly, the value of the
consideration they had offered. Principally as a result of this
development, on May 17, 2000, Dexter announced, among other things, that
its Board of Directors had authorized management to pursue the sale of
Dexter's wholly owned businesses -- nonwoven materials, electronic
materials and adhesive and coating systems. Shortly thereafter, Lehman
Brothers re-contacted those bidders for Dexter's wholly owned businesses
that had submitted the strongest indications of interest.
In mid-April representatives of Dexter and its counsel met with the
four directors of Life Technologies not affiliated with Dexter. Generally,
the purpose of these meetings was to brief the unaffiliated Life
Technologies directors concerning the process in which Dexter was engaged
and possible alternative implications it might have for Life Technologies
and its minority stockholders. In the course of those discussions, the
unaffiliated Life Technologies directors inquired about and expressed an
interest in retaining Wachtell, Lipton, Rosen & Katz, the former counsel
for Life Technologies' 1998 special committee, to represent the
unaffiliated Life Technologies directors individually. The representatives
of Dexter and its counsel agreed this would be an appropriate course of
action. Accordingly, Life Technologies retained that counsel to represent
the unaffiliated Life Technologies directors individually.
During the time from mid-May to mid-June, the prospective bidders
for Dexter's wholly owned businesses conducted comprehensive due diligence
investigations, including meetings with management representatives. In
addition, during the first week of June, counsel to Dexter circulated forms
of asset acquisition agreements to the prospective purchasers. Each
interested party was requested to submit its final bid prior to the close
of business on June 9, 2000. The requested bid was to include proposed
changes to the form of asset acquisition agreement that had previously been
distributed to all prospective purchasers.
On June 10, 2000, the Dexter Board of Directors met telephonically
with members of management and its financial and legal advisors to review
and consider the bids received the prior evening. The Dexter Board
authorized management and its advisors to proceed as promptly as
practicable to negotiate definitive acquisition agreements for the sale of
Dexter's wholly owned businesses. The Board initially selected five
different parties to participate in such negotiations.
During the week of June 12, a representative of Lehman Brothers
received an inquiry from a representative of one of the parties that had
previously expressed an interest in acquiring all of Dexter in a "pooling
of interests" transaction but had not submitted a proposal at the time they
had been due. The representative said that his client (of which he was a
Board member) had a renewed interest in attempting to structure a
transaction that would be acceptable both to Dexter and to ISP and that the
representative believed that a transaction in which Dexter stockholders
would receive $48 in shares of the third party and Life Technologies
stockholders would receive $50 in shares of the third party was both
possible and likely to be acceptable to ISP. After consultation with Dexter
and its legal advisor, Lehman Brothers informed the party that Dexter was
willing to waive the other party's confidentiality agreement obligations
(as well as ISP's confidentiality agreement obligations) to permit ISP and
the other party to structure a joint proposal to Dexter. However, no
proposal was made.
On or about June 19, the same third party representative renewed
contact with Lehman Brothers and reiterated his belief that a transaction
could be developed that would be acceptable to ISP, of which he said he was
confident. As part of this contact, the third party representative
suggested that his client would be willing to pursue a "pooling"
transaction in which Dexter stockholders would receive $50 in shares of the
third party and Life Technologies stockholders would receive $55 in shares
of the third party. Once again the representative was informed that Dexter
would welcome a joint proposal from his client and ISP and that it would
waive any limitations in their confidentiality agreements necessary to
facilitate discussions leading to such a proposal. No proposal was ever
communicated to Dexter. Mr. Heyman subsequently testified under oath that
he had had a number of conversations with the representative of the third
party exploring that third party's willingness to make a proposal to
acquire Dexter in a "pooling" transaction.
Between June 13, 2000 and June 19, 2000, representatives of the
potential acquirors of Dexter's wholly owned businesses and their
respective legal and financial advisors completed their remaining due
diligence investigation and negotiated the terms of definitive acquisition
agreements with representatives of Dexter and its legal and financial
advisors. Included among the prospective acquirors of Dexter's wholly owned
businesses were Loctite Corporation (a member of the Henkel Group) which
expressed interest primarily in acquiring Dexter's electronic materials,
adhesives and polymer systems businesses and Ahlstrom Paper Group Oy which
expressed interest in acquiring Dexter's nonwovens business.
On June 18, 2000, the Dexter Board met with its legal and financial
advisors to review the status of negotiations with the various prospective
purchasers of Dexter's wholly owned businesses, including Loctite and
Ahlstrom. At that meeting, Lehman Brothers reviewed with the Dexter Board
the financial terms of the transactions currently being negotiated, and
Dexter's legal advisors summarized the terms of the agreements that were
under negotiation.
On June 19, 2000, the Dexter Board met telephonically. Dexter's
legal advisors updated the Board on the status of negotiations with the
various potential buyers, including Loctite and Ahlstrom. In addition,
Lehman Brothers delivered its oral opinion, which was later confirmed in
writing, to the effect that, from a financial point of view and subject to
the matters discussed in its opinion, the consideration to be received by
Dexter in the proposed nonwovens asset sale to Ahlstrom was fair to Dexter.
Lehman Brothers also delivered its oral opinion, which was later confirmed
in writing, to the effect that, from a financial point of view and subject
to the matters discussed in its opinion, the consideration to be received
by Dexter in the proposed sale of the assets of Dexter's electronic
materials, adhesives and polymer systems businesses to Loctite was fair to
Dexter. The Dexter Board of Directors then authorized the nonwovens asset
sale and the electronic materials, adhesives and polymer systems asset sale
subject to the satisfactory finalization of definitive asset purchase
agreements.
During the evening of June 19, 2000, and the following day,
representatives of Dexter and Ahlstrom and their respective legal advisors
finalized the terms of a definitive asset purchase agreement relating to
the sale of Dexter's nonwovens business. Also during that period,
representatives of Dexter and Loctite and their respective legal advisors
finalized the terms of a definitive asset purchase agreement relating to
the sale of Dexter's electronic materials, adhesives and polymer systems
businesses.
On June 20, 2000, ISP announced its intention to commence a $45 per
share all cash tender offer for all shares of Dexter common stock not owned
by ISP. The Dexter Board of Directors reconvened late in the afternoon on
June 20. Dexter's legal advisors reviewed with the members of the Board the
terms of the acquisition agreements for the sale of the nonwoven materials
business and the electronic materials, adhesives and polymer systems
businesses. In addition, Lehman Brothers reconfirmed its opinions with
respect to the fairness of the proposed sales. Shortly thereafter, Dexter
and Ahlstrom executed and delivered the nonwovens asset purchase agreement
and Dexter and Loctite executed and delivered the electronic materials,
adhesives and polymer systems asset purchase agreement. Dexter issued a
press release announcing the transactions in the evening on June 20, 2000.
At the same time, Dexter announced the postponement of its annual meeting
of stockholders for two weeks, from June 30 to July 14, 2000, to allow
adequate time for the dissemination of information and evaluation of the
proposed asset purchase sales by Dexter's stockholders before being
asked to vote for directors.
On June 22, 2000, at a regularly scheduled meeting of the Dexter
Board of Directors, the Board discussed with management and their legal and
financial advisors the next steps necessary to complete their program to
maximize value in the short-term. The Board of Directors authorized
management and Lehman Brothers to continue to pursue a possible transaction
involving a sale of Dexter's remaining wholly owned business, the Company's
coatings business, and a merger transaction involving Life Technologies.
On June 24, 2000, representatives of DLJ contacted representatives
of Lehman Brothers to discuss a possible transaction involving Dexter and
indicated that Invitrogen intended to submit a written indication of
interest to Dexter in the near future.
On June 26, 2000, Invitrogen sent to the Dexter Board a
confidential written proposal indicating Invitrogen's interest in entering
into a transaction with Dexter pursuant to which Invitrogen would acquire
all of the outstanding equity interest of Dexter in a merger transaction
for a purchase price of $62.50 per share in cash and Invitrogen common
stock. Invitrogen further indicated its desire to commence immediate
negotiations of an agreement with Life Technologies that would "provide a
complete solution to Dexter, Life Technologies and their respective
stockholders." The letter also stated that Invitrogen intended to use cash
proceeds from Dexter's asset sales and Invitrogen cash balances "to provide
a significant cash component to stockholders of Dexter and Life
Technologies." Finally, the letter stated Invitrogen's intention to conduct
due diligence in parallel with the contract negotiations, which it said
would include a business update on Life Technologies, a review of the asset
sale agreements that Dexter had recently announced and confirmatory legal
and financial due diligence. Dexter promptly provided details of
Invitrogen's proposal to counsel for the unaffiliated Life Technologies
directors.
On June 29, 2000, representatives of Invitrogen and Dexter and
their respective financial and legal advisors met to discuss the terms of a
transaction in which Invitrogen would acquire the entire equity interest in
Dexter and Life Technologies and to permit Invitrogen to complete its due
diligence investigation.
As of June 30, 2000, the Board of Directors of Life Technologies,
acting by written consent, constituted a special committee of the Life
Technologies Board of Directors consisting of directors not affiliated with
Dexter (all of the unaffiliated Life Technologies directors) to consider a
possible transaction involving Life Technologies. The members of the
special committee are Thomas H. Adams, Ph. D. (Chairman), R. Barry Gettins,
Ph. D., Joseph C. Stokes, Jr. and J. Stark Thompson, Ph.D. The special
committee was authorized to retain legal and financial advisors to assist
it in connection with its consideration of a possible transaction, and the
special committee promptly retained Wachtell, Lipton, Rosen & Katz as its
legal advisor (which firm had previously been retained to advise the four
directors individually) and, after contacting several investment banks,
retained Credit Suisse First Boston Corporation as its financial advisor.
The special committee selected Wachtell Lipton in part because Wachtell
Lipton had represented a special committee (of which Dr. Adams was the
chairman) of the Life Technologies board that was constituted in 1998 for
the purpose of considering Dexter's 1998 offer to purchase all of the
outstanding Life Technologies shares that it did not then own at a price of
$37.00 per share, and because Wachtell Lipton had been advising these
directors in their individual capacities for several months.
From June 30, 2000 until July 7, 2000, representatives of
Invitrogen and Dexter and their respective legal advisors negotiated the
terms of the proposed Dexter merger agreement and representatives of
Invitrogen, Dexter and the Life Technologies special committee and their
respective legal advisors negotiated the terms of the proposed Life
Technologies merger agreement. During this period, at the special
committee's request, Invitrogen agreed to change the form of consideration
available to Life Technologies stockholders from all stock to a mixture of
stock and cash in the aggregate proportion of 72% to 28%. The special
committee also sought to increase the amount of consideration to be paid in
the merger to Life Technologies' stockholders, but Invitrogen declined to
increase its $60 per share offer.
From July 3 through July 6, Invitrogen, Dexter and their respective
legal and financial advisors conducted due diligence investigations of each
other, and the respective managements of each company made business and
financial presentations to the management of the other. Also during this
period, Invitrogen, Life Technologies, the Life Technologies special
committee and their respective legal and financial advisors conducted
reciprocal due diligence investigations of Invitrogen and Life
Technologies, and on July 5, 2000, the management of each of Invitrogen and
Life Technologies made business and financial presentations to the
management of the other. Two members of the Life Technologies special
committee, Drs. Thompson and Adams, attended the Invitrogen/Life
Technologies management presentations on July 5 and participated in the due
diligence investigations.
During the period from June 30 through July 5, the special
committee's legal advisors provided frequent updates on the progress of
discussions and negotiations to the individual members of the special
committee. On July 6, 2000, the Life Technologies special committee met
telephonically to receive an update from its advisors and from Drs. Adams
and Thompson, who had participated in the previous day's due diligence
sessions. At this meeting, the special committee's legal advisors discussed
with the special committee the legal issues surrounding the existence and
purpose of the special committee, as well as the committee members'
responsibilities under applicable law. Drs. Adams and Thompson informed the
other members of the special committee of the results of the previous day's
management presentations, and Dr. Thompson discussed Life Technologies'
recent operating performance and reviewed the history of Life Technologies'
relationship with Dexter and the impact of this relationship on Life
Technologies' operations and performance. Next, the special committee's
legal advisors explained that as a result of several days of negotiations
among the parties, the parties were close to agreement on all terms of the
proposed merger agreement. The legal representatives then summarized and
explained in detail the proposed terms of the Life Technologies merger
agreement and the material terms of the Dexter merger agreement. Also at
this meeting, representatives of the special committee's financial advisor
discussed various financial aspects of the proposed transaction, including
the proposed consideration of $60 per Life Technologies share, the
allocation of that consideration between cash and shares of Invitrogen
common stock and the "collar" mechanism.
Negotiations among Invitrogen's, Dexter's and the Life
Technologies special committee's legal advisors over the final terms of
the transaction continued through the night of July 6 and into the morning
of July 7, 2000.
On the morning of July 7, 2000, the Board of Directors of
Invitrogen met and reviewed the terms of the proposed merger agreements.
DLJ rendered its fairness opinion, which was subsequently confirmed in
writing, to the effect that, as of that date and based on and subject to
the matters described in its opinion, the consideration to be paid by
Invitrogen in the mergers, taken together, was fair from a financial point
of view to Invitrogen. At that meeting, the Invitrogen Board unanimously
approved the Dexter merger and the Life Technologies merger and recommended
that Invitrogen's stockholders approve and adopt the Dexter merger
agreement and the Life Technologies merger agreement.
Also that morning, the Board of Directors of Dexter met to discuss
the status of negotiations between Dexter and Invitrogen. At that meeting,
Lehman Brothers made a financial presentation and Dexter's legal advisors
reviewed the current terms of the proposed acquisition agreement and
discussed with the Board its fiduciary obligations. The Dexter board then
adjourned its meeting until later in the afternoon.
In the afternoon on July 7, 2000, the Life Technologies special
committee met with its legal and financial advisors to review the terms of
the Life Technologies merger. The special committee's legal advisors
provided an update on the discussion that had occurred since the previous
afternoon. Dr. Thompson discussed the business and strategic rationales,
from management's perspective, for the proposed transaction.
Representatives of Credit Suisse First Boston, the special committee's
financial advisor, discussed financial aspects of the proposed Life
Technologies merger, after which Credit Suisse First Boston rendered to the
special committee its opinion to the effect that, as of that date and based
on and subject to the matters described in its opinion, the consideration
to be received in the Life Technologies merger by holders of Life
Technologies common stock was fair, from a financial point of view, to such
holders (other than Dexter and its subsidiaries, officers and directors).
Following further discussion, the Life Technologies special committee
unanimously recommended that the Life Technologies Board of Directors
approve the Life Technologies merger agreement. Following the meeting of
the special committee, the Board of Directors of Life Technologies met and
received the report and recommendation of the Life Technologies special
committee. Based upon, among other things, the report and recommendation of
the special committee, the Life Technologies Board of Directors, by
unanimous vote of the seven directors present, approved the Life
Technologies merger agreement and recommended that Life Technologies'
stockholders approve and adopt the Life Technologies merger agreement.
Following the meeting of the Life Technologies Board of Directors,
the meeting of the Dexter Board was reconvened. Management of Dexter and
its legal advisors reviewed the terms of the acquisition agreement, and
Lehman Brothers delivered its written fairness opinion to the effect that
from a financial point of view, as of that date and based on and subject to
the matters described in its opinion, the consideration to be received by
Dexter stockholders was fair from a financial point of view to such
holders.
Thereafter, on July 7, 2000, Invitrogen and Life Technologies
executed the Life Technologies merger agreement and, following execution
and delivery of the Life Technologies merger agreement, Invitrogen and
Dexter executed the Dexter merger agreement.
During the morning of July 9, 2000, representatives of DLJ and
Invitrogen advised Samuel J. Heyman, Chairman of the Board of ISP, that
Invitrogen had entered into the merger agreements. Mr. Heyman requested a
meeting that afternoon which would make available to ISP representatives of
Invitrogen, Dexter and Life Technologies who could brief ISP concerning the
financial and legal terms of the transactions and their various legal
features, such as stockholder voting requirements and the like. During the
afternoon, Mr. Heyman and other representatives of ISP and ISP's legal and
financial advisors met with representatives of Invitrogen, Dexter and their
respective financial and legal advisors, as well as a representative of the
Life Technologies' special committee's legal advisor, to discuss the terms
and conditions of both the Dexter and the Life Technologies merger
agreements. Following a discussion of the economic terms of the two
transactions and of Invitrogen's plans for achieving stockholder value from
the combination, Mr. Heyman indicated his belief that there appeared to be
a "good strategic fit between Invitrogen and Life Technologies." Mr. Heyman
said that he preferred to have a larger cash component in the consideration
and a wider collar than was provided in the merger agreements. Despite
these preferences, Mr. Heyman stated that he intended to reserve judgment
on the transaction until the stockholder meeting and ISP's general counsel
and a representative of its legal advisor informed counsel for Dexter and
the Life Technologies special committee that ISP would terminate its tender
offer, withdraw all its stockholder proposals and cease pursuit of its
proxy contest and that, because of the conditions in ISP's tender offer, it
was necessary to have Dexter's concurrence with the termination of the
tender offer, which Dexter afforded to ISP.
In the late afternoon of July 9, 2000, Invitrogen and Life
Technologies issued a joint press release and Dexter issued a separate
press release, each of which announced the signing of the Life Technologies
and Dexter merger agreements.
REASONS FOR THE MERGERS AND RECOMMENDATIONS OF THE BOARDS
REASONS FOR THE INVITROGEN/LIFE TECHNOLOGIES MERGER
Invitrogen and Life Technologies believe that the combination of
Invitrogen and Life Technologies will create a leader in molecular biology
research and services and that the combined company will be uniquely
positioned to service the rapidly developing life sciences and genomics
research market. In particular, the senior managements and the boards of
directors of each company believes the following are key specific reasons
that the merger will be beneficial to Invitrogen and Life Technologies and
in the best interest of their respective stockholders:
Create a more diversified portfolio by combining technologies for
gene cloning and gene expression. Together, Invitrogen and Life
Technologies will have substantial growth opportunities by offering a
comprehensive product line in gene cloning, expression and analysis. For
example, the combination of Invitrogen's TOPO/TA cloning and Echo cloning
technology, Life Technologies' cDNA and GATEWAY cloning technology, and
the industry's broadest line of expression vectors will form an integrated
operating system for gene cloning and expression. This system will also
provide a highly desirable platform for high-throughput gene expression and
analysis. Through this product offering, we will not only be able to
enhance our leadership position in the high growth gene cloning and
expression market, but also be able to cross sell a wide range of molecular
biology products and services into our combined customer base.
Create substantial operating synergies and new business
opportunities. Invitrogen and Life Technologies believe that integrating
our worldwide distribution and marketing infrastructure, which will include
over 300 sales professionals and over 60 technical support representatives,
will create a significant advantage in serving Invitrogen's and Life
Technologies' customers. Invitrogen and Life Technologies believe that the
addition of Life Technologies' global manufacturing network, with
facilities in North America, Europe, New Zealand and Japan will provide
significant advantages in delivering product to our customers, rapidly
introducing new products and supporting Invitrogen's growing product line.
INVITROGEN BOARD OF DIRECTORS' REASONS AND CONSIDERATION
AND APPROVAL OF THE TRANSACTION
Information and Factors Considered by the Invitrogen Board of
Directors. The Invitrogen board of directors, in connection with its
approval of the mergers, its determination that the mergers are fair to and
in the best interest of Invitrogen's stockholders and its recommendation
that stockholders adopt the merger agreements, consulted with its legal
advisors, including its general counsel and representatives of Gray Cary
Ware & Freidenrich LLP, outside counsel on the transaction, regarding the
duties of the members of the board, as well as with members of management
and its financial advisor. The Invitrogen board also considered the
following material information and factors in reaching its determination to
approve the mergers, to conclude that the mergers are fair to and in the
best interest of Invitrogen's stockholders, and to recommend that
stockholders adopt the merger agreements:
o the reasons described under "--Invitrogen Board of Directors'
Reasons and Consideration and Approval of the Transaction;"
o the exchange ratios being used in the merger and the expected
continuing [55%] ownership interest in the combined company by
Invitrogen's stockholders;
o presentations by senior members of Invitrogen's management
regarding the strategic advantages of acquiring Life
Technologies, operational aspects of the transaction and the
results of management's operational and legal due diligence
review;
o Invitrogen management's view of the financial condition, results
of operations and businesses of Invitrogen and Life Technologies
before and after giving effect to the merger based on
management's due diligence and publicly available earnings
estimates;
o the strategic fit of Invitrogen and Life Technologies, including
the belief that the merger has the potential to enhance
stockholder value through the numerous growth opportunities and
synergies resulting from combining the two companies'
complementary strengths and assets, including cross- promotions
and operating efficiencies;
o the analyses and presentation of Donaldson Lufkin & Jenrette on
the financial aspects of the proposed merger, and their written
opinion to the effect that, as of July 7, 2000, and based on and
subject to the various considerations set forth in its opinion,
the aggregate consideration to be paid by Invitrogen in the Life
Technologies merger and the Dexter merger was fair from a
financial point of view to Invitrogen;
o the terms and conditions of the merger agreements; the
conditions to consummate the mergers, including the contingent
sale of Dexter's non-Life Technologies related businesses; the
circumstances under which the merger agreement could be
terminated and the size and impact of the termination fees
associated with a termination; as well as the advice of
Invitrogen's financial and legal advisors that these provisions
were reasonable in the context of the transaction;
o the corporate governance arrangements established for the
transaction, including the board composition and designation of
key senior management which are designed to promote the
continuity of management from Invitrogen and Life Technologies
and smooth integration of the businesses;
o the fact that the mergers likely will be completed, including
the likelihood that the mergers will receive the necessary
regulatory approvals;
o the accounting treatment of the transaction as a "purchase"
transaction, including the goodwill that will be recorded on the
financial statements of Invitrogen; and
o the interests of the officers and directors of Invitrogen and
Life Technologies in the merger, including the matters described
under "--Interests of Certain Invitrogen Directors and Executive
Officers in the Merger," and the impact on Invitrogen's
stockholders, customers and employees.
The Invitrogen board also considered the potential adverse
consequences of other factors on the proposed merger including:
o the challenges of combining the businesses, assets and
workforces of two major companies and the risks of not achieving
the expected operating efficiencies or growth;
o the risk of diverting management focus and resources from other
strategic opportunities and from operational matters while
working to implement the merger; and
o the risk that the mergers will not be consummated.
This discussion of the information and factors considered by the
Invitrogen board is not intended to be exhaustive, but includes the
material factors considered. The Invitrogen board did not assign particular
weight or rank to the factors it considered in approving the merger. In
considering the factors described above, individual members of the
Invitrogen board may have given different weight to various ones. The
Invitrogen board considered all these factors as a whole, and overall
considered them to be favorable to and to support its determination.
RECOMMENDATION OF THE LIFE TECHNOLOGIES SPECIAL COMMITTEE
AND BOARD OF DIRECTORS; FAIRNESS OF THE MERGER
Recommendation of the Life Technologies Special Committee. The
special committee (consisting of four directors not affiliated with Dexter)
unanimously has determined that the terms of the Life Technologies merger
are advisable, fair to and in the best interests of Life Technologies
stockholders other than Dexter, its subsidiaries, officers and directors,
and has recommended that the Life Technologies board approve the Life
Technologies merger agreement and recommend the approval and adoption of
the Life Technologies merger agreement to the stockholders of Life
Technologies. The Life Technologies board, by unanimous vote of the seven
directors present, has determined that the terms of the Life Technologies
merger are advisable, fair to and in the best interests of Life
Technologies stockholders and has approved and adopted the Life
Technologies merger agreement.
In the course of reaching its decision to recommend that the Life
Technologies board approve the Life Technologies merger agreement and
recommend its approval to Life Technologies stockholders, the special
committee consulted with Life Technologies' management and with independent
legal and financial advisors, and considered the following material
factors:
o The reasons described above under "--Reasons for the
Invitrogen/Life Technologies Merger;"
o The financial terms of the transaction, including the ability of
stockholders to elect to receive the merger consideration in the
form of cash, stock of Invitrogen, or a combination of cash and
stock, subject to proration to preserve the overall 72% - 28%
stock/cash mix, and the assurance that stockholders making the
"standard election" will receive at least $16.80 in cash
together with shares of Invitrogen common stock intended to be
worth $43.20 per share;
o That Life Technologies' stockholders will be entitled to elect
to receive the consideration payable to them in the merger
solely in cash or solely in stock of Invitrogen, subject to
proration to preserve the overall 72% - 28% stock/cash mix;
o That the funds necessary to pay the cash portion of the
consideration payable in both the Dexter merger and the Life
Technologies merger will be internally generated by Dexter, Life
Technologies and Invitrogen and, accordingly, neither
transaction is subject to a financing condition;
o The existence of the "collar" that ensures that if the average
trading price per share of Invitrogen common stock as determined
in accordance with the Life Technologies merger agreement is $60
or less, the exchange ratio for determining the stock portion of
the consideration payable in the Life Technologies merger will
be fixed at 1.0 (although this mechanism also provides that if
the average trading price of Invitrogen stock is $80 or more,
the exchange ratio for determining the stock portion of the
consideration payable in the Life Technologies merger will be
fixed at .75);
o Presentations by senior members of Life Technologies' management
regarding the strategic advantages of merging Life Technologies
with Invitrogen and certain operational aspects of the
transaction, including the belief that the merger has the
potential to enhance stockholder value through the numerous
growth opportunities resulting from combining the two companies'
complementary strengths and assets, including cross-promotions
and operational efficiencies;
o Life Technologies' management's view of the financial condition,
operations and businesses of Invitrogen and Life Technologies;
o The uncertainty and instability for Life Technologies' business
and operations created by ISP's actions in connection with its
unilateral attempt to seize control of Dexter, Life
Technologies' majority stockholder, including its proxy contest,
litigation and announced intention to commence a $45 per share
cash tender offer for all Dexter shares, subject to financing
and numerous other conditions;
o The fact that if the Life Technologies merger is completed,
Dexter will no longer be the controlling stockholder of Life
Technologies;
o The fact that, during the course of Dexter's solicitation of
indications of interest in acquiring all or part of Dexter,
including Life Technologies, Dexter did not receive any
indication of interest in acquiring Life Technologies at value
ranges meeting or exceeding the value offered by Invitrogen;
o The fact that the special committee negotiated certain terms of
the merger agreement directly with Invitrogen, including that
such negotiations resulted in improvements to the terms of the
Life Technologies merger, including:
- changing the form of consideration from all stock to a
mixture of stock and cash in the aggregate proportion of 72%
to 28%;
- reciprocal representations and warranties between Invitrogen
and Life Technologies;
- certain operating restrictions on Invitrogen during the
pendency of the merger;
- the right of the special committee to approve or veto any
proposed amendments to the merger agreement; and
- assurances that Drs. Adams and Thompson would join the
Invitrogen board of directors and that Dr. Thompson would
continue to be the chief executive officer of Invitrogen's
Life Technologies division, which the special committee
believed would contribute to a smooth and stable integration
of the two companies' business and to the management and
operation of the Life Technologies business within
Invitrogen during the period following the merger, which the
special committee viewed as directly benefitting Life
Technologies' public stockholders who would become
stockholders of Invitrogen if the merger is completed;
o The financial presentation of Credit Suisse First Boston,
including its opinion dated July 7, 2000 as to the fairness,
from a financial point of view, of the Life Technologies merger
consideration to the holders of Life Technologies common stock,
other than Dexter and its subsidiaries, officers and directors,
as described below under the caption "Opinion of Financial
Advisor to the Life Technologies Special Committee;"
o The corporate governance arrangements established for the
transaction, including the board composition and designation of
key senior management, which are designed to promote the
continuity of management from each company and smooth
integration of the businesses, which the special committee
viewed as directly benefitting Life Technologies' public
stockholders who would become stockholders of Invitrogen if the
merger is completed;
o The fact that there are relatively few conditions to the
completion of the merger which, the special committee believes,
increases the likelihood that the merger will be completed; and
o That the Life Technologies merger is expected to qualify as a
reorganization for purposes of the Internal Revenue Code and
that the portion of the merger consideration received in the
form of Invitrogen common stock should not be taxable to Life
Technologies' stockholders for U.S. income tax purposes.
The Life Technologies special committee also considered the
potential adverse consequences of other factors on the proposed merger
including:
o The fact that the Dexter merger is conditioned upon and will
occur simultaneously with the Life Technologies merger, as well
as the fact that this condition may not be waived; the fact that
the Dexter merger must be approved by the affirmative vote of
the holders of at least two-thirds of the issued and outstanding
shares of Dexter common stock; and the fact that Invitrogen's
obligation to consummate the Dexter merger is conditioned upon
the consummation of Dexter's previously announced sale of its
nonwovens business to Ahlstrom Paper Group Oy and the sale of
its electronic materials, adhesives and polymer systems
businesses to Loctite Corporation.
o The challenges of combining the businesses, assets and
workforces of two major companies and the risks of not achieving
the expected operating efficiencies or growth.
o The fact that the cash portion of the consideration payable in
the Life Technologies merger is limited to approximately $105
million.
o The risk of diverting management focus and resources from other
strategic opportunities and from operational matters while
working to implement the merger.
o The risk that the merger is not completed.
o The fact that because Dexter, which holds in excess of 75% of
Life Technologies' common stock, has agreed with Invitrogen to
vote its Life Technologies shares in favor of the merger, under
the Life Technologies merger agreement Life Technologies will be
unable to engage in any other acquisition transaction that could
be proposed by any third party while the merger agreement is in
effect.
o The fact that Dexter has agreed to vote its Life Technologies
shares in favor of the Life Technologies merger, thereby
assuring approval, and that fact that the Life Technologies
merger is not conditioned upon approval of a majority of Life
Technologies stockholders who are not affiliated with Dexter.
In addition, in considering the proposed merger with Invitrogen,
the members of the special committee were aware of the interests of certain
officers and directors (including committee members) in the transaction, as
described under "--Interests of Certain Persons in the Merger."
The foregoing discussion of the information and factors considered
by the special committee includes all of the material factors considered by
the special committee in reaching its conclusions and recommendations but
is not meant to be exhaustive. In view of the variety of factors considered
in its reaching its determination, the special committee did not find it
practicable to, and did not, quantify or otherwise assign relative weights
to the specific factors considered in reaching its conclusions and
recommendations. In addition, individual members of the special committee
may have given different weights to different factors.
The Life Technologies board consists of nine directors, four of
whom served on the special committee. At the July 7, 2000 meeting of the
Life Technologies board, the special committee, with its legal and
financial advisors participating, reported to the Life Technologies board
on its review of the merger agreement and the financial terms of the
proposed merger and the factors taken into account by the special committee
in reaching its determination to recommend that the board of directors
approve the merger agreement. Accordingly, the same factors considered by
the special committee were taken into account by the Life Technologies
board. In addition, the Life Technologies board considered the conclusions
and recommendations of the special committee and believes that these
factors supported the Life Technologies board's determination to approve
and recommend the merger agreement.
Fairness of the Merger. The Life Technologies board, including the
members of the special committee, also believes that the merger is
procedurally fair because, among other things:
o The special committee consisted of four directors unaffiliated
with Dexter, Life Technologies' majority stockholder, who were
appointed to represent the interests of Life Technologies'
stockholders other than Dexter, its subsidiaries, officers and
directors.
o The special committee retained and received advice from
independent legal and financial advisors.
o The special committee negotiated certain terms of the merger
agreement directly with Invitrogen, including that such
negotiations resulted in improvements to the terms of the Life
Technologies merger, including those described above under
"-Recommendation of the Life Technologies Special Committee."
DEXTER BOARD OF DIRECTORS' REASONS AND CONSIDERATION
AND APPROVAL OF THE TRANSACTIONS
THE DEXTER BOARD BELIEVES THAT THE MERGER IS FAIR TO AND IN THE
BEST INTERESTS OF DEXTER AND ITS STOCKHOLDERS AND RECOMMENDS TO THE
STOCKHOLDERS OF DEXTER THAT THEY VOTE FOR THE PROPOSED MERGER.
The proposed merger enables Dexter to deliver the final installment
of its commitment to maximize value for the benefit of all Dexter's
stockholders. In reaching its decision, the Dexter Board consulted with its
financial and legal advisors, and considered a variety of factors,
including the following:
o The fact that over a period of four months Dexter solicited and
received indications of interest from a large number of
potential purchasers interested in acquiring either Dexter as an
entirety or one or more of its wholly-owned constituent
businesses in a process designed to maximize stockholder value
in the short-term.
o The opinion of Lehman Brothers that the consideration to be
received by Dexter stockholders pursuant to the Dexter merger
agreement is fair, from a financial point of view, to the Dexter
stockholders.
o The fact that under the terms of the Dexter merger agreement,
Dexter stockholders will receive at least $17.50 in cash
together with shares of Invitrogen common stock intended to be
worth $45.00 per share and that the funds necessary to pay the
cash portion will be internally generated by Dexter and
Invitrogen.
o The fact that if the average trading price per share of
Invitrogen common stock as determined in accordance with the
Dexter merger agreement is $80 or more, the exchange ratio for
determining the stock portion of the consideration payable in
the Dexter merger will be fixed at 0.7813 and if the average
trading price per share of Invitrogen common stock is $60 or
less, the exchange ratio will be fixed at 1.0417.
o That the Dexter merger is expected to qualify as a
reorganization for purposes of the Internal Revenue Code and
that, as such (i) a stockholder of Dexter who exchanges all of
such stockholder's Dexter common stock solely for cash in the
Dexter merger will recognize gain or loss in an amount equal to
the difference between the cash received and such stockholder's
adjusted tax basis in the shares surrendered, (ii) a stockholder
of Dexter who exchanges all of such stockholder's Dexter common
stock solely for Invitrogen common stock in the Dexter merger
will not recognize any gain or loss as a result of the exchange,
and (iii) a stockholder of Dexter who receives a combination of
cash and Invitrogen common stock in the Dexter merger as the
case may be, will not recognize any loss but will recognize a
gain, if any, on the shares so exchanged to the extent of any
cash received.
o Information concerning the financial performance and condition,
prospects, business operation, credit capacity and asset quality
of Dexter and Invitrogen.
o The fact that the Dexter merger is conditioned upon and will
occur simultaneously with the Life Technologies merger, as well
as the fact that this condition may not be waived.
o The fact that the Dexter merger must be approved by the
affirmative vote of the holders of at least two-thirds of the
issued and outstanding shares of Dexter common stock.
o The fact that Invitrogen's obligation to consummate the Dexter
merger is conditioned upon the consummation of Dexter's
previously announced sale of its nonwovens business to Ahlstrom
Paper Group Oy and the sale of its electronic materials,
adhesives and polymer systems businesses to Loctite Corporation.
o The interests of the directors and executive officers of Dexter
in the Dexter merger as described in "- Interests of Certain
Persons in the Mergers."
o The fact that Invitrogen's obligation to consummate the proposed
merger contemplated by the merger agreement is not subject to
any financing contingencies.
o The long-term as well as the short-term interests of Dexter, as
well as the interests of Dexter's employees, customers,
creditors and suppliers.
o The uncertainty and instability for Dexter's business and
operations, employees, customers, suppliers and other important
constituencies created by ISP's actions in connection with its
unilateral attempt to seize control of Dexter, including its
proxy contest, litigation and announced a $45 per share cash
tender offer for all Dexter shares, subject to financing and
numerous other conditions.
o The provisions of the Dexter merger agreement that preclude
Dexter's ability to solicit other offers for Dexter or negotiate
or exchange information with potential bidders and the
requirement that Dexter pay Invitrogen a termination fee of $65
million if the Dexter merger were terminated for a superior
proposal.
The foregoing discussion of the information and factors considered
by the Dexter Board is not exhaustive but does include all material factors
considered by the Dexter Board. The Dexter Board did not quantify or attach
any particular relative or specific weight to the various factors it
considered in reaching its determination that the proposed merger is fair
to and in the best interests of Dexter and its stockholders. Rather, the
Dexter Board viewed its position and recommendation as being based on the
totality of the information presented to and considered by it. In addition,
individual members of the Dexter Board may have given different weights to
different factors.
OPINION OF INVITROGEN'S FINANCIAL ADVISOR
Invitrogen asked DLJ, in its role as financial advisor to
Invitrogen, to render an opinion to the Invitrogen Board of Directors as to
the fairness, from a financial point of view, of the consideration to be
paid by Invitrogen pursuant to the Life Technologies merger agreement and
the Dexter merger agreement. On July 7, 2000, DLJ delivered to the
Invitrogen Board its opinion, subsequently confirmed in writing on July 8,
2000, to the effect that, as of July 7, 2000, based on and subject to the
assumptions, limitations and qualifications set forth in its written
opinion, the aggregate consideration (as defined below) to be paid by
Invitrogen in the merger was fair to Invitrogen from a financial point of
view. The full text of DLJ's opinion is attached as Annex C to this proxy
statement/prospectus.
DLJ expressed no opinion as to the price at which Life Technologies
or Dexter common stock or Invitrogen common stock would trade at any time.
DLJ's opinion did not address the relative merits of the merger and other
business strategies considered by the Invitrogen Board nor did it address
the Invitrogen Board's decision to proceed with the merger. DLJ's opinion
did not constitute a recommendation to any Invitrogen stockholder as to how
such stockholder should vote on the merger.
Invitrogen and Life Technologies and Dexter determined the
consideration to be paid by Invitrogen in arm's length negotiations, in
which DLJ advised Invitrogen.
Invitrogen selected DLJ as its financial advisor because DLJ is an
internationally recognized investment banking firm that has substantial
experience providing strategic advisory services. DLJ was not retained as
an advisor or agent to the stockholders of Invitrogen or any other person.
As part of its investment banking business, DLJ is regularly engaged in the
valuation of businesses and securities in connection with mergers,
acquisitions, underwritings, sales and distributions of listed and unlisted
securities, private placements and valuations for corporate and other
purposes. Invitrogen did not impose any restrictions or limitations upon
DLJ with respect to the investigations made or the procedures followed by
DLJ in rendering its opinion.
In arriving at its opinion, DLJ:
o Reviewed the drafts dated July 7, 2000 of the merger agreements
and assumed the final form of the merger agreements would not
vary in any respect material to DLJ's analysis;
o Reviewed financial and other information that was publicly
available or furnished to it by Invitrogen, Life Technologies
and Dexter, including information provided during discussions
with their respective managements. Included in the information
provided during discussions with the managements of Invitrogen,
Dexter and Life Technologies were financial projections of
Invitrogen, for the period beginning January 1, 2000 and ending
December 31, 2004 prepared by the management of Invitrogen,
financial projections of Life Technologies for the period
beginning January 1, 2000 and ending December 31, 2002 prepared
by the management of Life Technologies and Dexter and financial
projections of Dexter for the period beginning January 1, 2000
and ending December 31, 2002 prepared by the management of
Dexter as supplemented by projections of estimated annual
revenues and earnings growth rates for Life Technologies for the
years ending December 31, 2003 and December 31, 2004 furnished
by the management of Life Technologies and Dexter;
o Compared certain financial and securities data of Invitrogen,
Dexter and Life Technologies with various other companies whose
securities are traded in public markets;
o Reviewed the historical stock prices and trading volumes of the
common stock of Invitrogen, Dexter and Life Technologies;
o Reviewed prices and premiums paid in certain other business
combinations; and
o Conducted such other financial studies, analyses and
investigations as it deemed appropriate for purposes of
rendering its opinion.
In rendering its opinion, DLJ relied upon and assumed the accuracy
and completeness of all of the financial and other information that was
available to it from public sources, that was provided to it by Invitrogen,
Dexter, Life Technologies or their respective representatives, or that DLJ
otherwise reviewed. With respect to the financial projections supplied to
DLJ, DLJ relied on representations that the projections were reasonably
prepared on the basis reflecting the best currently available estimates and
judgments of the management of Invitrogen, Dexter and Life Technologies as
to the future operating and financial performance of Invitrogen, Dexter and
Life Technologies, respectively. DLJ expressed no opinion with respect to
these projections or the assumptions upon which they were based. DLJ
assumed that the Life Technologies merger and the Dexter merger would be
consummated in accordance with the terms of the merger agreements,
including the consummation of the transactions contemplated by the Loctite
asset purchase agreement and the Ahlstrom asset purchase agreement. DLJ did
not assume responsibility for making any independent evaluation of the
assets or liabilities, or for making any independent verification of the
information DLJ reviewed. DLJ relied as to certain legal matters on advice
of counsel to Invitrogen.
DLJ necessarily based its opinion on economic, market, financial
and other conditions as they existed on, and on the information made
available to DLJ as of, the date of its opinion. DLJ states in its opinion
that, although subsequent developments may affect the conclusions reached
in its opinion, DLJ does not have any obligation to update, revise or
reaffirm its opinion.
For purposes of the opinion, the implied cost of Life Technologies
to Invitrogen is referred to herein as the "aggregate consideration."
Aggregate consideration was defined as the equity purchase price of Dexter
plus the equity purchase price of the Life Technologies common stock not
owned by Dexter, less the net cash available at Dexter and Life
Technologies after repayment of debt. DLJ assumed that the net cash
available included the estimated net after-tax proceeds contemplated by the
Loctite asset purchase agreement and the Ahlstrom asset purchase agreement,
which are conditions to the consummation of the mergers, as well as certain
other assumptions provided by the managements of Invitrogen, Dexter and
Life Technologies. Based upon this methodology, the aggregate consideration
is estimated to be approximately $1.56 billion.
Summary of Financial Analyses Performed by DLJ
The following is a summary of the financial analyses DLJ presented
to the Invitrogen Board on July 7, 2000 in connection with the preparation
of DLJ's opinion. No company or transaction DLJ used in the analyses
described below is directly comparable to Dexter, Life Technologies or
Invitrogen or the contemplated transaction. In addition, mathematical
analysis such as determining the mean or median is not in itself a
meaningful method of using selected company or transaction data. The
analyses DLJ performed are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than
suggested by these analyses.
Pro Forma Merger Analysis. Using assumptions provided by
Invitrogen, Dexter and Life Technologies managements including assumptions
regarding the projected financial performance of Invitrogen and Life
Technologies and the assumption of no operating synergies, DLJ compared the
projected cash earnings per share ("cash EPS") of Invitrogen for the
projected fiscal years ending December 31, 2000 through December 31, 2004
on a stand-alone basis to the projected pro forma cash EPS for the
projected fiscal years ending December 31, 2000 through December 31, 2004
of the combined company after the mergers. Cash EPS is earnings per share
before goodwill amortization. The mergers were analyzed at both the July 6,
2000 closing stock price for Invitrogen and the maximum exchange ratio on
the common stock portion of the aggregate consideration assuming that the
maximum cash consideration portion of the aggregate consideration was
elected by Dexter's and Life Technologies' stockholders. The analysis
indicated that Invitrogen's pro forma cash EPS, on a fully taxed basis,
assuming no operating synergies achievable as a result of the mergers,
would be higher in the fiscal years ending December 31, 2000 through
December 31, 2004 than the comparable projections for Invitrogen as a
stand-alone company during the same periods. This analysis did not take
into account any restructuring charges or non-recurring transaction costs
related to the transaction, as these charges will not affect the future
operating results of the merged companies.
The actual results achieved by the combined company may vary from
projected results and the variations may be material.
Contribution Analysis. DLJ analyzed the relative contributions of
Invitrogen and Life Technologies to the pro forma combined company for the
projected fiscal years ending December 31, 2000 through 2003, based on
selected financial data, assuming no anticipated operating synergies. DLJ
analyzed the respective contributions of each company's projected revenues,
gross margin and earnings before interest, taxes, depreciation and
amortization, or EBITDA, for each of the periods listed above based on
estimates provided by the managements of Invitrogen, Dexter and Life
Technologies. For purposes of the contribution analysis, DLJ has assumed
that Dexter's and Life Technologies' stockholders elected the maximum cash
consideration which would be funded, in part, by approximately $265 million
of Invitrogen's cash and the net cash available at Dexter and Life
Technologies after repayment of debt, which would include the estimated net
after-tax proceeds contemplated by the Loctite asset purchase agreement and
the Ahlstrom asset purchase agreement. Based on these assumptions,
Invitrogen stockholders will own between approximately 52% and 58% of the
combined company (not including the conversion of Invitrogen's $172.5
million of convertible subordinated notes). This compares with Invitrogen's
contribution to the combined company's pro forma results for the periods
ending December 31, 2000 through 2003 of between approximately 20% and 34%
of revenues, gross margin and EBITDA.
Analysis of Selected Publicly-Traded Companies. To provide
contextual data and comparative market information, DLJ compared selected
historical share price, earnings and operating and financial ratios for
Life Technologies to the corresponding data and ratios of a sample,
selected in DLJ's subjective judgment, of other comparable companies whose
securities are publicly traded. DLJ analyzed the market values and trading
multiples of selected publicly traded companies that DLJ believed were
reasonably comparable to Life Technologies. These comparable companies
consisted of: Waters Corporation, Millipore Corporation, PerkinElmer, Inc.
Sigma Aldrich Corporation, Cambrex Corporation, Packard Biosciences, Inc.,
Charles River Labs International Inc., and Molecular Devices Corporation.
DLJ compared the enterprise values of these companies as multiples of their
latest twelve months revenue, projected revenues for calendar year 2000,
latest twelve months earnings before interest, taxes, depreciation and
amortization, or LTM EBITDA, and projected earnings per share for the
calendar years 2000 and 2001. The enterprise value of a company is equal to
the value of its fully-diluted common equity plus debt and the liquidation
value of outstanding preferred stock, if any, minus cash and the value of
certain other assets, including minority interests in other entities. LTM
means the last twelve-month period for which financial data for the company
at issue has been reported. Projections for Life Technologies were based
upon estimates provided to DLJ by the managements of Life Technologies and
Dexter. Projections for the comparable companies were based upon publicly
available Wall Street research reports. All multiples were based on closing
stock prices on July 6, 2000. This analysis implied an enterprise value
between approximately $1.45 billion and $1.75 billion for Life
Technologies.
No company used in the "Analysis of Selected Publicly-Traded
Companies" as a comparison is identical to Life Technologies. Accordingly,
an analysis of the results of the foregoing is not entirely mathematical;
rather, it involves complex considerations and judgments concerning
differences in financial and operating characteristics and other factors
that could affect the public trading or other values of the comparable
companies or the business segment, to which they are being compared.
Premiums Paid Analysis. DLJ determined the premium over the common
stock trading prices for one day, one week and four weeks prior to the
announcement date in all merger and acquisition transactions of U.S. public
companies ranging from $1.5 to $2.0 billion in size announced between
January 1, 1999 and June 30, 2000 (approximately 40 transactions). DLJ
obtained the premiums for these transactions from Securities Data Company.
DLJ analyzed the average premiums in these transactions for one day prior,
one week prior and four weeks prior to the public announcement of the
respective transaction, and applied the average premiums to the Dexter and
Life Technologies closing share prices one day prior, one week prior and
four weeks prior to the public announcement of ISP's December 14, 1999
proposal to acquire Dexter to calculate the implied enterprise value of
Life Technologies. This analysis implied an enterprise value between
approximately $1.3 billion and $1.5 billion for Life Technologies.
Discounted Cash Flow Analysis. DLJ performed a discounted cash flow
analysis of the projected cash flows of Life Technologies for the fiscal
years ending December 31, 2000 through December 31, 2004, using projections
and assumptions provided by the management of Life Technologies.
Specifically, DLJ performed its analysis using the five year estimates for
Life Technologies' unlevered free cash flows. Unlevered free cash flows
were calculated as the projected after-tax operating earnings of Life
Technologies, plus projected depreciation, amortization, and other
projected non-cash items, plus (or minus) net changes in working capital,
minus projected capital expenditures. DLJ selected, in its subjective
judgment, a range of terminal multiples of 16.0x to 20.0x projected EBITDA
for 2004 and discount rates ranging from 15% to 17%, based on estimates
relating to the comparable companies' weighted average costs of capital.
The terminal exit multiple represents an estimate of the value of Life
Technologies' earnings stream at the end of the five year period. This
analysis implied an enterprise value between approximately $1.5 billion and
$1.7 billion for Life Technologies.
The summary set forth above does not purport to be a complete
description of the analyses performed by DLJ but describes the material
elements of the presentation that DLJ made to the Invitrogen Board on July
7, 2000 in connection with the preparation of DLJ's fairness opinion. The
preparation of a fairness opinion involves various determinations as to the
most appropriate and relevant methods of financial analysis and the
application of these methods to the particular circumstances and,
therefore, such an opinion is not readily susceptible to summary
description. DLJ conducted each of the analyses in order to provide a
different perspective on the transaction and to add to the total mix of
information available. DLJ did not form a conclusion as to whether any
individual analysis, considered in isolation, supported or failed to
support an opinion as to fairness from a financial point of view. Rather,
in reaching its conclusion, DLJ considered the results of the analyses in
light of each other and ultimately reached its opinion based on the results
of all analyses taken as a whole. DLJ did not place any particular reliance
or weight on any individual analysis, but instead concluded that its
analyses, taken as a whole, supported its determination. Accordingly,
notwithstanding the separate factors summarized above, DLJ has indicated to
Invitrogen that it believes that its analyses must be considered as a whole
and that selecting portions of its analyses and the factors considered by
it, without considering all analyses and factors, could create an
incomplete view of the evaluation process underlying its opinion. The
analyses DLJ performed are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than
suggested by these analyses.
Engagement Letter
Pursuant to the terms of an engagement agreement dated July 3,
2000, Invitrogen has agreed to pay DLJ for its services in connection with
the Life Technologies merger and the Dexter merger an aggregate financial
advisory fee of $12.5 million, including a fee of $2.5 million for
rendering its fairness opinion to the Invitrogen Board. In addition,
Invitrogen agreed to reimburse DLJ, upon DLJ's request from time to time,
for all out-of-pocket expenses (including the reasonable fees and expenses
of counsel) DLJ incurred in connection with its engagement thereunder and
to indemnify DLJ and certain related persons against certain liabilities in
connection with its engagement, including liabilities under U.S. federal
securities laws.
Other Relationships
DLJ has advised Invitrogen that, in the ordinary course of
business, DLJ and its affiliates may actively trade or hold the securities
of Invitrogen, Dexter and Life Technologies for their own account or for
the account of customers and, accordingly, may at any time hold a long or
short position in these securities. DLJ has performed investment banking
and other services for Invitrogen in the past and has been compensated for
such services. Most recently, DLJ served as lead-manager of Invitrogen's
$172.5 million Convertible Subordinated Note offering in February 2000, as
lead-manager of Invitrogen's $147.5 million follow-on offering in October
1999 and as lead- manager of Invitrogen's $60.4 million initial public
offering of common stock in February 1999. DLJ has also performed
investment banking and other services for Dexter in the past and has been
compensated for such services. Most recently, DLJ served as financial
advisor in the $33 million sale of Dexter's printed wiring board business
in November 1999. DLJ has also performed investment banking and other
services for Life Technologies in the past and has been compensated for
such services.
OPINION OF FINANCIAL ADVISOR TO THE LIFE TECHNOLOGIES SPECIAL COMMITTEE
The Life Technologies special committee engaged Credit Suisse First
Boston to evaluate the fairness, from a financial point of view, of the
consideration to be received in the Life Technologies merger by the holders
of Life Technologies common stock, other than Dexter and its subsidiaries,
officers and directors. The Life Technologies special committee selected
Credit Suisse First Boston based on Credit Suisse First Boston's
experience, expertise and reputation. Credit Suisse First Boston is an
internationally recognized investment banking firm and is regularly engaged
in the valuation of businesses and securities in connection with mergers
and acquisitions, leveraged buyouts, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities,
private placements and valuations for corporate and other purposes.
On July 7, 2000, at a meeting of the Life Technologies special
committee held to evaluate the Life Technologies merger, Credit Suisse
First Boston rendered to the special committee its written opinion to the
effect that, as of that date and based on and subject to the matters
described in its opinion, the Life Technologies merger consideration was
fair, from a financial point of view, to the holders of Life Technologies
common stock, other than Dexter and its subsidiaries, officers and
directors.
THE FULL TEXT OF CREDIT SUISSE FIRST BOSTON'S WRITTEN OPINION DATED
JULY 7, 2000 TO THE LIFE TECHNOLOGIES SPECIAL COMMITTEE, WHICH SETS FORTH
THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS ANNEX D AND IS
INCORPORATED INTO THIS DOCUMENT BY REFERENCE. HOLDERS OF LIFE TECHNOLOGIES
COMMON STOCK ARE URGED TO READ THIS OPINION CAREFULLY IN ITS ENTIRETY.
CREDIT SUISSE FIRST BOSTON'S OPINION IS ADDRESSED TO THE LIFE TECHNOLOGIES
SPECIAL COMMITTEE AND RELATES ONLY TO THE FAIRNESS OF THE LIFE TECHNOLOGIES
MERGER CONSIDERATION FROM A FINANCIAL POINT OF VIEW, DOES NOT ADDRESS ANY
OTHER ASPECT OF THE PROPOSED LIFE TECHNOLOGIES MERGER OR ANY RELATED
TRANSACTION AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER AS
TO THE FORM OF LIFE TECHNOLOGIES MERGER CONSIDERATION TO BE ELECTED OR ANY
OTHER MATTERS RELATING TO THE LIFE TECHNOLOGIES MERGER. THE SUMMARY OF
CREDIT SUISSE FIRST BOSTON'S OPINION IN THIS DOCUMENT IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION.
In arriving at its opinion, Credit Suisse First Boston reviewed the
Life Technologies merger agreement and related documents, as well as
publicly available business and financial information relating to Life
Technologies and Invitrogen. Credit Suisse First Boston also reviewed other
information relating to Life Technologies and Invitrogen, including
financial forecasts, which Life Technologies and Invitrogen provided to and
discussed with Credit Suisse First Boston, and met with Life Technologies'
and Invitrogen's managements to discuss Life Technologies' and Invitrogen's
businesses and prospects.
Credit Suisse First Boston also considered financial and stock
market data of Life Technologies and Invitrogen and compared those data
with similar data for other publicly held companies in businesses similar
to Life Technologies and Invitrogen and considered, to the extent publicly
available, the financial terms of other business combinations and
transactions recently effected. Credit Suisse First Boston also considered
other information, financial studies, analyses and investigations and
financial, economic and market criteria that it deemed relevant.
In connection with its review, Credit Suisse First Boston did not
assume any responsibility for independent verification of any of the
information that was provided to or otherwise reviewed by it and relied on
that information being complete and accurate in all material respects. With
respect to financial forecasts, Credit Suisse First Boston was advised, and
assumed, that the forecasts were reasonably prepared on bases reflecting
the best currently available estimates and judgments of Life Technologies'
and Invitrogen's managements as to the future financial performance of Life
Technologies and Invitrogen. In addition, Credit Suisse First Boston
relied, without independent verification, on the assessments of Life
Technologies' and Invitrogen's managements as to Life Technologies' and
Invitrogen's existing and future technology and products and the risks
associated with their technology and products. Credit Suisse First Boston
also assumed, with Life Technologies' consent, that the Life Technologies
merger will be treated as a tax-free reorganization for federal income tax
purposes.
Credit Suisse First Boston was not requested to, and did not, make
an independent evaluation or appraisal of Life Technologies' or
Invitrogen's assets or liabilities, contingent or otherwise, and was not
furnished with any evaluations or appraisals. Representatives of Life
Technologies advised Credit Suisse First Boston that, concurrently with the
consummation of the Life Technologies merger, Invitrogen intended to
consummate the Dexter merger. Credit Suisse First Boston was not requested
to, and its opinion does not, address any aspects or implications of the
Dexter merger. Credit Suisse First Boston's opinion was necessarily based
on information available to, and financial, economic, market and other
conditions as they existed and could be evaluated by, Credit Suisse First
Boston on the date of its opinion. Credit Suisse First Boston did not
express any opinion as to what the value of Invitrogen common stock
actually would be when issued in the merger or the prices at which
Invitrogen common stock would trade after the Life Technologies merger.
The Life Technologies special committee retained Credit Suisse
First Boston solely for purposes of rendering an opinion. Accordingly,
Credit Suisse First Boston was not requested to, and it did not, solicit
third party indications of interest in the possible acquisition of all or a
part of Life Technologies. Credit Suisse First Boston was advised, however,
by representatives of Dexter that, in connection with Dexter's public
announcement of its plans to explore alternatives to maximize stockholder
value, including the possible sale of assets, Dexter solicited indications
of interest from, and held discussions with, third parties regarding the
possible acquisition of all or a part of Dexter, including Life
Technologies.
Although Credit Suisse First Boston evaluated the merger
consideration from a financial point of view, Credit Suisse First Boston
was not requested to, and did not, recommend the specific consideration
payable in the Life Technologies merger, which consideration was determined
between Life Technologies and Invitrogen. The special committee imposed no
other limitations on Credit Suisse First Boston with respect to the
investigations made or procedures followed in rendering its opinion.
In preparing its opinion to the Life Technologies special
committee, Credit Suisse First Boston performed a variety of financial and
comparative analyses, including those described below. The summary of
Credit Suisse First Boston's analyses described below is not a complete
description of the analyses underlying Credit Suisse First Boston's
opinion. The preparation of a fairness opinion is a complex analytical
process involving various determinations as to the most appropriate and
relevant methods of financial analysis and the application of those methods
to the particular circumstances and, therefore, a fairness opinion is not
readily susceptible to summary description. In arriving at its opinion,
Credit Suisse First Boston made qualitative judgments as to the
significance and relevance of each analysis and factor that it considered.
Accordingly, Credit Suisse First Boston believes that its analyses must be
considered as a whole and that selecting portions of its analyses and
factors or focusing on information presented in tabular format, without
considering all analyses and factors or the narrative description of the
analyses, could create a misleading or incomplete view of the processes
underlying its analyses and opinion.
In its analyses, Credit Suisse First Boston considered industry
performance, regulatory, general business, economic, market and financial
conditions and other matters, many of which are beyond the control of Life
Technologies and Invitrogen. No company, transaction or business used in
Credit Suisse First Boston's analyses as a comparison is identical to Life
Technologies or Invitrogen or the proposed Life Technologies merger, and an
evaluation of the results of those analyses is not entirely mathematical.
Rather, the analyses involve complex considerations and judgments
concerning financial and operating characteristics and other factors that
could affect the acquisition, public trading or other values of the
companies, business segments or transactions analyzed.
The estimates contained in Credit Suisse First Boston's analyses
and the ranges of valuations resulting from any particular analysis are not
necessarily indicative of actual values or predictive of future results or
values, which may be significantly more or less favorable than those
suggested by the analyses. In addition, analyses relating to the value of
businesses or securities do not necessarily purport to be appraisals or to
reflect the prices at which businesses or securities actually may be sold.
Accordingly, Credit Suisse First Boston's analyses and estimates are
inherently subject to substantial uncertainty.
Credit Suisse First Boston's opinion and financial analyses were
only one of many factors considered by the Life Technologies special
committee in its evaluation of the proposed Life Technologies merger and
should not be viewed as determinative of the views of the Life Technologies
special committee, Board of Directors or management with respect to the
Life Technologies merger or the Life Technologies merger consideration.
The following is a summary of the material financial analyses
underlying Credit Suisse First Boston's opinion dated July 7, 2000
delivered to the Life Technologies special committee in connection with the
Life Technologies merger. THE FINANCIAL ANALYSES SUMMARIZED BELOW INCLUDE
INFORMATION PRESENTED IN TABULAR FORMAT. IN ORDER TO FULLY UNDERSTAND
CREDIT SUISSE FIRST BOSTON'S FINANCIAL ANALYSES, THE TABLES MUST BE READ
TOGETHER WITH THE TEXT OF EACH SUMMARY. THE TABLES ALONE DO NOT CONSTITUTE
A COMPLETE DESCRIPTION OF THE FINANCIAL ANALYSES. CONSIDERING THE DATA IN
THE TABLES BELOW WITHOUT CONSIDERING THE FULL NARRATIVE DESCRIPTION OF THE
FINANCIAL ANALYSES, INCLUDING THE METHODOLOGIES AND ASSUMPTIONS UNDERLYING
THE ANALYSES, COULD CREATE A MISLEADING OR INCOMPLETE VIEW OF CREDIT SUISSE
FIRST BOSTON'S FINANCIAL ANALYSES.
INTRODUCTION
Credit Suisse First Boston performed a "Discounted Cash Flow
Analysis," "Selected Companies Analysis" and "Selected Transactions
Analysis" for each of Life Technologies and Invitrogen as described below
in order to derive implied aggregate per share equity value reference
ranges for Life Technologies and Invitrogen. Credit Suisse First Boston
compared the implied aggregate per share equity value reference range for
Life Technologies against the Life Technologies merger consideration based
on the closing price of Invitrogen common stock on July 6, 2000. Credit
Suisse First Boston compared the implied aggregate per share equity value
reference range for Invitrogen against the closing price of Invitrogen
common stock on July 6, 2000.
LIFE TECHNOLOGIES
Discounted Cash Flow Analysis. Credit Suisse First Boston estimated
the present value of the stand-alone, unlevered, after-tax free cash flows
that Life Technologies could produce over calendar years 2001 through 2006.
Credit Suisse First Boston performed its analysis based on two scenarios, a
management case and an adjusted management case. The management case was
based on internal estimates of Life Technologies' management provided by
and discussed with Life Technologies' management and reflected separately
the estimated financial results of Life Technologies' existing operations
and current research and development pipeline. The adjusted management case
was based on adjustments to the management case discussed with Life
Technologies' management to reflect, among other things, the potential for
lower revenue growth and operating margins.
Credit Suisse First Boston calculated a range of estimated terminal
values for Life Technologies by multiplying Life Technologies' estimated
calendar year 2006 net income and earnings before interest, taxes,
depreciation and amortization, commonly referred to as EBITDA, by various
multiples. With respect to Life Technologies' existing operations, Credit
Suisse First Boston applied net income multiples ranging from 20.0x to
22.0x under the management case and 18.0x to 20.0x under the adjusted
management case and EBITDA multiples ranging from 12.0x to 14.0x under the
management case and 11.0x to 12.0x under the adjusted management case. With
respect to Life Technologies' current research and development pipeline,
Credit Suisse First Boston applied net income multiples ranging from 45.0x
to 50.0x and EBITDA multiples ranging from 28.0x to 30.0x. Credit Suisse
First Boston then discounted to present value the estimated after-tax free
cash flows and terminal values of Life Technologies using discount rates of
11.0% to 15.0% for Life Technologies' existing operations and 22.0% to
28.0% for Life Technologies' current research and development pipeline
under both the management case and the adjusted management case.
This analysis indicated an implied enterprise value reference range
for Life Technologies of approximately $1.1 billion to $1.7 billion based
on the management case and approximately $850 million to $1.1 billion based
on the adjusted management case.
Selected Companies Analysis. Credit Suisse First Boston compared
financial, operating and stock market data of Life Technologies to
corresponding data of the following lower-growth publicly traded companies
in the biotechnology industry:
o Sigma-Aldrich Corporation
o Beckman Coulter, Inc.
o Cambrex Corporation
o Diagnostic Products Corporation
o Bio-Rad Laboratories, Inc.
Credit Suisse First Boston reviewed enterprise values, calculated
as equity value, plus total debt, preferred stock and minority interest,
less cash, as a multiple of latest 12 months revenue and EBITDA. Credit
Suisse First Boston also reviewed equity values as multiples of estimated
calendar year 2000 net income. Credit Suisse First Boston then applied a
range of selected multiples derived from the selected companies of latest
12 months revenue and EBITDA and estimated calendar year 2000 net income to
corresponding financial data of Life Technologies. All multiples were based
on closing stock prices on July 6, 2000. Estimated financial data for Life
Technologies were based on the management case and estimated financial data
for the selected companies were based on publicly available research
analysts' estimates and public filings of the selected companies. This
analysis indicated an implied enterprise value reference range for Life
Technologies of approximately $800 million to $1.25 billion.
Selected Transactions Analysis. Credit Suisse First Boston analyzed
the implied transaction multiples paid or proposed to be paid in the
following selected merger and acquisition transactions in the biotechnology
industry:
ACQUIROR Target
o Qiagen N.V. Rapigene Inc.
o Invitrogen Research Genetics, Inc.
o E.I. du Pont de Nemours and Company Combichem, Inc.
o Affymetrix, Inc. Genetic Microsystems, Inc.
o Invitrogen NOVEX
o PerkinElmer Corporation NEN Life Sciences, Inc.
o Becton Dickinson & Company Clontech Laboratories, Inc.
o Amersham Pharmacia Biotech Inc. Molecular Dynamics, Inc.
o Dexter Life Technologies
o Incyte Pharmaceuticals, Inc. Synteni, Inc.
o Cambrex Corporation Biowhittaker, Inc.
o PerkinElmer Corporation PerSeptive Biosystems, Inc.
o Amersham Life Science Pharmacia Biotech AB
o Agouron Pharmaceuticals, Inc. Alanex Corporation
o Thermo Instrument Systems Inc. Life Sciences International plc
Credit Suisse First Boston compared enterprise values in the
selected transactions as multiples of latest 12 months revenue and EBITDA.
Credit Suisse First Boston also reviewed equity values as a multiple of
latest 12 months net income. All multiples were based on financial
information available at the time of the relevant transaction. Credit
Suisse First Boston then applied a range of selected multiples derived from
the selected transactions of latest 12 months revenue, EBITDA and net
income to corresponding financial data of Life Technologies. This analysis
indicated an implied enterprise value reference range for Life Technologies
of approximately $1.1 billion to $1.9 billion.
Aggregate Reference Range. Based on the valuation methodologies
described above, Credit Suisse First Boston derived the following aggregate
per share equity value reference range for Life Technologies, as compared
to the Life Technologies merger consideration based on the closing price of
Invitrogen common stock on July 6, 2000:
<TABLE>
<CAPTION>
Aggregate Per Share Equity Life Technologies Merger Consideration Based on
Reference Range for Life Technologies Invitrogen Closing Stock Price on July 6, 2000
------------------------------------- --------------------------------------------
<S> <C>
$46.22 to $65.49 per share $60.00 per share
</TABLE>
INVITROGEN
Discounted Cash Flow Analysis. Credit Suisse First Boston estimated
the present value of the stand-alone, unlevered, after-tax free cash flows
that Invitrogen could produce over calendar years 2001 through 2006. Credit
Suisse First Boston performed its analysis based on two scenarios, a
management case and a street case. The management case was based on
internal estimates of Invitrogen's management provided by and discussed
with Invitrogen's management and the street case was based on publicly
available research analysts' estimates.
Credit Suisse First Boston calculated a range of estimated terminal
values for Invitrogen by multiplying Invitrogen's estimated calendar year
2006 net income and EBITDA by net income multiples ranging from 40.0x to
55.0x and EBITDA multiples ranging from 26.0x to 32.0x under both the
management case and the street case. Credit Suisse First Boston then
discounted to present value the estimated after-tax free cash flows and
terminal values of Invitrogen using discount rates of 12.0% to 16.0% under
both the management case and the street case.
This analysis indicated an implied enterprise value reference range
for Invitrogen of approximately $1.75 billion to $2.1billion based on the
management case and approximately $1.6 billion to $2.0 billion based on the
street case.
Selected Companies Analysis. Credit Suisse First Boston compared
financial, operating and stock market data of Invitrogen to corresponding
data of the following higher-growth publicly traded companies in the
biotechnology industry:
o PE Biosystems (a tracking stock of PE Corporation)
o Waters Corporation o Qiagen N.V.
o Affymetrix, Inc.
o Techne Corporation
o Enzo Biochem, Inc.
o Aurora Biosciences Corporation
o Caliper Technologies Corp.
o Nanogen, Inc.
Credit Suisse First Boston reviewed enterprise values as a multiple
of latest 12 months revenue and EBITDA. Credit Suisse First Boston also
reviewed equity values as multiples of estimated calendar year 2000 net
income. Credit Suisse First Boston then applied a range of selected
multiples derived from the selected companies of latest 12 months revenue
and EBITDA and estimated calendar year 2000 net income to corresponding
financial data of Invitrogen. All multiples were based on closing stock
prices on July 6, 2000. Estimated financial data for Invitrogen and the
selected companies were based on publicly available research analysts'
estimates and public filings of the selected companies. This analysis
indicated an implied enterprise value reference range for Invitrogen of
approximately $1.75 billion to $1.9 billion.
Selected Transactions Analysis. Credit Suisse First Boston also
performed a selected transactions analysis for Invitrogen in which Credit
Suisse First Boston applied to the latest 12 months revenue of Invitrogen a
range of selected multiples of latest 12 months revenue derived from the
selected transactions in the biotechnology industry which it reviewed for
Life Technologies. All multiples were based on financial information
available at the time of the relevant transaction. This analysis indicated
an implied enterprise value reference range for Invitrogen of approximately
$1.45 billion to $2.25 billion.
Aggregate Reference Range. Based on the valuation methodologies
described above, Credit Suisse First Boston derived the following aggregate
per share equity value reference range for Invitrogen, as compared to the
closing price of Invitrogen common stock on July 6, 2000:
Aggregate Per Share Equity Closing Stock Price of Invitrogen
Reference Range for Invitrogen Common Stock on July 6, 2000
------------------------------ ----------------------------
$64.49 to $83.10 per share $73.50 per share
OTHER FACTORS
In the course of preparing its opinion, Credit Suisse First Boston
also reviewed and considered other information and data, including:
o the trading characteristics of Life Technologies common stock
and Invitrogen common stock and the exchange ratios implied by
the closing prices of Life Technologies common stock and
Invitrogen common stock over various periods prior to July 3,
2000;
o the potential pro forma impact of the Life Technologies merger
on Invitrogen's earnings per share both before and after taking
into account goodwill amortization;
o the implied per share prices of Life Technologies common stock
based on the average implied premiums paid in selected merger
and acquisition transactions involving the sale of minority
holdings over the period 1998 to 2000; and
o the financial terms of the Dexter merger.
MISCELLANEOUS
Life Technologies has agreed to pay Credit Suisse First Boston upon
delivery of its opinion a fee of $1.5 million. Life Technologies also has
agreed to reimburse Credit Suisse First Boston for its reasonable
out-of-pocket expenses, including fees and expenses of legal counsel and
any other advisor retained by Credit Suisse First Boston, and to indemnify
Credit Suisse First Boston and related parties against liabilities,
including liabilities under the federal securities laws, arising out of its
engagement. In the ordinary course of business, Credit Suisse First Boston
and its affiliates may actively trade the debt and equity securities of
Life Technologies, Invitrogen and Dexter for their own accounts and for the
accounts of customers and, accordingly, may at any time hold long or short
positions in those securities.
OPINION OF DEXTER'S FINANCIAL ADVISOR
On July 7, 2000, Lehman Brothers delivered its opinion to the
Dexter Board of Directors, to the effect that, as of such date, and, based
upon and subject to certain matters stated therein, the consideration to be
received by the holders of Dexter common stock pursuant to the Dexter
merger was fair from a financial point of view to such holders.
THE FULL TEXT OF THE WRITTEN OPINION OF LEHMAN BROTHERS, DATED JULY
7, 2000, IS INCLUDED AS ANNEX E TO THIS DOCUMENT. DEXTER STOCKHOLDERS
SHOULD READ THIS OPINION FOR A DISCUSSION OF THE ASSUMPTIONS MADE, FACTORS
CONSIDERED AND LIMITATIONS UPON THE REVIEW UNDERTAKEN BY LEHMAN BROTHERS IN
RENDERING ITS OPINION. THE FOLLOWING IS A SUMMARY OF LEHMAN BROTHERS'
OPINION AND THE METHODOLOGY LEHMAN BROTHERS USED TO RENDER ITS FAIRNESS
OPINION.
LEHMAN BROTHERS' ADVISORY SERVICES AND OPINION WERE PROVIDED FOR
THE USE AND BENEFIT OF THE DEXTER BOARD OF DIRECTORS IN CONNECTION WITH ITS
CONSIDERATION OF THE DEXTER MERGER. THE LEHMAN BROTHERS OPINION IS NOT
INTENDED TO BE AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER
OF DEXTER AS TO HOW SUCH STOCKHOLDER SHOULD VOTE WITH RESPECT TO THE DEXTER
MERGER AND WHETHER SUCH STOCKHOLDER SHOULD ELECT TO RECEIVE THE STOCK
ELECTION, THE CASH ELECTION OR THE STANDARD ELECTION. LEHMAN BROTHERS WAS
NOT REQUESTED TO OPINE AS TO, AND ITS OPINION DOES NOT IN ANY MANNER
ADDRESS, DEXTER'S UNDERLYING BUSINESS DECISION TO PROCEED WITH OR EFFECT
THE DEXTER MERGER.
In arriving at its opinion, Lehman Brothers reviewed and analyzed:
o the Dexter merger agreement and the specific terms of the Dexter
merger;
o the Life Technologies merger agreement and the specific terms of
the Life Technologies merger;
o publicly available information concerning Dexter, Life
Technologies and Invitrogen that Lehman Brothers believed to be
relevant to its analysis;
o financial and operating information with respect to the
business, operations and prospects of Dexter and Life
Technologies furnished to Lehman Brothers by Dexter, including,
without limitation, certain projections of future financial
performance of Dexter and Life Technologies prepared by
management of Dexter and Life Technologies, respectively;
o financial and operating information with respect to the
business, operations and prospects of Invitrogen furnished to
Lehman Brothers by Invitrogen, including, without limitation,
certain projections of future financial performance of
Invitrogen prepared by management of Invitrogen;
o a comparison of the historical financial results and present
financial condition of Life Technologies and Invitrogen with
those of other companies that Lehman Brothers deemed relevant;
o a trading history of the common shares of Life Technologies and
Invitrogen and a comparison of that trading history with those
of other companies that Lehman Brothers deemed relevant;
o the pro forma impact of the Dexter merger, including strategic
benefits expected by the management of Dexter to result from a
combination of the businesses of Dexter and Invitrogen;
o the relative contributions of Dexter and Invitrogen to the
combined company following the consummation of the Dexter
merger;
o a comparison of the financial terms of the Dexter merger with
the financial terms of certain other recent transactions that
Lehman Brothers deemed relevant;
o the terms and conditions of the recently announced sale of
Dexter's electronic materials, adhesives and polymer systems
businesses;
o the terms and conditions of the recently announced sale of
Dexter's nonwoven materials business; and
o efforts to solicit potential buyers of Dexter and Dexter's
interest in Life Technologies.
In addition, Lehman Brothers had discussions with the managements
of Dexter, Life Technologies and Invitrogen concerning their respective
businesses, operations, assets, financial conditions and prospects and
undertook such other studies, analyses and investigations as it deemed
appropriate.
In arriving at its opinion, Lehman Brothers assumed and relied upon
the accuracy and completeness of the financial and other information used
by it without assuming any responsibility for independent verification of
such information and further relied upon the assurances of the managements
of Dexter and Invitrogen that they were not aware of any facts or
circumstances that would make such information inaccurate or misleading.
With respect to the financial projections of Dexter, Life Technologies and
Invitrogen, upon advice of the companies, Lehman Brothers assumed that such
projections had been reasonably prepared on a basis reflecting the best
currently available estimates and judgments of the managements of the
Dexter, Life Technologies and Invitrogen, as the case may be, as to the
future financial performance of Dexter, Life Technologies and Invitrogen
and that Dexter, Life Technologies and Invitrogen would perform
substantially in accordance with such projections. In arriving at its
opinion, Lehman Brothers did not conduct a physical inspection of the
properties and facilities of Dexter, Life Technologies or Invitrogen and
did not make or obtain any evaluations or appraisals of the assets or
liabilities of Dexter, Life Technologies or Invitrogen. Lehman Brothers'
opinion was based upon market, economic and other conditions as they
existed on, and could be evaluated as of, the date of its opinion letter.
In connection with rendering its opinion, Lehman Brothers performed
certain financial, comparative and other analyses as described below. The
preparation of a fairness opinion involves various determinations as to the
most appropriate and relevant methods of financial and comparative analysis
and the application of those methods to the particular circumstances, and,
therefore, such an opinion is not readily susceptible to summary
description. Furthermore, in arriving at its fairness opinion, Lehman
Brothers did not attribute any particular weight to any analysis or factor
considered by it, but rather made qualitative judgments as to the
significance and relevance of each analysis and factor. Accordingly, Lehman
Brothers believes that its analyses must be considered as a whole and that
considering any portion of such analyses and of the factors considered,
without considering all analyses and factors, could create a misleading or
incomplete view of the process underlying the opinion. In its analyses,
Lehman Brothers made numerous assumptions with respect to industry
performance, general business and economic conditions and other matters,
many of which are beyond the control of Dexter, Life Technologies or
Invitrogen. Any estimates contained in the analyses are not necessarily
indicative of actual values or predictive of future results or values,
which may be significantly more or less favorable than as set forth
therein. In addition, analyses relating to the value of businesses do not
purport to be appraisals or to reflect the prices at which businesses
actually may be sold.
Valuation Analysis
Lehman Brothers prepared a valuation of Dexter. In determining its
valuation, Lehman Brothers used the following methodologies:
o comparable company trading analysis (without acquisition premium);
o comparable company trading analysis (with acquisition premium);
o discounted cash flow analysis; and
o comparable transaction analysis.
Each of the methodologies was used to generate a reference value range for
the common stock of Dexter.
The various valuation methodologies noted above and the implied
values derived therefrom are included in the following table. This table
should be read together with the more detailed descriptions set forth
below. The table alone does not constitute a complete description of the
financial and comparative analyses. In particular, in applying the various
valuation methodologies to the particular business, operations and
prospects of Dexter and the particular circumstances of the Dexter merger,
Lehman Brothers made qualitative judgments as to the significance and
relevance of each analysis and factor. In addition, Lehman Brothers made
numerous assumptions with respect to industry performance, general business
and economic conditions and other matters, many of which are beyond the
control of Dexter, Life Technologies or Invitrogen. Accordingly, the
methodologies and the values derived therefrom, as set forth in the table,
must be considered as a whole and in the context of the narrative
description of the financial analyses, including the assumptions underlying
these analyses. Considering the implied values without considering the
narrative description of the financial analyses, including the assumptions
underlying these analyses, could create a misleading or incomplete view of
the process underlying, and conclusions represented by, Lehman Brothers'
opinion.
<TABLE>
<CAPTION>
IMPLIED VALUE PER SHARE OF
SUMMARY DESCRIPTION OF VALUATION DEXTER
VALUATION METHODOLOGY METHODOLOGY COMMON STOCK
<S> <C> <C>
COMPARABLE COMPANY TRADING Market valuation benchmark based on the $48.00 -- $55.00
ANALYSIS WITHOUT PREMIUM common stock trading multiples of
selected comparable companies, assuming
no acquisition premium
COMPARABLE COMPANY TRADING Market valuation benchmark based on the $61.00 -- $70.00
ANALYSIS WITH PREMIUM common stock trading multiples of
selected comparable companies, assuming
34.3% (1 week prior) and 41.1% (one
month prior) acquisition premiums
DISCOUNTED CASH FLOW ANALYSIS Net present valuation of management $50.00 -- $56.00
projections of projected after-tax
unlevered free cash flows based on
Dexter's financial projections using
selected discount rates
COMPARABLE TRANSACTION ANALYSIS Market valuation benchmark based on $48.00 -- $61.00
consideration paid in selected comparable
transactions
</TABLE>
Comparable Company Trading Analysis without Premium. The comparable
company trading analysis without premium provides a market valuation
benchmark based on the common stock trading multiples of selected
comparable companies. For this analysis, Lehman Brothers reviewed the
public stock market trading multiples for selected companies that Lehman
Brothers deemed comparable to Dexter, whose principal business, after
giving effect to the sale of its electronic materials, adhesives and
specialty polymer systems businesses and its nonwoven materials business,
is its approximate 75% interest in Life Technologies. These companies were:
o Bio-Rad Laboratories, Inc.;
o Cambrex Corporation;
o Dionex Corporation;
o Invitrogen Corporation;
o Millipore Corporation;
o PE Corporation--PE Biosystems Group;
o Qiagen N.V.;
o Sigma-Aldrich Corporation;
o Techne Corporation; and
o Waters Corporation.
Using publicly available information, Lehman Brothers calculated
and analyzed the common equity market value as a multiple of certain
projected financial criteria (such as net income and the ratio of the
price/earnings ratio to the projected long-term earnings per share growth
rate, which is referred to as the PEG ratio) and the net market
capitalization, which means common equity market value plus the net debt
plus preferred equity at liquidation value plus minority interests at book
value, as a multiple of certain projected financial criteria (such as
revenues and earnings before interest, taxes, depreciation and
amortization, which is referred to as EBITDA) as of June 30, 2000. Net
income and the long-term earnings per share growth rates for the selected
companies were based on research analysts' estimates published by IBES, a
service reporting equity analyst estimates.
This analysis indicated that:
o market value as a multiple of projected 2001 net income for the
comparable companies ranged from approximately 14.1x to 187.1x,
with a mean of approximately 25.4x and median of approximately
19.9x (excluding Invitrogen, PE Corporation--PE Biosystems,
Qiagen and Techne), compared to approximately 18.7x for Life
Technologies;
o the estimated 2001 PEG ratio for the comparable companies ranged
from approximately 0.87x to 4.56x, with a mean of approximately
2.30x and median of approximately 2.55x, compared to
approximately 1.25x for Life Technologies;
o net market capitalization as a multiple of projected 2000
revenues for the comparable companies ranged from approximately
0.71x to 34.92x, with a mean of approximately 4.03x and median
of approximately 2.81x (excluding Invitrogen, PE Corporation--PE
Biosystems, Qiagen and Techne), compared to approximately 2.58x
for Life Technologies; and
o net market capitalization as a multiple of projected 2000 EBITDA
for the comparable companies ranged from approximately 4.8x to
138.8x, with a mean of approximately 15.0x and median of
approximately 10.0x (excluding Invitrogen, PE Corporation--PE
Biosystems, Qiagen and Techne), compared to approximately 12.3x
for Life Technologies.
Based upon this analysis, the implied values per share of Life
Technologies common stock ranged from approximately $44.00 to approximately
$53.00. Based upon this range of implied values per share of Life
Technologies common stock, after subtracting Dexter's net liabilities of
$237 million and adding estimated after-tax divestiture proceeds of $577.8
million from assets other than Dexter's approximate 75% interest in Life
Technologies, this methodology yielded valuations for Dexter common stock
that imply a value range of approximately $48.00 to approximately $55.00
per share of Dexter common stock.
Because of the inherent differences between the businesses,
operations, financial conditions and prospects of Dexter and the
businesses, operations, financial conditions and prospects of the companies
included in the comparable company group, Lehman Brothers believed that it
was inappropriate to, and therefore did not, rely solely on the
quantitative results of the analysis, and accordingly, also made
qualitative judgments concerning differences between the financial and
operating characteristics of Dexter and companies in the comparable company
group that would affect the public trading values of Dexter and such
comparable companies.
Comparable Company Trading Analysis with Premium. The comparable
company trading analysis with premium provides a market valuation benchmark
based on the common stock trading multiples of selected comparable
companies and illustrative acquisition premiums. To derive illustrative
acquisition premiums, Lehman Brothers reviewed the purchase price premium
to share price for selected completed domestic acquisition transactions
exceeding $250 million from January 1, 1998 to July 3, 2000 in which the
acquirer's pro forma ownership was greater than 50 percent.
The median purchase price premiums resulting from this analysis
were:
o 34.3% purchase price premium to the share price one week prior
to announcement of the transaction; and
o 41.1% purchase price premium to the share price one month prior
to announcement of the transaction.
Lehman Brothers applied these median premiums to the range of
implied values per share of Life Technologies common stock derived from the
analysis described above in the section entitled "Comparable Company
Trading Analysis without Premium." Based upon this analysis, the implied
values per share of Life Technologies common stock ranged from
approximately $61.00 to approximately $73.00. Based upon this range of
implied values per share of Life Technologies common stock, after
subtracting Dexter's net liabilities and adding estimated after-tax
divestiture proceeds as described above, this methodology yielded
valuations for Dexter common stock that imply a value range of
approximately $61.00 to approximately $70.00 per share of Dexter common
stock.
Because of the inherent differences between the businesses,
operations, financial conditions and prospects of Dexter and the
businesses, operations, financial conditions and prospects of the companies
included in the comparable company group, Lehman Brothers believed that it
was inappropriate to, and therefore did not, rely solely on the
quantitative results of the analysis, and accordingly, also made
qualitative judgments concerning differences between the financial and
operating characteristics of Dexter and companies in the comparable company
group that would affect the public trading values of Dexter and such
comparable companies.
Discounted Cash Flow Analysis. The discounted cash flow analysis
provides a net present valuation of management projections of the projected
after-tax unlevered free cash flows based upon financial projections for
Life Technologies. Utilizing such financial forecasts, Lehman Brothers
calculated a range of present values for Life Technologies using a range of
after-tax discount rates from 11% to 13% and a terminal value based upon a
range of multiples of estimated 2004 EBITDA from 10.0x to 12.0x. Based upon
the midpoint of the discount rates and the range of the terminal values,
the implied values per share of Life Technologies common stock ranged from
approximately $47.00 to approximately $55.00. Based upon this range of
implied values per share of Life Technologies common stock, after
subtracting Dexter's net liabilities and adding estimated after-tax
divestiture proceeds as described above, this methodology yielded
valuations for Dexter common stock that imply a value range of
approximately $50.00 to approximately $56.00 per share of Dexter common
stock.
Comparable Transaction Analysis. The comparable transaction
analysis provides a market benchmark based on the consideration paid in
selected comparable transactions. For this analysis, Lehman Brothers
reviewed publicly available information to determine the purchase prices
and multiples paid in certain transactions that were publicly announced
between January 21, 1997 and June 30, 2000 involving target companies that
were similar to Dexter's approximate 75% interest in Life Technologies in
terms of business mix, product portfolio, and/or markets served. These
transactions and the months in which they were announced were:
o Celgene Corporation's acquisition of Signal Pharmaceuticals,
Inc. (June 2000);
o Qiagen N.V.'s acquisition of Operon Technologies, Inc. (June
2000);
o PerkinElmer, Inc.'s acquisition of Nen Life Sciences (June
2000);
o E. I. du Pont de Nemours and Company's acquisition of CombiChem,
Inc. (October 1999);
o Amersham Pharmacia Biotech Inc.'s acquisition of Molecular
Dynamics, Inc. (August 1998);
o Incyte Pharmaceuticals, Inc.'s acquisition of Synteni, Inc.
(December 1997);
o The Perkin-Elmer Corporation's acquisition of PerSeptive
Biosystems, Inc. (August 1997);
o Cambrex Corporation's acquisition of BioWhittaker, Inc. (August
1997);
o Amersham International's acquisition of Nycomed ASA (July 1997);
o Agouron Pharmaceuticals, Inc.'s acquisition of Alanex
Corporation (April 1997); and
o Thermo Instrument Systems Inc.'s acquisition of Life Sciences
International PLC (January 1997).
Lehman Brothers calculated the transaction value of the relevant
transactions (calculated as the consideration offered for the common equity
and short- and long-term debt, and subtracting its cash and cash
equivalents), and applied it to certain historical financial criteria
(including revenues, EBITDA and EBIT) of the acquired business for the last
twelve months period.
The analysis indicated that:
o the transaction value as a multiple of last twelve months
revenues ranged from approximately 1.20x to 6.73x, with a mean
of approximately 3.95x and a median of approximately 3.54x;
o the transaction value as a multiple of last twelve months EBITDA
for the comparable transactions ranged from approximately 7.9x
to 32.6x, with a mean of approximately 10.4x and a median of
approximately 10.7x (excluding Amersham Pharmacia Biotech's
acquisition of Molecular Dynamics); and
o the transaction value as a multiple of last twelve months EBIT
for the comparable transactions ranged from approximately 9.5x
to 54.0x, with a mean of approximately 15.1x and a median of
approximately 16.8x (excluding Amersham Pharmacia Biotech's
acquisition of Molecular Dynamics).
Based upon a multiple range of 2.5x to 3.5x last twelve months
revenues, the implied values per share of Life Technologies common stock
ranged from approximately $44.00 to approximately $61.00. Based upon this
range of implied values per share of Life Technologies common stock, after
subtracting Dexter's net liabilities and adding estimated after-tax
divestiture proceeds as described above, this methodology yielded
valuations for Dexter common stock that imply a value range of
approximately $48.00 to approximately $61.00 per share of Dexter common
stock.
Because the market conditions, rationale and circumstances
surrounding each of the transactions analyzed were specific to each
transaction and because of the inherent differences between the businesses,
operations and prospects of Dexter and the acquired businesses analyzed,
Lehman Brothers believed that it was inappropriate to, and therefore did
not, rely solely on the quantitative results of the analysis and,
accordingly, also made qualitative judgments concerning differences between
the characteristics of these transactions and the Dexter merger that would
affect the acquisition values of Dexter and such acquired companies.
Stock Trading Analysis. Lehman Brothers reviewed the daily closing
prices and trading volume of Dexter common stock for the period from June
30, 1997 to December 13, 1999. Lehman Brother then calculated that the
implied value of $62.50 per share of Dexter common stock offered by
Invitrogen represented:
o a 43.7% premium to the highest closing price of Dexter common
stock for this period;
o a 163.2% premium to the lowest closing price of Dexter common
stock for this period; and
o a 92.0% premium to the closing price of Dexter common stock on
December 13, 1999, the day prior to the offer by International
Specialty Products Inc. to acquire Dexter for $45.00 per share
of Dexter common stock.
Comparable Company Trading Multiples Analysis. Using publicly
available information regarding the selected publicly-traded companies
listed in the section above entitled "Comparable Company Trading Analysis
without Premium," Lehman Brothers analyzed the relationship between the
ratio of the market value of the common stock of Invitrogen and each other
comparable company to the projected 2000 revenues and the forecasted
five-year earnings growth rates for Invitrogen and such other comparable
companies. Lehman Brothers also analyzed the hypothetical pro forma impact
of the merger. For this hypothetical analysis, Lehman Brothers analyzed the
projected blended five-year earnings growth rate of the combined company at
illustrative per share trading prices of $60.00, $80.00, and $100.00, and
compared the ratio of the market value of the common stock implied by each
illustrative trading price to the projected 2000 revenues of the combined
company with the corresponding ratios for the group of comparable
companies.
Collar Analysis. Lehman Brothers reviewed with the Dexter Board of
Directors the collar mechanism under the Dexter merger agreement with
respect to the number of shares of Invitrogen common stock to be issued
based upon the trading prices of Invitrogen common stock during the
measurement period prior to the date of the Dexter stockholders meeting.
Lehman Brothers observed that, because of the asymmetrical structure of the
collar mechanism relative to the closing price per share of Invitrogen
common stock on July 6, 2000, meaning that the closing price per share of
Invitrogen common stock on that date was greater than the midpoint of the
collar mechanism, this structure provided downside price protection to
Dexter stockholders and therefore had theoretical positive value on an
options pricing basis.
Lehman Brothers is an internationally recognized investment banking
firm engaged in, among other things, the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive bids, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and
other purposes. The Dexter Board of Directors selected Lehman Brothers
because of its expertise, reputation and familiarity with Dexter and Life
Technologies and because its investment banking professionals have
substantial experience in transactions comparable to the Dexter merger.
As compensation for its services in connection with the Dexter
merger and Dexter's short-term stockholder maximization efforts, Dexter has
agreed to pay Lehman Brothers a fee of approximately $12.1 million, a
portion of which is contingent upon the consummation of the Dexter merger
and against which certain other fees payable for other services performed
by Lehman Brothers for Dexter will be credited. In addition, Dexter has
agreed to reimburse Lehman Brothers for reasonable out-of-pocket expenses
incurred in connection with the Dexter merger and to indemnify Lehman
Brothers for certain liabilities that may arise out of its engagement by
Dexter and the rendering of the Lehman Brothers opinion. Lehman Brothers
has performed various financial advisory and investment banking services
for Dexter in the past (including the pending sale of Dexter's electronic
materials, adhesives and polymer systems businesses to Loctite Corporation,
the pending sale of Dexter's nonwoven materials business to Ahlstrom Paper
Group Oy and the pending sale of the coatings business to Akzo Nobel
Coatings Inc.) and has received customary fees for such services. In the
ordinary course of its business, Lehman Brothers may actively trade in the
debt and equity securities of Dexter and Invitrogen for its own account and
for the accounts of its customers and, accordingly, may at any time hold a
long or short position in such securities.
ACCOUNTING TREATMENT
The mergers will be accounted for using the purchase method of
accounting for financial accounting purposes in accordance with U.S.
generally accepted accounting principles. The purchase method accounts for
a merger as an acquisition of one company by another, and Invitrogen will
be deemed the acquiring company principally because the common stockholders
of Life Technologies and Dexter will have their shares converted into cash
and Invitrogen shares. Purchase accounting requires that the purchase price
and costs of the acquisition be allocated to all of the assets acquired and
liabilities assumed, based on their relative fair values. This allocation
will be made based upon valuations and other studies that have not yet been
finalized. Accordingly, the purchase accounting adjustments made in
connection with the development of the pro forma combined financial
information appearing elsewhere in the joint proxy statement and prospectus
are preliminary and have been made solely for purposes of developing such
pro forma combined financial information. As the purchase price exceeds the
fair value of the purchased companies' net assets, the excess cost will be
amortized to expense. Earnings or losses of the purchased companies will be
included in the buyer's financial statements from the consummation date of
the acquisition. See "Pro Forma Condensed Combined Financial Information."
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS
The following discussion summarizes the anticipated material United
States federal income tax consequences of the Life Technologies merger to
holders of Life Technologies common stock and of the Dexter merger to the
holders of Dexter common stock. This discussion assumes that shares of Life
Technologies common stock and Dexter common stock are held as capital
assets and does not address all of the United States federal income tax
consequences that may be relevant to particular stockholders in light of
their individual circumstances or to stockholders that are subject to
special rules, such as:
o financial institutions,
o mutual funds,
o tax-exempt organizations,
o insurance companies,
o dealers in securities or foreign currencies,
o traders in securities who elect to apply a mark-to-market method
of accounting,
o foreign holders
o stockholders that hold such shares as a hedge against currency
risk or as part of a straddle, constructive sale or conversion
transaction or
o stockholders who acquired their shares upon the exercise of
employee stock options or otherwise as compensation.
The following discussion is not binding on the Internal Revenue
Service. It is for general information only and is based upon the Internal
Revenue Code, laws, regulations, rulings and decisions in effect as of the
date of this proxy statement, all of which are subject to change, possibly
with retroactive effect. Tax consequences under state, local and foreign
laws are not addressed herein. THE FOLLOWING DISCUSSION DOES NOT PURPORT TO
BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT
TO THE MERGERS. THUS, DEXTER STOCKHOLDERS AND LIFE TECHNOLOGIES
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC
TAX CONSEQUENCES TO THEM OF THE MERGERS, INCLUDING TAX RETURN REPORTING
REQUIREMENTS, THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL, AND
OTHER APPLICABLE TAX LAWS AND THE EFFECT OF ANY PROPOSED CHANGES IN THE TAX
LAWS.
IN GENERAL
It is a condition to the consummation of the Dexter merger that (i)
Dexter receive an opinion from Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to Dexter, dated as of the effective date of the Dexter
merger, to the effect that the Dexter merger will qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code and (ii) Invitrogen receive an opinion from Gray, Cary, Ware &
Freidenrich LLP, special counsel to Invitrogen, dated as of the effective
date of the Dexter merger, to the effect that the Dexter merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code. It is a condition to the consummation of the Life
Technologies merger that (i) Life Technologies receive an opinion from
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to Life
Technologies, dated as of the effective date of the Life Technologies
merger, to the effect that the Life Technologies merger will qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code and (ii) Invitrogen receive an opinion from Gray, Cary, Ware &
Freidenrich LLP, special counsel to Invitrogen, dated as of the effective
date of the Life Technologies merger, to the effect that the Life
Technologies merger will qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code. These conditions relating to
the tax opinions may not be waived by Dexter or Invitrogen or by Life
Technologies or Invitrogen, as the case may be, after receipt of
stockholder approval unless further stockholder approval is obtained with
appropriate disclosure. The opinions will be based on customary assumptions
and customary representations made by, among others, Dexter and Invitrogen
or Life Technologies and Invitrogen, as the case may be. An opinion of
counsel represents counsel's best legal judgment and is not binding on the
Internal Revenue Service or any court. No ruling has been, or will be,
sought from the Internal Revenue Service as to the United States federal
income tax consequences of the mergers.
In general, assuming the respective mergers qualify as
reorganizations within the meaning of Section 368(a) of the Internal
Revenue Code and subject to the assumptions and qualifications set forth
herein, (i) a stockholder of Dexter or Life Technologies, as the case may
be, who has exchanged all of such stockholder's Dexter common stock or Life
Technologies common stock solely for cash in the Dexter merger or the Life
Technologies merger, as the case may be, will recognize gain or loss in an
amount equal to the difference between the cash received and such
stockholder's adjusted tax basis in the shares surrendered, (ii) a
stockholder of Dexter or Life Technologies, as the case may be, who has
exchanged all of such stockholder's Dexter common stock or Life
Technologies common stock solely for Invitrogen common stock in the Dexter
merger or the Life Technologies merger, as the case may be, will not
recognize any gain or loss as a result of the exchange, and (iii) a
stockholder of Dexter or Life Technologies, as the case may be, who
receives a combination of cash and Invitrogen common stock in the Dexter
merger or the Life Technologies merger, as the case may be, will not
recognize any loss but will recognize gain, if any, on the shares so
exchanged to the extent of any cash received. Any such recognized gain will
be treated as capital gain unless the receipt of the cash has the effect of
the distribution of a dividend for United States federal income tax
purposes under the Hypothetical Redemption Analysis discussed below, in
which case such gain will be treated as ordinary dividend income to the
extent of such stockholder's ratable share of accumulated earnings and
profits. For individual taxpayers, long-term capital gains are generally
subject to tax at a maximum United States federal income tax rate of 20%,
while ordinary dividend income is generally subject to tax at a maximum
United States federal income tax rate of 39.6%.
LIFE TECHNOLOGIES MERGER
CASH ELECTION WITH RESPECT TO ALL SHARES HELD - NO PRORATION. If
the cash exchanged by Invitrogen in the Life Technologies merger is not
prorated, a Life Technologies stockholder who makes the cash election with
respect to all of his or her shares actually owned and who is not
considered to constructively own any shares of Invitrogen common stock
actually owned by other persons, or own any options to acquire shares of
Invitrogen common stock, will recognize capital gain or loss equal to the
difference between the amount of cash received and such stockholder's
aggregate adjusted tax basis in the shares of Life Technologies common
stock surrendered in exchange therefor. The gain or loss will be long-term
capital gain or loss if, as of the date of the exchange, the holding period
for such shares is more than one year. If the cash exchanged in the Life
Technologies merger is prorated, see "Standard Election, Mixed Elections
and Other Cases" below.
STOCK ELECTION WITH RESPECT TO ALL SHARES HELD . A stockholder of
Life Technologies who makes a stock election with respect to all of his or
her shares actually owned will not recognize any gain or loss upon such
exchange. Such stockholder may recognize gain or loss, however, to the
extent cash is received in lieu of a fractional share of Invitrogen common
stock, as discussed below. The aggregate adjusted tax basis of the shares
of Invitrogen common stock received in the merger will be equal to the
aggregate adjusted tax basis of the Life Technologies common stock
surrendered in exchange therefor, and the holding period of the Invitrogen
common stock will include the holding period of the shares of Life
Technologies common stock surrendered in exchange therefor.
STANDARD ELECTION, MIXED ELECTIONS AND OTHER CASES. A stockholder
of Life Technologies who makes a standard election or who is otherwise not
described above and who receives a combination of cash and shares of
Invitrogen common stock in the merger will not recognize any loss but will
recognize gain, if any, on the Life Technologies common stock surrendered
in exchange therefor to the extent of any cash received. Any such
recognized gain will be treated as capital gain unless the receipt of the
cash has the effect of the distribution of a dividend for United States
federal income tax purposes under the Hypothetical Redemption Analysis
discussed below, in which case such gain will be treated as ordinary
dividend income to the extent of such stockholder's ratable share of
accumulated earnings and profits. Any capital gain will be long-term
capital gain if, as of the date of the exchange, the holding period for
such shares is greater than one year.
The aggregate adjusted tax basis of the shares of Invitrogen common
stock received in the merger will be equal to the aggregate tax basis of
the Life Technologies common stock surrendered in exchange therefor,
decreased by the cash received and increased by the amount of gain
recognized, if any. The holding period of Invitrogen common stock will
include the holding period of the shares of Life Technologies common stock
surrendered in exchange therefor.
CASH RECEIVED IN LIEU OF A FRACTIONAL INTEREST OF INVITROGEN
COMMON STOCK. Cash received in lieu of a fractional share of Invitrogen
common stock will be treated as received in redemption of such fractional
interest and gain or loss will be recognized, measured by the difference
between the amount of cash received and the portion of the basis of the
shares of Life Technologies common stock allocable to such fractional
interest. Such gain or loss will be long-term capital gain or loss if, as
of the date of the exchange, the holding period for such shares is greater
than one year.
DEXTER MERGER
CASH ELECTION WITH RESPECT TO ALL SHARES HELD - NO PRORATION. If
the cash exchanged by Invitrogen in the Dexter merger is not prorated, a
Dexter stockholder who makes the cash election with respect to all of his
or her shares actually owned and who is not considered to constructively
own any shares of Invitrogen common stock actually owned by other persons,
or own any options to acquire shares of Invitrogen common stock, will
recognize capital gain or loss equal to the difference between the amount
of cash received and such stockholder's aggregate adjusted tax basis in the
shares of Dexter common stock surrendered in exchange therefor. The gain or
loss will be long-term capital gain or loss if, as of the date of the
exchange, the holding period for such shares is more than one year. If the
cash exchanged by Invitrogen in the Dexter merger is prorated, see
"Standard Election, Mixed Elections and Other Cases" below.
STOCK ELECTION WITH RESPECT TO ALL SHARES HELD . A stockholder of
Dexter who makes a stock election with respect to all of his or her shares
actually owned will not recognize any gain or loss upon such exchange. Such
stockholder may recognize gain or loss, however, to the extent cash is
received in lieu of a fractional share of Invitrogen common stock, as
discussed below. The aggregate adjusted tax basis of the shares of
Invitrogen common stock received in the merger will be equal to the
aggregate adjusted tax basis of the Dexter common stock surrendered in
exchange therefor, and the holding period of the Invitrogen common stock
will include the holding period of the shares of Dexter common stock
surrendered in exchange therefor.
STANDARD ELECTION, MIXED ELECTIONS AND OTHER CASES. A stockholder
of Dexter who makes a standard election or who is otherwise not described
above and who receives a combination of cash and shares of Invitrogen
common stock in the merger will not recognize any loss but will recognize
gain, if any, on the Dexter common stock surrendered in exchange therefor
to the extent of any cash received. Any such recognized gain will be
treated as capital gain unless the receipt of the cash has the effect of
the distribution of a dividend for United States federal income tax
purposes under the Hypothetical Redemption Analysis discussed below, in
which case such gain will be treated as ordinary dividend income to the
extent of such stockholder's ratable share of accumulated earnings and
profits. Any capital gain will be long-term capital gain if, as of the date
of the exchange, the holding period for such shares is greater than one
year.
The aggregate adjusted tax basis of the shares of Invitrogen
common stock received in the merger will be equal to the aggregate tax
basis of the Dexter common stock surrendered in exchange therefor,
decreased by the cash received and increased by the amount of gain
recognized, if any. The holding period of Invitrogen common stock will
include the holding period of the shares of Dexter common stock surrendered
in exchange therefor.
CASH RECEIVED IN LIEU OF A FRACTIONAL INTEREST OF INVITROGEN
COMMON STOCK. Cash received in lieu of a fractional share of Invitrogen
common stock will be treated as received in redemption of such fractional
interest and gain or loss will be recognized, measured by the difference
between the amount of cash received and the portion of the basis of the
shares of Dexter common stock allocable to such fractional interest. Such
gain or loss will be long-term capital gain or loss if, as of the date of
the exchange, the holding period for such shares is greater than one year.
HYPOTHETICAL REDEMPTION ANALYSIS
The characterization of any gain recognized on the receipt of cash
pursuant to the mergers as a capital gain or as ordinary dividend income
will depend on whether or not the receipt of such cash has the effect of a
distribution of a dividend under Sections 302 and 356(a)(2) of the Internal
Revenue Code (the "Hypothetical Redemption Analysis"). Under the
Hypothetical Redemption Analysis, a stockholder of Dexter or Life
Technologies will be treated as if the portion of the shares of Dexter
common stock or Life Technologies common stock, as the case may be,
exchanged for cash in the Dexter merger or the Life Technologies merger, as
the case may be, had been instead exchanged for shares of Invitrogen common
stock (the "Hypothetical Shares"), followed immediately by a redemption of
the Hypothetical Shares by Invitrogen for cash. Under the principles of
Section 302 of the Code, a stockholder of Dexter or Life Technologies will
recognize capital gain rather than ordinary dividend income with respect to
the cash received if the hypothetical redemption is (i) in complete
redemption of all of the stock of Invitrogen owned by such stockholder,
(ii) "not essentially equivalent to a dividend" with respect to such
stockholder or (iii) "substantially disproportionate" with respect to such
stockholder. In applying the foregoing Section 302 tests, the constructive
ownership rules of Section 318 of the Internal Revenue Code apply in
comparing the stockholder's ownership interest in Invitrogen both
immediately after the merger (but before the hypothetical redemption) and
after the hypothetical redemption. Under these constructive ownership
rules, a stockholder is deemed to own shares of Invitrogen common stock
that are actually owned (and in some cases constructively owned) by certain
related individuals and entities, and also is deemed to own shares of
Invitrogen common stock that may be acquired by such stockholder or such
related individuals or entities by exercising an option, including an
employee stock option. Moreover, the Section 302 tests are applied after
taking into account any related transactions undertaken by a stockholder
pursuant to a single, integrated plan. Thus, dispositions or acquisitions
by a holder of shares of Invitrogen before or after the mergers which are
part of such holder's plan with respect to his or her ownership level of
Invitrogen stock following the mergers may be taken into account in
applying the principles of Section 302 to such stockholder.
In order for the receipt of cash pursuant to the Dexter merger or
the Life Technologies merger, as the case may be, to be treated as "not
essentially equivalent to a dividend" with respect to any particular Dexter
stockholder or Life Technologies stockholder, it must result in a
"meaningful reduction" in such stockholder's percentage ownership of the
stock of the Invitrogen. This determination requires that a stockholder
compare his or her percentage ownership in Invitrogen (including stock
owned constructively and hypothetically) before the hypothetical redemption
with his or her percentage ownership in Invitrogen (including stock owned
constructively) after the hypothetical redemption. In this regard, the
Internal Revenue Service has indicated in published rulings that any
reduction in the percentage interest of a public company stockholder whose
relative stock interest is minimal (an interest of less than 1% of the
outstanding Invitrogen common stock should satisfy this requirement) and
who exercises no control over corporate affairs should constitute such a
meaningful reduction in such stockholder's interest.
In addition, a stockholder's reduction in his or her percentage
ownership of Invitrogen stock as a result of receiving cash pursuant to the
Dexter merger or the Life Technologies merger, as the case may be, may be
"substantially disproportionate," so that the receipt of cash by such
stockholder will result in capital gain or loss, if such stockholder owns
less than 50% of the total voting power of the Invitrogen common stock and
the percentage of the voting power and value of the Invitrogen common stock
actually and constructively owned by such stockholder immediately after the
hypothetical redemption is less than 80% of both the voting power and the
value of the Invitrogen common stock actually, constructively or
hypothetically owned by such stockholder immediately before the
hypothetical redemption.
CERTAIN LITIGATION
ISP Action
On January 27, 2000, ISP 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 entitled INTERNATIONAL
SPECIALTY PRODUCTS INC. AND ISP INVESTMENTS INC. V. DEXTER CORPORATION, ET
AL., Civil Action No. 3:00 CV 157 (JBA). ISP's second amended 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 stockholders 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 stockholders have the right to vote on the Nominee
Election Proposals, Stockholder Rights Proposals and Voting Rights
Proposals, as such terms are defined therein, at the 2000 Annual Meeting;
that Dexter is prohibited from postponing its 2000 annual meeting of
stockholders beyond June 30, 2000; that the sale of any of Dexter's core
businesses would constitute the sale of all or substantially all of
Dexter's assets pursuant to Section 33-831 of the Connecticut Business
Corporation Act and therefore require approval of Dexter's stockholders;
and that the directors have breached their fiduciary obligations to Dexter
and its stockholders. The complaint requests declaratory and injunctive
relief as well as money damages.
On March 10, 2000 Dexter filed a motion for summary judgment to
dismiss Count III of the complaint, in which ISP seeks a judicial
determination that Dexter's Bylaws can lawfully be amended to increase the
total number of directorships from 10 to 17 and to elect seven additional
nominees to fill the seven newly created seats. On May 30, 2000, the Court
issued an opinion granting Dexter's motion for summary judgment and
dismissing Count III of the Complaint, on the grounds that ISP's Nominee
Election Proposals violate (i) the terms of Dexter's certificate of
incorporation, which provides that "the number of directorships within each
class shall . . . be determined by the Board"; and (ii) Section 33-740(a)
of the Connecticut Business Corporation Act, which provides that each class
of directors on a classified board such as Dexter's "contain[ ]
approximately the same percentage of the total, as near as may be." On June
14, 2000, the Court entered an order directing the entry of final judgment
dismissing Count III of the complaint. On June 29, 2000, ISP filed an
amended notice of appeal to the United States Court of Appeals for the
Second Circuit from the June 15, 2000 Partial Judgment entered in the
action, the Court's May 30, 2000 Memorandum of Decision and Order
dismissing Count III of the complaint, and the Ruling and Final Judgment
entered pursuant to Federal Rule 54(b) on June 14, 2000. Dexter believes
that the appeal is moot in view of ISP's abandonment of its proposals to
elect ISP nominees to Dexter's board of directors.
On June 27, 2000, ISP filed a motion for a preliminary injunction
seeking to enjoin the consummation of the transactions contemplated by
Dexter's asset purchase agreement with Loctite Corporation unless and until
the transaction is approved by a vote of two-thirds of Dexter's shares of
common stock. In the papers submitted to the Court in support of its
motion, ISP initially claimed that the Loctite transaction, Dexter's asset
purchase agreement with Ahlstrom Paper Group Oy and any transaction
involving Dexter's Life Technologies shares constituted a sale of
substantially all of Dexter's assets and thus the Loctite transaction must
be approved by a vote of two-thirds of the outstanding shares of Dexter
common stock pursuant to Section 33-831 of the Connecticut Business
Corporation Act. In the alternative, ISP argued that the Loctite and
Ahlstrom transactions, together with any sale of Dexter's coatings
business, represented a sale of substantially all of Dexter's assets. Since
the announcement of the merger of Dexter with and into Invitrogen on July
9, 2000, ISP now contends that the Loctite transaction, in conjunction with
the Ahlstrom transaction and the merger of Dexter with and into Invitrogen,
constitutes a sale of substantially all of Dexter's assets and thus all
three transactions must be approved by a two-thirds vote of the outstanding
shares of Dexter common stock pursuant to CBCA Section 33-831. ISP's
"alternative" argument that the Loctite and Ahlstrom transactions (together
with any sale of Dexter's coatings business) constitute a sale of
substantially all of Dexter's assets has been abandoned. On July 18, 2000,
the Court held a hearing on ISP's motion. On July 26, 2000, the Court
issued an opinion denying ISP's motion for a preliminary injunction,
concluding that on the evidence presented at the hearing, the Loctite sale
does not require shareholder approval under CBCA Section 33-831. The Court
found that the Invitrogen merger, the Ahlstrom sale and the Loctite sale
are not sufficiently interrelated to require a shareholder vote and ISP had
therefore failed to demonstrate a likelihood of success on the merits of
its claim. At the time this joint proxy statement and prospectus was being
mailed, ISP has not filed any notice of appeal from the Court's decision,
which it has a right to do any time before August 26, 2000.
Dexter and its general counsel continue to believe that ISP's
lawsuit is without merit and Dexter intends to defend vigorously against
it.
Delaware Action on Behalf of Life Technologies
On July 10, 2000, Dexter and Life Technologies filed a Complaint
for Declaratory and Injunctive Relief in the Delaware Court of Chancery
entitled LIFE TECHNOLOGIES, INC. V. INTERNATIONAL SPECIALTY PRODUCTS INC.
AND ISP INVESTMENTS INC., Civil Action No. 18141-NC. The complaint seeks an
order declaring that the Life Technologies merger agreement must be
approved by an affirmative vote of 67% of the outstanding shares of Life
Technologies, rather than 80% of the outstanding shares of Life
Technologies for either of two separate and independent reasons under the
terms of Life Technologies' certificate of incorporation: (i) 75% of Life
Technologies' directors voted to approve the Life Technologies merger
agreement and a majority of the Life Technologies directors who so voted
are "continuing directors" under Life Technologies' certificate of
incorporation; and (ii) Invitrogen is not a "related person" or an
"affiliate" or "associate" of a related person of Life Technologies within
the meaning of Life Technologies' certificate of incorporation. The
complaint also seeks an order enjoining defendants from bringing any action
in any other court concerning application of the super majority vote
requirement. Defendants must respond to the complaint by July 31, 2000. To
date, Dexter has not received notice that the defendants have responded to
the complaint.
REGULATORY MATTERS
U.S. Antitrust. Under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 and the related rules of the Federal Trade Commission, we
cannot complete the mergers until notifications have been given, certain
information has been furnished to the FTC and the Antitrust Division of the
United States Department of Justice and specified waiting period
requirements have been satisfied. We filed notification and report forms
under the HSR Act with the FTC and the Antitrust Division on July 25, 2000.
If the FTC believes that the mergers would violate the federal antitrust
laws by substantially lessening competition in any line of commerce
affecting U.S. consumers, it has the authority to challenge the mergers by
seeking a federal court order temporarily enjoining the transactions
pending conclusion of administrative hearings. The FTC may also proceed
with an administrative hearing if the injunction is denied, and if the
mergers are found to be anticompetitive, challenge the mergers after the
fact. We can give no assurance that a challenge to the mergers will not be
made or, if such a challenge is made, that it would be unsuccessful.
Expiration of the HSR Act waiting period is a condition to each of the
mergers.
Other Laws. Invitrogen , Life Technologies and Dexter conduct
operations in a number of jurisdictions where other regulatory filings or
approvals may be required or advisable in connection with the completion of
the mergers. Invitrogen , Life Technologies and Dexter currently are in the
process of reviewing whether other filings or approvals may be required or
desirable in these other jurisdictions. We recognize that some of these
filings may not be completed before the completion of the mergers, and that
some of these approvals, which are not as a matter of practice required to
be obtained prior to effectiveness of the mergers, may not be obtained
prior to the closing.
FEDERAL SECURITIES LAWS CONSEQUENCES; STOCK TRANSFER RESTRICTION AGREEMENTS
This joint proxy statement and prospectus does not cover any
resales of the Invitrogen common stock to be received by the stockholders
of either Life Technologies or Dexter upon completion of the mergers, and
no person is authorized to make any use of this joint proxy statement and
prospectus in connection with any such resale.
All shares of Invitrogen common stock received by Dexter
stockholders in the Dexter merger will be freely transferable, except that
shares of Invitrogen common stock received by persons who are deemed to be
"affiliates" of Dexter under the Securities Act of 1933 at the time of the
Dexter special meeting may be resold by them only in transactions permitted
by Rule 145 under the Securities Act of 1933 or as otherwise permitted
under the Securities Act of 1933. Persons who may be deemed to be
affiliates of Dexter for such purposes generally include individuals or
entities that control, are controlled by or are under common control with
Dexter and include directors and executive officers of Dexter. The Dexter
merger agreement requires Dexter to use its reasonable best efforts to
cause each of such affiliates to execute a written agreement to the effect
that such persons will not offer, sell or otherwise dispose of any of the
shares of Invitrogen common stock issued to them in the Dexter merger in
violation of the Securities Act of 1933 or the related Securities and
Exchange Commission rules.
All shares of Invitrogen common stock received by Life Technologies
stockholders in the Life Technologies merger will be freely transferable,
except that shares of Invitrogen common stock received by persons who are
deemed to be "affiliates" of Life Technologies under the Securities Act of
1933 at the time of the Life Technologies special meeting may be resold by
them only in transactions permitted by Rule 145 under the Securities Act of
1933 or as otherwise permitted under the Securities Act of 1933. Persons
who may be deemed to be affiliates of Life Technologies for such purposes
generally include individuals or entities that control, are controlled by
or are under common control with Life Technologies and include directors
and executive officers of Life Technologies. The Life Technologies merger
agreement requires Life Technologies to use its reasonable best efforts to
cause each of such affiliates to execute a written agreement to the effect
that such persons will not offer, sell or otherwise dispose of any of the
shares of Invitrogen common stock issued to them in the Life Technologies
merger in violation of the Securities Act of 1933 or the related Securities
and Exchange Commission rules.
COMPARATIVE PER SHARE MARKET PRICE
AND DIVIDEND INFORMATION
We are providing you with the high and low sale prices of
Invitrogen common stock, Life Technologies common stock and Dexter common
stock as reported for each calendar quarter during the past three years for
Life Technologies and Dexter and since its initial public offering in
February of 1999 for Invitrogen. We are also providing you with information
regarding dividends declared by Dexter and Life Technologies during those
periods. Invitrogen has never declared or paid any cash dividends on its
common stock and does not anticipate paying cash dividends in the
foreseeable future.
Invitrogen common stock is listed on the Nasdaq as "IVGN," Life
Technologies is listed on the over-the- counter bulletin board as "LTEK.OB"
and Dexter common stock is listed on the New York Stock Exchange as "DEX."
<TABLE>
<CAPTION>
LIFE TECHNOLOGIES COMMON STOCK DEXTER COMMON STOCK
-------------------------------------- ----------------------------------
CASH CASH
DIVIDENDS DIVIDENDS
MARKET PRICE DECLARED MARKET PRICE DECLARED
---------------------- ------------- ------------------- ------------
HIGH LOW HIGH LOW
---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
1998
First Quarter.......... $ 38 1/2 $ 30 $ 0.05 $ 43 3/8 $ 37 1/2 $ 0.24
Second Quarter......... 39 1/2 30 3/4 0.05 42 15/16 31 9/16 0.26
Third Quarter.......... 39 3/8 30 1/2 0.05 33 5/16 23 7/8 0.26
Fourth Quarter......... 40 29 3/8 0.05 32 7/8 23 1/2 0.26
1999
First Quarter.......... $ 40 3/4 $ 34 $ 0.05 $ 32 3/4 $ 26 3/8 $ 0.26
Second Quarter......... 38 1/2 34 1/2 0.05 42 3/8 31 1/2 0.26
Third Quarter.......... 41 36 1/8 -- 41 9/16 33 1/2 0.26
Fourth Quarter......... 43 38 -- 42 1/4 32 3/8 0.26
2000
First Quarter........... $ 53 $ 41 -- $ 54 5/16 $ 34 $ 0.26
Second Quarter.......... 55 48 -- 56 1/4 41 1/4 0.26
Third Quarter (through
[month, day], 2000.....
</TABLE>
INVITROGEN
COMMON STOCK
------------------------
MARKET PRICE
---------------------
HIGH LOW
---------- --------
1999
First Quarter..... $ 15 1/2 $ 12
Second Quarter.... 26 12 7/8
Third Quarter..... 35 1/8 23 3/8
Fourth Quarter.... 67 3/8 23 1/4
2000
First Quarter...... $ 99 1/2 $ 43 5/8
Second Quarter..... 78 1/2 36
Third Quarter (through
[month, day], 2000..
The following table sets forth the closing price of Invitrogen,
Life Technologies and Dexter as reported as of (i) July 7, 2000 (the last
full trading day prior to the public announcement of the proposed mergers)
and (ii) [month, day], 2000 (the last full trading day prior to the date we
filed with the Securities and Exchange Commission the registration
statement of which this joint proxy statement and prospectus is a part):
INVITROGEN LIFE TECHNOLOGIES DEXTER
COMMON STOCK COMMON STOCK COMMON STOCK
------------ ----------------- ---------------
July 7, 2000...... $77.13 $49.00 $48.00
[month, day], 2000 $xx.xx $xx.xx $xx.xx
We urge you to obtain current market quotations before voting your
shares. Because the exchange ratios vary in the merger agreements, the
market value of the shares of Invitrogen that holders of Dexter common
stock and Life Technologies common stock will have the right to acquire
when the mergers become effective may vary significantly from the market
value of the shares of Invitrogen common stock that holders of Dexter
common stock and Life Technologies common stock would receive if the
mergers were consummated on the date of this joint proxy statement and
prospectus.
INVITROGEN UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
We have presented below unaudited pro forma combined financial
statements that reflect the mergers using the purchase method of
accounting. For a more detailed description of the purchase method of
accounting, see "The Mergers--Accounting Treatment." The pro forma
adjustments are preliminary and based on management's estimates of the fair
value of the assets acquired and liabilities assumed and have been prepared
to illustrate the estimated effect of the mergers. Consequently, the
amounts reflected in the unaudited pro forma combined financial statements
are subject to change, and the final amounts may differ substantially. In
addition, the managements of Invitrogen, Life Technologies and Dexter are
in the process of assessing and formulating their integration plans, which
are expected to include employee separations, elimination of duplicative
facilities, employee relocations and other restructuring actions. The final
result of these plans could result in material revisions to the estimated
liabilities reflected in the accompanying unaudited pro forma combined
financial statements.
The unaudited pro forma condensed combined income statements for
the three-month period ended March 31, 2000 and for the year ended December
31, 1999 give effect to the mergers as if they were completed on January 1,
1999. The unaudited pro forma combined balance sheet as of March 31, 2000
gives effect to the mergers as if they were completed on that date. The
unaudited pro forma combined financial statements also assume the sale of
Dexter's electronic materials, adhesives and polymer systems, nonwoven
materials and coatings businesses prior to the completion of the mergers.
The results of operations of these specific businesses have been excluded
from the pro forma financial information. The pro forma condensed combined
financial statements should be read in conjunction with the separate
historical consolidated financial statements and the notes thereto
contained in the Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Registration Statement on Form S-3 of Invitrogen, Life
Technologies, and Dexter included in and/or incorporated by reference in
this joint proxy statement and prospectus.
The pro forma information is presented for illustrative purposes
only and is not necessarily indicative of the operating results or
financial position that would have occurred if the merger had occurred as
of the date or during the periods presented nor is it necessarily
indicative of future operating results or financial positions.
<TABLE>
<CAPTION>
INVITROGEN CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AFTER GIVING EFFECT TO THE MERGERS
MARCH 31, 2000
(IN THOUSANDS) ELIMINATE
HISTORICAL HISTORICAL BUSINESSES PRO FORMA PRO FORMA
INVITROGEN DEXTER TO BE SOLD ADJUSTMENTS COMBINED
----------- ----------- ----------- ---------- ----------
ASSETS
Current Assets:
Cash and cash equivalents and short term
<S> <C> <C> <C> <C> <C>
investments $ 265,411 $ 94,162 $ 256,082 $ (517,713) a) $ 97,939
Accounts and notes receivable............ 14,092 193,992 (98,313) (12) f) 109,759
Inventories.............................. 7,536 170,266 (82,561) - 95,241
Deferred income taxes.................... 11,923 23,141 (195) - 34,869
Prepaid expenses and other current assets 3,770 14,408 (5,395) - 12,783
----------- ----------- ----------- ---------- ----------
Total current assets................... 302,732 495,969 69,618 (517,728) 350,591
Property, plant and equipment, net......... 22,833 327,197 (197,311) 152,719
Intangible assets, net..................... 3,994 124,218 (22,098) - 106,114
Excess cost over net assets of businesses
acquired, net 130 136,647 (37,736) 1,102,815 a) 1,201,856
Other assets............................... 5,976 56,104 (8,556) - 53,524
----------- ----------- ----------- ---------- ----------
Total Assets............................... $ 335,665 $ 1,140,135 $ (196,083) $ 585,087 $1,864,804
=========== =========== =========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term debt.......................... $ - $ 48,518 $ (47,953) $ - $ 565
Current portion of long-term obligations. 813 20,621 (20,230) - 1,204
Accounts payable......................... 2,456 69,475 (44,349) (12) f) 27,570
Accrued expenses......................... 7,055 72,534 (35,566) 36,428 a) 80,451
Accrued taxes payable.................... 766 35,144 (6,856) - 29,054
Dividends payable........................ - 5,939 - - 5,939
----------- ----------- ----------- ---------- ----------
Total current liabilities.............. 11,090 252,231 (154,954) 36,415 144,782
Long-term obligations, less current maturities 3,024 232,050 (228,993) - 6,081
Deferred items............................. - 41,373 (2,367) - 39,006
Deferred income taxes...................... - 51,625 (34,081) - 17,544
Environmental reserves..................... - 11,271 (1,073) - 10,198
5.5% Convertible subordinated notes due
March 1, 2007 172,500 - - - 172,500
Minority interests......................... - 83,909 - (79,383) a) 4,526
Stockholders' Equity:
Common stock and additional paid-in-capital 141,170 42,569 - 1,284,988 a),b) 1,468,727
Deferred compensation.................... (595) - - (6,441 a) (7,036)
Accumulated other comprehensive loss..... (730) (24,328) 12,436 11,892 b) (730)
Treasury stock........................... - (58,839) - 58,839 b) -
Retained earnings........................ 9,206 508,274 212,949 (721,223 b) 9,206
----------- ----------- ----------- ---------- ----------
Total stockholders' equity................. 149,051 467,676 225,385 628,055 1,470,167
----------- ----------- ----------- ---------- ----------
Total Liabilities and Stockholders' Equity.$ 335,665 $ 1,140,135 $ (196,083) $ 585,087 $1,864,804
=========== =========== =========== ========== ==========
See Notes to Unaudited Pro Forma Combined Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
INVITROGEN CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
AFTER GIVING EFFECT TO THE MERGERS
THREE MONTHS ENDED MARCH 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ELIMINATE
HISTORICAL HISTORICAL BUSINESSES PRO FORMA PRO FORMA
INVITROGEN DEXTER TO BE SOLD ADJUSTMENTS COMBINED
---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Revenues............................... $ 27,286 $ 261,776 $(153,012) $ (427) f),h)$ 136,477
Cost of Revenues....................... 9,090 157,360 (108,086) 30 c),f) 58,394
---------- ---------- --------- ---------- ----------
Gross margin......................... 18,196 104,416 (44,926) (397) 78,083
Operating Expenses:
Sales and marketing.................. 4,778 38,368 (12,896) 198 c) 30,448
General and administrative........... 3,587 25,899 (9,628) 303 c) 20,161
Research and development............. 3,521 11,999 (5,851) (4) c), f) 9,665
Goodwill amortization................ 8 1,888 - 28,155 d) 30,051
Merger related costs................. 6,427 - - - 6,427
---------- ---------- --------- ---------- ----------
Total operating expenses........... 18,321 78,154 (28,375) 28,652 96,752
---------- ---------- --------- ---------- ----------
Income (loss) from operations.... (125) 26,262 (16,551) (28,255) (18,669)
---------- ---------- --------- ---------- ----------
Interest and other income and expense, net 812 (2,619) 9,903 (8,837) g) (741)
---------- ---------- --------- ---------- ----------
Income (loss) before provision for income taxes 687 23,643 (6,648) (37,092) (19,410)
Provision for income taxes............. 2,447 8,039 (2,261) (3,262) c),g) 4,963
---------- ---------- --------- ---------- ---------
(1,760) 15,604 (4,387) (33,830) (24,373)
NET INCOME (LOSS) BEFORE MINORITY INTERESTS
Minority interests..................... - 3,204 - (2,809) e) 395
---------- ---------- --------- ---------- ----------
NET INCOME (LOSS)...................... (1,760) 12,400 (4,387) (31,021) (24,768)
Less: Preferred stock dividends........ - - - - -
Accretion of non-voting redeemable
common stock - - - - -
Adjustment to beneficial conversion
featured related to convertible
preferred stock - - - - -
---------- ---------- --------- ---------- ----------
Income (loss) available to common
stockholders $ (1,760) $ 12,400 $ (4,387) $ (31,021) $ (24,768)
========== ========== ========= ========== ==========
Earnings (loss) per share:
Basic................................ $ (0.08) $ 0.54 $ (0.59)
========== ========== ==========
Diluted.............................. $ (0.08) $ 0.54 $ (0.59)
========== ========== ==========
Weighted average shares used in per share
calculation:
Basic................................ 22,776 22,822 42,001 i)
Diluted.............................. 22,776 23,024 42,001 i)
See Notes to Unaudited Pro Forma Combined Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
INVITROGEN CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
AFTER GIVING EFFECT TO THE MERGERS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ELIMINATE
HISTORICAL HISTORICAL BUSINESSES PRO FORMA PRO FORMA
INVITROGEN DEXTER TO BE SOLD ADJUSTMENTS COMBINED
---------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenues......................................... $ 92,880 $1,041,673 $(634,474) $ (1,863) f),h) $ 499,532
Cost of Revenues................................. 32,862 628,437 (445,624) 297 c),f) 215,972
---------- ---------- --------- ---------- ----------
Gross margin................................... 60,018 413,236 (188,850) (844) 285,970
Operating Expenses:
Sales and marketing............................ 16,235 151,777 (55,483) 1,207 c) 113,736
General and administrative..................... 12,108 99,467 (37,569) 1,842 c) 75,848
Research and development....................... 14,699 49,711 (25,875) (86) c),f) 38,449
Provision for contract settlement.............. - 3,870 - 3,870
Charge for restructuring businesses............ - 2,430 (2,430) -
Goodwill amortization.......................... 31 7,387 - 112,786 d) 120,204
Merger related costs........................... 4,379 - - - 4,379
---------- ---------- --------- ---------- ----------
Total operating expenses..................... 47,452 314,642 (121,357) 115,749 356,486
---------- ---------- --------- ---------- ----------
Income from operations....................... 12,566 98,594 (67,493) (114,183) (70,516)
---------- ---------- --------- ---------- ----------
Other Income (Expense):
Gain on divestiture of product lines........... - 95,011 (95,011) - -
Interest and other income and expense,
net.......................................... 1,273 (12,427) 45,738 (25,309) g) 9,275
---------- ---------- --------- ---------- ----------
1,273 82,584 (49,273) (25,309) 9,275
---------- ---------- --------- ---------- ----------
Income (loss) before provision for income
taxes.......................................... 13,839 181,178 (116,766) (139,492) (61,241)
Provision for income taxes....................... 4,779 61,605 (41,480) (9,748) c),g) 15,156
---------- ---------- --------- ---------- ----------
NET INCOME (LOSS) BEFORE MINORITY INTERESTS...... 9,060 119,573 (75,286) (129,744) (76,397)
Minority interests............................... - 12,074 (66) (10,934) e) 1,074
---------- ---------- --------- ---------- ----------
(e)
NET INCOME (LOSS)................................ 9,060 107,499 (75,220) (118,810) (77,471)
Less: Preferred stock dividends................. (163) - - - (163)
Accretion of non-voting redeemable common
stock........................................ (74) - - - (74)
Adjustment to beneficial conversion
feature related to convertible preferred
stock........................................ 985 - - - 985
---------- ---------- --------- ---------- ----------
Income (loss) available to common stockholders... $ 9,808 $ 107,499 $ (75,220) $ (118,810) $ (76,723)
========== ========== ========= ========== ==========
Earnings (loss) per share:
Basic.......................................... $ 0.51 $ 4.71 $ (2.00)
========== ========== ==========
Diluted........................................ $ 0.45 $ 4.67 $ (2.00)
========== ========== ==========
Weighted average shares used in per share
calculation:
Basic.......................................... 19,069 22,842 38,294 i)
Diluted........................................ 21,629 23,002 38,294 i)
See Notes to Unaudited Pro Forma Combined Financial Statements.
</TABLE>
INVITROGEN CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The unaudited pro forma condensed combined financial statements of
Invitrogen have been prepared using the purchase method of accounting based
on the historical financial statements of Invitrogen, Life Technologies and
Dexter for the three months ended March 31, 2000 and for the year ended
December 31, 1999. The unaudited pro forma combined balance sheet has been
prepared as if the mergers had been consummated at March 31, 2000 and the
unaudited pro forma combined statements of income assume consummation of
the mergers on January 1, 1999. The unaudited pro forma combined financial
statements also assume the sale of Dexter's electronic materials, adhesives
and polymer systems, nonwoven materials and coatings businesses prior to
the completion of the mergers as well as the pay down of associated debt
and the related decrease in interest expense and income from the investment
of the net proceeds received from the respective sales. The results of
operations of these specific businesses have been excluded from the pro
forma financial information.
Certain costs associated with the restructuring of existing
Invitrogen operations and costs necessary to integrate the businesses of
Invitrogen and Life Technologies that are expected to benefit future
operations are estimated to range from $5 million to $10 million. These
estimated costs will be expensed as restructuring costs after the
completion of the mergers and after management has completed and approved
the restructuring plans and associated costs. Dexter also anticipates
incurring an estimated $11 million in prepayment penalties associated with
the prepayment of existing debt. This expense will be recorded by Dexter
upon the prepayment of the debt which is expected to occur prior to the
completion of the mergers. These estimates have not been included in the
unaudited pro forma financial statements since they are nonrecurring
expenses.
2. PRO FORMA ADJUSTMENTS AND ASSUMPTIONS
a) PURCHASE PRICE
The estimated purchase price of the mergers was based on the
estimated cash and stock to be paid to Life Technologies and Dexter
stockholders upon consummation of the mergers and estimated direct
transaction costs to be incurred by Invitrogen. The calculation of
the estimated cash and stock to be paid assumed the "standard
election" combination of cash and stock, an Invitrogen common stock
equivalent of .8950 (based on the average closing price of
Invitrogen common stock for 20 consecutive trading days prior the
public announcement of the mergers) and an assumed fair value of
Invitrogen common stock of $68.683 upon consummation of the mergers
(based on the closing price of Invitrogen common stock 5 days prior
to and 5 days after the public announcement of the mergers). The
estimated direct costs of the transaction to be incurred by
Invitrogen include advisory fees for investment bankers, attorneys,
accountants, filing and printing fees and certain restructuring
costs. The estimates below are subject to change and the final
amounts may differ substantially.
Cash $ 517,716,000
Common stock and additional paid-in-capital 1,320,423,000
Estimated fair value of stock options assumed 7,134,000
Estimated direct costs 36,427,000
---------------
Estimated purchase price $ 1,881,700,000
===============
The allocation of the above purchase price is
estimated to be as follows:
Fair value of net assets acquired $ 673,533,000
Deferred compensation 6,441,000
Intangible assets 1,201,726,000
---------------
$ 1,881,700,000
===============
The allocation of the excess cost over net assets acquired is
preliminary and is pending completion of the valuation of the
assets acquired.
b) INTERCOMPANY INVESTMENT
Reflects the elimination of the investment in Life Technologies and
Dexter by Invitrogen.
c) DEFERRED COMPENSATION
Reflects the estimated amortization of deferred compensation to be
recorded subsequent to the completion of the merger as a result of
the issuance of Invitrogen stock options in exchange for Life
Technologies' outstanding stock options at an exchange ratio of
.8950. The deferred compensation is amortized over the remaining
vesting period of the newly issued stock options which ranges from
one to three years.
d) GOODWILL AMORTIZATION
Reflects the estimated amortization of goodwill over a 10-year
blended rate which is preliminary and may change significantly upon
completion of the valuation of the assets acquired.
e) MINORITY INTEREST
Reflects the elimination of minority interest of Dexter that would
be purchased upon approval of the merger by the minority interest
stockholders and completion of the merger.
f) INTERCOMPANY TRANSACTIONS
Reflects the elimination of intercompany transactions and balances.
g) INTEREST INCOME
Reflects the estimated reduction in interest income from cash used
to purchase Dexter and Life Technologies shares and cash used for
merger expenses.
h) REVENUE RECLASSIFICATION
Reclassifies royalty revenue for Life Technologies from other income to
revenues to be consistent with Invitrogen's classification of royalty
revenue.
h) EARNINGS PER SHARE
Reflects the issuance of an estimated 19,224,884 shares of
Invitrogen common stock for the common stock of Dexter and Life
Technologies based on the assumptions discussed in a) above.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
The executive officers of Dexter and Life Technologies and the
members of the Dexter and Life Technologies boards of directors have
interests in the mergers that are different from, or in addition to, the
interests of stockholders generally. Several executive officers of Dexter
and Life Technologies, including some officers who are also directors, have
employment or severance agreements and are or may become entitled to
specific benefits under employee benefit plans as a result of the mergers.
Each of the employee-directors of Dexter and Life Technologies may be
entitled to receive compensation if the mergers are completed. The Dexter
and Life Technologies boards of directors were aware of and discussed these
potentially conflicting interests when they approved the mergers.
DEXTER SEVERANCE AGREEMENTS
Each of Dexter's executive officers is a party to a severance
agreement which provides certain benefits upon a qualifying termination of
employment after a change in control of Dexter. The consummation of the
Dexter merger will constitute a change in control of Dexter under the
severance agreements. An executive officer will be provided with the
benefits under his or her severance agreement if within 395 days after a
change in control (the "severance period") the executive officer's
employment is involuntary terminated (for reasons other than death,
permanent disability, attainment of the age of 65 or cause), or if the
executive officer terminates his or her employment for good reason. In
addition, an executive officer will also be entitled to benefits under the
severance agreement if he or she terminates employment for any reason
within the thirty-day period immediately preceding the expiration of the
severance period.
Upon a qualifying termination of employment, each executive officer
will be entitled to a lump sum cash severance payment equal to 200% of the
sum of (i) his or her base salary at the time of the qualifying termination
and (ii) the highest annual incentive compensation paid to the executive
officer in the three full years immediately prior to the change in control.
Upon a qualifying termination after a change of control, Messrs. Walker,
Gordon, J. Thompson and Beatt and Ms. Burdett, the named executive officers
of Dexter, would be entitled to an approximate lump sum cash severance
payment of $2,543,000, $873,000, $750,000, $693,000 and $947,000, respectively.
The severance agreements also entitle each executive officer to two
years of employee welfare benefits continuation and two years of additional
credit for retirement plan purposes. Executive officers are also entitled
to receive additional payments, if necessary, to reimburse them for (i) any
legal expenses, plus interest thereon, incurred in enforcing or defending
the severance agreement, and (ii) any excise tax liability imposed under
section 4999 of the Internal Revenue Code.
In general, section 4999 of the Internal Revenue Code imposes an
excise tax on the recipient of any "excess parachute payment" equal to 20%
of such payment. A "parachute payment" is any payment that is contingent on
a change in control. Excess parachute payments consist of the excess of
parachute payments over an individual's average taxable compensation
received from his or her employer during the five taxable years (or entire
period of employment if less) preceding the year in which the change in
control occurs (the "base amount"). The Internal Revenue Code provides a
"safe harbor" from the excise tax if an employee does not receive parachute
payments with a value in excess of 2.99 times the employee's base amount.
Stock Options
Each executive officer's severance agreement also provides that
upon a change in control of Dexter, and without regard to the termination
of the employment of the executive officer, all outstanding and unexercised
options theretofore granted to the executive officer by Dexter shall become
immediately exercisable in full.
The following table sets forth, with respect to each named
executive officer and the eight other Dexter executive officers as a group,
(i) the number of shares of Dexter common stock subject to options held by
such persons that will become exercisable as a result of the merger and
(ii) the weighted average exercise price for such options.
Options which Weighted
become Average
Exercisable Exercise Price
------------- --------------
K. Grahame Walker 113,001 $46.34
Kathleen Burdett 34,501 46.55
David G. Gordon 45,000 48.98
John D. Thompson 18,667 46.97
Bruce H. Beatt 18,668 46.97
Other Executive Officers
as a Group 110,303 47.54
Restricted Stock
Each executive officer's severance agreement also provides that
upon a change in control of Dexter, and without regard to the termination
of the employment of the executive officer, restrictions on all outstanding
restricted stock theretofore granted to the executive officer by Dexter
shall lapse. The number of shares of restricted stock where restrictions
will lapse upon changing control are as follows:
Shares of Restricted
Stock
--------------------
K. Grahame Walker 38,622
Kathleen Burdett 16,607
David G. Gordon 8,120
John D. Thompson 11,274
Bruce H. Beatt 10,450
Other Executive Officers as a Group 38,588
Notwithstanding the foregoing, the most recent restricted stock
grant made to each of the executive officers does not provide for all
restrictions to lapse upon a change in control. Rather, each executive
officer is entitled to receive a lump sum payment in respect of such
restricted stock upon the earlier to occur of (i) the first anniversary of
the change in control if the executive has remained continuously employed
by Dexter or a Dexter affiliate, (ii) the date restrictions would have
otherwise lapsed, or (iii) the date on which the executive officer's
employment terminates under circumstances entitling him or her to severance
benefits under the severance agreement.
The number of restricted stock subject to the foregoing are as
follows:
Shares of Restricted
Stock
--------------------
K. Grahame Walker 9,600
Kathleen Burdett 4,500
David G. Gordon 7,000
John D. Thompson 3,500
Bruce H. Beatt 3,500
Other Executive Officers as a Group 18,200
DEXTER COMPENSATION AND BENEFIT PLANS
Executive Incentive Compensation Plan
Each of Dexter's executive officers, other than the Chief Executive
Officer, K. Grahame Walker, participates in Dexter's executive incentive
compensation plan. Under the executive incentive compensation plan
participants are eligible to receive an annual cash bonus based upon
personal performance and corporate and/or business unit financial
performance. Upon a change in control, which will be triggered under the
executive incentive compensation plan by the consummation of the merger,
the executive incentive compensation plan provides that a terminated
participant's award will be calculated for the period up to the
participant's termination of employment.
Executive Supplemental Retirement Plan
Dexter has an executive supplemental pension plan in which each of
the executive officers is eligible to participate. The executive
supplemental pension plan provides for a normal retirement pension that
commences upon the first day of the month coincident with or next following
an executive supplemental pension plan participant's 65th birthday. An
executive supplemental pension plan participant may request an early
payment of his or her pension, in which case the pension will be reduced by
an early retirement factor. After a change in control, the reduction
attributable to the early retirement factor for participants who have
attained age 55 with 10 or more years of service is reduced (i.e., the
pension payable is increased). The consummation of the merger will
constitute a change in control under the executive supplemental retirement
plan.
Currently, only three executive officers, Messrs. Walker, Benham
and McClelland, have attained age 55 with ten or more years of service and
would be entitled to an enhanced early executive retirement supplemental
plan as a result of the application of the post-change in control early
retirement factor. It is not expected that by the time the merger is
consummated that any of the other executive officer's will have attained or
will be credited with having attained age 55 with ten or more years of
service.
The 1996 Non-Employee Directors' Stock Plan
Dexter maintains the 1996 non-employee directors' stock plan. Under
the non-employee director stock plan, a non-employee director may elect to
receive shares of Dexter common stock in lieu of all or a portion of the
cash retainer he or she is to receive in respect of board service. Such
election must be made in advance of the calendar year in respect of which
the retainer is to be paid. The non-employee director stock plan provides
that a non-employee director may elect to convert shares of Dexter common
stock otherwise issuable under the non- employee director stock plan to
restricted stock. The restrictions upon such stock will lapse upon the
non-employee director's death, disability, retirement, or approved
termination of service and also upon a change in control. The consummation
of the merger will constitute a change in control under the non-employee
director stock plan. If a non-employee director ceases to be a director
while holding restricted stock, and such cessation is for any reason other
than as described above, the restricted stock is forfeited. The number of
shares of restricted stock held by each non-employee director pursuant to
an election made under the non-employee director stock plan is shown below.
Charles H. Curl - 2,451
Peter G. Kelly - 1,791
Jean-Francois Saglio - 0
Henrietta Holsman Fore - 361
Bernard M. Fox - 1,955
George M. Whitesides - 736
Robert M. Furek - 2,451
Martha Clark Goss - 0
Edgar G. Hotard - 1,754
LIFE TECHNOLOGIES
Change-in-Control Agreements
General. Each of Life Technologies' executive officers is a party
to an agreement which provides certain benefits upon a qualifying
termination of employment after a change of control of Life Technologies or
Dexter. The consummation of the Life Technologies merger will constitute a
change of control of Life Technologies under such agreements. An executive
officer will be provided with certain benefits under his or her
change-in-control agreement if within 24 months after a change in control
the executive officer's employment is involuntary terminated (for reasons
other than disability or cause) or if the executive officer terminates his
or her employment for good reason.
Upon a qualifying termination of employment, each executive officer
will be entitled to a lump sum cash severance payment equal to 200% or 150%
(depending on the executive officer's salary grade) of the sum of (i) his
or her annual base salary at the time of the qualifying termination and
(ii) the higher of (A) the average annualized bonus paid to the executive
officer in the three fiscal years immediately prior to the change in
control or the targeted annual bonus payable to the executive pursuant to
the company's incentive compensation plan for the fiscal year in which the
date of termination occurs (assuming 100% achievement of the company
performance factor and 100% achievement of the executive's personal
performance factor). Upon a qualifying termination after a change of
control, J. Stark Thompson, Ph.D., President and Chief Executive Officer,
Derek Woods, Senior Vice President Research and Development, Tom Coutts,
Vice President, Global Serum Group, Brian Graves, Senior Vice President &
General Manager, U.S. Industrial Bioproducts, and John Cooper, Senior Vice
President & General Manager, Americas Research Products, who are the named
executive officers of Life Technologies, would be entitled to an
approximate lump sum cash severance payment of $1,856,000, $914,500,
$852,500, $806,000, and $771,900, respectively.
The change-in-control agreements also entitle each executive
officer to receive employee welfare benefits during the two year period
following the change of control and additional credit for retirement plan
purposes up to the end of such period, an amount equal to the company's
contribution to the executive's 401(k) plan that is not vested on the date
of termination, and $25,000 worth of executive outplacement services.
Executive officers are also entitled to receive additional payments, if
necessary, to reimburse them for legal expenses, plus interest thereon,
incurred in enforcing the change-in-control agreement.
Stock Options. Each executive officer's change-in-control agreement
also provides that upon a change in control followed by a qualifying
termination of employment, all outstanding stock options held by the
executive officer pursuant to any Life Technologies stock option plan shall
become immediately vested and exercisable in full.
The following table sets forth, with respect to each named
executive officer and the other Life Technologies executive officers as a
group, (i) the number of shares of Life Technologies common stock subject
to options held by such persons that would become exercisable as a result
of the mergers and a qualifying termination and (ii) the weighted average
exercise price for such options.
OPTIONS WHICH WEIGHTED
BECOME AVERAGE
EXERCISABLE EXERCISE PRICE
J. Stark Thompson $
Derek E. Woods
Thomas M. Coutts
Brian D. Graves
John V. Cooper
Other Executive Officers
as a Group
Retention Agreements
Each of Life Technologies' executive officers, except Dr. Thompson
is party to a retention agreement pursuant to which each such executive
officer would receive a lump sum payment of $50,000 under any of the
following circumstances: (1) the executive officer's employment is
terminated without cause prior to February 28, 2001 and prior to the
completion of a "strategic transaction"(which is defined to include a
merger of Dexter or Life Technologies); (2) a strategic transaction is
completed by February 28, 2001, and the executive officer is not offered
comparable employment within 10 days; (3) the executive officer's
employment is terminated without cause within 90d ays after a strategic
transaction that is completed before February 28, 2001; (4) the executive
officer continues as an active employee for 90 days after a strategic
transaction that is completed before February 28, 2001; or (5) the
executive officer remains employed as of February 28, 2001, and no
strategic transaction has been completed by that date. Completion of the
Life Technologies merger would constitute completion of a strategic
transaction for purposes of the retention agreements.
Restricted Stock
Each executive officer of Life Technologies has received restricted
stock from Dexter pursuant to restricted stock agreements. Under the
restricted stock agreements, upon a change in control (including the Life
Technologies merger) each executive officer is entitled to receive a lump
sum payment in respect of such restricted stock upon the earlier to occur
of (i) the first anniversary of the change in control if the executive has
remained continuously employed by Life Technologies or a Life Technologies
affiliate, (ii) the date restrictions would have otherwise lapsed, or (iii)
the date on which the executive officer's employment terminates under
circumstances entitling him or her to severance benefits under the
change-in-control agreement.
The number of shares of restricted stock held by the named executive
officers and by the other executive officers as a group are as follows:
SHARES OF RESTRICTED STOCK
--------------------------
J. Stark Thompson 7,500
Derek E. Woods 2,500
Thomas M. Coutts 1,000
Brian D. Graves 2,500
John V. Cooper 5,000
Other Executive Officers as a Group 13,500
Executive Supplemental Retirement Plan
Life Technologies has an executive supplemental pension plan in
which each of the executive officers (except for Mr. Coutts, who
participates in a U.K. pension plan) is eligible to participate. The
executive supplemental pension plan provides for a normal retirement
pension that commences upon the first day of the month coincident with or
next following an executive supplemental pension plan participant's 65th
birthday. An executive supplemental pension plan participant may request an
early payment of his or her pension, in which case the pension will be
reduced by an early retirement factor. After a change in control, the
reduction attributable to the early retirement factor for participants who
have attained age 55 with 10 or more years of service is reduced (i.e., the
pension payable is increased). The consummation of the merger will
constitute a change in control under the executive supplemental retirement
plan.
Currently, only Dr. Thompson, Mr. Graves and one other executive
officer have attained age 55 with ten or more years of service and would be
entitled to an enhanced early executive retirement supplemental plan as a
result of the application of the post-change in control early retirement
factor. It is not expected that by the time the merger is consummated any
of the other executive officers will have attained or will be credited with
having attained age 55 with ten or more years of service.
The 1996 Non-Employee Directors' Stock Option Plan
Life Technologies previously maintained a stock option plan for
non-employee directors (its 1996 non- employee directors' stock option
plan). Under the plan the company issued options to non-employee directors
in 1996, 1997, and 1998. Upon a change in control of the company the plan
provides that all outstanding options granted under the plan shall
immediately become exercisable. The consummation of the merger will
constitute a change in control of the company under the plan.
The number of unvested options that will become vested as a result
of the merger will depend on whether the merger is consummated before
October 1, 2000, because some of the options will automatically vest on
such date even if the merger has not been consummated by then. The number
of unvested options that will become vested under the plan as a result of
the merger that are held by any of the company's non-employee directors are
listed below, taking into account the date of the consummation of the
merger, together with the weighted average exercise price for such options:
ACCELERATED ACCELERATED WEIGHTED
OPTIONS WEIGHTED OPTIONS IF AVERAGE
IF MERGER AVERAGE MERGER CLOSES EXERCISE
CLOSES BEFORE EXERCISE OCTOBER 1 PRICE
DIRECTOR OCTOBER 1, 2000 PRICE OR LATER
-------------------- --------------- -------- ------------- --------
Thomas H. Adams 6750 $32.79 2250 $33.25
George M. Whitesides 6750 $34.90 4500 $35.72
Peter G. Kelly 6750 $34.93 4500 $35.77
Relationship to Dexter
R. Barry Gettins, Ph. D., who is a director of Life Technologies
and a member of the Life Technologies special committee, was an employee of
Dexter (most recently as Senior Vice President, Operations and Technology
Development) until his retirement in 1998. Joseph C. Stokes, Jr., who is a
director of Life Technologies and a member of the Life Technologies special
committee, was an employee of Dexter until 1999 and later of Life
Technologies (most recently as Senior Vice President, Chief Financial
Officer and Secretary) until his retirement in 1999. Each of these
individuals may receive pension, retirement or other benefits from Dexter
and/or Life Technologies.
Board of Directors and Management of Invitrogen Following the Mergers
The Life Technologies merger agreement provides that two directors
of Life Technologies, J. Stark Thompson, Ph.D., the president and chief
executive officer of Life Technologies and Thomas H. Adams, Ph.D., will
join the board of directors of Invitrogen effective at the effective time
of the Life Technologies merger.
After the Life Technologies merger, Dr. Thompson will continue as
the president and chief executive officer of Life Technologies' operations,
and he will be appointed to a senior executive management position with
Invitrogen. Otherwise, the executive officers of Invitrogen immediately
following the mergers will be the same as those immediately prior to the
mergers.
INDEMNIFICATION AND INSURANCE
Invitrogen has agreed to indemnify present and former directors and
officers of Life Technologies and Dexter against any costs or expenses
incurred in connection with any claim, action, suit, proceeding or
investigation by reason of the fact that such individual is or was a
director, officer, employee or agent of Life Technologies or Dexter.
Invitrogen has also agreed that, for six years from the time the
mergers becomes effective, it will maintain in effect Life Technologies'
and Dexter's and their respective subsidiaries' current directors' and
officers' liability insurance policies for those persons who are currently
covered by the policies. However, Invitrogen will not be required to expend
in any one year an amount in excess of 150% of the annual premiums
currently paid by Life Technologies or Dexter for such insurance. If the
annual premiums of such insurance coverage exceed this amount, Invitrogen
only will be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount. Invitrogen may meet its
obligations under this paragraph by covering the relevant persons under its
own insurance policies.
See "Life Technologies Merger Agreement--Indemnification;
Directors' and Officers' Insurance" and "Dexter Merger
Agreement--Indemnification; Directors' and Officers' Insurance."
THE MERGER AGREEMENTS
We believe this summary describes the material terms of the merger
agreements. However, we recommend that you read carefully the complete
agreements for the precise legal terms of the merger agreements and other
information that may be important to you. The merger agreements are
included in this joint proxy statement and prospectus as Annexes A and B.
LIFE TECHNOLOGIES MERGER AGREEMENT
FORM OF MERGER
If all the conditions to the merger are satisfied or waived in
accordance with the merger agreement, Life Technologies will merge with and
into Invitrogen Corporation. The merger will become effective when a
certificate of merger is filed with the Delaware Secretary of State.
CONSIDERATION TO BE RECEIVED IN THE MERGER
At the time the merger becomes effective, each Life Technologies
stockholder will have the choice to elect to receive in exchange for each
of their Life Technologies shares one of the following:
1. $60.00 in cash, which will be prorated as follows, (i) the
right to receive an amount in cash equal to $60.00
multiplied by the cash election proration factor, plus (ii)
if the cash election proration factor is less than 1, a
fraction of a share of Invitrogen's common stock equal to
the exchange ratio multiplied by a fraction the numerator of
which is $60.00 minus the cash determined above and the
denominator of which is $60.00. The "cash election proration
factor" shall mean the lesser of (x) 1.00 or (y) a fraction
(i) the numerator of which is (1) the product of the total
number of shares outstanding multiplied by $16.80 minus (2)
$16.80 multiplied by the number of shares for which standard
elections have been made, and (ii) the denominator of which
is the product of $60.00 multiplied by the number of shares
for which cash elections have been made, so that Invitrogen
will not issue more than $105 million in cash and in the
Life Technologies merger;
2. $16.80 in cash and a number of shares of Invitrogen common
stock equivalent in value to $43.20 determined by
multiplying the exchange ratio by 0.7200; or
3. A number of shares of Invitrogen common stock equivalent in
value to $60.00 determined as follows, the right to receive
that fraction of a share of Invitrogen common stock shall be
calculated by dividing (x) $60.00 by (y) the average bidder
trading price, rounded to four decimal places. The "average
bidder trading price" shall mean the average of the reported
closing sales prices per share of Invitrogen common stock as
reported in The Wall Street Journal for the 20 consecutive
Nasdaq National Market trading days ending on the third
trading day prior to the date of the Life Technologies
stockholders meeting; provided, that if the quotient exceeds
1.0, then the exchange ratio shall be 1.0, and if the
quotient is less than 0.7500, then the exchange ratio shall
be 0.7500.
An election to receive only cash is called a "cash election," an
election to receive all stock is called a "stock election," and an election
to receive a combination of cash and stock is called a "standard election."
Stockholders who do not make an election and who are not dissenting
stockholders, will be deemed to have made a standard election. All shares
of Life Technologies common stock held by Dexter will be cancelled at the
effective time of the Life Technologies merger, and no consideration will
be delivered in exchange for such shares.
EXCHANGE AGENT; PROCEDURES FOR EXCHANGE OF CERTIFICATES
Exchange AgentInvitrogen shall appoint an exchange agent, prior to
the effective time, under the merger agreement. The exchange agent will
exchange certificates representing shares of Life Technologies common stock
for the consideration to be received in the merger. At the time the merger
becomes effective, Invitrogen will deposit with the exchange agent the
consideration to be received in the merger and the cash for the exchange
fund. Soon after the completion of the merger, the exchange agent will send
a letter and election form to each person who was a Life Technologies
stockholder at the time the merger became effective. The letter will
contain instructions on how to surrender Life Technologies stock
certificates to the exchange agent and receive, depending on the election
of the stockholder, Invitrogen common stock, cash, or a combination of
Invitrogen common stock and cash.
Dividends. Holders of Life Technologies common stock will not be
entitled to receive any dividends or other distributions payable by
Invitrogen until they exchange their Life Technologies stock certificates
for shares of Invitrogen common stock. After they deliver their Life
Technologies stock certificates to the exchange agent, those stockholders
will receive, subject to applicable laws, accumulated dividends and
distributions, without interest.
Fractional Shares. No fractional shares of Invitrogen common stock
will be issued upon the surrender of certificates representing shares of
Life Technologies common stock. No dividend or other distribution of
Invitrogen will relate to any such fractional shares and no such fractional
shares will entitle the owner thereof to any voting or other rights of a
stockholder of Invitrogen.
Holders of Life Technologies common stock otherwise entitled to
fractional shares of Invitrogen will receive a cash payment instead of such
fractional shares. The cash payment will be equal to the product obtained
by multiplying the fractional share interest the stockholder would be
entitled to receive by the average reported closing sales price for a share
of Invitrogen common stock as reported in The Wall Street Journal for five
consecutive trading days immediately before the closing date.
Antidilution Adjustments. If, before the merger becomes effective,
Invitrogen makes certain changes to the number of outstanding shares of
Invitrogen common stock or to the number of outstanding securities
convertible or exchangeable into or exercisable for shares of Invitrogen
common stock, the stock election merger consideration and the standard
election merger consideration will be adjusted accordingly. An adjustment
will be made if Invitrogen makes such a change as a result of a
reclassification, stock split (including a reverse split), stock dividend
or distribution, recapitalization, subdivision, or other similar
transaction, or if Invitrogen declares or pays any dividend or distribution
(including of rights) other than any regular quarterly cash dividends.
Appraisal Rights. The Life Technologies stockholders who do not
vote in favor of this merger and who comply with all relevant provisions of
Section 262 of the Delaware General Business Law possess appraisal rights.
If such stockholder or stockholders shall have failed to perfect or shall
have effectively withdrawn or lost their rights to appraisal, their Life
Technologies shares shall be converted into and become exchangeable for the
right to receive the standard election merger consideration. Invitrogen
stockholders do not have appraisal rights in connection with the merger.
Withholding Rights. Invitrogen shall be entitled to deduct and
withhold from the consideration payable to any person amounts as it is
required to deduct and withhold with respect to the making of such payment
under any provision of federal, state, local or foreign tax law. If
Invitrogen withholds amounts, such amounts shall be treated for all
purposes of the merger as having been paid to the holders.
REPRESENTATIONS AND WARRANTIES
In the merger agreement Life Technologies and Invitrogen make
representations and warranties to each other about their respective
companies with respect to, among other things:
o their organization, existence, good standing, corporate power,
subsidiaries and similar corporate matters;
o their capitalization;
o their authorization, execution, delivery and performance and
the enforceability of the merger agreement and related matters;
o the absence of defaults or violations under their certificates
of incorporation and bylaws and certain other agreements and
laws as a result of the contemplated transactions;
o filings with the Securities and Exchange Commission and the
accuracy and completeness of the information contained in such
filings;
o the absence of undisclosed material liabilities required to be
disclosed under accounting principles generally accepted in the
United States;
o the absence of undisclosed material violations of laws or
government orders;
o environmental matters;
o employee benefit matters;
o the absence of certain material changes in their respective
businesses since December 31, 1999;
o this proxy statement and prospectus and the registration
statement to be filed in connection with the issuance of
Invitrogen common stock in the merger, and the accuracy of the
information contained herein and therein;
o tax matters;
o intellectual property;
o title and related matter; and
o the receipt of opinions from each company's financial advisors.
In addition, Life Technologies makes representations and warranties
in the merger agreement with respect to:
equity investments;
o required stockholder approval with respect to the merger;
o legal proceedings;
o material contracts; and
o real property owned by Life Technologies.
Invitrogen also makes additional representations and warranties in
the merger agreement with respect to:
o its ownership of Life Technologies shares, and
o required stockholder approval with respect to the merger and
amendment to Invitrogen certificate of incorporation to
authorize additional Invitrogen common stock.
All representations of Life Technologies and Invitrogen expire at
the time the merger becomes effective.
COVENANTS IN THE MERGER AGREEMENT
Conduct of Business by Life Technologies.
Life Technologies has agreed that, until the merger has been
completed or the merger agreement has been terminated, it will not, subject
to certain exceptions, take certain actions without the consent of
Invitrogen, unless such actions are expressly permitted by the merger
agreement, and except for certain pending transactions. Subject to certain
exceptions, Life Technologies has agreed to the following with respect to
itself and, where applicable, its subsidiaries:
o Conduct of Operations. To conduct its operations according to
their ordinary and usual course of business.
o Preserve Organizations. To use its reasonable best efforts to
preserve intact its business organizations and goodwill, keep
available the services of its current officers and other key
employees, and preserve its business relationships.
o Dividends and Distributions. Not to authorize or pay any
dividends on or make any distribution with respect to its
outstanding shares of capital stock other than any dividend or
distribution by a wholly owned subsidiary of Life Technologies
to Life Technologies or any of its wholly owned subsidiaries.
o Amendments to Plans. Not to enter into or amend any severance
agreement or employee benefit plan or increase the compensation
or benefits of its directors, officers, or employees, except as
contemplated by law, existing contracts, plans or policies or
in the ordinary course of business. Changes in the ordinary
course of business are permitted only with respect to Life
Technologies employees who are not officers, except for changes
relating to annual bonuses and other incentive awards.
o Business Combinations; Assets. Not to enter into any business
combinations or acquisitions or dispositions of material
amounts of assets or securities except for this merger.
o Governing Documents. Not to propose or adopt any amendments to
corporate charters or bylaws.
o Issuance of Capital Stock. Not to issue or authorize the issuance
of any shares of capital stock of any class, except for (1) the
issuance of Life Technologies common stock pursuant to options
and grants outstanding on the date of the merger agreement
under existing stock plans or (2) options and other equity
awards granted in the ordinary course of business consistent
with past practice to any new employee hired after July 7, 2000
but before the closing date or pursuant to formula awards, in
either case under a Life Technologies equity plan.
o Changes to Capital Stock. Not to reclassify, combine, split,
purchase or redeem any shares of capital stock or purchase or
redeem any rights, warrants or options to acquire any such
shares.
o Indebtedness. Not to incur, assume or prepay any indebtedness
or other liabilities for borrowed money or issue any debt
securities, other than incurrences and repayments of
indebtedness under existing credit facilities and not to
assume, guarantee, endorse or otherwise become liable for the
obligations of any other person other than wholly owned
subsidiaries except for guarantees by subsidiaries of the
company permitted under the merger agreement.
o Loans, Advances, Capital Contributions. Not to make or forgive
any loans, advances or capital contributions to, or
investments, other than advances to employees in the ordinary
course of business in accordance with Life Technologies'
established policies, except those to Life Technologies or any
wholly owned Life Technologies subsidiary.
o Properties and Assets. Not to sell, lease, license or otherwise
subject to any lien or otherwise dispose of any properties or
assets (including securitizations) other than in the ordinary
course of business, not to modify or terminate any material
contracts or waive any material rights, and not to permit
insurance coverage to lapse, be cancelled or expire unless a
substantially identical policy is in effect as of the date of
lapse, cancellation or expiration.
o Accounting Methods. Not to change accounting methods unless
required by accounting principles generally accepted in the
United States.
o Tax Election. Not to make any tax election that is likely to
have a material adverse effect and not to settle or compromise
any material tax liability.
o Tax Treatment. Not to take any actions that would prevent the
merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code.
o Agree to Take Actions. Not to take or agree to take any of the
foregoing actions or take any action which would result in any
of the conditions to the merger set forth in the merger
agreement not being satisfied.
Invitrogen's Interim Operations.
Invitrogen has agreed that, until the merger has been completed or
the merger agreement has been terminated, it will not take certain actions
without the consent of Life Technologies. Invitrogen will (and will cause
its subsidiaries to) conduct its business in all material respects in the
ordinary course consistent with past practice. Invitrogen will preserve
intact its current business organization, keep the services of key officers
and employees available, maintain all material licenses and authorizations
in effect, and preserve its material business relationships. Any waiver by
Life Technologies of the requirement for Invitrogen's interim operations
must be authorized by the affirmative vote of at least six members of Life
Technologies' board of directors. Invitrogen has also agreed to the
following with respect to itself and, where applicable, its subsidiaries:
o Governing Documents. Not to amend its certificate of
incorporation, bylaws, or similar organizational documents.
o Changes to Capital Stock. Not to amend in any respect the terms
of its capital stock.
o Changes to Common Stock. Not to split, combine, subdivide or
reclassify any shares of its common stock.
o Dividends and Distributions. Not to authorize or pay any
dividends on or make any distribution with respect to its
common stock other than regular quarterly cash dividends or any
dividends paid by any subsidiary of Invitrogen to Invitrogen or
to any subsidiary that is wholly owned by Invitrogen.
o Accounting Methods. Not to change accounting methods unless
required by accounting principles generally accepted in the
United States.
o New Lines of Business. Not to enter into any material new line
of business that is not strategically related to its current
business or operations.
o Indebtedness. Not to incur indebtedness outside the ordinary
course of business or for acquisitions other than to consummate
the transactions contemplated by this merger agreement and the
Life Technologies merger.
o Business Combinations; Assets. Not to enter into any business
combination and not to dispose of assets, securities or
ownership interests representing a material portion of the
total assets of Invitrogen and its subsidiaries taken as a
whole.
o Tax Treatment. Not to take any actions that would prevent the
merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code.
o Agree to Take Actions. Not to take or agree to take any of the
foregoing actions or take any action which would result in any
of the conditions to the merger set forth in the merger
agreement not being satisfied.
Investigation. Life Technologies has agreed, subject to legal and
contractual restrictions, until the merger becomes effective or the merger
agreement is terminated, to afford Invitrogen's representatives reasonable
access to its properties, offices, employees, contracts, commitments, books
and records and any documents filed or received by Life Technologies
pursuant to applicable securities laws, and to furnish to Invitrogen any
additional information about its businesses and properties as Invitrogen
may reasonably request. However, Life Technologies will not be required to
disclose competitively sensitive information. Invitrogen will hold all
non-public information provided under the agreement in confidence.
Invitrogen will afford Life Technologies' representatives
reasonable access to its officers, employees, and books and records to the
extent reasonably necessary in connection with preparing this proxy
statement. Except as required by law, Life Technologies will hold all
information provided under the merger agreement in confidence.
Stockholder Approvals and Other Cooperation.
Life Technologies and Invitrogen have each agreed to call an annual
or special meeting of its stockholders as soon as practicable for
considering and taking action upon the approval of this merger. Life
Technologies and Invitrogen have also agreed to prepare and file with the
Securities and Exchange Commission, as promptly as possible, this document,
and, subject to fiduciary duties, to include in this document the
recommendation of their respective boards of directors that their
respective stockholders approve the merger and the merger agreement and, in
the case of Invitrogen, that the Invitrogen stockholders approve an
amendment to the Invitrogen certificate of incorporation to authorize the
shares of common stock necessary to issue the merger consideration and an
increase in the number of shares issuable by Invitrogen under the
Invitrogen option plans.
Invitrogen has agreed to prepare and file the registration
statement and use its reasonable best efforts to have the registration
statement declared effective by the Securities and Exchange Commission as
promptly as practicable, to cause this proxy statement and prospectus to be
mailed to Life Technologies stockholders at the earliest practicable date
after the registration statement is declared effective, to take all actions
required under state blue sky or securities laws in connection with the
issuance of shares of Invitrogen common stock in the merger, and to use its
best efforts to cause the shares of Invitrogen common stock to be issued in
the merger to be approved for quotation on the Nasdaq National Market,
subject only to official notice of issuance.
Life Technologies and Invitrogen have agreed to cooperate with one
another in order to lift any injunctions or remove any other impediment to
the consummation of the contemplated transactions and to grant such
approvals and take such actions as are reasonably necessary to eliminate or
minimize the effects of any anti-takeover statutes or regulations which may
become applicable to the merger.
In addition, the merger agreement contains general covenants
requiring Life Technologies and Invitrogen to act in good faith and use
commercially reasonable efforts to do all things necessary, proper or
advisable to consummate the contemplated transactions.
Public Announcements. Life Technologies and Invitrogen agree not to
make any public announcements with respect to the merger agreement and the
transactions contemplated thereby without first getting each other's
approval, which shall not be unreasonably withheld.
Tax Matters. Life Technologies and Invitrogen agree to use all
reasonable efforts to cause the merger to qualify as a reorganization under
the Internal Revenue Code.
Additional Reports. Each of Life Technologies and Invitrogen shall
furnish to the other copies of all reports filed with the SEC and all
financial materials. All statements in the reports are true and correct in
light of the circumstances under which they were made, and are not
misleading. Life Technologies shall continue to deliver to Invitrogen going
forward all other financial information required under the merger
agreement.
Affiliates. Life Technologies shall deliver to Invitrogen a list
identifying all persons who are deemed to be "affiliates" of the Company
for purposes of Rule 145 under the Securities Act, and shall notify
Invitrogen of any changes thereafter to the list.
Disclosure Supplements. The parties shall amend their respective
disclosure schedules, if the need arises and shall provide the other party
with such updated schedules.
EMPLOYEE MATTERS
Simultaneously with the merger, each outstanding option granted by
Life Technologies to purchase shares of Life Technologies common stock will
be assumed by Invitrogen and will, as of the merger, constitute an option
to acquire, on the same terms and conditions as applied to the Life
Technologies stock option prior to the merger, the number, rounded down to
the nearest whole number, of shares of Invitrogen common stock determined
by multiplying:
o the number of shares of Life Technologies common stock subject
to the option immediately before the effective time by
o the exchange ratio.
The exercise price of each of these options will be at a price per share of
Invitrogen common stock, rounded up to the nearest cent, equal to:
o the per share exercise price for Life Technologies common stock
that otherwise could have been purchased under the Life
Technologies stock option divided by
o the exchange ratio.
For the period through December 31, 2001, Invitrogen has agreed to
maintain:
o employee benefit plans, programs, policies and arrangements,
wages or salaries, as applicable, and bonus and other incentive
compensation plans, programs, policies and arrangements for
each individual who was an employee of Life Technologies
immediately prior to the effective time of the merger, which
are, in the aggregate, no less favorable than those provided by
Life Technologies immediately prior to the effective time of
the merger; and
o contribution levels and loan provisions under the savings plans
of Life Technologies, in each case, at levels and subject to
terms and conditions which are no less favorable that those
provided by Life Technologies immediately prior to the
effective time of the merger.
Invitrogen has agreed that each person who is an employee or former
employee of Life Technologies immediately prior to the effective time of
the merger ("Life Technologies Employee") will be given credit for all
service with Life Technologies (and service credited by Life Technologies)
prior to the effective time of the merger:
o for all purposes (other than benefit accrual under any defined
benefit pension plan) under all employee benefit plans,
programs and arrangements maintained by or contributed to by
Invitrogen in which such Life Technologies Employees become
participants for purposes of eligibility to participate,
vesting and determination of level of benefits; and
o for purposes of calculating the amount of each Life
Technologies Employee's benefits under all severance and
vacation pay plans, programs, policies and arrangements.
Invitrogen has agreed to:
o waive, or cause to be waived, all limitations as to preexisting
conditions exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Life
Technologies Employees under any welfare benefit plans that
such Life Technologies Employees may be eligible to participate
in after the effective time of the merger, except to the extent
such limitations or waiting periods are already in effect with
respect to such employees and have not been satisfied as of the
acquisition under any welfare benefit plan maintained for the
Life Technologies Employees immediately prior to the effective
time of the merger; and
o provide each Life Technologies Employee with credit for any
co-payments, deductibles and other out-of-pocket expenses
incurred prior to the acquisition in satisfying any applicable
co-payment, deductible and other out-of-pocket expense
requirements under any welfare plans that such Life
Technologies Employees are eligible to participate in after the
effective time of the merger, as if those deductibles,
co-payments and other out- of-pocket expenses had been incurred
under the welfare plans in which such employees are eligible to
participate after the effective time of the merger.
Without limiting the generality of the foregoing, Invitrogen has
agreed to assume and honor all employment, consulting, termination and
severance agreements to which Life Technologies is a party.
Savings Plans. Life Technologies has agreed to terminate the Life
Technologies savings plan at the direction of Invitrogen. Invitrogen has
agreed to notify Life Technologies at least three days prior to the closing
of any decision to terminate a savings plan. Upon doing so, Life
Technologies has agreed to provide evidence to Invitrogen that the savings
plan shall be terminated effective as of the day immediately preceding the
closing. Invitrogen has agreed to, consistent with its 401(k) savings plan
and applicable law, allow those who were employees of Life Technologies or
a Life Technologies subsidiary immediately prior to the closing to
participate in the Invitrogen savings plan.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE
Invitrogen has agreed to indemnify present and former directors and
officers of Life Technologies and its subsidiaries against any costs or
expenses incurred in connection with any claim, action, suit, proceeding or
investigation by reason of the fact that such individual is or was a
director, officer, employee or agent of Life Technologies or its
subsidiaries.
Invitrogen has also agreed that, for six years from the time the
merger becomes effective, it will maintain in effect Life Technologies' and
its subsidiaries' current directors' and officers' liability insurance
policies for those persons who are currently covered by the policies.
However, Invitrogen will not be required to expend in any one year an
amount in excess of 150% of the annual premiums currently paid by Life
Technologies for such insurance. If the annual premiums of such insurance
coverage exceed this amount, Invitrogen only will be obligated to obtain a
policy with the greatest coverage available for a cost not exceeding such
amount. Invitrogen may meet its obligations under this paragraph by
covering the relevant persons under its own insurance policies.
CONDITIONS PRECEDENT TO THE MERGER
The merger agreement contains certain conditions to the parties'
obligations to complete the merger. The parties will not be obligated to
complete the merger unless at or before the time the merger becomes
effective:
o Stockholder Approval. The approval of Life Technologies and
Invitrogen stockholders has been obtained.
o Dexter Merger. The conditions to the Dexter merger have been
satisfied or waived in accordance with the terms of the Dexter
merger agreement.
o Legality. No statute, rule, regulation, executive order,
decree, ruling or permanent injunction by a governmental entity
prohibits the consummation of the merger substantially
contemplated by the merger agreement.
o HSR Act. Any waiting period under the Hart-Scott-Rodino Act has
expired or been terminated.
o Nasdaq National Market. The shares of Invitrogen common stock
issuable in the merger are approved for quotation on the Nasdaq
National Market, subject only to official notice of issuance.
o Registration Statement. The registration statement relating to
this joint proxy statement and prospectus is effective, and no
stop order suspending effectiveness has been issued.
Invitrogen will not be obligated to complete the merger unless:
o Tax Opinion. Invitrogen has received an opinion of Gray Cary
Ware & Freidenrich LLP to the effect that the merger will
qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code. This condition may not be
waived after the Life Technologies and Invitrogen stockholders
approve the merger proposal unless further Life Technologies
stockholder approval is obtained with appropriate disclosure.
o Representations and Warranties. The representations and
warranties of Life Technologies contained in the merger
agreement that are qualified by materiality are true and
correct as of the time the merger becomes effective (other than
those which speak as of a different date, which must be true
and correct as of that date), and the representations and
warranties of Life Technologies that are not so qualified shall
be true and correct in all material respects.
o Agreements and Covenants. Life Technologies has performed and
complied in all material respects with all agreements and
obligations required by the merger agreement before the time
the merger becomes effective.
o Certificate. Life Technologies has delivered to Invitrogen a
certificate of an officer evidencing compliance with the two
preceding clauses.
Life Technologies will not be obligated to complete the merger
unless:
o Tax Opinion. Life Technologies has received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP to the effect that the
merger will qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code. This condition may
not be waived after the Life Technologies and Invitrogen
stockholders approve the merger proposal unless further Life
Technologies stockholder approval is obtained with appropriate
disclosure.
o Representations and Warranties. The representations and
warranties of Invitrogen contained in the merger agreement that
are qualified by materiality are true and correct as of the
time the merger becomes effective (other than those which speak
as of a different date, which must be true and correct as of
that date) and the representations and warranties of Invitrogen
that are not so qualified shall be true and correct in all
material respects.
o Agreements and Covenants. Invitrogen has performed and complied
in all material respects with all agreements and obligations
required by the merger agreement before the time the merger
becomes effective.
o Certificate. Invitrogen has delivered to Life Technologies a
certificate of an officer evidencing compliance with the two
preceding clauses.
TERMINATION
The merger agreement may be terminated at any time before the
merger becomes effective, in any of the following circumstances:
o By mutual written consent of Life Technologies and
Invitrogen.
o By either Invitrogen or Life Technologies if the
merger has not become effective by October 31, 2000.
If on October 31, 2000 the waiting period under the
Hart-Scott-Rodino Act has not expired or been
terminated or, prior to September 15, 2000 the
registration statement has not been declared
effective, then such date will be extended to the
earlier of:
(i) the later of (a) three business days after the
expiration of the waiting period under the
Hart-Scott-Rodino Act or (b) three business
days after the special meeting of Life
Technologies' stockholders; or
(ii) December 31, 2000.
o By either Invitrogen or Life Technologies if a
statute, rule, regulation or executive order has been
enacted, entered, promulgated or enforced prohibiting
the consummation of the merger substantially on the
terms contemplated by the merger agreement.
o By either Invitrogen or Life Technologies if a final
and non-appealable order, decree, ruling or
injunction has been entered permanently prohibiting
the consummation of the merger substantially on the
terms contemplated by the merger agreement, if the
terminating party has used its reasonable best
efforts to remove such order, decree, ruling or
injunction.
o By Invitrogen or Life Technologies if Life
Technologies holds the stockholders meeting and the
Life Technologies stockholders vote against approval
of the merger agreement and merger.
o By Invitrogen or Life Technologies if Invitrogen
holds the stockholders meeting and the Invitrogen
stockholders vote against approval of the merger
agreement and merger or vote against amendment of
Invitrogen's certificate of incorporation.
o By Invitrogen if there has been a material violation
or breach by Life Technologies of any agreement,
representation or warranty contained in the merger
agreement that has rendered the satisfaction of any
condition to the obligations of Invitrogen
impossible.
o By Life Technologies if there has been a material
violation or breach by Invitrogen of any agreement,
representation or warranty contained in the merger
agreement that has rendered the satisfaction of any
condition to the obligations of Life Technologies
impossible.
o By Invitrogen or Life Technologies if the Life
Technologies merger agreement has been terminated in
accordance with its terms.
o By Invitrogen or Life Technologies, if the expiration
date is extended beyond October 31, 2000, any time
after the tenth business day following the
termination of either the Loctite or Ahlstrom
acquisition agreements.
COSTS AND EXPENSES
Invitrogen and Life Technologies will pay their own costs and
expenses in connection with the merger agreement and the contemplated
transactions.
AMENDMENT
At any time before the merger becomes effective, the parties may
amend or supplement any of the terms of the merger agreement in writing
(which in the case of Life Technologies may be taken only upon the
recommendation of the Life Technologies special committee), except that
following approval by the Life Technologies and Invitrogen stockholders,
the parties may not change the consideration Life Technologies stockholders
will receive or make any other change requiring stockholder approval
without obtaining such approval.
WAIVER
Any waiver by Life Technologies of the requirement for Invitrogen's
interim operations must be authorized by the affirmative vote of at least
six members of Life Technologies' board of directors. At any time before
the merger becomes effective, the parties may (which in the case of Life
Technologies may be taken only upon the recommendation of the Life
Technologies Special Committee), in writing:
o extend the time for the performance of any of the
obligations or other acts of any other party;
o waive any inaccuracies in the representations and
warranties of any other party; or
o subject to obtaining stockholder approval if
necessary as discussed under "Amendment" above, waive
compliance with any of the agreements or conditions,
of any other party contained in the merger agreement,
provided that Life Technologies shall receive
authorization from the Special Committee of the board
of directors for any waiver of conditions to Life
Technologies obligations.
DEXTER MERGER AGREEMENT
FORM OF MERGER
If all the conditions to the merger are satisfied or waived in
accordance with the merger agreement, Dexter Corporation, will merge with
and into Invitrogen Corporation. Simultaneous to the Dexter merger, Life
Technologies will merge with and into Invitrogen. As a result of the
mergers, Dexter and Life Technologies will cease to exist. Invitrogen will
be the sole surviving company. The merger will become effective when a
certificate of merger is filed with the Delaware Secretary of State and
with the Connecticut Secretary of State.
CONSIDERATION TO BE RECEIVED IN THE MERGER
At the time the merger becomes effective, each Dexter stockholder
will have the choice to elect to receive in exchange for each of their
Dexter shares one of the following:
1. $62.50 in cash, which will be prorated as follows, (i) the right
to receive an amount in cash equal to $62.50 multiplied by the
cash election proration factor, plus (ii) if the cash election
proration factor is less than 1, a fraction of a share of
Invitrogen's common stock equal to the exchange ratio multiplied
by a fraction the numerator of which is $62.50 minus the cash
determined above and the denominator of which is $62.50. The
"cash election proration factor" shall mean the lesser of (x)
1.00 or (y) a fraction (i) the numerator of which is (1) the
product of the total number of shares outstanding multiplied by
$17.50 minus (2) $17.50 multiplied by the number of shares for
which standard elections have been made, and (ii) the
denominator of which is the product of $62.50 multiplied by the
number of shares for which cash elections have been made, so
that Invitrogen will not issue more than $410 million in cash in
the Dexter merger;
2. $17.50 in cash and a number of shares of Invitrogen common stock
equivalent in value to $45 determined by multiplying the exchange
ratio by 0.7200; or
3. A number of shares of Invitrogen common stock equivalent in
value to $62.50 determined as follows, the right to receive that
fraction of a share of Invitrogen common stock shall be
calculated by dividing (x) $62.50 by (y) the average bidder
trading price, rounded to four decimal places. The "average
bidder trading price" shall mean the average of the reported
closing sales prices per share of Invitrogen common stock as
reported in The Wall Street Journal for the 20 consecutive
Nasdaq National Market trading days ending on the third trading
day prior to the date of the Dexter stockholders meeting;
provided, that if the quotient exceeds 1.0417, then the exchange
ratio shall be 1.0417, and if the quotient is less than 0.7813,
then the exchange ratio shall be 0.7813.
An election to receive only cash is called a "cash election," an
election to receive all stock is called a "stock election," and an election
to receive a combination of cash and stock is called a "standard election."
Stockholders who do not make an election and who are not dissenting
stockholders, will be deemed to have made a standard election.
EXCHANGE AGENT; PROCEDURES FOR EXCHANGE OF CERTIFICATES
Exchange AgentInvitrogen shall appoint an exchange agent, prior to
the effective time, under the merger agreement. The exchange agent will
exchange certificates representing shares of Dexter common stock for the
consideration to be received in the merger. At the time the merger becomes
effective, Invitrogen will deposit with the exchange agent the
consideration to be received in the merger and the cash for the exchange
fund. Soon after the completion of the merger, the exchange agent will send
a letter and election form to each person who was a Dexter stockholder at
the time the merger became effective. The letter will contain instructions
on how to surrender Dexter stock certificates to the exchange agent and
receive, depending on the election of the stockholder, Invitrogen common
stock, cash, or a combination of Invitrogen common stock and cash.
Dividends. Holders of Dexter common stock will not be entitled to
receive any dividends or other distributions payable by Invitrogen until
they exchange their Dexter stock certificates for shares of Invitrogen
common stock. After they deliver their Dexter stock certificates to the
exchange agent, those stockholders will receive, subject to applicable
laws, accumulated dividends and distributions, without interest.
Fractional Shares. No fractional shares of Invitrogen common stock
will be issued upon the surrender of certificates representing shares of
Dexter common stock. No dividend or other distribution of Invitrogen will
relate to any such fractional shares and no such fractional shares will
entitle the owner thereof to any voting or other rights of a stockholder of
Invitrogen.
Holders of Dexter common stock otherwise entitled to fractional
shares of Invitrogen common stock will receive a cash payment instead of
such fractional shares. The cash payment will be equal to the product
obtained by multiplying the fractional share interest the stockholder would
be entitled by the average reported closing sales price for a share of
Invitrogen common stock as reported in The Wall Street Journal for five
consecutive trading days immediately before the closing date.
Antidilution Adjustments. If, before the merger becomes effective,
Invitrogen makes certain changes to the number of outstanding shares of
Invitrogen common stock or to the number of outstanding securities
convertible or exchangeable into or exercisable for shares of Invitrogen
common stock, the stock election merger consideration and the standard
election merger consideration will be adjusted accordingly. An adjustment
will be made if Invitrogen makes such a change as a result of a
reclassification, stock split (including a reverse split), stock dividend
or distribution, recapitalization, subdivision, or other similar
transaction, or if Invitrogen declares or pays any dividend or distribution
(including of rights) other than any regular quarterly cash dividends.
Appraisal Rights. The Dexter stockholders who do not vote in favor
of this merger and who comply with all relevant provisions of Section
33-861 of the Connecticut Business Corporation Act possess appraisal
rights. If such stockholder or stockholders shall have failed to perfect or
shall have effectively withdrawn or lost their rights to appraisal, their
Dexter shares shall be converted into and become exchangeable for the right
to receive the standard election merger consideration. Invitrogen
stockholders do not have appraisal rights in connection with the merger.
Withholding Rights. Invitrogen shall be entitled to deduct and
withhold from the consideration payable to any person amounts as it is
required to deduct and withhold with respect to the making of such payment
under any provision of federal, state, local or foreign tax law. If
Invitrogen withholds amounts, such amounts shall be treated for all
purposes of the merger as having been paid to the holders of shares in
respect of which Invitrogen made such deduction and withholding.
REPRESENTATIONS AND WARRANTIES
In the merger agreement Dexter and Invitrogen make representations
and warranties to each other about their respective companies with respect
to, among other things:
o their organization, existence, good standing, corporate
power, subsidiaries and similar corporate matters;
o their capitalization;
o their authorization, execution, delivery and performance and
the enforceability of the merger agreement and related
matters;
o the absence of defaults or violations under their
certificates of incorporation and bylaws and certain other
agreements and laws as a result of the contemplated
transactions;
o filings with the Securities and Exchange Commission and the
accuracy and completeness of the information contained in
such filings;
o the absence of undisclosed material liabilities required to
be disclosed under accounting principles generally accepted
in the United States;
o the absence of undisclosed material violations of laws or
government orders;
o environmental matters;
o employee benefit matters;
o the absence of certain material changes in their respective
businesses since December 31, 1999;
o this proxy statement and prospectus and the registration
statement to be filed in connection with the issuance of
Invitrogen common stock in the merger, and the accuracy of
the information contained herein and therein;
o tax matters; and
o the receipt of opinions from each company's financial
advisors.
In addition, Dexter makes representations and warranties in the
merger agreement with respect to:
o equity investments;
o required stockholder approval with respect to the merger;
o amendment of its stockholder rights plan so that the
stockholder rights plan will not apply to the merger;
o the Loctite acquisition agreement and the Ahlstrom
acquisition agreement;
o environmental matters and applicable insurance;
o legal proceedings;
o material contracts; and
o real property owned by Dexter.
Invitrogen also makes additional representations and warranties in
the merger agreement with respect to:
o its ownership of Dexter or Life Technologies shares; and
o required stockholder approval with respect to the merger and
amendment to Invitrogen certificate of incorporation to
authorize additional Invitrogen common stock.
All representations of Dexter and Invitrogen expire at the time the
merger becomes effective.
COVENANTS IN THE MERGER AGREEMENT
Conduct of Business by Dexter.
Dexter has agreed that, until the merger has been completed or the
merger agreement has been terminated, it will not, subject to certain
exceptions, take certain actions without the consent of Invitrogen, unless
such actions are expressly permitted by the merger agreement, and except
for certain pending transactions. Subject to certain exceptions, Dexter has
agreed to the following with respect to itself and, where applicable, its
subsidiaries:
o Conduct of Operations. To conduct its operations according
to their ordinary and usual course of business.
o Preserve Organizations. To use its reasonable best efforts
to preserve intact its business organizations and goodwill,
keep available the services of its current officers and
other key employees, and preserve its business
relationships.
o Dividends and Distributions. Not to authorize or pay any
dividends on or make any distribution with respect to its
outstanding shares of capital stock other than regular
quarterly cash dividends or any dividend or distribution by
a wholly owned subsidiary of Dexter to Dexter or any of its
wholly owned subsidiaries.
o Amendments to Plans. Not to enter into or amend any
severance agreement or employee benefit plan or increase the
compensation or benefits of its directors, officers, or
employees, except as contemplated by law, existing
contracts, plans or policies or in the ordinary course of
business. Changes in the ordinary course of business are
permitted only with respect to Dexter employees who are not
officers, except for changes relating to annual bonuses and
other incentive awards.
o Business Combinations; Assets. Not to enter into any
agreements in connection with any merger, consolidation,
business combination or disposition of material amounts of
assets or securities except for this merger and the Life
Technologies merger.
o Governing Documents. Not to propose or adopt any amendments
to corporate charters or bylaws.
o Issuance of Capital Stock. Not to issue or authorize the
issuance of any shares of capital stock of any class, except
for (1) the issuance of Dexter or Life Technologies common
stock pursuant to options and grants outstanding on the date
of the merger agreement under existing stock plans or (2)
options and other equity awards granted in the ordinary
course of business consistent with past practice to any new
employee hired after July 7, 2000 but before the closing
date or pursuant to formula awards, in either case under a
Dexter or Life Technologies equity plan.
o Changes to Capital Stock. Not to reclassify, combine, split,
purchase or redeem any shares of capital stock or purchase
or redeem any rights, warrants or options to acquire any
such shares.
o Indebtedness. Not to incur, assume or prepay any
indebtedness or other liabilities for borrowed money or
issue any debt securities, other than incurrences and
repayments of indebtedness under existing credit facilities
and not to assume, guarantee, endorse or otherwise become
liable for the obligations of any other person other than
wholly owned subsidiaries except for guarantees by
subsidiaries of the company permitted under the merger
agreement.
o Loans, Advances, Capital Contributions. Not to make or
forgive any loans, advances or capital contributions to, or
investments, other than advances to employees in the
ordinary course of business in accordance with Dexter's
established policies, except those to Dexter or any wholly
owned Dexter subsidiary.
o Properties and Assets. Not to sell, lease, license or
otherwise subject to any lien or otherwise dispose of any
properties or assets (including securitizations) other than
in the ordinary course of business, not to modify or
terminate any material contracts or waive any material
rights, and not to permit insurance coverage to lapse, be
cancelled or expire unless a substantially identical policy
is in effect as of the date of lapse, cancellation or
expiration.
o Accounting Methods. Not to change accounting methods unless
required by accounting principles generally accepted in the
United States.
o Tax Election. Not to make any tax election that is likely to
have a material adverse effect and not to settle or
compromise any material tax liability.
o Asset Sales. Not to, without the prior consent of
Invitrogen, amend or modify the Loctite or Ahlstrom
acquisition agreements;
o Tax Treatment. Not to take any actions that would prevent
the merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code.
o Agree to Take Actions. Not to take or agree to take any of
the foregoing actions or take any action which would result
in any of the conditions to the merger set forth in the
merger agreement not being satisfied.
Invitrogen's Interim Operations.
Invitrogen has agreed that, until the merger has been completed or
the merger agreement has been terminated, it will not take certain actions
without the consent of Dexter. Invitrogen will (and will cause its
subsidiaries to) conduct its business in all material respects in the
ordinary course consistent with past practice. Invitrogen will preserve
intact its current business organization, keep the services of key officers
and employees available, maintain all material licenses and authorizations
in effect, and preserve its material business relationships.
Invitrogen has also agreed to the following with respect to itself and,
where applicable, its subsidiaries:
o Governing Documents. Not to amend its certificate of
incorporation, bylaws, or similar organizational documents.
o Changes to Capital Stock. Not to amend in any respect the
terms of its capital stock.
o Changes to Common Stock. Not to split, combine, subdivide or
reclassify any shares of its common stock.
o Dividends and Distributions. Not to authorize or pay any
dividends on or make any distribution with respect to its
common stock other than regular quarterly cash dividends or
any dividends paid by any subsidiary of Invitrogen to
Invitrogen or to any subsidiary that is wholly owned by
Invitrogen.
o Accounting Methods. Not to change accounting methods unless
required by accounting principles generally accepted in the
United States.
o New Lines of Business. Not to enter into any material new
line of business that is not strategically related to its
current business or operations.
o Indebtedness. Not to incur indebtedness outside the ordinary
course of business or for acquisitions other than to
consummate the transactions contemplated by this merger
agreement and the Life Technologies merger.
o Business Combinations; Assets. Not to enter into any
business combination and not to dispose of assets,
securities or ownership interests representing a material
portion of the total assets of Invitrogen and its
subsidiaries taken as a whole.
o Tax Treatment. Not to take any actions that would prevent
the merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code.
o Agree to Take Actions. Not to take or agree to take any of
the foregoing actions or take any action which would result
in any of the conditions to the merger set forth in the
merger agreement not being satisfied.
Investigation.
Dexter has agreed, subject to legal and contractual restrictions,
until the merger becomes effective or the merger agreement is terminated,
to afford Invitrogen's representatives reasonable access to its properties,
offices, employees, contracts, commitments, books and records and any
documents filed or received by Dexter pursuant to applicable securities
laws, and to furnish to Invitrogen any additional information about its
businesses and properties as Invitrogen may reasonably request. However,
Dexter will not be required to disclose competitively sensitive
information. Invitrogen will hold all non-public information provided under
the agreement in confidence.
Invitrogen will afford Dexter's representatives reasonable access
to its officers, employees, and books and records to the extent reasonably
necessary in connection with preparing this proxy statement. Except as
required by law, Dexter will hold all information provided under the merger
agreement in confidence.
Stockholder Approvals and Other Cooperation.
Dexter and Invitrogen have each agreed to call an annual or special
meeting of its stockholders as soon as practicable for considering and
taking action upon the approval of this merger. Dexter and Invitrogen have
also agreed to prepare and file with the Securities and Exchange
Commission, as promptly as possible, this document, and, subject to
fiduciary duties, to include in this document the recommendation of their
respective boards of directors that their respective stockholders approve
the merger and the merger agreement and, in the case of Invitrogen, that
the Invitrogen stockholders approve an amendment to the Invitrogen
certificate of incorporation to authorize the shares of common stock
necessary to issue the merger consideration.
Invitrogen has agreed to prepare and file the registration
statement and use its reasonable best efforts to have the registration
statement declared effective by the Securities and Exchange Commission as
promptly as practicable, to cause this proxy statement and prospectus to be
mailed to Dexter stockholders at the earliest practicable date after the
registration statement is declared effective, to take all actions required
under state blue sky or securities laws in connection with the issuance of
shares of Invitrogen common stock in the merger, and to use its best
efforts to cause the shares of Invitrogen common stock to be issued in the
merger to be approved for quotation on the Nasdaq National Market, subject
only to official notice of issuance.
Dexter and Invitrogen have agreed to cooperate with one another in
order to lift any injunctions or remove any other impediment to the
consummation of the contemplated transactions and to grant such approvals
and take such actions as are reasonably necessary to eliminate or minimize
the effects of any anti-takeover statutes or regulations which may become
applicable to the merger.
In addition, the merger agreement contains general covenants
requiring Dexter and Invitrogen to act in good faith and use commercially
reasonable efforts to do all things necessary, proper or advisable to
consummate the contemplated transactions.
Public Announcements. Dexter and Invitrogen agree not to make any
public announcements with respect to the merger agreement and the
transactions contemplated thereby without first getting each other's
approval.
Tax Matters. Dexter and Invitrogen agree to use all reasonable
efforts to cause the merger to qualify as a reorganization under the
Internal Revenue Code.
Life Technologies Stock. Dexter has agreed to vote all of the
shares of Life Technologies common stock owned by it in favor of the
approval and adoption of the Life Technologies merger agreement.
Additional Reports. Each of Dexter and Invitrogen shall furnish to
the other copies of all reports filed with the SEC and all financial
materials. All statements in the reports are true and correct in light of
the circumstances under which they were made, and are not misleading.
Dexter shall continue to deliver to Invitrogen going forward all other
financial information required under the merger agreement.
Affiliates. Dexter shall deliver to Invitrogen a list identifying
all persons who are deemed to be "affiliates" of the Company for purposes
of Rule 145 under the Securities Act, and shall notify Invitrogen of any
changes thereafter to the list.
Disclosure Supplements. The parties shall amend their respective
disclosure schedules, if the need arises and shall provide the other party
with such updated schedules.
NO SOLICITATION
Dexter has agreed that neither it nor any of its directors,
officers, employees or any representatives retained by it will, directly or
indirectly through another person:
o solicit, initiate, encourage, or otherwise knowingly
facilitate any inquiries (whether by furnishing information
or otherwise) or the making of any acquisition proposal, or
o participate in any discussions or negotiations regarding an
acquisition proposal.
However, in response to an unsolicited bona fide written
acquisition proposal that the Dexter board of directors concludes in good
faith would provide greater aggregate value to the Dexter stockholders,
thus concluding the acquisition proposal is a superior proposal, after
providing reasonable advance notice to Invitrogen, Dexter's board of
directors may, or may authorize Dexter representatives to:
o furnish information with respect to Dexter and its
subsidiaries to any person making the superior proposal, and
o participate in discussions or negotiations regarding the
superior proposal.
Except as provided in the next two paragraphs, neither Dexter's
board of directors nor any committees of such board will do any of the
following:
o withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Invitrogen, the
recommendation by the board of directors or any committee,
of the merger or the merger agreement,
o approve or recommend, or propose publicly to approve or
recommend, any acquisition proposal, or
o cause Dexter to enter into any letter of intent, agreement
in principle, acquisition agreement or other similar
agreement related to any acquisition proposal.
However, Dexter's board of directors or any committee of such board
may withdraw its recommendation of the merger agreement if it determines in
good faith, based on advice of legal and financial advisors, that its
failure to do so would be a breach of its fiduciary duties under applicable
law.
Additionally, in response to a superior proposal, Dexter may:
o withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Invitrogen, the
recommendation by the board of directors or any committee,
of the merger or the merger agreement,
o approve or recommend, or propose publicly to approve or
recommend, any superior proposal, or
o terminate this merger agreement and concurrently with or
after termination enter into any acquisition agreement with
respect to any superior proposal but only after the fifth
business day following Invitrogen's receipt of written
notice advising Invitrogen that Dexter's board of directors
is prepared to accept a superior proposal, and attaching the
most current version of any such proposal or any draft of an
acquisition agreement.
The merger agreement does not prohibit Dexter from taking and
disclosing to its stockholders a position contemplated by Rule 14e-2 under
the Securities Exchange Act or from making any disclosure to the Dexter
stockholders required by applicable law.
EMPLOYEE MATTERS
Dexter has agreed to take all actions as shall be reasonably
necessary to:
o cause each outstanding stock option to purchase shares of
Dexter common stock granted under any stock option or
compensation plan or arrangement of Dexter or its
subsidiaries to become fully vested and exercisable
immediately prior to the effective time of the merger; and
o cause all employee stock options that are outstanding
immediately prior to the effective date of the merger to be
cancelled.
In exchange for the cancellation of each employee stock option, the
holder shall be entitled to receive, as of the merger, a cash payment and a
number of shares of Invitrogen common stock. The cash payment each option
holder will receive is determined by multiplying 0.28 by each of the number
of shares of Dexter common stock subject to the option and "option value
spread". The option value spread is the excess, if any, of:
o the sum of $17.50 and the product of (A) 0.72 and (B) the
product of (x) the exchange ratio multiplied by (y) the
average bidder trading price (as defined above under the
caption "Consideration to be Received in the Merger") over
o the per share exercise for Dexter common stock that
otherwise could have been purchased under the Dexter stock
option.
The number of shares of Invitrogen common stock each option holder will
receive is determined by multiplying 0.72 by each of the number of shares
of Dexter common stock subject to the option and:
o the quotient obtained by dividing (A) the option value
spread (as defined above) by (B) the average bidder trading
price.
The foregoing payment will be reduced by any income tax or employment tax
witholding required under the Internal Revenue Code and the number of
shares of Invitrogen common stock to be received will be rounded to the
nearest full share.
Following the merger, and to the extent not provided for in an
acquisition agreement that Dexter is a party to as of the effective time of
the merger, or any agreement entered into after the merger by Dexter and/or
Invitrogen with any purchaser of Dexter's coating business or any other
assets of Dexter, Invitrogen will, or will cause an Invitrogen subsidiary
to:
o provide to the former Dexter employees whose employment
terminated prior to the effective time of the merger
post-retirement welfare benefits substantially equivalent to
those provided by Dexter immediately prior to the effective
time of the merger;
o continue an arrangement pursuant to which such
post-retirement welfare benefits shall be provided upon any
termination of employment with Invitrogen or its
subsidiaries, to those employees who elect to receive such
benefits and who immediately prior to the effective time of
the merger would be eligible for such benefits upon a
termination of employment with Dexter; and
o continue an arrangement pursuant to which such
post-retirement welfare benefits shall be provided to those
individuals who are not retirees or vested eligible
employees, and who, as of the effective time of the merger,
had attained the age of 50 and had been credited with at
least five years of service with Dexter, but only if at the
time of termination with Invitrogen or an Invitrogen
subsidiary, such employee would have been eligible to
receive such benefits under the Dexter benefit program as in
effect immediately prior to the effective time of the merger
and such employee elects to receive such benefits.
Invitrogen has agreed not to, and not to permit its subsidiaries
to, terminate or modify in any adverse manner the foregoing post-retirement
welfare benefits for the above employees and former employees.
Savings Plans. Dexter has agreed to terminate the Dexter
Corporation 401(k) Plan and the Employees Savings and Profit Sharing
Retirement Income of Dexter at the direction of Invitrogen and to the
extent permissible under any previous acquisition agreement entered into by
Dexter. Invitrogen has agreed to determine whether any such previous
acquisition agreement would affect the proposed savings plan terminations
and to notify Dexter at least three days prior to the closing of any
decision to terminate a savings plan. Upon doing so, Dexter has agreed to
provide evidence to Invitrogen that the savings plan shall be terminated
effective as of the day immediately preceding the closing. Invitrogen has
agreed to, consistent with its 401(k) savings plan and applicable law,
allow those who were employees of Dexter or a Dexter subsidiary immediately
prior to the closing to participate in the Invitrogen savings plan.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE
Invitrogen has agreed to indemnify present and former directors and
officers of Dexter and its subsidiaries against any costs or expenses
incurred in connection with any claim, action, suit, proceeding or
investigation by reason of the fact that such individual is or was a
director, officer, employee or agent of Dexter or its subsidiaries.
Invitrogen has also agreed that, for six years from the time the
merger becomes effective, it will maintain in effect Dexter's and its
subsidiaries' current directors' and officers' liability insurance policies
for those persons who are currently covered by the policies. However,
Invitrogen will not be required to expend in any one year an amount in
excess of 150% of the annual premiums currently paid by Dexter for such
insurance. If the annual premiums of such insurance coverage exceed this
amount, Invitrogen only will be obligated to obtain a policy with the
greatest coverage available for a cost not exceeding such amount.
Invitrogen may meet its obligations under this paragraph by covering the
relevant persons under its own insurance policies.
CONDITIONS PRECEDENT TO THE MERGER
The merger agreement contains certain conditions to the parties'
obligations to complete the merger. The parties will not be obligated to
complete the merger unless at or before the time the merger becomes
effective:
o Stockholder Approval. The approval of Dexter and Invitrogen
stockholders has been obtained.
o Life Technologies Merger. The conditions to the Life
Technologies merger have been satisfied or waived in
accordance with the terms of the Life Technologies merger
agreement.
o Legality. No statute, rule, regulation, executive order,
decree, ruling or permanent injunction by a governmental
entity prohibits the consummation of the merger
substantially contemplated by the merger agreement.
o HSR Act. Any waiting period under the Hart-Scott-Rodino Act
has expired or been terminated.
o Nasdaq National Market. The shares of Invitrogen common
stock issuable in the merger are approved for quotation on
the Nasdaq National Market, subject only to official notice
of issuance.
o Registration Statement. The registration statement relating
to this joint proxy statement and prospectus is effective,
and no stop order suspending effectiveness has been issued.
Invitrogen will not be obligated to complete the merger unless:
o Tax Opinion. Invitrogen has received an opinion of Gray Cary
Ware & Freidenrich LLP to the effect that the merger will
qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code. This condition may not
be waived after the Dexter and Invitrogen stockholders
approve the merger proposal unless further Dexter
stockholder approval is obtained with appropriate
disclosure.
o Representations and Warranties. The representations and
warranties of Dexter contained in the merger agreement that
are qualified by materiality are true and correct as of the
time the merger becomes effective (other than those which
speak as of a different date, which must be true and correct
as of that date), and the representations and warranties of
Dexter that are not so qualified shall be true and correct
in all material respects.
o Agreements and Covenants. Dexter has performed and complied
in all material respects with all agreements and obligations
required by the merger agreement before the time the merger
becomes effective.
o Certificate. Dexter has delivered to Invitrogen a
certificate of an officer evidencing compliance with the two
preceding clauses.
o Asset Sales. The transactions contemplated by the Loctite
and Ahlstrom acquisition agreements have been consummated
substantially in accordance with the terms thereof.
Dexter will not be obligated to complete the merger unless:
o Tax Opinion. Dexter has received an opinion of Skadden,
Arps, Slate, Meagher & Flom LLP to the effect that the
merger will qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code. This
condition may not be waived after the Dexter and Invitrogen
stockholders approve the merger proposal unless further
Dexter stockholder approval is obtained with appropriate
disclosure.
o Representations and Warranties. The representations and
warranties of Invitrogen contained in the merger agreement
that are qualified by materiality are true and correct as of
the time the merger becomes effective (other than those
which speak as of a different date, which must be true and
correct as of that date), and the representations and
warranties of Invitrogen that are not so qualified shall be
true and correct in all material respects.
o Agreements and Covenants. Invitrogen has performed and
complied in all material respects with all agreements and
obligations required by the merger agreement before the time
the merger becomes effective.
o Certificate. Invitrogen has delivered to Dexter a
certificate of an officer evidencing compliance with the two
preceding clauses.
TERMINATION
The merger agreement may be terminated at any time before the
merger becomes effective, in any of the following circumstances:
o By mutual written consent of Dexter and Invitrogen.
o By either Invitrogen or Dexter if the merger has not become
effective by October 31, 2000. If on October 31, 2000 the
waiting period under the Hart-Scott-Rodino Act has not
expired or been terminated or, prior to September 15, 2000,
the registration statement has not been declared effective,
then such date will be extended to the earlier of:
(i) the later of (a) three business days after the
expiration of the waiting period under the
Hart-Scott-Rodino Act or (b) three business days
after the special meeting of Dexter's stockholders;
or
(ii) December 31, 2000.
o By either Invitrogen or Dexter if a statute, rule,
regulation or executive order has been enacted, entered,
promulgated or enforced prohibiting the consummation of the
merger substantially on the terms contemplated by the merger
agreement.
o By either Invitrogen or Dexter if a final and non-appealable
order, decree, ruling or injunction has been entered
permanently prohibiting the consummation of the merger
substantially on the terms contemplated by the merger
agreement, if the terminating party has used its reasonable
best efforts to remove such order, decree, ruling or
injunction.
o By Dexter in order to accept a superior proposal, so long as
Dexter complies with the covenants described under "No
Solicitation" above and pays the termination fee
contemplated by the merger agreement.
o By Invitrogen or Dexter if Dexter holds the stockholders
meeting and the Dexter stockholders vote against approval of
the merger agreement and merger.
o By Invitrogen or Dexter if Invitrogen holds the stockholders
meeting and the Invitrogen stockholders vote against
approval of the merger agreement and merger or vote against
amendment of Invitrogen's certificate of incorporation.
o By Invitrogen if there has been a material violation or
breach by Dexter of any agreement, representation or
warranty contained in the merger agreement that has rendered
the satisfaction of any condition to the obligations of
Invitrogen impossible.
o By Dexter if there has been a material violation or breach
by Invitrogen of any agreement, representation or warranty
contained in the merger agreement that has rendered the
satisfaction of any condition to the obligations of Dexter
impossible.
o By Invitrogen or Dexter if the Life Technologies merger
agreement has been terminated in accordance with its terms.
o By Invitrogen or Dexter, if the expiration date is extended
beyond October 31, 2000, any time after the tenth business
day following the termination of either the Loctite or
Ahlstrom acquisition agreements.
TERMINATION FEES
Dexter will pay Invitrogen a termination fee of $65 million if:
o Dexter terminates the merger agreement to accept a superior
proposal, as described under "Termination" above, or
o an acquisition proposal for Dexter has been publicly
announced and following such announcement the merger
agreement is terminated after Dexter stockholders fail to
approve the merger and, within 12 months of such
termination, a transaction involving a change of control of
Dexter or an asset transaction involving a sale of all or
substantially all of the assets of Dexter and its
consolidated subsidiaries is consummated.
COSTS AND EXPENSES
Invitrogen and Dexter will pay their own costs and expenses in
connection with the merger agreement and the contemplated transactions.
AMENDMENT
At any time before the merger becomes effective, the parties may
amend or supplement any of the terms of the merger agreement in writing,
except that following approval by the Dexter and Invitrogen stockholders,
the parties may not change the consideration Dexter stockholders will
receive or make any other change requiring stockholder approval without
obtaining such approval.
WAIVER
At any time before the merger becomes effective, any party may, in
writing:
o extend the time for the performance of any of the
obligations or other acts of any other party;
o waive any inaccuracies in the representations and warranties
of any other party; or
o subject to obtaining stockholder approval if necessary as
discussed under "Amendment" above, waive compliance with any
of the agreements or conditions of any other party contained
in the merger agreement.
APPRAISAL RIGHTS OF STOCKHOLDERS
Under the law of Delaware, where Invitrogen is incorporated,
holders of Invitrogen common stock do not have the right to receive an
appraisal of the value of their shares of Invitrogen common stock in
connection with either of the mergers.
Under the law of Delaware, where Life Technologies is incorporated,
holders of Life Technologies common stock who comply with the applicable
requirements of Delaware law will have the right to receive an appraisal of
the value of their shares in connection with the Life Technologies merger.
Under the law of Connecticut, where Dexter is incorporated, holders
of Dexter common stock who comply with the applicable requirements of
Connecticut law will have the right to receive an appraisal of the value of
their Dexter shares in connection with the Dexter merger.
LIFE TECHNOLOGIES STOCKHOLDERS' APPRAISAL RIGHTS
Delaware law entitles the holders of record of shares of Life
Technologies stock who follow the procedures specified in Section 262 of
the Delaware corporate law to have their shares appraised by the Delaware
Court of Chancery and to receive the "fair value" of such shares as of the
effective time of the Life Technologies merger as determined by the court
in place of the consideration that the holder would otherwise receive in
the Life Technologies merger. In order to exercise appraisal rights, a
stockholder must demand and perfect the rights in accordance with Section
262 of the Delaware corporate law. The following is a summary of Section
262 of the Delaware corporate law and is qualified in its entirety by
reference to Section 262 of the Delaware corporate law, a copy of which is
attached hereto as Annex F. Life Technologies stockholders should carefully
review Section 262 of the Delaware corporate law as well as information
discussed below to evaluate their rights to appraisal.
If a holder of Life Technologies common stock elects to exercise
the right to an appraisal under Section 262 of the Delaware corporate law,
such stockholder must:
o file with Life Technologies at its main office in Rockville,
Maryland, a written demand for appraisal of the shares of
Life Technologies common stock held (which demand must
identify the stockholder and expressly request an appraisal)
before the vote is taken on the Life Technologies merger
agreement at the special meeting; and
o continuously hold such shares through the effective time of
the Life Technologies merger.
All written demands for appraisal should be addressed to: C. Eric
Winzer, Secretary, Life Technologies, Inc., 9800 Medical Center Drive,
Rockville, Maryland, 20850, before the vote is taken on the merger
agreement at the Life Technologies special meeting, and should be executed
by, or on behalf of, the holder of record. Such demand reasonably must
inform Life Technologies of the identity of the stockholder and that such
stockholder is thereby demanding appraisal of such stockholder's shares.
Within 10 days after the effective time of the Life Technologies
merger, Invitrogen (the surviving company of the Life Technologies merger)
will give written notice of the effective time to each holder of Life
Technologies common stock who has satisfied the requirements of Section 262
of the Delaware corporate law. Within 120 days after the effective time,
Invitrogen or any dissenting stockholder may file a petition in the court
demanding a determination of the fair value of the shares of Life
Technologies common stock of all dissenting stockholders. Any dissenting
stockholder desiring the filing of such petition is advised to file such
petition on a timely basis unless the dissenting stockholder receives
notice that such a petition has been filed by Life Technologies or another
dissenting stockholder.
If a petition for appraisal is timely filed, the court will
determine which stockholders are entitled to appraisal rights and
thereafter will determine the fair value of the shares of Life Technologies
common stock held by dissenting stockholders, exclusive of any element of
value arising from the accomplishment or expectation of the Life
Technologies merger, but together with a fair rate of interest, if any, to
be paid on the amount determined to be fair value. In determining such fair
value, the court shall take into account all relevant factors. The court
may determine such fair value to be more than, less than or equal to the
consideration that such dissenting stockholder would otherwise be entitled
to receive pursuant to the merger agreement. If a petition for appraisal is
not timely filed, then the right to an appraisal shall cease. The costs of
the appraisal proceeding shall be determined by the court and taxed against
the parties as the court determines to be equitable under the
circumstances. Upon the application of any stockholder, the court may
determine the amount of interest, if any, to be paid upon the value of the
stock of stockholders entitled thereto. Upon application of a stockholder,
the court may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding, including, without
limitation, reasonable attorneys' fees and the fees and expenses of
experts, to be charged pro rata against the value of all shares entitled to
appraisal.
After the effective time of the Life Technologies merger, no
dissenting stockholder shall have any rights of a Life Technologies
stockholder with respect to such holder's shares for any purpose, except to
receive payment to which Life Technologies stockholders of record as of a
date prior to the effective time are entitled, if any. If a dissenting
stockholder delivers to Invitrogen a written withdrawal of the demand for
an appraisal within 60 days after the effective time of the Life
Technologies merger or thereafter with the written approval of Invitrogen,
or if no petition for appraisal is filed within 120 days after the
effective time, then the right of such Dissenting Stockholder to an
appraisal will cease and such dissenting stockholder will be entitled to
receive only the shares of common stock of Invitrogen as provided in the
merger agreement.
The foregoing is only a summary of the applicable provision of the
Delaware General Business Law and is qualified in its entirety by reference
to the full text of such provision, which is included in Annex F.
DEXTER STOCKHOLDERS' APPRAISAL RIGHTS
Connecticut law entitles the holders of record of shares of Dexter
common stock who follow the procedures specified in the Connecticut
Business Corporation Act to be entitled to appraisal rights upon compliance
with certain procedures prescribed by Connecticut law. Holders of Dexter
common stock who would want to invoke their appraisal rights should
therefore follow the procedures described below.
Under sections 33-855 through 33-872 of the Connecticut Business
Corporation Act holders of Dexter's common stock would have a right to
dissent from the Dexter merger and can choose to be paid the fair value of
your Dexter shares once the Dexter merger is completed, provided you follow
the procedures outlined in the statute. The complete text of these sections
is included in Annex G to this joint proxy statement and prospectus.
If you wish to exercise your dissenters' rights of appraisal or to
preserve the right to do so, you should carefully review Annex G and seek
the advice of counsel. If you do not comply with the deadlines and
procedures specified in the Connecticut Business Corporation Act, you may
lose your dissenters' rights of appraisal. To exercise these rights, you
must satisfy each of the following conditions:
o you must not vote in favor of the Dexter merger; and
o you must deliver to the Secretary of Dexter, Bruce H. Beatt
before the vote on the Dexter merger at the special meeting,
a written notice of your intent to demand payment of the
fair value of your shares.
You must deliver the notice of intent even if you submit a proxy or
vote against the merger. Merely voting against, abstaining from voting or
failing to vote in favor of adoption of the merger will not constitute a
notice of intent to exercise dissenters' rights of appraisal under the
Connecticut Business Corporation Act.
If Dexter stockholders approve the Dexter merger at the special
meeting of Dexter stockholders and you meet the requirements above, then
Dexter will send you, within 10 days of the approval of the Dexter merger,
a written dissenters' notice to be used to demand payment for your shares.
The dissenters' notice must:
o state where the payment demand must be sent and when and
where certificates for certificated shares must be
deposited;
o inform holders of uncertificated shares to what extent
transfer of the shares will be restricted after the payment
demand is received;
o supply a form for demanding payment that includes the date
of the first announcement to the news media or to
stockholders of the terms of the Dexter merger agreement and
require that each stockholder asserting dissenters' rights
certify whether or not he acquired beneficial ownership of
the shares before that date;
o set a date by which Dexter must receive the payment demand,
which may not be fewer than 30 nor more than 60 days after
the written dissenters' notice is delivered by Dexter; and
o be accompanied by a copy of Sections 33-855 through 33-872
of the Connecticut Business Corporation Act (these are the
sections that discuss dissenters' rights).
Under Section 33-863(a) of the Connecticut Business Corporation
Act, if you receive a dissenters' notice and wish to exercise your
dissenters' rights of appraisal, you must:
o demand payment for your shares;
o certify that you acquired beneficial ownership of your
shares (generally, the right to vote or enter into an
arrangement or agreement for the purpose of voting your
shares, the right to acquire shares and the right to dispose
of shares) before the date of the first announcement to the
news media or to the stockholders of the terms of the asset
purchase agreement as set forth in the dissenters' notice;
and
o deposit the certificate or certificates representing your
shares in accordance with the terms of the dissenters'
notice.
If you are considering seeking dissenters' rights of appraisal, you
should be aware that the fair value of your shares as determined under the
applicable provisions of the Connecticut Business Corporation Act could be
greater than, the same as or less than the Dexter merger consideration.
After Dexter receives a valid, timely and complete payment demand,
or upon completion of the Dexter merger, Invitrogen, the surviving company,
will pay to each dissenting Dexter stockholder the amount it estimates to
be the fair value of the dissenting stockholder's shares, plus accrued
interest, as provided in Section 33-865(a) of the Connecticut Business
Corporation Act. That payment will be accompanied by:
o Dexter's balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an
income statement for that year, a statement of changes in
stockholders' equity for that year and the latest available
interim financial statements, if any;
o a statement of Dexter's estimate of the fair value of the
shares;
o an explanation of how the accrued interest was calculated;
o a statement of the stockholders' right to demand payment
under Section 33-868 of the Connecticut Business Corporation
Act; and
o a copy of Sections 33-855 through 33-872 of the Connecticut
Business Corporation Act.
If the Dexter merger does not take place within 60 days after the
date set for demanding payment and depositing certificates representing
dissenting stockholders' shares, Dexter will return the deposited
certificates and release any transfer restrictions that may have been
imposed on uncertificated shares. If the Dexter merger is
completed after the return of the deposited shares and the release of
transfer restrictions, Invitrogen will send a new dissenters' notice and
repeat the payment-demand procedure.
Under Section 33-868 of the Connecticut Business Corporation Act,
you may send to Invitrogen your own estimate of the fair value of your
shares and the amount of any interest due, and demand payment of the
difference between your estimate and the amount paid, if any, by Invitrogen
in the following cases:
o if you believe that the amount paid by Invitrogen is less than
the fair value of your shares or that the interest due is
incorrectly calculated;
o if Invitrogen fails to make payment within 60 days after the
date set in the dissenters' notice for demanding payment (except
if the payment is withheld to holders of shares who acquired the
shares after the announcement of the Dexter merger); or
o if the asset sale is not completed, and Dexter does not return
the deposited certificates or release any transfer restrictions
imposed on uncertificated shares within 60 days after the date
set in the dissenters' notice for demanding payment.
If you do not demand payment of the difference between your
estimate of the fair value of your shares, plus interest, and the amount
paid by Invitrogen within 30 days after Invitrogen made or offered to make
that payment, you will lose your right to demand payment of any such
difference.
Under Sections 33-871(a) and (b) of the Connecticut Business
Corporation Act, if your demand for payment of your estimate remains
unsettled, Invitrogen will commence a proceeding within 60 days after
receipt of your demand for payment and petition the Connecticut superior
court for the judicial district where Dexter's principal office is located
to determine the fair value of your shares and accrued interest. If
Invitrogen does not timely commence this proceeding, Invitrogen must pay
you the unsettled amount that you demanded.
If this proceeding takes place, Invitrogen will make all dissenting
stockholders whose demands remain unsettled (even if they are not residents
of Connecticut) parties to the proceeding, and all parties will be served
with a copy of the petition. The court may appoint appraisers who will
receive evidence and recommend a decision on the question of fair value. If
the court finds that the amount Invitrogen paid is less than the fair value
of a dissenting stockholder's shares, plus accrued interest, the court will
order Invitrogen to pay the difference to the dissenting stockholder.
The court will determine all costs of the proceeding, including the
reasonable compensation and expenses of court-appointed appraisers.
Invitrogen generally will pay these costs, but the court may order the
dissenting stockholders to pay some of them, in amounts the court finds
equitable, if the court finds that the stockholders acted arbitrarily,
vexatiously or not in good faith in demanding payment.
If you give notice of your intent to demand dissenters' rights for
your shares under the applicable provisions of the Connecticut Business
Corporation Act but fail to return the dissenters' notice or withdraw or
lose your right to demand payment, your shares will be converted into the
right to receive the consideration in the Dexter merger.
The foregoing is only a summary of the applicable provisions of the
Connecticut Business Corporation Act and is qualified in its entirety by
reference to the full text of such provisions, which is included in Annex
G.
OWNERSHIP OF COMMON STOCK
BENEFICIAL OWNERSHIP OF INVITROGEN COMMON STOCK
The following table sets forth information, as of [June 30], 2000,
with respect to the beneficial ownership of shares of the common stock of
Invitrogen by (1) each Invitrogen director, (2) each of the executive
officers named in the summary compensation table in Invitrogen's 2000 proxy
statement, and (3) all persons known to Invitrogen to be the beneficial
owners of more than five percent of Invitrogen's outstanding common stock
and (4) all executive officers of Invitrogen as a group. Such beneficial
ownership is reported in accordance with the rules of the SEC, under which
a person may be deemed to be the beneficial owner of shares of such common
stock if such person has or shares the power to vote or dispose of such
shares or has the right to acquire beneficial ownership of such shares
within 60 days (for example, through the exercise of an option).
Accordingly, the shares shown in the table as beneficially owned by certain
individuals may include shares owned by certain members of their respective
families. Because of such rules, more than one person may be deemed to be
the beneficial owner of the same shares. The inclusion of the shares shown
in the table is not necessarily an admission of beneficial ownership of
those shares by the person indicated.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED (1) SHARES THAT MAY BE
ACQUIRED WITHIN 60 DAYS OF
FEBRUARY 29, 2000
---------------------------- --------------------------
NUMBER PERCENT
------------ -------------- --------------------------
<S> <C> <C> <C>
Lyle C. Turner.................... 3,878,285 16.4% -
James R. Hudson, Jr............... 2,594,800 11.0 2,800
Putnam Investment Management, Inc. 1,391,995 5.9 -
One Post Office Square
Boston, MA 02109
Joseph M. Fernandez (2)........... 1,230,869 5.2 34,607
Janus Capital Corporation......... 1,164,750 4.9
100 Fillmore Street, Suite 400
Denver, Colorado 80206
TA Associates(3).................. 882,942 3.7
Kurt R. Jaggers
TA Associates, Inc.
125 High Street Tower,
Suite 2500
Boston, Massachusetts 02110
James R. Glynn.................... 139,101 * 137,499
David E. McCarty (4).............. 67,266 * 61,823
Jay M. Short (5).................. 67,000 * 42,000
Lewis J. Shuster.................. 28,332 * 28,332
Donald W. Grimm................... 23,000 * 20,000
Bradley G. Lorimier............... 10,000 * 10,000
All Directors and Executive
Officers as a group
(8 persons) (6)................... 5,095,926 21.5 299,654
</TABLE>
---------
* Less than 1%.
(1) Percentage of ownership is based on: 23,665,458 shares of
Invitrogen common stock outstanding as of June 30, 2000. Shares of
Invitrogen common stock that an individual or group has the right
to acquire within 60 days of June 30, 2000, pursuant to the
exercise of options are deemed to be outstanding for the purposes
of computing the percentage ownership of such individual or group,
but are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person shown in the table.
(2) Includes 1,082,841 shares held by J&J Fernandez Ventures, L.P.
(3) Includes 731,215 shares held by TA/Advent VIII L.P., 137,103 shares
held by Advent Atlantic and Pacific III, L.P., and 14,624 shares
held by TA Venture Investors L.P. Advent Atlantic and Pacific III,
L.P., TA/Advent VIII L.P. and TA Venture Investors L.P. are part of
an affiliated group of investment partnerships referred to
collectively as TA Associates Group. The general partner of
TA/Advent VIII, L.P. is TA Associates VIII LLC. The general partner
of Advent Atlantic and Pacific III, L.P. is TA Associates AAP III
Partners. TA Associates, Inc. is the general partner of TA
Associates VIII LLC and the manager of TA Associates AAP III
Partners. In such capacity, TA Associates, Inc. exercises sole
voting and investment power with respect to all of the shares held
of record by the named investment partnerships, with the exception
of those shares held by TA Venture Investors, L.P.; individually,
no stockholder, director or officer of TA Associates, Inc., is
deemed to have or share such voting or investment power. Principals
and employees of TA Associates, Inc., including Mr. Jaggers, a
director, comprise the general partners of TA Venture Investors,
L.P. In such capacity, Mr. Jaggers may be deemed to share voting
and investment power with respect to the 28,206 shares held of
record by TA Venture Investors, L.P. Mr. Jaggers disclaims
beneficial ownership of such shares.
(4) Includes 68 shares held of record by NOVEX's ESOP Trust Fund as to
which Mr. McCarty holds a pecuniary interest.
(5) Includes options to purchase 5,000 shares held of record by Dr.
Short's spouse.
(6) Includes 68 shares held of record by NOVEX's ESOP Trust Fund as to
which Mr. McCarty holds a pecuniary interest. Includes options to
purchase 5,000 shares held of record by Dr. Short's spouse.
BENEFICIAL OWNERSHIP OF LIFE TECHNOLOGIES STOCK
The following table sets forth information, as of [month, day],
2000, with respect to the beneficial ownership of shares of the common
stock of Life Technologies by (1) beneficial owners of more than five
percent of Life Technologies' outstanding common stock, (2) each director
and nominee for director of Life Technologies, (3) each of the executive
officers named in the summary compensation table in Life Technologies' 2000
proxy statement, and (4) all directors, nominees and executive officers of
Life Technologies as a group. Such beneficial ownership is reported in
accordance with the rules of the SEC, under which a person may be deemed to
be the beneficial owner of shares of such common stock if such person has
or shares the power to vote or dispose of such shares or has the right to
acquire beneficial ownership of such shares within 60 days (for example,
through the exercise of an option). Accordingly, the shares shown in the
table as beneficially owned by certain individuals may include shares owned
by certain members of their respective families. Because of such rules,
more than one person may be deemed to be the beneficial owner of the same
shares. The inclusion of the shares shown in the table is not necessarily
an admission of beneficial ownership of those shares by the person
indicated. Except as otherwise specified, the named beneficial owner has
sole voting and investment power of the shares listed.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENTAGE OF
OF COMMON STOCK (1) COMMON STOCK
------------------------ ---------------
<S> <C> <C>
Dexter Corporation 18,815,447(2) 75.2%
One Elm Street
Windsor Locks, CT 06096
Samuel J. Heyman 3,506,270 (3) (4) (5) 14.0%
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
International Specialty Products Inc. 3,506,270 (3) (4) (5) 14.0%
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
ISP OPCO Holdings Inc. 3,384,600 (4) (5) 13.5%
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
ISP Investments Inc. 3,384,600 (3) (4) 13.5%
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
The 13D Group 5,417,991(6) 21.7%
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
Thomas H. Adams, Ph.D. 14,633 (7) *
Bruce H. Beatt -
Kathleen Burdett -
R. Barry Gettins, Ph.D. -
Peter G. Kelly 4,500 (8) *
Joseph C. Stokes, Jr. 26,666 (9) *
J. Stark Thompson, Ph.D. 72,816 (10) *
K. Grahame Walker -
George M. Whitesides, Ph.D. 6,900 (11) *
John V. Cooper 27,333 (12) *
Thomas M. Coutts 26,667 (13) *
Brian D. Graves 7,500 (14) *
Derek E. Woods, Ph.D 29,167 (15) *
All directors, nominees, and executive 291,604 (16) *
officers as a group (18 persons)
--------------------
* Less than 1.0%.
</TABLE>
(1) Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission (the "SEC"), based on
factors including voting and investment power with respect to
shares. Percentage of beneficial ownership is based on shares of
Life Technologies' common stock outstanding as of March 1, 2000.
Shares of common stock subject to options or warrants currently
exercisable, or exercisable within 60 days after March 1, 2000, are
deemed outstanding for the purpose of computing the percentage
ownership of the person holding such options or warrants, but are
not deemed outstanding for computing the percentage ownership of
any other persons.
(2) Includes 5,569,187 shares of common stock of Life Technologies held
by Dexter Acquisition Delaware, Inc., a wholly owned subsidiary of
Dexter. Dexter has the sole power to vote and direct the voting of
13,246,260 shares, the shared power to vote and direct the voting
of 5,569,187 shares and the shared power to dispose of and direct
the disposition of 18,815,447 shares of common stock of Life
Technologies. This number of shares excludes 34,744, 63,668,
34,075, 8,322, 229,692 and 3,265 shares of common stock of Dexter
beneficially owned by Mr. Beatt, Ms. Burdett, Dr. Gettins, Mr.
Kelly, Mr. Walker and Dr. Whitesides, respectively, constituting an
aggregate of 373,766 shares, or approximately 1.6% of the
outstanding shares of Dexter, as of December 31, 1999. The shares
of Dexter beneficially owned by Mr. Beatt, Ms. Burdett, Dr. Gettins
and Mr. Walker include 11,834, 19,333, 23,834 and 101,500 shares,
respectively, which they may acquire within 60 days upon the
exercise of stock options.
(3) This information is based on Annex VII of the Preliminary Proxy
Statement relating to Dexter Corporation, dated February 8, 2000,
filed with the SEC by International Specialty Products Inc. ("ISP")
and ISP Investments Inc. ("ISP Investments"), which specifies as
follows: 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 common
stock of Life Technologies. 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) all of the common stock of Life
Technologies 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 common stock of Life Technologies 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 of Life Technologies owned by ISP Investments.
(4) This information is based on Annex VII of the Preliminary Proxy
Statement relating to Dexter Corporation, dated February 8, 2000,
filed with the SEC by ISP and ISP Investments, which specifies as
follows: ISP Ireland has the sole power to vote, direct the voting
of, dispose of and direct the disposition of 452,000 shares of
common stock of Life Technologies. 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 common stock of Life Technologies 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 common stock of Life Technologies 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 common stock of Life Technologies 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 common stock of Life Technologies owned by ISP Ireland.
(5) This information is based on Annex VII of the Preliminary Proxy
Statement relating to Dexter Corporation, dated February 8, 2000,
filed with the SEC by ISP and ISP Investments, which specifies as
follows: ISP has the sole power to vote, direct the voting of,
dispose of and direct the disposition of 121,670 shares of common
stock of Life Technologies. 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 of Life Technologies owned
by ISP.
(6) This figure is based on information set forth in Amendment No. 8 to
a Schedule 13D of Life Technologies dated January 28, 2000, filed
with the SEC, which filing indicates that the following persons are
part of the 13D Group and beneficially own and have sole or shared
voting and dispositive power as to the number of shares indicated
next to the person's name in the table below:
<TABLE>
<CAPTION>
SOLE SHARED SOLE SHARED
BENEFICIAL VOTING VOTING DISPOSITIVE DISPOSITIVE
NAME OWNERSHIP POWER POWER POWER POWER
------------------ ---------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ISP Opco Holdings, Inc. 3,384,600 0 3,384,600 0 3,384,600
ISP Investments Inc. 3,384,600 2,932,600 452,000 2,932,600 452,000
ISP Ireland 452,000 452,000 0 452,000 0
International Specialty 3,506,270 121,670 3,384,600 121,670 3,384,600
Products Inc
Bear, Stearns & Co Inc. 432,826 340,826 92,000 340,826 92,000
Frederick R. Adler 714,895 714,895 0 714,895 0
The Cohen Revocable 397,100 397,100 0 397,100 0
Trust
A. Chang 135,500 135,500 0 135,500 0
York Capital 78,700 78,700 0 78,700 0
Management, L.P.
Dinan Management L.L.C. 78,700 0 78,700 0 78,700
JGD Management Corp. 23,100 23,100 0 23,100 0
York Investment Limited 129,600 129,600 0 129,600 0
Dinan Management 129,600 0 129,600 0 129,600
Corporation
James G. Dinan 231,400 231,400 0 231,400
</TABLE>
The foregoing persons are parties to a letter agreement dated December
3, 1999 pursuant to which the parties agreed to extend through September
30, 2000 the provisions of the respective group agreements to which such
persons are parties pursuant to which, among other things, they generally
agreed (i) not to sell or otherwise dispose of any shares of common stock
of Life Technologies unless all of the parties mutually agreed (or, in the
case of Bear, Stearns & Co., Inc., sell shares which would reduce its
ownership below 300,000 shares) and (ii) not to enter into any other
contract, arrangement, understanding or relationship with any other persons
with respect to equity securities of Life Technologies without the written
consent of the other parties.
(7) Consists of 1,133 shares of common stock owned by Dr. Adams and
13,500 shares of common stock which Dr. Adams may acquire upon the
exercise of stock options.
(8) Consists of 4,500 shares of common stock which Mr. Kelly may
acquire upon the exercise of stock options.
(9) Consists of 2,006 shares of common stock owned by Mr. Stokes and
24,660 shares of common stock which Mr. Stokes may acquire upon the
exercise of stock options.
(10) Consists of 72,666 shares of common stock Dr. Thompson may acquire
upon the exercise of stock options and 150 shares of common stock
owned by Dr. Thompson's wife, of which Dr. Thompson may be deemed
to be the beneficial owner. Dr. Thompson disclaims beneficial
ownership of the 150 shares owned by his wife.
(11) Consists of 150 shares of common stock owned by Dr. Whitesides and
6,750 shares of common stock which Dr. Whitesides may acquire upon
the exercise of stock options.
(12) Consists of 27,333 shares of common stock Mr. Cooper may acquire
upon the exercise of stock options.
(13) Consists of 26,667 shares of common stock Mr. Coutts may acquire
upon the exercise of stock options.
(14) Consists of 7,500 shares of common stock Mr. Graves may acquire
upon the exercise of stock options.
(15) Consists of 29,167 shares of common stock Dr. Woods may acquire
upon the exercise of stock options.
(16) Includes a total of 287,243 shares of common stock the respective
directors, nominees, and executive officers may acquire upon the
exercise of stock options.
BENEFICIAL OWNERSHIP OF DEXTER STOCK
The following table sets forth information, as of July 30, 2000, with
respect to the beneficial ownership of shares of the common stock of Dexter
by (1) beneficial owners of more than five percent of Dexter common stock,
(2) each director and nominee for director of Dexter, (3) each of the
executive officers named in the summary compensation table in Dexter's 2000
proxy statement, and (4) all directors, nominees and executive officers of
Dexter as a group. Such beneficial ownership is reported in accordance with
the rules of the SEC, under which a person may be deemed to be the
beneficial owner of shares of such common stock if such person has or
shares the power to vote or dispose of such shares or has the right to
acquire beneficial ownership of such shares within 60 days (for example,
through the exercise of an option). Accordingly, the shares shown in the
table as beneficially owned by certain individuals may include shares owned
by certain members of their respective families. Because of such rules,
more than one person may be deemed to be the beneficial owner of the same
shares. The inclusion of the shares shown in the table is not necessarily
an admission of beneficial ownership of those shares by the person
indicated.
<TABLE>
<CAPTION>
Stockholders:
SHARES OF
COMMON STOCK PERCENTAGE OF
BENEFICIALLY COMMON STOCK
OWNED(1) OUTSTANDING(1)
-------- --------------
<S> <C> <C>
ISP OPCO Holdings Inc. and related entities,
1361 Alps Road, Wayne, New Jersey 07470................ 2,299,200 9.91(2)
Mary K. Coffin, c/o Dexter Corporation,
One Elm Street, Windsor Locks, Connecticut 06096....... 1,290,000 5.56(3)
Directors, Nominees and Executive Officers:
K. Grahame Walker...................................... 276,089 *
Kathleen Burdett....................................... 80,467 *
David G. Gordon........................................ 60,009 *
John D. Thompson....................................... 47,527 *
Bruce H. Beatt......................................... 43,940 *
Charles H. Curl........................................ 4,589 *
Henrietta Holsman Fore................................. 5,999 *
Bernard M. Fox......................................... 5,415 *
Robert M. Furek........................................ 4,912 *
Martha Clark Goss...................................... 4,478 *
Edgar G. Hotard........................................ 3,513 *
Peter G. Kelly......................................... 8,541 *
Jean-Francois Saglio................................... 3,592 *
George M. Whitesides................................... 4,580 *
All Directors, Nominees and Executive Officers
as a Group (22 persons)................................ 729,764 3.15%
</TABLE>
----------
* Less than 1.0%.
(1) The shares reported above as beneficially owned by the following
persons include vested stock options granted under 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") and the 1999 Long
Term Incentive Plan (the "1999 Plan") as more fully described above
under the heading "Long Term Incentive Plan -- Awards in Last
Fiscal Year": K. Grahame Walker -- 48,222; Kathleen Burdett --
21,107; David G. Gordon -- 15,120; John D. Thompson -- 14,774;
Bruce H. Beatt -- 13,950 and "All Directors, Nominees and Executive
Officers as a Group" -- 169,961. Shares of restricted stock issued
pursuant to the 1994 Plan and the 1999 Plan are subject to
forfeiture, but may be voted by the holders thereof unless and
until forfeited. Percentages of common stock of less than 1% are
indicated by an asterisk.
(2) Share holding as of May 24, 2000, as reported on Amendment No. 13
to the Schedule 13D filed by such stockholder.
(3) Of the 1,290,000 shares shown in the table as owned by Mary K.
Coffin, 990,000 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 shown in the table are
held by Mary K. Coffin through a living trust.
As of [month, day], 2000 , two of Dexter's directors beneficially
owned shares of common stock of Life Technologies. Peter G. Kelly owned
4,500 shares, which consists of 4,500 shares of common stock which Mr.
Kelly may acquire upon the exercise of the stock options. George M.
Whitesides owned 4,650 shares, which consists of 150 shares of common stock
owned by Dr. Whitesides and 4,500 shares of common stock which Dr.
Whitesides may acquire upon the exercise of stock options. Mr. Kelly and
Dr. Whitesides each own less than one percent of the outstanding common
stock of Life Technologies.
DESCRIPTION OF INVITROGEN CAPITAL STOCK
The description of certain terms of the capital stock of Invitrogen
to be in effect after completion of the business combinations is not meant
to be complete and is qualified by reference to the Invitrogen Certificate
of Incorporation and by-laws which are incorporated by reference herein to
this joint proxy statement and prospectus.
AUTHORIZED CAPITAL STOCK
The authorized capital stock of Invitrogen consists of 50,000,000
shares of common stock, par value $0.01 per share, and 6,405,884 shares of
preferred stock, par value $0.01 per share. Stockholders of Invitrogen
stock are being asked to approve an amendment to Invitrogen's Certificate
of Incorporation to increase Invitrogen's capital stock to 131,405,888
shares of which 125,000,000 shares shall be Invitrogen common stock, par
value $0.01 per share and 6,405,884 shares shall be Invitrogen preferred
stock, par value $0.01 per share.
INVITROGEN COMMON STOCK
Holders of Invitrogen common stock are entitled to one vote for
each share held of record on all matters submitted to a vote of the
stockholders. Subject to preferences that may be applicable to any then
outstanding preferred stock, holders of common stock are entitled to
receive ratably such dividends, if any, as may be declared by the board of
directors out of funds legally available therefor.
In the event of liquidation, dissolution or winding up of
Invitrogen, holders of the common stock and the preferred stock are
entitled to share ratably on an as-converted basis in all assets remaining
after payment of liabilities and the liquidation preference of any then
outstanding preferred stock. The common stock has no preemptive or
conversion rights or other subscription rights, and there are no redemptive
or sinking funds provisions applicable to the common stock. Invitrogen has
received full payment for all outstanding shares of its common stock and
cannot require its stockholders to make further payments on the stock; the
common stock to be outstanding upon completion of this offering will have
the same status.
INVITROGEN PREFERRED STOCK
The board of directors has the authority, without further action by
the stockholders, to issue from time to time the preferred stock in one or
more series and to fix the number of shares, designations, preferences,
powers, and relative, participating, optional or other special rights and
the qualifications or restrictions thereof. The preferences, powers, rights
and restrictions of different series of preferred stock may differ with
respect to dividend rates, amounts payable on liquidation, voting rights,
conversion rights, redemption provisions, sinking fund provisions, and
purchase funds and other matters. The issuance of preferred stock could
decrease the amount of earnings and assets available for distribution to
holders of common stock or affect adversely the rights and powers,
including voting rights, of the holders of common stock, and may have the
effect of delaying, deferring or preventing a change in control of
Invitrogen.
TRANSFER AGENT AND REGISTRAR
The principal transfer agent and registrar for Invitrogen common
stock after the mergers will be designated by Invitrogen, Dexter and Life
Technologies prior to the completion of the mergers.
COMPARISON OF STOCKHOLDERS' RIGHTS
Invitrogen is incorporated under the laws of the State of Delaware,
Life Technologies is incorporated under the laws of the State of Delaware
and Dexter is incorporated under the laws of the State of Connecticut. In
accordance with the merger agreements, at the date the mergers becomes
effective, the holders of Dexter common stock and Life Technologies common
stock who make the stock election or standard election in the mergers will
each exchange their respective shares of common stock separately with
Invitrogen, and will thereby become holders of Invitrogen common stock. The
rights of Invitrogen stockholders are and will continue to be governed by
Delaware law and the certificate of incorporation and by-laws of
Invitrogen. The following is a comparison of the material rights of the
holders of Dexter common stock, Life Technologies common stock and
Invitrogen common stock.
The certificates of incorporation and the by-laws of Dexter, Life
Technologies and Invitrogen are incorporated by reference in this joint
proxy statement and prospectus. Copies of the Dexter, Life Technologies and
Invitrogen charters and by-laws can be found with each company's respective
filing with the Securities and Exchange Commission. See "Where You Can Find
More Information" on page 135. The following summary is not intended to be
complete and is qualified by reference to Delaware law, Connecticut law and
the Invitrogen, Life Technologies and Dexter charters and by-laws.
COMPARISON OF CHARTER AND BY-LAW PROVISIONS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Provision Invitrogen Life Technologies Dexter
-----------------------------------------------------------------------------------------------------------------
Board of Directors
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Classified Board Divided into three classes Divided into three classes, Divided into three classes,
fixed in number, with each the number in each not the number in each class
class serving a staggered differing by more than one determined by the board of
three year term (other than from any other, with each directors, with each class
two of the initial three initial class serving a serving a staggered three
classes which have served staggered term prescribed by year term.
or are serving one and two the board, and successor
years, respectively). One classes serving three year
of these directors is terms.
elected solely by a
plurality of votes of
Convertible Preferred
Stock, so long as any such
stock remains outstanding;
control over this
directorship is to remain
under the sole control of
the holders of Convertible
Preferred Stock.
-----------------------------------------------------------------------------------------------------------------
Removal of Directors A director may be removed A director may be removed only A director may be removed
only for cause, and only by for cause, and only by the only for cause, and only by
the affirmative vote of the affirmative vote of the the affirmative vote of the
holders of a majority of holders of 80% of the holders of a majority of the
the outstanding voting outstanding voting stock. outstanding voting stock.
stock.
-----------------------------------------------------------------------------------------------------------------
Size of Board Board must consist of not Board must consist of not less Board does not have to
less than five and not more than nine and not more than 15 consist of a particular
than nine directors; Board directors; Board currently number of directors, so long
currently consists of 8 consists of 9 directors. as it is greater than one;
directors. Board currently consists of
10 directors.
-----------------------------------------------------------------------------------------------------------------
Stockholder Meetings
-----------------------------------------------------------------------------------------------------------------
Annual Meetings Held on date fixed by the Held on the first Tuesday Held on date fixed by the
Board. after the last Thursday in Board.
April, or on a different date
if the Board so chooses.
-----------------------------------------------------------------------------------------------------------------
Calling a Special Only the Chairman of the Only the Chairman of the Only the Chief Executive
Meeting Board, the President, or a Board, the President, the Vice Officer, a majority of the
majority of the Board may President, a majority of the Board, or the holders of not
call a special meeting. Board, or the holders of not less than 35 percent of the
less than 30 percent of the voting stock may call a
voting stock may call a special meeting.
special meeting.
-----------------------------------------------------------------------------------------------------------------
Quorum Requirements The representation, in The representation, in person The representation, in
person or by proxy, of the or by proxy, of the holders of person or by proxy, of the
holders of a majority of not less than 50% entitled to holders of a majority of
shares entitled to vote at vote at any meeting shares issued and
any meeting constitutes a constitutes a quorum at such outstanding and entitled to
quorum at such meeting. meeting. vote at any meeting
constitutes a quorum at such
meeting.
-----------------------------------------------------------------------------------------------------------------
Vote Required for Stockholder action The certificate of Stockholder action on
Stockholder Action approving a merger or incorporation provides that matters other than the
consolidation or a sale of stockholder action approving a election of directors
substantially all of a business combination requires requires the affirmative
corporation's assets the affirmative votes by the vote of a majority of votes
requires the affirmative holders of 67% of outstanding cast.
vote by the holders of a voting stock; stockholder
majority of outstanding action approving a business
voting stock; stockholder combination with related
action on other matters persons require the
generally requires the affirmative vote by the
affirmative vote of a holders of 80% of outstanding
majority of votes cast, voting stock, if certain
except for the election of conditions are met require the
directors, which requires a affirmative vote of 67%.
plurality.
The by-laws provide that
stockholder action approving a
merger or consolidation or a
sale of substantially all of a
corporation's assets requires
the affirmative vote by the
holders of a majority of
outstanding voting stock;
stockholder action on other
matters generally requires the
affirmative vote of a majority
of votes cast.
-----------------------------------------------------------------------------------------------------------------
Action by Written Stockholder action must be Stockholder action must be Stockholder action must be
Consent taken at an annual or taken at an annual or special taken at an annual or
special meeting and not by meeting and not by written special meeting and not by
written consent. consent, unless such written written consent, unless such
consent is authorized by the written consent is
holders of outstanding stock authorized by the holders of
having not less than the all outstanding stock
minimum number of votes entitled to vote at a
necessary to take such action stockholder meeting.
at a stockholder meeting.
-----------------------------------------------------------------------------------------------------------------
Advanced Notice To bring a matter before an To bring a matter before an To bring a matter before an
Requirements for annual or special meeting, annual or special meeting, a annual or special meeting, a
Stockholder a stockholder must give stockholder must give notice stockholder must give notice
Nominations and notice to the corporation to the corporation of a to the corporation of a
Other Business of a proposed matter not proposed matter not less than proposed matter not less
less than 120 days before 120 days before the date of than 75 nor more than 125
the date of the company's the company's proxy statement days before the date of the
proxy statement released to released to stockholders in company's proxy statement
stockholders in connection connection with the previous released to stockholders in
with the previous year's year's annual meeting.(excerpt connection with the previous
annual meeting. from Delaware Law) year's annual meeting; if
the meeting is called more
than 75 days before the
anniversary date, then the
proposal must be received
before the end of the 15th
business day before the
meeting.
-----------------------------------------------------------------------------------------------------------------
Amendments to
Organizational
Documents
-----------------------------------------------------------------------------------------------------------------
Certificate of Certificate may be amended Certificate may be amended by Certificate of Incorporation
Incorporation by the affirmative vote of the affirmative vote of 80% of may be amended by the board
a majority of the the outstanding shares of of directors or by 2/3 of
outstanding voting stock. common stock. the stockholders entitled to
vote.
Certificate may be amended
with respect to the powers,
preferences or rights of
Series A Junior
Participating Preferred
Stock only with an
affirmative vote of
two-thirds of the
outstanding shares of the
Series A Junior
Participating Preferred
Stock.
Article VII of the
Certificate, dealing with
the composition of the
Board, can only be amended
by affirmative vote of 75%
of each class of stock
outstanding.
-----------------------------------------------------------------------------------------------------------------
Bylaws May be amended with May be amended with May be amended with
affirmative vote of 2/3 of affirmative vote of 67% of the affirmative vote of 2/3 of
the outstanding stock outstanding stock entitled to the outstanding stock
entitled to vote, or by a vote. entitled to vote, or by a
vote of at least 2/3 of the vote of the majority of the
directors of the directors of the corporation.
corporation.
Any bylaw adopted by the
stockholders may not be
altered, amended or repealed
by the board of directors if
the amendment so states.
-----------------------------------------------------------------------------------------------------------------
Capitalization
-----------------------------------------------------------------------------------------------------------------
Authorized Stock Common Stock: 50 million Common Stock: 50 million Common Stock: 100 million
shares (125 million shares shares shares
assuming approval of the Preferred Stock: one million Preferred Stock: 400,000
proposed charter amendment) shares shares
Preferred Stock: 6,405,884 Class I Preferred Stock:
shares 500,000 shares
Class II Preferred Stock:
500,000 shares
-----------------------------------------------------------------------------------------------------------------
Preferred Stock The company may issue The Board is authorized to The Board is authorized to
preferred stock from time issue preferred stock from issue preferred stock from
to time in one or more time to time in one or more time to time in one or more
series, with terms to be series, with terms to be fixed series, with terms to be
fixed by the Board. by the Board. fixed by the Board.
-----------------------------------------------------------------------------------------------------------------
Rights Agreements
-----------------------------------------------------------------------------------------------------------------
Terms N/A N/A Dexter Corporation has a
Rights Agreement, dated as
of August 23, 1996 and
amended October 4, 1999 and
February 8, 2000; the Rights
Agreement triggers upon the
acquisition by a third party
of 11% of Dexter's
outstanding common stock;
Board may redeem rights at
any time prior to the time
such an acquisition takes
place.
-----------------------------------------------------------------------------------------------------------------
Exculpation and The certificate of The certificate of
Indemnification of The certificate of incorporation of Life incorporation of Dexter
Directors, Officers incorporation of Invitrogen Technologies provides that no provides that no director
and Employees provides that no director director will be personally will be personally liable
will be personally liable liable for damages for breach for damages for breach of
for damages for breach of of fiduciary duty, except in fiduciary duty, except in
fiduciary duty, except in cases in which the director's cases in which the
cases in which the acts or omissions: director's acts or omissions:
director's acts or o breached his or her duty o involved a knowing and
omissions: of loyalty to the culpable violation of
o breached his or her corporation or its law,
duty of loyalty to stockholders, o provided an improper
the corporation or o were not in good faith personal benefit to
its stockholders, or involved intentional the director,
o were not in good misconduct or a knowing o were not in good faith
faith or involved violation of law, or and showed a conscious
intentional o provided an improper disregard toward the
misconduct or a personal benefit to the corporation,
knowing violation of director. o constituted a sustained
law, or The bylaws of Life and unexcused pattern
o provided an improper Technologies provide that the of inattention to the
personal benefit to corporation will indemnify any corporation, or
the director. director or officer to the abdication of the
The bylaws of Invitrogen fullest extent permitted by director's duty
provide that the law if such director or thereto, or
corporation will indemnify officer is involved in o created liability
any director or officer to litigation by reason of the under Section 33-757
the fullest extent fact that he or she is (or of the Stock Corporation
permitted by law if such was) a director or officer, Act of the State of
director or officer is and provide in addition that Connecticut.
involved in litigation by the corporation may purchase
reason of the fact that he and maintain insurance on
or she is (or was) a behalf of any person who is
director or officer, and (or was) a director, officer,
provide in addition that employee or agent of the
the corporation may corporation against any
purchase and maintain liability asserted against him
insurance on behalf of any or her and incurred by him or
person who is (or was) a her in any such capacity, or
director, officer, employee arising out of his or her
or agent of the corporation status as such.
against any liability
asserted against him or her
and incurred by him or her
in any such capacity, or
arising out of his or her
status as such.
-----------------------------------------------------------------------------------------------------------------
</TABLE>
COMPARISON OF STOCKHOLDERS RIGHTS UNDER THE CONNECTICUT LAW AND THE
DELAWARE LAW
The rights of stockholders of Dexter are currently governed by the
Connecticut Law, while the rights of stockholders of Invitrogen and Life
Technologies are currently governed by Delaware Law. Upon consummation of
the mergers, those stockholders of Dexter and Life Technologies electing to
receive Invitrogen shares in consideration for their Dexter or Life
Technologies will each become stockholders of Invitrogen and their rights
will be governed by the Delaware Law, which differs in certain material
respects from the Connecticut Law. The following is a summary of certain
differences between the Connecticut Law and the Delaware Law. The
identification of specific differences is not meant to indicate that other
differences do not exist. This summary is qualified in its entirety by
reference to the full text of the Delaware General Corporation Law and the
Connecticut Business Corporation Act.
Quorum and Voting Requirements. Under the Connecticut Law, in all
matters, other than the election of directors, a quorum exists when a
majority of stockholders entitled to vote are represented . If a quorum
exists, a majority of the votes cast at a meeting of the stockholders
present in person or by proxy and entitled to vote thereon shall be the act
of the stockholders, unless the certificate of incorporation or the
Connecticut Law requires a greater number of votes.
Similarly, the Delaware Law states that, in all matters, other than
the election of directors, a quorum exists when a majority of stockholders
entitled to vote are represented. If a quorum exists, a majority of the
votes cast at a meeting of the stockholders present in person or by proxy
and entitled to vote thereon shall be the act of the stockholders.
Removal of Directors. The Connecticut Law provides that
stockholders may remove one or more directors with or without cause unless
the certificate of incorporation provides that directors may be removed
only for cause. The Connecticut Law also enables a corporation or 10% of
its stockholders to seek removal of a director through court action in
cases of fraud, dishonesty or gross abuse of authority or discretion if
removal is in the best interest of the corporation.
Under the Delaware Law, any director or the entire board of
directors may be removed, with or without cause, by the holders of a
majority of the shares entitled to vote at an election of directors, except
in certain circumstances involving a classified board or cumulative voting.
The Delaware Law does not have a corresponding provision entitling a
corporation or 10% of its stockholders to seek removal of a director
through court action in cases of fraud, dishonesty or gross abuse of
authority or discretion if removal is in the best interest of the
corporation.
Newly-Created Directorships and Vacancies. Under the Connecticut
Law, unless the certificate of incorporation provides otherwise, if a
vacancy occurs on the board of directors, including a vacancy resulting
from an increase in the number of directors: (i) the stockholders may fill
the vacancy, (ii) the board of directors may fill the vacancy or (iii) if
the directors remaining in office constitute fewer than a quorum of the
board of directors, they may fill the vacancy by the affirmative vote of a
majority of all the directors remaining in office.
Under the Delaware Law, any vacancies in the board and any newly
created directorships resulting by reason of any increase in the number of
directors elected by all of the stockholders having the right to vote as a
single class may be filled by the board, acting by a majority of the
remaining directors then in office, although less than a quorum, or by a
sole remaining director.
Amendment to Certificate of Incorporation or By-laws. Under the
Connecticut Law, a proposed amendment to the certificate of incorporation
must be recommended by the corporation's board, unless the corporation's
board determines that because of conflicts of interest or other special
circumstances it should make no recommendation or that none is required by
the Connecticut Law, followed by, in most circumstances, the approval by
(i) a majority of the votes entitled to be cast on the amendment by any
voting group with respect to which the amendment would create dissenters'
rights and (ii) a majority of the votes cast by every other voting group
entitled to vote on the amendments, unless a greater vote is required by
law, the certificate of incorporation or the corporation's board. An
amendment to the by-laws that adds, changes or deletes a greater quorum or
voting requirement must meet the same quorum requirement and be adopted by
the same vote required to take action under the quorum and voting
requirements then in effect or proposed to be adopted, whichever is
greater.
According to the Delaware Law, an amendment to the certificate of
incorporation may be authorized by the vote of the board, followed by the
vote of the holders of a majority of all outstanding shares entitled to
vote thereon at a meeting of stockholders. Pursuant to the Delaware Law,
the by-laws may be adopted, amended or repealed by the affirmative vote of
the holders of a majority of all outstanding shares entitled to vote
thereon.
Special Meetings; Action Without Meeting. Under the Connecticut
Law, special meetings of a corporation's stockholders may be called by the
corporation's board or by such other persons as are authorized to do so by
the certificate of incorporation or by-laws or upon a written request and
delivery to the corporate secretary from the holders of at least 10% of the
shares entitled to vote on a particular issue.
Under the Connecticut Law, any action required or permitted to be
voted on by stockholders of a Connecticut corporation may be taken without
a meeting and without a stockholder vote, if (i) there is a unanimous
written consent, (ii) the certificate provides for a number not less than
majority required for action without meeting, and the consent of such
number is achieved.
Pursuant to the Delaware Law, special meetings of stockholders may
be called by the corporation's board or by such other persons as are
authorized to do so by the certificate of incorporation or by-laws.
Under the Delaware Law, unless otherwise provided in the
certificate of incorporation, any action required or permitted to be taken
by stockholders of a Delaware corporation may be taken without a meeting
and without a stockholder vote, if a written consent setting forth the
action to be taken is signed by the holders of shares of outstanding stock
having the requisite number of votes that would be necessary to authorize
such action at a meeting at which all stockholders entitled to vote were
present.
Business Combination Statutes. The Connecticut Law generally
prohibits a Connecticut corporation from engaging in certain business
combinations (as defined by the statute to include certain mergers and
consolidations, dispositions of assets and issuances of securities, as well
as certain other transactions) with an interested stockholder (as defined
by the statute generally to include holders of 10% or more of the
outstanding stock of the corporation of an affiliate thereto) for a period
of five years following the date that such stockholder became an interested
stockholder, (i) unless the business combination or the purchase of stock
is approved by the corporation's board and by a majority of the
non-employee directors of which there must be at least two, prior to the
date such stockholder became an interested stockholder or (ii) unless the
interested stockholder was an interested stockholder on February 1, 1988,
unless subsequent to June 7, 1988, such interested stockholder increased
its proportionate share of the voting power of the outstanding voting stock
of the corporation (excluding any increase approved by the corporation's
board before such increase occurs). The Connecticut Law also generally
requires business combinations with an interested stockholder to be
approved by the board of directors and then by the affirmative vote of at
least (1) the holders of 80% of the voting power of the outstanding shares
of voting stock and (2) the holders of 2/3 of such voting power excluding
the voting stock held by the interested stockholder, unless the
consideration to be received by the stockholders of the corporation meets
certain price and other requirements set forth in the statute or unless the
board of directors of the corporation has by resolution determined to
exempt business combinations with such interested stockholder prior to the
time that such stockholder became an interested stockholder.
Section 203 of the Delaware Law, in general, prohibits a Delaware
corporation from engaging in a business combination (defined as a variety
of transactions, including mergers, as set forth below) with an interested
stockholder (defined generally as a person that is the beneficial owner of
15% or more of a corporation's outstanding voting stock) for a period of
three years following the date that such person became an interested
stockholder unless, among other things, prior to the date such person
became an interested stockholder, the board of directors of the corporation
approved either the business combination or the transaction that resulted
in the stockholder becoming an interested stockholder or at or subsequent
to such time the business combination is approved by the board of directors
and authorized at an annual or special meeting of stockholders (not by
written consent) by the affirmative vote of a least 2/3 of the outstanding
voting stock which is not owned by the interested stockholder.
Stockholder Vote Required for Certain Fundamental Transactions.
Under the Connecticut Law, the sale of all or substantially all of a
corporation's assets other than in the regular course of business requires
the affirmative vote of a majority of the outstanding shares entitled to
vote. Unless the certificate of incorporation provides otherwise, and
except under certain circumstances where the Connecticut corporation is the
surviving corporation, a merger or share exchange of a Connecticut
corporation must be approved by each voting group entitled to vote
separately on the plan by a majority of all of the votes entitled to be
cast thereon by that voting group.
The Delaware Law generally requires that mergers and
consolidations, and sales, leases or exchanges of all or substantially all
of a corporation's property and assets, be approved by a vote of the
holders of a majority of the outstanding stock entitled to vote, unless a
corporation's certificate of incorporation requires a greater-than-majority
vote.
Dividends. Under the Connecticut Law, a corporation may make a
distribution to stockholders, including a dividend or stock repurchase,
with respect to their shares unless, after giving effect to such
distribution, (i) the corporation would not be able to pay its debts as
they become due in the usual course of business or (ii) the corporation's
total assets would be less than the sum of its total liabilities plus the
amount that would be needed, if the corporation were to be dissolved at the
time of the distribution, to satisfy the preferential rights upon
dissolution of stockholders whose preferential rights are superior to those
receiving the distribution.
Under the Delaware Law, a corporation's board may from time to time
declare and pay dividends out of its capital surplus or out of its net
profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year.
Limitation on Directors' Liability. The Connecticut Law authorizes
a corporation to limit the personal liability of a director to the
corporation and its subsidiaries for monetary damages for breach of duty as
a director.
The Delaware Law authorizes corporations to limit or eliminate the
personal liability of directors to corporations and their stockholders for
monetary damages for breach of directors' fiduciary duty of care.
Interested Director Transactions. Under the Connecticut Law, no
transaction effected or proposed to be effected by a corporation, its
subsidiaries or any other entity in which the corporation has a controlling
interest may be enjoined, set aside, or give rise to an award of damages or
other sanctions merely because a director of the corporation, or any person
with whom or which he/she has a personal, economic or other association,
has an interest in the transaction which is not a "director's conflicting
interest transaction" as defined in the Connecticut Law. A director's
conflicting interest transaction will not be enjoined, set aside, or give
rise to damages or other sanctions if (i) the transaction received the
affirmative vote of a majority, but no fewer than two, of the disinterested
directors on the corporation's board or on a duly empowered committee of
the board who voted on the transaction after adequate disclosure to them,
(ii) the transaction received a majority of the votes entitled to be cast
by the holders of all shares, excluding those beneficially owned by the
director with the conflict and/or by any persons related to the director or
(iii) the transaction, judged according to the circumstances at the time of
the commitment, is established to have been fair to the corporation.
Under the Delaware Law, no transaction between a Delaware
corporation and one or more of its directors or an entity in which one or
more of its directors are directors or officers or have a financial
interest will be void or voidable solely for that reason and no such
transaction will be void or voidable solely because the director is present
at or participates in the meeting of the board or committee which
authorizes the transaction, if, after the material facts of the director's
interest are disclosed to or known by the board or the committee, the
transaction is (i) is authorized by good faith by the disinterested
directors or a committee of disinterested directors by a vote sufficient
for such purpose, (ii) is approved by a vote of the stockholders after
disclosure of the material facts of the director's interest or (iii) the
transaction is fair to the corporation as of the time it is authorized by
the board, committee or stockholders.
Indemnification of Directors and Officers. Under the Connecticut
Law unless the certificate of incorporation provides otherwise, a
corporation must indemnify a director, officer, and any other employee or
agent of the corporation who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party because
he is or was a director, officer or other employee or agent of the
corporation against reasonable expenses incurred by him in connection with
the proceeding. Additionally, a corporation must indemnify the director,
officer or other employee or agent of the corporation made party to a
proceeding if (i) he conducted himself in good faith and (ii) he reasonably
believed (A) in the case of conduct in his official capacity with the
corporation, that his conduct was in its best interests and (B) in all
other cases, that his conduct was at least not opposed to its best
interests and (iii) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful. Unless a court orders
otherwise, the Connecticut Law prohibits indemnification (i) in connection
with a proceeding by or in the right of the corporation except for
reasonable expenses if it is determined that the director, officer or other
employee or agent has met the relevant standard of conduct or (ii) in
connection with any other proceeding in which he was adjudged liable to the
corporation or in connection with any other proceeding on the basis that an
improper personal benefit was received by him. Indemnification under the
Connecticut Law in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable is limited to
reasonable expenses incurred in connection with the proceeding. The
indemnification requirements under the Connecticut Law remain limited by
the provision in the Connecticut Law that requires that such
indemnification be authorized in the specific case after a determination
that indemnification is permissible in the circumstances because the
director, officer or other employee or agent has met the standard of
conduct set forth by the Connecticut Law.
Under the Delaware Law, a corporation may generally indemnify its
directors, officers, employees or agents for acts performed in good faith
and in a manner such person reasonably believed to be in or not opposed to
the best interest of the corporation, and with respect to any criminal
action or proceeding, had no reasonable cause to believe that such person's
act was unlawful.
Dissenters' Rights of Appraisal. The Connecticut Law provides for
dissenters' rights to obtain payment of the fair value of shares to
objecting corporation stockholders (i) entitled to vote on a merger or
share exchange, (ii) in a short form merger of a subsidiary into its parent
corporation, (iii) on the sale of all or substantially all of the assets of
a corporation other than in the usual or regular course of business (except
when done pursuant to court order or a liquidation plan resulting in
distributions to stockholders within one year after the date of sale), (iv)
on an amendment to the certificate of incorporation that materially and
adversely affects rights in respect of dissenters' shares and (v) in any
corporate action taken pursuant to a stockholder vote to the extent the
certificate of incorporation, the by-laws or a directors' resolution
provides that voting or non-voting stockholders are entitled to dissent and
obtain payment for their shares. Under the Connecticut Law, the dissenter's
right of appraisal and payment under the statute is the dissenter's
exclusive remedy.
The Delaware Law generally entitles a stockholder to exercise
appraisal rights upon a merger or consolidation of the corporation effected
pursuant to the Delaware Law if the holder complies with the requirements
of Section 262 thereof. Appraisal rights are available under Section 262 of
the Delaware Law if stockholder approval was required for the merger or
consolidation and holders of shares in the constituent corporation are
required by the terms of the merger to accept consideration other than
shares of stock of the surviving corporation, shares of stock of any
corporation listed on a national securities exchange designated as a
national market system security by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 stockholders, or cash in
lieu of fractional shares.
Duration of Proxies. Under the Connecticut Law, a proxy is not to
be voted or acted upon after the expiration of 11 months from the date of
such proxy, unless it specifies the length of time for which it is to
continue in force or limits its use to a particular meeting not yet held.
The Connecticut Law provides that an appointment of a proxy is revocable
unless the appointment form conspicuously states that it is irrevocable and
the appointment is coupled with an interest which includes proxies created
for (i) a pledgee, (ii) a person who has purchased or agreed to purchase
the shares, (iii) a creditor of the corporation who extends credit in
consideration of the proxy, (iv) an employee of the corporation whose
employment contract requires the proxy or (v) a person designated under a
voting agreement.
Under the Delaware Law, a proxy is not valid after three years from
the date of such proxy unless the proxy provides for a longer period. A
proxy may be made irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock
itself or an interest in the corporation generally.
Loans to Officers. Under the Delaware Law, a corporation may lend
money to, or guarantee any obligation of, or otherwise assist any officer
or other employee of the corporation or its subsidiary, including any
officer or employee who is a director of the corporation, whenever in the
judgment of the directors, such loan, guaranty or assistance may reasonably
be expected to benefit the corporation.
The Connecticut Law does not have a corresponding provision.
Classification of the Board of Directors. The Connecticut Law
permits a Connecticut corporation to provide for the staggering of the
terms of its directors by dividing the total number of directors into up to
five groups, with each group containing approximately the same percentage
of the total, as nearly as may be.
The Delaware Law permits a Delaware corporation to classify its
board of directors into 1, 2, or 3 classes. The Delaware Law provides that
in the case of a corporation, whose board is classified, stockholders can
only remove directors for cause, unless the certificate of incorporation
provides otherwise.
ADDITIONAL MATTERS FOR CONSIDERATION
OF INVITROGEN STOCKHOLDERS
In addition to consideration of and voting on the issuance of
Invitrogen common stock in connection with the mergers, the Invitrogen
stockholders will be asked to vote upon proposals to (i) amend Invitrogen's
Certificate of Incorporation to increase the authorized capital stock; (ii)
to amend Invitrogen's 1997 Stock Option Plan to increase the number of
shares reserved for issuance under this plan; and (iii) to amend
Invitrogen's 1998 Employee Stock Purchase Plan to increase the number of
shares reserved for issuance under this plan.
AMENDMENT TO INVITROGEN'S CERTIFICATE OF INCORPORATION
As part of the mergers, Invitrogen will be issuing options to Life
Technologies employees under Invitrogen's 1997 Stock Option Plan.
Additionally, Life Technologies employees will be eligible to participate
in Invitrogen's 1998 Employee Stock Purchase Plan. In order to be able to
increase the shares held in reserve for these two plans, and in order to
issue the amount of shares called for in the merger agreements, Invitrogen
must increase its authorized capital stock by amending its Certificate of
Incorporation.
Invitrogen is requesting that its stockholders approve a proposal
to amend Article IV of Invitrogen's certificate of incorporation to
increase Invitrogen's capital stock to 131,405,888 shares of which
125,000,000 shall be Invitrogen common stock, par value $0.01 per share and
6,405,888 shall be Invitrogen preferred stock, par value $0.01 per share. A
copy of the proposed amendment is attached to this joint proxy statement
and prospectus as Annex H.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO ARTICLE IV OF INVITROGEN"S CERTIFICATE OF INCORPORATION.
AMENDMENT OF 1997 STOCK OPTION PLAN
GENERAL
The maximum number of shares of Invitrogen common stock that may be
issued pursuant to options under the 1997 Stock Option Plan is currently
[5,485,479], and as of [___________], options covering a total of
[_____________] shares were outstanding or had been exercised under the
plan. Accordingly, only [______________] shares remain available for new
grants. The board of directors has unanimously approved, subject to
approval by the stockholders, an amendment to the plan to make an
additional [____________] shares of Invitrogen common stock available for
issuance under the plan for a total of [______________] shares of Invitrogen
common stock.
SUMMARY OF 1997 STOCK OPTION PLAN
The following is a summary of the principal features of the plan as
in effect and as proposed to be amended.
Purpose and Eligibility. The plan is intended to promote the
interests of Invitrogen and its stockholders by using options to purchase
shares of common stock of Invitrogen to attract, retain and motivate its
management and other persons, to encourage and reward their contributions
to the performance of Invitrogen and to align their interests with the
interests of Invitrogen stockholders. The persons eligible to receive
awards under the plan include directors, officers, employees, consultants,
and advisors of Invitrogen and its affiliated entities. Currently, it is
estimated that approximately [____] persons are eligible to receive stock
options under the plan, consisting of approximately [__] directors, [___]
executive officers and [____] employees.
Types of Options. The plan enables Invitrogen to grant incentive
and nonqualified stock options. Stock options granted under the plan may be
incentive stock options intended to qualify under the provisions of Section
422 of the Internal Revenue Code or nonqualified stock options that do not
so qualify. The exercise price for each option is determined by the
committee at the date of grant. Options granted under the plan vest, become
exercisable, and terminate as determined by the committee. All options
granted under the plan may be exercised at any time after they vest and
before their expiration date, provided that no option may be exercised more
than ten years after its grant or, in some instances, upon termination of
the recipient. The exercise of stock options under the plan will have the
effect of diluting current stockholders to the extent that the stock
options are exercised and therefore converted into shares of common stock.
Securities Subject to the Plan. No more than [_______________]
shares of common stock ([____________] shares if this proposal is approved)
may be issued pursuant to or upon exercise of options granted under the
plan. The shares available under the plan may either be authorized and
unissued shares or shares reacquired by Invitrogen through open market
purchases or otherwise. Shares of common stock subject to unexercised
options that expire, terminate or are canceled, and shares of common stock
issued under options that are reacquired by Invitrogen according to the
terms of the option under which the shares were issued, will again become
eligible for the grant of further options under the plan. The number of
shares of common stock available under the plan in general, as well as the
number of shares of common stock subject to outstanding options and the
exercise price per share of any options, may be proportionately adjusted to
reflect stock splits, stock dividends and other capital stock transactions.
If Invitrogen is the surviving corporation in any merger or
consolidation, each outstanding option will entitle the recipient to
receive the same consideration received by holders of the same number of
shares of Invitrogen common stock in the merger or consolidation. In the
event of a change-in-control, any then outstanding vested or unvested
options will automatically terminate unless:
o provision is made in writing in connection with such
transaction for the continuance of the plan and for the
assumption of any options, or for the substitution for
any options of new options covering the securities of a
successor entity or its affiliate with appropriate
adjustments as to the number and kind of securities and
exercise prices, in which event the plan and such
outstanding options will continue or be replaced, as the
case may be; or
o the board will provide in writing for any adjustments
it deems appropriate in the terms and conditions of the
then-outstanding options, including accelerating the
vesting of outstanding options and/or providing for the
cancellation of options and their automatic conversion
into the right to receive the securities, cash or other
consideration that a holder of the shares underlying
such options would have been entitled to receive upon
consummation of the change-in-control had the shares
been issued and outstanding immediately before the
effective date and time of the change-in-control, net
of the appropriate option exercise prices.
If the plan and the options terminate by reason of the occurrence
of a change-in-control without provision for any of the actions described
above, then any recipient holding outstanding options has the right, at a
time immediately before the consummation of the change-in-control
designated by the board, to fully exercise the recipient's options. For
purposes of the plan, a change-in-control includes:
o a reorganization, merger or consolidation after which
more than 50% of voting securities of Invitrogen are
not represented by holders of securities before the
reorganization, merger or consolidation;
o a liquidation or dissolution of Invitrogen;
o the acquisition of 50% or more of Invitrogen's voting
securities by any person; or
o a majority change in board membership without board
approval.
The following table sets forth the number of options granted under
the 1997 Stock Option Plan, including outstanding options and options that
have been exercised, as of July 2, 1999 for:
o each of Invitrogen's executive officers listed in its
summary compensation table;
o each person who received 5% of such options;
o all current executive officers of Invitrogen as a
group;
o all current directors of Invitrogen who are not
executive officers as a group; and
o all employees of Invitrogen, including current officers
who are not executive officers, as a group.
<TABLE>
<CAPTION>
NUMBER OF
NAME OF BENEFICIAL OWNER OPTIONS GRANTED
------------------------ ---------------
<S> <C>
Lyle C. Turner
President and Chief Executive Officer................................... 0
James R. Glynn
Senior Vice President Corporate Development and Chief Financial Officer. [________]
Donald W. Grimm......................................................... [________]
Kurt R. Jaggers......................................................... [________]
Bradley G. Lorimier..................................................... [________]
Jay M. Short, Ph.D...................................................... [________]
Lewis J. Shuster........................................................ [________]
All current executive officers as a group ([__] persons)................ [________]
All current directors who are not executive officers
as a group ([_] persons)................................................ [________]
All current employees, including all current officers who are not
executive officers, as a group ([___] persons).......................... [________]
</TABLE>
Administration, Amendment and Termination. The plan is administered
by a committee of the board, which consists of at least two non-employee
directors who are disinterested within the meaning of Rule 16b-3 of the
Exchange Act, and who are eligible to receive only automatic, non-employee
directors options. However, the board, instead of the committee, may
exercise any authority granted to the committee under the plan. The
committee has the authority to interpret the plan and the rights of
recipients of awards granted under the plan. The committee also has the
power to discontinue, suspend or amend the plan in any manner, subject to
certain limited exceptions, including increases in the number of shares
available that may be the subject of awards under the plan which requires
stockholder approval. With respect to all other amendments to the plan, the
board may, in its discretion, determine that such amendment shall only
become effective upon approval by the company's stockholders if the board
determines that such stockholder approval may be advisable, such as for the
purpose of obtaining or retaining any statutory or regulatory benefits
under federal or state securities laws, federal or state tax laws, or for
the purpose of satisfying applicable stock exchange listing requirements.
The committee may, with the consent of the recipient of an option, modify
the terms and conditions, accelerate or extend the vesting or exercise
period and adjust or reduce the purchase price of an option.
Terms and Conditions Of Options Under the Plan. The committee will
select the recipients of options granted under the plan and will determine
the dates, amounts, exercise prices, vesting periods and other relevant
terms of the option.
Option Pricing. The exercise price for stock options shall be
determined by the committee as of the date the award is granted. Options to
purchase Invitrogen common stock may, with some limitations, be granted
with an exercise price below the market value of such stock on the grant
date.
Option Vesting. Options granted under the plan vest and become
exercisable as determined by the committee in its discretion. Options
granted under the plan may be exercised at any time after they vest and
before the expiration date determined by the committee, provided that any
options intended to qualify as an incentive stock option under the Internal
Revenue Code will not be exercisable after the expiration of five years
from the date of grant to certain holders of significant amounts of
outstanding Invitrogen common stock. Furthermore, in the absence of a
specific agreement to the contrary, options will generally expire and
become unexercisable three months following termination of the recipient's
employment with Invitrogen for any reason other than for cause. The
committee may accelerate the vesting of any options and may also extend the
period following termination of employment with Invitrogen during which
options may vest and/or be exercised.
Option Payments. The exercise price for options may be paid in cash
or in any other consideration the committee deems acceptable, including
securities of Invitrogen surrendered by the recipient or withheld from the
shares otherwise deliverable upon exercise. Invitrogen may extend or
arrange for the extension of credit to any recipient to finance the
recipient's purchase of shares upon exercise of the recipient's award
and/or the payment of taxes payable in connection with an option, on terms
approved by the committee, subject to restrictions under applicable laws
and regulations, or allow exercise in a broker's transaction in which the
exercise price will not be received until after exercise and subsequent
sale of the underlying common stock.
Limited Transferability of Options. Options are generally not
transferable by the recipient during the life of the recipient.
Option Documentation. Options granted under the plan will be
evidenced by an agreement duly executed on behalf of Invitrogen and by the
recipient, or by a confirming memorandum issued by Invitrogen to the
recipient, setting forth the terms and conditions applicable to the option.
The plan does not preclude Invitrogen from establishing any other forms of
incentive or other compensation for its employees, directors, advisors or
consultants, whether or not approved by stockholders.
Rights With Respect to Common Stock. No recipient of an option
under the plan has any right, title or interest in or to any shares of
common stock subject to any option or any rights as a stockholder unless
and until the option is duly exercised pursuant to the terms of the plan
and the exercise of the option results in the issuance of shares of common
stock to the recipient.
Plan Provisions Regarding Section 162(m) of the Code. In general,
Section 162(m) of the Internal Revenue Code imposes a $1 million limit on
the amount of compensation that may be deducted by Invitrogen in any tax
year with respect to its Chief Executive Officer and its other four most
highly compensated employees, including any compensation relating to an
award under the plan. The plan is designed to allow Invitrogen to grant
options that are not subject to the $1 million limit of Section 162(m). No
one eligible person may be granted any awards with respect to more than
250,000 shares of common stock or in excess of $1 million in any one
calendar year. Furthermore, if Section 162(m) would otherwise apply and if
the amount of compensation an eligible person would receive under an award
is not based solely on an increase in the value of the underlying
Invitrogen common stock after the date of grant the committee may condition
the grant, vesting, or exercisability of the option on the attainment of a
preestablished objective performance goal. A preestablished objective
performance goal may include one or more of the following performance
criteria: (a) cash flow, (b) earnings per share (including earnings before
interest, taxes, and amortization), (c) return on equity, (d) total
shareholder return, (e) return on capital, (f) return on assets or net
assets, (g) income or net income, (h) operating income or net operating
income, (i) operating margin, (j) return on operating revenue, and (k) any
other similar performance criteria.
Participation in the Plan by Directors, Executive Officers and
Other Employees. On [month, day,] 2000, the market value of Invitrogen common
stock was $[____] per share, options to purchase [_______] shares had been
exercised under the plan and options to purchase an aggregate of [_________]
shares of common stock have been granted and were outstanding under the
plan at exercise prices ranging from $[____] to $[____] a share.
Participation in the plan is at the discretion of the board or the
committee; accordingly, future participation by directors, executive
officers and other employees under the plan is not determinable.
Federal Income Tax Treatment. The following brief description of
federal income tax treatment which will generally apply to options granted
under the plan, based on federal income tax laws currently in effect. The
exact federal income tax treatment of options and other awards will depend
on the specific circumstances of the recipient. No information is provided
with respect to estate, inheritance, gift, state or local tax laws,
although there may be certain tax consequences upon receipt or exercise of
an option or other award or the disposition of any acquired shares under
those laws.
Incentive Stock Options. Stock options granted under the plan may
qualify as "incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code. If a recipient exercises an incentive stock
option in accordance with its terms and does not dispose of the shares
acquired within two years from the date of the grant of the incentive stock
option nor within one year from the date of exercise, the required holding
periods, the recipient generally will not be subject to regular federal
income tax, and Invitrogen will not be entitled to any deduction on either
the grant or the exercise of the incentive stock option. A recipient's
basis in the shares acquired upon exercise will be the amount paid upon
exercise. Provided a recipient holds the shares as a capital asset at the
time of sale or other disposition of the shares, a recipient's gain or
loss, if any, recognized on the sale or other disposition will be capital
gain or loss. The amount of a recipient's gain or loss will be the
difference between the amount realized on the disposition of the shares and
the recipient's basis in the shares.
If, however, the recipient disposes of the acquired shares at any
time before the expiration of the required holding periods, then, subject
to certain exceptions, the recipient will recognize ordinary income at the
time of such disposition which will equal the excess, if any, of the lesser
of (a) the amount realized on such disposition, or (b) the fair market
value of the shares on the date of exercise, over the recipient's basis in
the shares. Invitrogen generally will be entitled to a deduction in an
amount equal to the amount of ordinary income recognized by a recipient.
Any gain in excess of such ordinary income amount will be a capital gain.
If a recipient disposes of such shares for less than the recipient's basis
in the shares, the difference between the amount realized and the
recipient's basis will be capital loss.
The excess of the fair market value of the shares acquired on the
exercise date of an incentive stock option over the exercise price of such
option generally is required to be included in the recipient's alternative
minimum taxable income for the year in which the option is exercised and,
accordingly, may subject a recipient to the alternative minimum tax.
Non-qualified Stock Options. In general, there are no tax
consequences to the recipient or to Invitrogen on the grant of a stock
option that does not qualify as an incentive stock option. On exercise,
however, the recipient generally will recognize ordinary income equal to
the excess of the fair market value of the shares as of the exercise date
over the purchase price paid for such shares, and Invitrogen will be
entitled to a deduction equal to the amount of ordinary income recognized
by the recipient. On a later disposition of the shares received under a
non-qualified stock option, the difference between the amount realized on
such disposition and the fair market value of the shares on the date of
exercise generally will be treated as a capital gain or loss.
Miscellaneous Tax Issues. Invitrogen generally will be required to
make arrangements for withholding applicable taxes with respect to any
ordinary income recognized by a recipient in connection with the exercise
of options granted under the plan.
Special rules will apply in cases where a recipient of an option
pays the exercise price or applicable withholding tax obligations by
delivering previously owned shares of common stock or by reducing the
amount of shares otherwise issuable pursuant to the exercise of an option.
The surrender or withholding of such shares will in certain circumstances
result in the recognition of income with respect to such shares or a
carryover basis in the shares acquired.
APPROVAL OF AMENDMENT TO THE 1998 EMPLOYEE STOCK PURCHASE PLAN INCREASING THE
SHARE RESERVE BY [__________] SHARES
BACKGROUND AND PROPOSAL
On November 20, 1998 the Board of Directors voted to establish the
1998 Employee Stock Purchase Plan (the "Plan") to attract and retain
highly-qualified employees. The Plan was approved by the stockholders at
their annual meeting on January 15, 1999. A total of [350,000] shares of
Invitrogen common stock have been reserved for issuance under the Plan. Of
those, [xxx] had been issued as of [xxx], leaving [xxx] available. The Plan
permits eligible employees to purchase common stock at a discount through
payroll deductions, during 24-month offering periods. Unless the Board of
Directors establishes different periods, each offering period is divided
into eight consecutive three-month purchase periods. Unless the Board of
Directors establishes a higher purchase price, the price at which stock is
purchased under the employee stock purchase plan is equal to 85% of the
fair market value of the common stock on the first day of the offering
period or the last day of the purchase period, whichever is lower.
In August of 1999 we merged with NOVEX and in February of 2000 we
merged with Research Genetics, Inc. Primarily because of these mergers, the
proposed merger with Life Technologies, and our recent stock price,
management projects that the current share reserve of [350,000] shares will
be exhausted before the 2001 Annual Meeting of Stockholders.
Because benefits under the Plan will depend on employees' elections
to participate and the fair market value of Invitrogen's common stock at
various future dates, it is not possible to determine the dollar value of
benefits that will be received by executive officers and other employees if
the proposed amendment to the Plan is approved by the stockholders.
Nonemployee directors are not eligible to participate in the Plan.
Accordingly, management requested, and on [July 7, 2000] the Board
of Directors approved, an amendment to the Plan to increase the number of
shares reserved under the Plan by [__________] for a total of [________]
shares, subject to stockholder approval.
The affirmative vote of a majority of the votes cast at the annual
meeting of stockholders, at which a quorum is present and voting, either in
person or by proxy, is required for approval of this proposal. Abstentions
will have the same effect as a negative vote. Broker non-votes will have no
effect on the outcome of the vote.
The Board of Directors believes that the approval of the amendment
to the Plan, increasing the share reserve by [___________] shares is in the
best interests of the stockholders and Invitrogen for the reasons stated
above. THEREFORE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
APPROVAL OF THE AMENDMENT TO THE PLAN, INCREASING THE SHARE RESERVE BY
[__________] SHARES.
SUMMARY OF THE EMPLOYEE STOCK PURCHASE PLAN
The following is a summary of the Plan, which is provided for your
information. The Plan is ultimately controlled by the specific language of
the Plan itself, a copy of which is available to any stockholder upon
request.
General. The Plan is intended to qualify as an "employee stock
purchase plan" under section 423 of the Internal Revenue Code. Each
participant in the Plan is granted at the beginning of each offering under
the plan the right to purchase through accumulated payroll deductions up to
a number of shares of our common stock determined on the first day of the
offering. This right to purchase stock is automatically exercised on the
last day of each purchase period within the offering unless the participant
has withdrawn from participation in the offering or in the Plan prior to
that date.
Shares Subject to the Plan. Currently, a maximum of [350,000] of
our authorized but unissued or reacquired shares of common stock may be
issued under the Plan, subject to appropriate adjustment in the event of a
stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in our capital structure or
in the event of any merger, sale of assets or other reorganization of
Invitrogen. If any right to purchase stock expires or terminates, the
shares subject to the unexercised portion of that right will again be
available for issuance under the Plan.
Administration. The Plan is administered by our board of directors.
Subject to the provisions of the Plan, the board determines the terms and
conditions of the rights to purchase stock granted under the plan. The
board will interpret the Plan and the rights granted thereunder, and all
determinations of the board will be final and binding on all persons having
an interest in the Plan or any rights to buy stock under the Plan. The Plan
provides, subject to certain limitations, that Invitrogen will indemnify
any director, officer or employee against all reasonable expenses,
including attorney's fees, incurred in connection with any legal action
arising from that person's action or failure to act in administering the
plan.
Eligibility. Any employee of Invitrogen or of any present or future
parent or subsidiary corporation of Invitrogen designated by the board for
inclusion in the Plan is eligible to participate in an offering to purchase
stock under the Plan so long as the employee is customarily employed for at
least 20 hours per week and 5 months per calendar year. However, no
employee who owns or holds options to purchase, or as a result of
participation in the Plan would own or hold options to purchase, five
percent or more of the total combined voting power or value of all classes
of stock of Invitrogen or of any parent or subsidiary corporation of
Invitrogen is entitled to participate in the Plan.
Offerings. Generally, each offering of common stock under the Plan
is for a period of twenty-four months. Offering periods under the Plan are
overlapping, with a new offering period beginning every three months.
However, employees may only participate in one offering at a time. Offering
periods generally commence on the first days of February, May, August and
November of each year and end on the last day of January, April, July and
October. However, the first offering period commenced on February 26, 1999,
the effective date of the Company's registration of its common stock with
the Securities and Exchange Commission and will end on January 31, 2001.
Shares are purchased on the last day of each purchase period. The board may
establish a different term for one or more offerings or purchase periods or
different commencement or ending dates for an offering or a purchase
period.
Participation and Purchase of Shares. Participation in the Plan is
limited to eligible employees who authorize payroll deductions prior to the
start of an offering period. Payroll deductions may not exceed 15% (or such
other rate as the board determines) of an employee's compensation for any
pay period during the offering period. Once an employee becomes a
participant in the Plan, that employee will automatically participate in
each successive offering period until such time as that employee withdraws
from the Plan, becomes ineligible to participate in the Plan, or terminates
employment.
Subject to certain limitations, each participant in an offering has
a purchase right equal to the lesser of that number of whole shares
determined by dividing $50,000 by the fair market value of a share of
common stock on the first day of the offering period or 5,000 shares,
provided that these dollar and share amounts will be prorated for any
offering period that is other than 24 months in duration. No participant
may purchase under the Plan shares of Invitrogen's common stock having a
fair market value exceeding $25,000 in any calendar year. This dollar
amount is measured using the fair market value of Invitrogen's common stock
on the first day of the offering period in which the shares are purchased.
At the end of each purchase period, Invitrogen issues to each
participant the number of shares of common stock determined by dividing the
amount of payroll deductions accumulated for the participant during that
purchase period by the purchase price, limited in any case by the number of
shares subject to the participant's Purchase Right for that Offering. The
price per share at which shares are sold at the end of a purchase period
generally equals 85% of the lesser of the fair market value per share of
Invitrogen's common stock on the first day of the offering period or the
purchase date. The fair market value of the common stock on any relevant
date generally will be the closing price per share on such date as reported
on the Nasdaq National Market. Any payroll deductions under the Plan not
applied to the purchase of shares will be returned to the participant,
unless the amount remaining is less than the amount necessary to purchase a
whole share of common stock, in which case the remaining amount may be
applied to the next purchase period or offering period. A participant may
withdraw from an offering at any time without affecting his or her
eligibility to participate in future offerings. However, once a participant
withdraws from an offering, that participant may not again participate in
the same offering.
Change in Control. The Plan provides that in the event of a change
in control, the acquiring or successor corporation may assume Invitrogen's
rights and obligations under the Plan or substitute substantially
equivalent purchase rights for such corporation's stock. If the acquiring
or successor corporation elects not to assume or substitute for the
outstanding purchase rights, the board may adjust the last day of the
offering period to a date on or before the date of the change in control.
Any purchase rights that are not assumed, substituted for, or exercised
prior to the change in control will terminate.
Termination or Amendment. The Plan will continue until terminated
by the board or until all of the shares reserved for issuance under the
plan have been issued. The board may at any time amend or terminate the
Plan. However, the approval of Invitrogen's stockholders is required within
twelve months of the adoption of any amendment that increases the number of
shares authorized for issuance under the Plan or changes the definition of
the corporations which may be designated by the board as corporations whose
employees may participate in the Plan.
SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The following summary is intended only as a general guide as to the
United States federal income tax consequences under current law of
participation in the Plan and does not attempt to describe all possible
federal or other tax consequences of such participation or tax consequences
based on particular circumstances.
A participant recognizes no taxable income either as a result of
commencing to participate in the Plan or purchasing shares of the common
stock under the terms of the Plan. If a participant disposes of shares
purchased under the Plan within two years from the first day of the
applicable offering period or within one year from the purchase date, known
as a disqualifying disposition, the participant will realize ordinary
income in the year of such disposition equal to the amount by which the
fair market value of the shares on the purchase date exceeds the purchase
price. The amount of the ordinary income will be added to the participant's
basis in the shares, and any additional gain or resulting loss recognized
on the disposition of the shares will be a capital gain or loss. A capital
gain or loss will be long-term if the participant's holding period is more
than twelve months.
If the participant disposes of shares purchased under the Plan at
least two years after the first day of the applicable offering period and
at least one year after the purchase date, the participant will realize
ordinary income in the year of disposition equal to the lesser of (i) the
excess of the fair market value of the shares on the date of disposition
over the purchase price or (ii) 15% of the fair market value of the shares
on the first day of the applicable offering period. The amount of any
ordinary income will be added to the participant's basis in the shares, and
any additional gain recognized upon the disposition after such basis
adjustment will be a long-term capital gain. If the fair market value of
the shares on the date of disposition is less than the purchase price,
there will be no ordinary income and any loss recognized will be a
long-term capital loss.
If the participant still owns the shares at the time of death, the
lesser of the excess of the fair market value of the shares on the date of
death over the purchase price or 15% of the fair market value of the shares
on the first day of the offering period in which the shares were purchased
will constitute ordinary income in the year of death.
Invitrogen should be entitled to a deduction in the year of a
disqualifying disposition equal to the amount of ordinary income recognized
by the participant as a result of the disposition, except to the extent
such deduction is limited by applicable provisions of the Internal Revenue
Code or the regulations thereunder. In all other cases, no deduction is
allowed to Invitrogen.
EXPERTS
The audited financial statements of Invitrogen and Research
Genetics included in and incorporated by reference in this joint proxy
statement and prospectus, have been audited by Arthur Anderson LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said reports.
The consolidated financial statements of Life Technologies, Inc. in
this joint proxy statement and prospectus by reference to the Annual Report
on Form 10-K for the year ended December 31, 1999, have been so
incorporated in reliance on the audit report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
With respect to the unaudited consolidated financial information of
Life Technologies for the three-month periods ended March 31, 2000 and
1999, respectively, incorporated by reference in this joint proxy statement
and prospectus, PricewaterhouseCoopers LLP reported that they have applied
limited procedures in accordance with professional standards for the review
of such information. However, their separate report dated April 11, 2000
incorporated by reference in this joint proxy statement and prospectus,
state that they did not audit and they do not express an opinion on that
unaudited consolidated financial information. Accordingly, the degree of
reliance on their report on such information should be restricted in light
of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions of
Section 11 of the Securities Act of 1933 for their report on the unaudited
consolidated financial information because that report is not a "report" or
a "part" of the registration statement prepared or certified by
PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the
Securities Act.
The consolidated financial statements of Dexter incorporated in
this joint proxy statement and prospectus by reference to the Annual Report
on Form 10-K for the year ended December 31, 1999, have been so
incorporated in reliance on the audit report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
With respect to the unaudited consolidated financial information of
Dexter for the three-month and six- month periods ended March 31, 2000 and
1999 and June 30, 2000 and 1999, respectively, incorporated by reference in
this joint proxy statement and prospectus, PricewaterhouseCoopers LLP
reported that they have applied limited procedures in accordance with
professional standards for the review of such information. However, their
separate reports dated April 13, 2000 and July 18, 2000 incorporated by
reference in this joint proxy statement and prospectus, state that they did
not audit and they do not express an opinion on that unaudited consolidated
financial information. Accordingly, the degree of reliance on their report
on such information should be restricted in light of the limited nature of
the review procedures applied. PricewaterhouseCoopers LLP is not subject to
the liability provisions of Section 11 of the Securities Act of 1933 for
their report on the unaudited consolidated financial information because
that report is not a "report" or a "part" of the registration statement
prepared or certified by PricewaterhouseCoopers LLP within the meaning of
Sections 7 and 11 of the Securities Act.
LEGAL MATTERS
The validity of the Invitrogen common stock to be issued in
connection with the business combination will be passed upon by Gray Cary
Ware & Freidenrich LLP. Certain United Stated federal income tax
consequences of the mergers will be passed upon for Dexter and Life
technologies by Skadden, Arps, Slate, Meagher & Flom LLP and for Invitrogen
by Gray Cary Ware & Freidenrich LLP.
WHERE YOU CAN FIND MORE INFORMATION
Invitrogen, Life Technologies and Dexter file annual, quarterly and
current reports, proxy statements and other information with the Securities
and Exchange Commission. You may read and copy any reports, statements or
other information we file at the Securities and Exchange Commission's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the Securities and Exchange Commission at 1-800-
SEC-0330 for further information on the public reference rooms. The SEC
filings of Invitrogen, Life Technologies and Dexter are also available to
the public from commercial document retrieval services and at the web site
maintained by the SEC at "http://www.sec.gov."
Invitrogen has filed a Registration Statement on Form S-4 to
register with the SEC for the Invitrogen common stock to be issued to Life
Technologies stockholders and Dexter stockholders in the mergers. This
joint proxy statement and prospectus is a part of that Registration
Statement and constitutes a prospectus of Invitrogen in addition to being a
proxy statement of Invitrogen, Life Technologies and Dexter for the special
meetings. As allowed by SEC rules, this document does not contain all the
information you can find in the registration statement or the exhibits to
the registration statement.
The SEC allows us to "incorporate by reference" information into
this joint proxy statement and prospectus. This means that we can disclose
important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is
deemed to be part of this joint proxy statement and prospectus, except for
any information superseded by information in this joint proxy statement and
prospectus. This joint proxy statement and prospectus incorporate by
reference the documents set forth below that we have previously filed with
the SEC. These documents contain important information about our companies
and their finances.
<TABLE>
<CAPTION>
<S> <C>
INVITROGEN SEC FILINGS FILE (FILE NO. 0-25317) PERIOD
Annual Report on Form 10K Year ended December 31, 1999
Quarterly Report of Form 10Q Quarterly ended March 31, 2000
Current Reports on Forms 8-K and 8-K/A Filed on February 16, 2000, February 17, 2000 and
July 11, 2000
Registration Statement on Forms S-3 and S-3/A Filed on May 26, 2000 and
July 28, 2000
LIFE TECHNOLOGIES (FILE NO. 0-14991)
Annual Report on Form 10K Year ended December 31, 1999
Quarterly Report on Form 10Q Quarter ended March 31, 2000
Current Reports on Form 8-K Filed on January 27, 2000 and July 14, 2000
DEXTER CORPORATION (FILE NO. 1-5542)
Annual Report on Form 10K Year ended December 31, 1999
Quarterly Reports on Form 10Q Quarter ended March 31, 2000 and June 30, 2000
Current Reports on Form 8-K Filed on June 22, 2000 and July 10, 2000
</TABLE>
We are also incorporating by reference additional documents that we
file with the SEC between the date of this joint proxy statement and
prospectus and the dates of the special meetings of our stockholders.
Invitrogen has supplied all information contained or incorporated
by reference in this document relating to Invitrogen, Life Technologies has
supplied all information contained or incorporated by reference in this
document relating to Life Technologies and Dexter has supplied all
information contained or incorporated by reference in this document
relating to Dexter.
If you are a stockholder, we may have previously sent you some of
the documents incorporated by reference. You can obtain any of the
incorporated documents by contacting us or the SEC. We will send you the
documents incorporated by reference without charge, excluding exhibits to
the information that is incorporated by reference, unless we have
specifically incorporated by reference the exhibit in this document.
Stockholders may obtain documents incorporated by reference in this
document by requesting them in writing or by telephone from the appropriate
party at the following addresses:
<TABLE>
<CAPTION>
<S> <C> <C>
Invitrogen Corporation Life Technologies, Inc. Dexter Corporation
1600 Faraday Avenue 9800 Medical Center Drive One Elm Street
Carlsbad, California 92008 Rockville, Maryland 20850 Windsor Locks, Connecticut 06096
760-603-7200 301-610-8000 860-292-7675
</TABLE>
If you would like to request documents from us, including any
documents we may subsequently file with the Securities and Exchange
Commission prior to the special meetings, please do so by [month, day],
2000 so that you will receive them before the special meetings.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS JOINT PROXY STATEMENT AND PROSPECTUS TO VOTE ON THE
MERGERS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT
IS DIFFERENT FROM WHAT IS CONTAINED IN THIS JOINT PROXY STATEMENT AND
PROSPECTUS. THIS JOINT PROXY STATEMENT AND PROSPECTUS IS DATED [MONTH,
DAY], 2000. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS
JOINT PROXY STATEMENT AND PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN
SUCH DATE, AND NEITHER THE MAILING OF THE JOINT PROXY STATEMENT AND
PROSPECTUS TO STOCKHOLDERS NOR THE ISSUANCE OF INVITROGEN COMMON STOCK IN
THE MERGERS SHALL CREATE ANY IMPLICATION TO THE CONTRARY.
<TABLE>
<CAPTION>
<S> <C> <C>
By order of the Board of Director By order of the Board of Directors, By order of the Board of Directors,
Invitrogen Corporation Life Technologies, Inc. Dexter Corporation
Warner R. Broaddus C. Eric Winzer Bruce H. Beatt
Secretary Secretary Secretary
</TABLE>
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
Page
INVITROGEN CORPORATION
AUDITED FINANCIAL STATEMENTS
<S> <C>
Report of Independent Public Accountants................................................F-2
Consolidated Balance Sheets as of December 31, 1999 and 1998............................F-3
Consolidated Statements of Income for the Years Ended December 31, 1999, 1998 and 1997..F-4
Consolidated Statements of Stockholders' Equity for the Years Ended December 31,
1997, 1998 and 1999.....................................................................F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 1998
and 1997................................................................................F-7
Notes to Consolidated Financial Statements..............................................F-8
INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Interim Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999..........F-23
Interim Consolidated Statements of Income for the Three Months ended March 31,
2000 and 1999...........................................................................F-24
Interim Consolidated Statements of Cash Flows for the Three Months ended
March 31, 2000 and 1999.................................................................F-25
Notes to Interim Consolidated Financial Statements......................................F-26
LIFE TECHNOLOGIES, INC.
AUDITED FINANCIAL STATEMENTS
Report of Independent Public Accountants...............................................F-28
Consolidated Balance Sheets as of December 31, 1999 and 1998...........................F-29
Consolidated Statements of Income for the Years Ended December 31, 1999, 1998
and 1997...............................................................................F-30
Consolidated Statements of Stockholders' Equity (Deficit) for the Years Ended
December 31, 1999, 1998 and 1997.......................................................F-31
Notes to Consolidated Financial Statements............................................F-32
INTERIM FINANCIAL STATEMENTS
Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999.................F-52
Interim Consolidated Statements of Income for the Three Months ended
March 31, 2000 and 1999................................................................F-53
Interim Consolidated Statements of Cash Flows for the Three Months ended
March 31, 2000 and 1999................................................................F-54
Notes to Consolidated Financial Statements.............................................F-55
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Invitrogen Corporation:
We have audited the accompanying consolidated balance sheets of
Invitrogen Corporation (a Delaware corporation) and subsidiaries as of
December 31, 1999 and 1998 and the related consolidated statements of
income, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Invitrogen
Corporation and subsidiaries as of December 31, 1999 and 1998 and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States.
/s/ ARTHUR ANDERSEN LLP
San Diego, California
March 1, 2000
<TABLE>
<CAPTION>
INVITROGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value data)
DECEMBER 31,
----------------------------
1999 1998
---- ----
ASSETS
Current Assets:
<S> <C> <C>
Cash and cash equivalents.................................... $102,221 $2,329
Short-term investments....................................... - 4,214
Accounts receivable, net of allowance for doubtful accounts
of $835 and $616............................................. 11,518 8,356
Note receivable officer...................................... - 150
Inventories.................................................. 7,490 5,947
Income taxes receivable...................................... 4,495 -
Deferred income taxes..................................... 3,561 1,057
Prepaid expenses and other current assets................. 1,052 1,433
-------------- -------------
Total current assets...................................... 130,337 23,486
Property and Equipment, net...................................... 21,582 18,806
Intangible Assets, net........................................... 4,199 1,980
Deferred income taxes............................................ 117 106
Other Assets..................................................... 440 1,244
-------------- -------------
Total assets.............................................. $156,675 $45,622
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank......................................... $415 $1,512
Current portion of long term obligations...................... 6,211 1,255
Accounts payable.............................................. 4,301 4,453
Accrued expenses.............................................. 5,181 3,086
Income taxes payable.......................................... 1,680 1,002
-------------- -------------
Total current liabilities................................. 17,788 11,308
-------------- -------------
Long term obligations............................................ 7,256 8,033
-------------- -------------
Deferred income taxes............................................ 439 322
-------------- -------------
Commitments and contingencies
Non-voting Redeemable Common Stock of Invitrogen B.V; Subsidiary
common stock, 66,000 shares authorized; no shares issued or
outstanding on December 31, 1999 and 18,000 issued and
outstanding on December 31, 1998.............................. - 1,599
-------------- -------------
Convertible Redeemable Preferred Stock; $0.01 par value, 2,202,942
shares authorized; no shares issued or outstanding on December
31, 1999 and 2,202,942 shares issued and outstanding on
December 31, 1998............................................. - 16,141
-------------- -------------
Stockholders' Equity:
Common stock; $0.01 par value, 50,000,000 shares authorized;
22,271,140 and 13,148,035 shares issued and outstanding at
December 31, 1999 and 1998, respectively...................... 223 131
Additional paid-in-capital....................................... 121,269 6,399
Deferred compensation............................................ (746) (962)
Value of common stock designated pursuant to Employee Stock
Ownership Plan................................................ - 100
Accumulated other comprehensive loss............................. (520) (40)
-------------- -------------
Retained earnings................................................ 10,966 2,591
-------------- -------------
Total stockholders' equity................................ 131,192 8,219
-------------- -------------
Total liabilities and stockholders' equity................ $156,675 $45,622
============== =============
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
<TABLE>
<CAPTION>
INVITROGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues.............................................. $92,880 $70,567 $55,334
Cost of Revenues...................................... 32,862 26,443 22,713
------------- ------------- -------------
Gross margin................................ 60,018 44,124 32,621
Operating Expenses:
Sales and marketing......................... 16,235 13,165 9,935
General and administrative.................. 12,139 11,066 9,564
Research and development.................... 14,699 11,201 7,545
Merger costs................................ 4,379 - -
------------- ------------- -------------
Total operating expenses................ 47,452 35,432 27,044
------------- ------------- -------------
Income from operations.................. 12,566 8,692 5,577
------------- ------------- -------------
Other Income (Expense):
Net gains (losses) on foreign currency
transactions.............................. (90) 25 145
Interest and other expense.................. (866) (910) (698)
Interest and other income................... 2,229 700 239
------------- ------------- -------------
1,273 (185) (314)
------------- ------------- -------------
Income before provision for income taxes.............. 13,839 8,507 5,263
Provision for income taxes............................ 4,779 2,988 1,846
------------- ------------- -------------
Net income............................................ 9,060 5,519 3,417
Less: Preferred stock dividends............. (163) (900) (475)
Accretion of non-voting redeemable common stock. (74) (204) (175)
Adjustment to beneficial conversion feature
related to convertible preferred stock........... 985 - (15,000)
------------- ------------- -------------
Net income (loss) applicable to common shares.... $9,808 $4,415 $(12,233)
============= ============= =============
Earnings (loss) per share:
Basic.............................................. $0.51 $0.29 $(0.83)
============= ============= =============
Diluted............................................ $0.45 $0.26 $(0.83)
============= ============= =============
Weighted average shares used in per share calculation:
Basic.............................................. 19,069 15,352 14,661
Diluted............................................ 21,629 17,083 14,661
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<TABLE>
<CAPTION>
INVITROGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
Additional
Paid-in
Common Stock
-----------------------------------
Common Stock Series A Series B Deferred
--------------- ---------------- -----------------
Shares Amount Shares Amount Shares Amount Capital Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996....... $ 5,722 $ 57 $ 7,226 - $ 1,188 $ - $ 5,698 $ -
Recapitalization of stock............... 8,414 84 (7,226) - (1,188) - (84) -
Value of common stock designated
pursuant to Employee Stock
Ownership Plan........................ - - - - - - - -
Deferred compensation................... - - - - - - 664 (664)
Amortization of deferred compensation - - - - - - - 169
expense...............................
Common stock issued under employee plans 202 2 - - - - 258 -
Shareholder equity contribution......... - - - - - - 147 -
Repurchase of common stock.............. (1,189) (12) - - - - (1,437) -
Beneficial conversion feature related
to convertible preferred stock........ - - - - - - 15,000 -
Accretion of beneficial conversion
feature related to convertible
preferred stock....................... - - - - - - (15,000) -
Preferred and common stock dividends
declared and accretion of redemption
value over stated value on subsidiary
common stock........................... - - - - - - - -
Foreign currency translation adjustment. - - - - - - - -
Net income.............................. - - - - - - - -
------- ------ ------- ------- ------- ------- ------- -----------
Balance at December 31, 1997............ 13,149 131 - - - - 5,246 (495)
Value of common stock designated
pursuant to Employee Stock
Ownership Plan........................ - - - - - - - -
Deferred compensation................... - - - - - - 683 (683)
Amortization of deferred compensation - - - - - - - 216
expense.................................
Common stock issued under employee plans 33 - - - - - 130 -
Shareholder equity contribution......... - - - - - - 205 -
Tax effect of exercise of stock options. - - - - - - 138 -
Repurchase of common stock.............. (34) - - - - - (150) -
Stock option issued to acquire - - - - - - 147 -
Morphagen, Inc..........................
Preferred and common stock dividends
declared and accretion of redemption
over stated value on subsidiary common
stock................................... - - - - - - - -
Foreign currency translation adjustment. - - - - - - - -
Net income.............................. - - - - - - - -
------- ------ ------- ------- ------- ------- ------- -----------
........................................ 13,148 131 - - - - 6,399 (962)
Balance at December 31, 1998............
Initial public stock offering........... 3,525 36 - - - - 48,093 -
Conversion of redeemable preferred stock 2,203 22 - - - - 729 -
Adjustment to beneficial conversion
feature related to convertible
preferred stock........................ - - - - - - (985) -
Accretion of beneficial conversion
feature related to convertible preferred
stock .................................. - - - - - - 985 -
Secondary stock offering................ 2,400 24 - - - - 56,443 -
Deferred compensation................... - - - - - - 126 (126)
Amortization of deferred compensation - - - - - - (20) 342
expense.................................
Common stock issued under employee plans 995 10 - - - - 3,219 -
Shareholder equity contribution......... - - - - - - 80 -
Tax effect of exercise of stock options. - - - - - - 6,200 -
Preferred and common stock dividends
declared and accretion of redemption
value over stated value on subsidiary
common stock............................ - - - - - - - -
Foreign currency translation adjustment. - - - - - - - -
Net income.............................. - - - - - - - -
------- ------ ------- ------- ------- ------- ------- -----------
Balance at December 31, 1999............ $22,271 $ 223 $ - $ - $ - $ - $121,269 $ (746)
------- ------ ------- ------- ------- ------- ------- -----------
</TABLE>
<TABLE>
<CAPTION>
Accumulated
Employee Other Retained
Ownership Plan Comprehensive Earnings Stockholders Comprehensive
Contribution Income (loss) (Deficit) Equity Income
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996....... $ 100 $ (29) $ 2,791 $ $8,617 $ -
Recapitalization of stock............... - - - - -
Value of common stock designated
pursuant to Employee Stock
Ownership Plan........................ 100 - - 100 -
Deferred compensation................... - - - - -
Amortization of deferred compensation - - - 169 -
expense...............................
Common stock issued under employee plans (100) - - 160 -
Shareholder equity contribution......... - - - 147 -
Repurchase of common stock.............. - - (6,385) (7,834) -
Beneficial conversion feature related
to convertible preferred stock........ - - - (15,000) -
Accretion of beneficial conversion
feature related to convertible
preferred stock....................... - - - 15,000 -
Preferred and common stock dividends
declared and accretion of redemption
value over stated value on subsidiary
common stock........................... - - (990) (990) -
Foreign currency translation adjustment. - (95) - (95) (95)
Net income.............................. - - 3,417 3,417 3,417
------------ ------------ ------ --------- -----------
Balance at December 31, 1997............ 100 (124) (1,167) 3,691 $ 3,322
===========
Value of common stock designated
pursuant to Employee Stock
Ownership Plan........................ 100 - - 100 -
Deferred compensation................... - - - - -
Amortization of deferred compensation - - - 216 -
expense.................................
Common stock issued under employee plans (100) - - 30 -
Shareholder equity contribution......... - - - 205 -
Tax effect of exercise of stock options. - - - 138 -
Repurchase of common stock.............. - - - (150) -
Stock option issued to acquire
Morphagen, Inc.......................... - - - 147 -
Preferred and common stock dividends
declared and accretion of redemption
over stated value on subsidiary common
stock................................... - - (1,761) (1,761) -
Foreign currency translation adjustment. - 84 - 84 84
Net income.............................. - - 5,519 5,519 5,519
------------ ------------ ------ --------- -----------
Balance at December 31, 1998............ 100 (40) 2,591 8,219 $ 5,603
===========
Initial public stock offering........... - - - 48,129 -
Conversion of redeemable preferred stock - - - 751 -
Adjustment to beneficial conversion
feature related to convertible
preferred stock........................ - - - 985 -
Accretion of beneficial conversion
feature related to convertible preferred
stock .................................. - - - (985) -
Secondary stock offering................ - - - 56,467 -
Deferred compensation................... - - - - -
Amortization of deferred compensation - - - 322 -
expense.................................
Common stock issued under employee plans (100) - - 3,129 -
Shareholder equity contribution......... - - - 80 -
Tax effect of exercise of stock options. - - - 6,200 -
Preferred and common stock dividends
declared and accretion of redemption
value over stated value on subsidiary
common stock............................ - - (685) (685) -
Foreign currency translation adjustment. - (480) - (480) (480)
Net income.............................. - - 9,060 9,060 9,060
------------ ------------ ------ --------- -----------
Balance at December 31, 1999............ $ - $ (520) $ 10,966 $131,192 $ 8,580
============ ============ ========= ========= ===========
</TABLE>
<TABLE>
<CAPTION>
INVITROGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
For the Years Ended December 31,
-----------------------------------
1999 1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income.................................................. $9,060 $5,519 $3,417
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization............................... 4,464 3,227 2,355
Amortization of deferred compensation....................... 322 216 169
Employee stock ownership plan contribution.................. - 100 100
Deferred income taxes....................................... (700) 45 (676)
Non-cash write-off of investments........................... - - 330
Non-cash merger related costs............................... 1,820 - -
Other non-cash adjustments.................................. 409 22 161
Changes in operating assets and liabilities:
Accounts receivable....................................... (3,383) (2,172) (1,429)
Inventories............................................... (1,623) (2,385) (32)
Prepaid expenses and other current assets................. (138) (713) (171)
Other assets.............................................. 406 (530) (310)
Accounts payable.......................................... (80) 1,974 724
Accrued expenses.......................................... 2,172 1,022 358
Income taxes payable...................................... 703 469 (172)
------- ----------- ---------
Net cash provided by operating activities................ 13,432 6,794 4,824
======= =========== =========
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in short term investments............................ 4,214 (438) (3,777)
Payment received on note receivable from officer............ 150 - 415
Purchases of property and equipment......................... (5,228) (10,070) (4,284)
Payments for intangible assets.............................. (1,724) (926) (249)
Investment in related party................................. - - (500)
------- ----------- ---------
Net cash used in investing activities..................... (2,588) (11,434) (8,395)
======= =========== =========
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances (principal payments) on lines of credit, net....... (1,067) (568) 812
Proceeds from long term obligations......................... 1,916 4,708 1,447
Principal payments on long term obligations................. (2,268) (2,338) (1,747)
Proceeds from sale of preferred stock....................... - - 14,766
Proceeds from sale of common stock and equity contributions. 108,019 235 308
Redemption of preferred and common stock and payment of
accrued dividends......................................... (17,507) (657) (340)
Repurchase of common stock.................................. (150) (7,834)
------- ----------- ---------
Net cash provided by financing activities................ 89,093 1,230 7,412
Effect of exchange rate changes on cash..................... (45) 183 (105)
------- ----------- ---------
Net increase (decrease) in cash and cash equivalents..... 99,892 (3,227) 3,736
Cash and cash equivalents, beginning of period.............. 2,329 5,556 1,820
------- ----------- ---------
Cash and cash equivalents, end of period.................... $102,221 $2,329 $5,556
======= =========== =========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of Convertible Redeemable Preferred Stock
into Redeemable Preferred Stock............................ $ 14,015 $-- $--
Conversion of Redeemable Preferred Stock into Common Stock.. $751 $-- $--
Preferred dividends declared................................ $163 $900 $475
Accretion of redemption value for redeemable common stock... $74 $204 $175
Deferred compensation....................................... $164 $683 $664
Contribution of common stock to ESOP........................ $100 $100 $100
Note issued for patent rights............................... $1,000 $-- $--
Property acquired with debt................................. . $3,500 $-- $--
Converted deposit to note receivable-officer................ $-- $150 $--
Options issued for assets of Morphagen, Inc................. $-- $147 $--
Note issued for Serva product line assets acquired.......... $-- $500 $--
Accretion of beneficial conversion feature of convertible
preferred stock $-- $-- $15,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest...................................... $588 $709 $692
------- ----------- ---------
Cash paid for income taxes.................................. $3,659 $1,971 $1,980
------- ----------- ---------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
INVITROGEN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS AS OF DECEMBER 31, 1999, 1998 AND 1997
1. BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity
Invitrogen Corporation (the "Company") was incorporated in the
state of California on September 29, 1989. The Company operates in one
business segment which develops, manufactures and sells products designed
to facilitate molecular biology research. The Company sells its products to
researchers at universities, corporations, and research institutions
throughout North America, the Pacific Rim and Europe. In 1997, the Company
changed its state of incorporation to Delaware. In connection with the
Company's recapitalization, all of the Series A common stock and Series B
common stock of the former California Corporation were converted to the
common stock of the new Delaware corporation; accordingly, Series A common
stock and Series B common stock ceased to exist (see Note 3).
On August 17, 1999, the Company consummated a merger with NOVEX, in
a stock-for-stock transaction (see Note 2). NOVEX, formerly known as Novel
Experimental Technology, a California Corporation, was incorporated on
April 5, 1989. NOVEX manufactures protein and nucleic acid electrophoresis
gels and related equipment, solutions, standards, and fine chemicals,
primarily for use in research laboratories. On February 2, 2000, the
Company consummated a merger with Research Genetics, an Alabama
Corporation, incorporated on June 1, 1994 (see Note 2). Research Genetics
supplies products and services for functional genomics and gene-based drug
discovery research. These transactions have been accounted for as pooling
of interests' and, accordingly, the Company's consolidated financial
statements have been restated for all periods prior to the business
combinations to include the financial results of Invitrogen, NOVEX and
Research Genetics.
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its 100% controlled subsidiaries, Invitrogen B.V., which
commenced operations in The Netherlands in April 1993, NOVEX
Electrophoresis GmbH (formerly known as Anamed GmbH), which commended
operations in Germany in December 1992, Serva GmbH, incorporated in Germany
in May 1998, Invitrogen Export Company, Ltd., a foreign sales corporation
incorporated in 1996 and NOVEX International Sales Corporation,
incorporated in February 1997. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Concentrations of Risks
Segment and Geographic Data.
The Company has adopted Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related
Information" and has determined that it operates in one business segment
dedicated to molecular biology research. The Company does not report
product line information as it would be impracticable to do so. Information
about the Company by geographic area is as follows:
<TABLE>
<CAPTION>
(in thousands) 1999 1998 1997
----------- ---------- ----------
Product sales to unrelated customers located in:
<S> <C> <C> <C>
North America.................................... $62,952 $48,172 $39,987
Europe........................................... 22,475 17,089 10,672
Pacific Rim...................................... 5,728 4,023 3,538
----------- ---------- ----------
Total product revenue........................... $91,155 $69,284 $54,197
=========== ========== ==========
Net long-lived assets located in:
North America.................................... $19,139 $15,426
Europe........................................... 2,443 3,380
----------- ----------
Total net long-lived assets..................... $21,582 $18,806
=========== ==========
</TABLE>
Customers
Approximately $39.5 million, $29.7 million and $23.9 million, or
42%, 42% and 43% of the Company's revenues during the years ended December
31, 1999, 1998, and 1997, respectively, were derived from university and
research institutions which management believes are, to some degree,
directly or indirectly supported by the U.S. Government. A change in
current research fundings, particularly with respect to the National
Institute of Health, may have an adverse impact on the Company's future
results of operations.
Revenue Recognition
Revenues from product sales are recognized upon shipment to the
customer. The Company does not receive material upfront fees; those that
are received are deferred and recognized upon shipment to the customers.
Grant revenue is recorded as earned, as defined within the specific
agreements and is not refundable. Grant revenue was $1.7 million, $1.3
million and $1.1 million in 1999, 1998 and 1997, respectively. Cost of
grant revenue is included in research and development.
Royalty revenue is recognized when earned, generally upon the
receipt of cash, and is not refundable.
Cash, Cash Equivalents and Short-Term Investments
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents. Cash
equivalents at December 31, 1999 and 1998 consist primarily of U.S.
Treasury and government agency obligations, commercial paper and
dividend-bearing securities.
Inventories
Inventories are stated at lower of cost (first-in, first-out
method) or market. The Company reviews the components of its inventory on a
quarterly basis for excess, obsolete and impaired inventory and makes
appropriate dispositions as obsolete stock is identified.
Property and Equipment
Property and equipment is stated at cost and depreciated over the
estimated useful lives of the assets (3 to 39 years) using the
straight-line method. Amortization of leasehold improvements is computed on
the straight-line method over the shorter of the lease term or the
estimated useful lives of the assets. Maintenance and repairs are charged
to operations as incurred. When assets are sold, or otherwise disposed of,
the cost and related accumulated depreciation are removed from the accounts
and any gain or loss is included in operations.
Intangible Assets
Intangible assets represent patents, license agreements and genome
libraries, are recorded at cost and are amortized on a straight-line basis
over estimated useful lives of 3 to 17 years. The excess of cost over the
fair value of the net tangible assets purchased (goodwill) arose from the
Company's 1996 acquisition of its wholly-owned subsidiary, NOVEX
Electrophoresis GmbH, and is being amortized over ten years.
Long-lived Assets
The Company has adopted Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets." The
statement requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for possible
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be fully recoverable. The Company
periodically re-evaluates the original assumptions and rationale utilized
in the establishment of the carrying value and estimated lives of its
long-lived assets. The criteria used for these evaluations include
management's estimate of the asset's continuing ability to generate income
from operations and positive cash flow in future periods as well as the
strategic significance of any intangible asset in the Company's business
objectives.
Research and Development Costs
All research and development costs are charged to operations as
incurred.
Income Taxes
The Company uses the liability method of accounting for income taxes
in accordance with Statement of Financial Statement Accounting Standards No.
109, "Accounting for Income Taxes." Deferred income taxes reflect the net
tax effects of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for
income tax purposes, using enacted tax rates in effect for the year in
which the differences are expected to reverse. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.
Foreign Currency Translation
The balance sheet accounts of the Company's foreign operations are
translated from their respective foreign currencies into U.S. dollars at
the exchange rate in effect at the balance sheet date and revenue and
expense accounts are translated using an average exchange rate during the
period of recognition. The effects of translation are recorded as a
separate component of stockholders' equity. Exchange gains and losses
arising from transactions denominated in foreign currencies are recorded
using the actual exchange differences on the date of the transaction and
are included in the Consolidated Statements of Income.
Fair Value of Financial Instruments
The carrying amounts of all financial instruments such as cash
equivalents, foreign cash accounts, accounts receivable, accounts payable
and accrued expenses are reasonable estimates of their fair value because
of the short maturity of these items. The Company believes the carrying
amounts of the Company's line of credit and obligations under capital
leases approximate fair value because the interest rates on these
instruments are subject to change with, or approximate, market interest
rates.
Computation of Earnings Per Share
The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 128 ("SFAS No. 128"), "Earnings Per Share." SFAS
No. 128 requires companies to compute basic and diluted per share data for
all periods for which an income statement is presented. Basic earnings per
share was computed by dividing net income applicable to common shares by
the weighted average number of common shares outstanding during the period.
Diluted earnings per share reflects the potential dilution that could occur
if the income were divided by the weighted-average number of common shares
and potential common shares from outstanding stock options. Potential
common shares were calculated using the treasury stock method and represent
incremental shares issuable upon exercise of the Company's outstanding
options. Diluted earnings per share does not consider the impact of the
conversion of outstanding redeemable convertible preferred stock as its
inclusion would be antidilutive for all periods presented. Potentially
dilutive securities are not considered in the calculation of net loss per
share as their impact would be antidilutive.
Comprehensive Income
The Company has implemented Statement of Financial Accounting
Standards No. 130 "Comprehensive Income." This statement requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement
that is displayed with the same prominence as other financial statements.
Accordingly, in addition to reporting net income under the current rules,
the Company is required to display the impact of any fluctuations in its
foreign currency translation adjustments as a component of comprehensive
income and to display an amount representing total comprehensive income for
each period presented.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Recent Accounting Pronouncements
In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in
Financial Statements." This SAB summarizes the SEC's view in applying
generally accepted accounting principles to revenue recognition in
financial statements. This SAB is effective for all registrants during the
second quarter of fiscal 2000. Management has reviewed the impact of SAB
101 on the Company's financial statements, and does not believe that its
adoption will have a material impact on the Company's financial statements.
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
which establishes accounting and reporting standards for derivative
instruments and hedging activities. SFAS 133 requires that an entity
recognize all derivatives as either assets or liabilities in the statement
of financial position and measure those instruments at fair value. This
Statement was amended by SFAS No. 137 which defers the effective date to
all fiscal quarters of fiscal years beginning after June 15, 2000. SFAS No.
133 is effective for our first quarter in the fiscal year ending March 31,
2001 and is not expected to have a material effect on our financial
position or results of operations.
Reclassifications
Certain reclassifications of prior year amounts have been made to
conform to the current year presentation.
2. BUSINESS COMBINATIONS
Research Genetics Merger
On February 2, 2000, the Company completed a merger with Research
Genetics, a privately held U.S. company that supplies products and services
for functional genomics and gene-based drug discovery research. The Company
issued 3.2 million shares of common stock for all of the outstanding common
stock of Research Genetics. The transaction has been accounted for as a
pooling of interests and qualifies as a tax free exchange. Costs incurred
as a result of the merger and related integration are expected to be $6.4
million and are subject to change. These costs were expensed in February
2000 upon completion of the merger. The combined results of operations of
Invitrogen and Research Genetics are presented as if the merger had
occurred at the beginning of the periods presented.
NOVEX Merger
On August 17, 1999, the Company consummated a merger with NOVEX, in
a stock-for-stock transaction. NOVEX manufactures protein and nucleic acid
electrophoresis gels and related equipment, solutions, standards, and fine
chemicals, primarily for use in research laboratories.
Invitrogen issued 2,530,124 shares of common stock in exchange for
all the outstanding shares of NOVEX stock based on an exchange ratio of
approximately .23188 shares of Invitrogen common stock for each share of
NOVEX common stock. Invitrogen also assumed and exchanged all options to
purchase NOVEX common stock for options to purchase 469,678 shares of
Invitrogen common stock. The merger is intended to qualify as a tax-free
reorganization and has been accounted for as a pooling of interests. In
August 1999, after the merger was completed, the Company recorded $4.4
million in merger-related costs. These costs included transaction costs to
complete the merger, severance, write-downs of duplicate property, plant
and equipment and other costs to close duplicate facilities. The duplicate
facilities were located in San Diego, California and in Frankfurt, Germany
and the closure of these facilities included workforce reductions of
approximately 45 employees in 1999 and 22 in 2000. It is expected that the
closure of the duplicate facilities will be completed by the end of 2000.
At December 31, 1999 the Company had $1.7 million remaining in accrued
merger related costs, which are subject to change.
Prior to the merger, NOVEX used a fiscal year ending March 31. In
order to report the combined results on a consistent basis, NOVEX's fiscal
years have been recast to a twelve-month period ended December 31, for all
periods presented. These recast results have been combined with the
corresponding fiscal years ended December 31, 1999, 1998 and 1997, of
Invitrogen to arrive at the financial information presented. The combined
results of operations of Invitrogen and NOVEX are presented as if the
merger had occurred at the beginning of the periods presented.
The reconciliations of revenues and net income previously reported
prior to the respective mergers by the separate companies to the combined
results reported in the Consolidated Statements of Income for the years
ended December 31, 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
(in thousands) 1999 1998 1997
-------- -------------- --------------
Revenues:
<S> <C> <C> <C>
Invitrogen......................................... $49,530 $31,414 $24,965
Research Genetics.................................. 24,581 17,006 14,331
NOVEX.............................................. 18,807 22,293 16,240
Intercompany sales................................. (38) (146) (202)
$92,880 $70,567 $55,334
======== ============== ==============
(in thousands) 1999 1998 1997
-------- -------------- --------------
Net Income:
Invitrogen......................................... $5,526 $2,978 $2,524
Research Genetics.................................. 2,395 1,289 982
NOVEX.............................................. 1,139 1,252 (89)
$9,060 $5,519 $3,417
======== ============== ==============
</TABLE>
Serva Acquisition
In May 1998, the Company purchased the assets of the Serva product
line from Boehringer Ingelheim Bioproducts Partnership ("Boehringer
Ingelheim") in Heidelberg, Germany. The purchase price was $1.5 million
comprised of $.8 million in cash, acquisition costs of $.2 million, and a
promissory note for $.5 million. The assets acquired include inventory and
property with an estimated fair value of $1.5 million. Revenues, expenses
and acquired assets relating to this product line are included in the
consolidated financial statements from the date of acquisition.
3. RELATED PARTY TRANSACTIONS
Investment in Morphagen, Inc.
In February 1997, the Company entered into an agreement with
Morphagen, Inc., a start-up company, for an initial investment of $500,000
in exchange for 109,850 shares of Series A Preferred Stock of Morphagen,
Inc. The former president of Morphagen, Inc. is the spouse of a member of
the board of directors of the Company. On November 3, 1998, the Company
acquired all of the outstanding common stock of Morphagen, Inc. which the
Company did not already own for 50,000 options to purchase company stock at
$8.50 per share. In connection with this acquisition, the Company recorded
$147,000 as additional paid-in capital representing the estimated fair
value of the options issued.
Research Genetics
Related party transactions consist of minor pass-through
arrangements with various start-up biotech companies in which the President
of Research Genetics holds a nominal equity interest.
Common Stock
In connection with the Company's recapitalization in 1997, all of
the Series A common stock and Series B common stock of the former
California Corporation were converted to the common stock of the new
Delaware corporation; accordingly, Series A common stock and Series B
common stock ceased to exist.
Series A
All outstanding shares of Series A common stock have been issued to
founders, directors, employees or consultants of the Company pursuant to
agreements which entitles the Company to repurchase the shares at the
current market value in the event of termination of employment.
Series B
All outstanding shares of Series B common stock have been issued to
the president and majority stockholder of the Company. The Series B common
stock has the same rights, preferences, privileges and restrictions of
Series A common stock except the Series B shares may not vote in the
election of directors of the Company. In 1997, the Company converted all
the outstanding Series B common stock to Series A common stock on a one to
one basis.
4. INVENTORIES
Inventories include material, labor and overhead costs and consist
of the following at December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998
--------- --------
<S> <C> <C>
Raw materials and components................................. $1,962 $1,787
Work in process.............................................. 1,082 1,217
Finished goods............................................... 4,446 2,943
--------- --------
$7,490 $5,947
========= ========
</TABLE>
5. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998
--------- ---------
<S> <C> <C>
Land......................................................... $5,592 $2,107
Building and improvements.................................... 5,845 5,304
Machinery and equipment...................................... 21,941 20,225
Leasehold improvements....................................... 1,969 1,516
Construction in process...................................... 10 302
--------- ---------
35,357 29,454
Accumulated depreciation and amortization.................... (13,775) (10,648)
--------- ---------
$21,582 $18,806
========= ========
</TABLE>
6. INTANGIBLE ASSETS
Intangible assets consist of the following at December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998
--------- ----------
<S> <C> <C> <C>
Licensing agreements (see Note 11)........................... $2,841 $984
Patents and trademarks....................................... 1,259 848
Genome libraries............................................. 806 350
Goodwill..................................................... 156 156
Other........................................................ 49 49
--------- ----------
5,111 2,387
Accumulated amortization..................................... (912) (407)
--------- ----------
$4,199 $1,980
========= ==========
</TABLE>
7. ACCRUED EXPENSES
Accrued expenses consist of the following at December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998
--------- ----------
<S> <C> <C>
Accrued purchases............................................ $733 $931
Accrued payroll and related expenses......................... 1,482 1,148
Accrued benefit plan contributions........................... 692 254
Accrued merger related costs................................. 1,661 -
Customer prepayments......................................... 171 192
Accrued other................................................ 442 561
--------- ----------
$5,181 $3,086
========= ==========
</TABLE>
8. LINES OF CREDIT
The Company has an available line of credit for advances up to $3
million. The credit facility bears interest at the bank's Libor rate (6.5%
at December 31, 1999) plus 2% or the bank's prime rate (8.5% at December
31, 1999). The line of credit expires on October 1, 2001. No amounts were
outstanding on this credit facility at December 31, 1999. The line is
collateralized by assets with a net book value of $135.5 million at
December 31, 1999. The line of credit agreement contains various normal and
customary financial covenants, which the Company was in compliance with for
all periods presented.
In February and March 2000, due to sufficient cash balances, the
Company terminated certain revolving line of credit facilities with banks
for advances totaling up to $2.7 million. At December 31, 1999, $415,000
was outstanding on these lines and $2,285,000 was available. The
outstanding balances on the lines were paid in full in January and March
2000.
9. LONG TERM OBLIGATIONS
The Company leases certain equipment under capital leases which are
due in aggregate monthly installments of $8,000 and mature at various dates
through November 2002. Property and equipment, net, at December 31, 1999
and 1998, include approximately $326,000 and $398,000, respectively, of
equipment under capital leases which have been capitalized.
Long term obligations consist of the following at December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998
--------- ---------
<S> <C> <C>
Notes payable to SouthTrust Bank, paid in full March 2000..... $8,855 $3,862
Bonds payable to State Industrial Development Authority of
Alabama, interest due monthly, principal due annually
through 2008, variable rate interest, supported by a
letter of credit for $3.6 million with a bank.............. 2,880 3,120
Note payable to Molecular Biology Resources, principal and
interest due annually through June 2003, with interest at
6%, supported by a standby letter of credit with a bank.... 1,030 -
Note payable to Boehringer Ingelheim, payable $500 plus
interest on December 31, 1999, with interest at 8%,
supported by a standby letter of credit with a bank,
paid in full January 2000.................................. 500
Other notes payable........................................... 30 1,668
Capital leases................................................ 172 138
--------- ---------
13,467 9,288
Less current maturities........................................ (6,211) (1,255)
--------- ---------
$7,256 $8,033
========= =========
</TABLE>
The bonds payable represent Variable Rate Industrial Development
Revenue Bonds issued for the benefit of Research Genetics. Improvements and
equipment acquired with the bond proceeds become the property of the
Industrial Development Board of the City of Huntsville, Alabama. The
Company has entered into a lease arrangement with the Board whereby the
property is leased for one dollar per year through January 1, 2008. The
company has an option to purchase the property from the Board for one
hundred dollars.
Maturities of long term obligations at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
Years Ending
(in thousands) December 31,
--------------
<C> <C>
2000................................................................ $6,211
2001................................................................ 1,375
2002................................................................ 1,234
2003................................................................ 1,124
2004................................................................ 853
Thereafter.......................................................... 2,670
--------------
$13,467
==============
</TABLE>
10. INCOME TAXES
Significant components of the Company's deferred tax assets and
liabilities are as follows at December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998
--------- ---------
Deferred tax assets:
<S> <C> <C>
Various accruals.......................................... $842 $743
Net operating loss and credit carryforwards............... 2,147 -
State taxes............................................... 66 91
Depreciation and amortization............................. 161 -
Reserves.................................................. 160 141
Other..................................................... 448 202
--------- ---------
Total deferred tax assets.................................... 3,824 1,177
Deferred tax liabilities:
Valuation allowance....................................... - -
Depreciation and amortization............................. (585) (336)
--------- ---------
Net deferred tax assets...................................... $3,239 $841
========= =========
</TABLE>
Income before income taxes includes the following components for
the years ended December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
United States..................................... $11,224 $7,395 $4,522
Foreign........................................... 2,615 1,112 741
--------- --------- ---------
$13,839 $8,507 $5,263
========= ========= =========
</TABLE>
The provision for income taxes consists of the following for the
years ended December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998 1997
--------- --------- ----------
Current:
<S> <C> <C> <C>
Federal........................................ $5,183 $2,040 $1,628
State.......................................... 1,103 414 363
Foreign........................................ 1,015 342 334
--------- --------- ----------
Total current provision........................... 7,301 2,796 2,325
Deferred:
Federal........................................ (2,165) 168 (344)
State.......................................... (357) 24 (135)
--------- --------- ----------
Total deferred provision.......................... (2,522) 192 (479)
--------- --------- ----------
Total provision................................... $4,779 $2,988 $1,846
========= ========= ==========
</TABLE>
The difference between the provision for income taxes and the
amounts that would be obtained by applying the Federal statutory rate to
income before income taxes relates primarily to the utilization of certain
tax credit and net operating loss carryforwards.
The provision for income taxes differs from the amount computed by
applying the federal statutory rate to the Company's income before
provision for income taxes as follows for the years ended December 31:
<TABLE>
<CAPTION>
(in thousands) 1999 1998 1997
---------- --------- --------
<S> <C> <C> <C>
Federal tax provision at statutory rate............... $4,702 $2,892 $1,790
State tax, net of federal benefit..................... 408 460 276
Foreign Sales Corporation Benefit..................... (98) (74) (39)
Research and development and other credits............ (384) (455) (280)
Change in valuation allowance......................... - (80) 26
Other................................................. 151 245 73
---------- --------- --------
Provision for income taxes............................ $4,779 $2,988 $1,846
========== ========= ========
</TABLE>
The tax benefit associated with the disqualifying dispositions by
employees of shares issued in the Company's stock options plans reduced
taxes payable by $6,200,000 and $138,000 for 1999 and 1998, respectively. A
portion of this benefit was utilized in the current year and has been
reflected as additional paid-in capital in the accompanying statement of
stockholders' equity.
11. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases certain equipment and its office and
manufacturing facilities under operating leases which expire through
September 2010. Certain rental commitments provide for specific escalating
rental payments and certain commitments have renewal options extending
through the year 2015. Rent expense under all operating leases was $1.2
million, $1.3 million and $1.0 million for the years ended December 31,
1999, 1998 and 1997, respectively.
Future minimum lease commitments for operating leases at December
31, 1999 are as follows:
<TABLE>
<CAPTION>
(in thousands)
Years Ending December 31,
<C> <C>
2000................................................................. $1,475
2001................................................................. 1,490
2002................................................................. 1,326
2003................................................................. 1,335
2004................................................................. 1,388
Thereafter........................................................... 6,209
-------------
Total minimum lease payments...................................... $13,223
=============
</TABLE>
Licensing Agreements
The Company manufactures and sells certain products under several
licensing agreements. The agreements require royalty payments based upon
various percentages of sales or profits from the products. Terms of the
agreements generally range from the remaining life of the patent up to
twenty years and initial costs are amortized over their terms using the
straight-line method. Total royalties paid under the agreements were
approximately $1.2 million, $1.4 million and $1.1 million for the years
ended December 31, 1999, 1998 and 1997, respectively.
Certain of the licensing agreements require guaranteed minimum
annual royalty payments, to maintain exclusivity. Future minimum guaranteed
royalties at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
(in thousands)
Years Ending December 31,
<C> <C>
2000....................................................................... $643
2001....................................................................... 708
2002....................................................................... 693
2003....................................................................... 696
2004....................................................................... 660
Thereafter................................................................. 2,682
-------
$6,082
=======
</TABLE>
Purchase Commitments
The Company has minimum purchase commitments for inventory from
certain vendors. Future minimum guaranteed minimum purchase commitments at
December 31, 1999 are as follows:
<TABLE>
<CAPTION>
(in thousands)
Years Ending December 31,
<C> <C>
2000....................................................................... $812
2001....................................................................... 837
2002....................................................................... 987
2003....................................................................... 1,026
2004....................................................................... 1,000
Thereafter................................................................. 1,871
-------
$6,533
=======
</TABLE>
Litigation
The Company and its subsidiaries are subject to claims and from
time to time are named as defendants in legal proceedings. In the opinion
of management, the amount of ultimate liability, if any, with respect to
those actions will not materially affect the financial position or results
of operations of the Company.
Hedging
At December 31, 1999 the Company had outstanding put options to
sell 1.7 million pounds sterling at $1.63 per pound. Additionally, the
Company had outstanding call options to purchase 1.7 million pounds
sterling at $1.66 per pound. These contracts expire monthly through
December 2000. The above contracts had no net value at December 31, 1999.
12. REDEEMABLE COMMON STOCK OF INVITROGEN B.V.
Effective February 26, 1993, Invitrogen B.V. entered into a money
loan agreement with N.V. Noordelijke Ontwikkelingsmaatschappij, Investment
and Development Company for the Northern Netherlands ("NOM"). As of
December 31, 1994, the due date of the Loan, the Company had borrowed
$618,000, at a 15% effective interest rate, under the agreement which had
provisions by which NOM could convert its loan balance to Invitrogen B.V.
common stock. On April 7, 1995, the Company, Invitrogen B.V. and NOM
entered into a Shareholders' Agreement. As a result, Invitrogen B.V. issued
18,000 shares of non-voting redeemable common stock to NOM in exchange for
NLG 1.8 million. The proceeds from the issuance of the non-voting
redeemable common stock were utilized to retire the outstanding debt of
$618,000 (NLG 1.2 million). The Company redeemed all of the shares on April
7, 1999 for the redemption amount of NLG 3,150,000 (USD $1,507,000).
The excess of the redemption value over the issue price was
accredited by periodic charges to equity over the life of the issue through
April 7, 1999.
13. PREFERRED STOCK
Authorized Shares
The Company has authorized 6,405,884 shares of preferred stock,
designated as follows:
<TABLE>
<CAPTION>
SHARES
----------
<S> <C>
Series A cumulative convertible redeemable preferred stock.............. 2,202,942
Series A redeemable preferred stock..................................... 2,202,942
Undesignated preferred stock............................................ 2,000,000
----------
Total preferred shares.................................................. 6,405,884
==========
</TABLE>
The Series A Cumulative Convertible Redeemable Preferred Stock
("Convertible Preferred Stock") accrues dividends at a rate of 6% per annum
and has a liquidation preference of $6.8091 per share plus accrued and
unpaid dividends. Additionally, the Convertible Preferred Stock entitles
the holder thereof to elect one director of the Company and vote on certain
other significant transactions, voting together as one separate class. The
Convertible Preferred Stock may be voluntarily converted upon the election
of holders of not less than 66.67% of the voting power of this stock. The
rate at which the Convertible Preferred Stock converts to common stock is
automatically adjusted in the event of most future issuances of equity
securities by the Company below the original purchase price of the
Convertible Preferred Stock. After June 18, 2003, any holders of the
Convertible Preferred Stock have the right to require the Company to redeem
their shares for the original purchase price plus accrued dividends. There
were no shares of Convertible Preferred Stock outstanding at December 31,
1999.
The Series A Redeemable Preferred Stock ("RPS") accrues dividends
at 3% per annum and entitles the holder thereof to one vote per outstanding
share in the election of one director of the Company, voting together as a
separate class. The RPS is redeemable upon the occurrence of a qualified
public offering or sale or other qualified event. Upon liquidation, the RPS
is entitled to be paid out of the assets of the Company at the redeemable
base liquidation amount (original issue price of $6.8091 per share plus
accrued dividends) per share determined at the measurement date. There were
no shares of RPS outstanding at December 31, 1999.
Issued Shares
On June 20, 1997, the Company entered into a stock purchase
agreement with a group of three investors ("Investors"). The Company sold
2,202,942 shares of Convertible Preferred Stock at $6.8091 per share to the
Investors in exchange for $14,766,000, net of issuance costs. Additionally,
the Company repurchased and retired 1,101,471 shares of the Company's
common stock at $6.8091 per share, representing the fair value of these
shares, from certain stockholders of the Company in exchange for $7.5
million. In accordance with EITF D-60, the maximum possible premium to
holders of convertible preferred stock ($15 million) was recognized as a
beneficial conversion feature through a charge to equity on June 20, 1997,
the date the Convertible Preferred Stock first became convertible. This $15
million charge has been recognized as a reduction to earnings available to
common stockholders in 1997.
Subsequent Conversion and Redemption
In February 1999, upon the closing of the Company's IPO (see Note
14), each of the 2,202,942 outstanding shares of Convertible Preferred
Stock were automatically converted into 2,202,942 shares of common stock
and 2,202,942 shares of RPS. At the closing of the IPO, the RPS was
redeemed for $14,015,000 and accumulated dividends on the Convertible
Preferred Stock of $1,538,000 were paid. Upon determination of the final
redemption price of $14,015,000 at the IPO a credit to equity of $985,000
was recorded which has been reported as an adjustment to Income Available
to Common Stockholders in the income statement for the quarter ended March
31, 1999.
14. COMMON STOCK, INITIAL PUBLIC OFFERING AND SECONDARY STOCK OFFERING
Authorized Shares
In November 1998, the Company amended its bylaws to reflect an
increase of authorized shares of common stock from 20,000,000 to
50,000,000.
Stock Split
On June 20, 1997, the Company approved a recapitalization which
authorized 20,000,000 shares of common stock and a stock split that
converted each share of Class A and Class B stock into seven shares of
common stock of the Company. All prior period share amounts have been
restated to reflect the stock split.
Initial Public Offering
In February 1999, the Company completed its initial public offering
and issued 3,525,000 newly issued shares of its Common Stock at a price of
$15.00 per share. The Company received $48.1 million in cash, net of
underwriting discounts, commissions and other offering costs.
Secondary Stock Offering
In November 1999, the Company completed a secondary stock offering
and issued 2,400,000 newly issued shares of its Common Stock at a price of
$25.00 per share. The Company received $56.5 million in cash, net of
underwriting discounts, commissions and offering costs.
15. EARNINGS (LOSS) PER SHARE
Earnings loss per share is calculated as follows for the years
ended December 31:
<TABLE>
<CAPTION>
1999
------------- ---------------- - ----------
INCOME SHARES
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- --------------- ----------
(in thousands, except per share amounts)
Basic EPS:
<S> <C> <C> <C>
Income available to common stockholders $9,808 19,069 $0.51
Stock options......................... 2,560 ==========
------------- ---------------
Diluted EPS:
Income available to common stockholders
plus assumed conversions........... $9,808 21,629 $0.45
============= =============== ==========
1998
------------- ---------------- ----------
INCOME SHARES
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- --------------- ----------
(in thousands, except per share amounts)
Basic EPS:
Income available to common stockholders $4,415 15,352 $0.29
Stock options......................... 1,731 ==========
------------- ---------------
Diluted EPS:
Income available to common stockholders
plus assumed conversions........... $4,415 17,083 $0.26
============= =============== ==========
1997
------------- ---------------- - ----------
INCOME SHARES
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- --------------- ----------
(in thousands, except per share amounts)
Basic and Diluted EPS:
Loss available to common stockholders. $(12,233) 14,661 $(0.83)
============= =============== ==========
</TABLE>
-----------
(1) In accordance with SAB Topic 4D, the Company considers any common
stock issuable upon the occurrence of an IPO for little or no
consideration as a nominal issuance. In accordance with the above
bulletin, the Company has considered 2,202,942 common shares
issuable in connection with the conversion of convertible preferred
stock to be a nominal issuance and outstanding for all periods
since the original issuance of the underlying security.
16. EMPLOYEE BENEFIT PLANS
Employee Stock Ownership Plans
The Company previously had an Employee Stock Ownership Plan
("ESOP") for the benefit of all Invitrogen employees. The ESOP was
terminated as of December 31, 1998 and the assets of the ESOP were
distributed to the participants or rolled into the Invitrogen 401(k) plan
or other qualified retirement plans as designated by the participants in
December 1999 and January 2000. Contributions of $100,000 were designated
for the ESOP for each of the years ended December 31, 1998 and 1997.
The Company also has a 401(k)/ESOP plan covering all NOVEX
employees. The 401(k)/ESOP plan was terminated as of December 31, 1999.
Upon receipt of the IRS Determination Letter, the Company intends to
distribute the assets to the participants or roll those assets into the
Invitrogen 401(k) plan or other qualified retirement plans as designated by
the participants. Previous contributions to the 401(k)/ESOP were based upon
a Company match of employee 401(k) salary deferrals, as well as a
discretionary percentage of eligible participants' total compensation. The
Company made contributions of $117,000, $136,000 and $383,000 for the years
ended December 31, 1999, 1998 and 1997, respectively.
Section 401(k) Profit Sharing Plan
The Company has a profit sharing plan which allows each
eligible employee to voluntarily make pre-tax deferred salary
contributions. The Company may make matching contributions in amounts as
determined by the board of directors. The Company made matching
contributions of approximately $313,000, $179,000 and $134,000, for the
years ended December 31, 1999, 1998 and 1997, respectively.
The Company also has a 401(k) profit sharing plan that
covers all Research Genetics employees who meet minimum participation
requirements. Annual compensation may be deferred up to the maximum
prescribed by the Internal Revenue Code. The Company contributes an amount
equal to 50% of the first 5% of the participant's pre-tax contribution.
Matching contributions for the years ended December 31, 1999, 1998 and 1997
were $91,000, $71,000 and $49,000, respectively. The Company intends to
terminate this plan and to distribute the assets to the participants or
roll those assets into the Invitrogen 401(k) plan or other qualified
retirement plans as designated by the participants.
Employee Stock Purchase Plan
The Company has an employee stock purchase plan which became
effective upon the Company's initial public offering in February 1999.
During 1999 employees purchased 34,191 shares at an average price of $12.86
per share. As of December 31, 1999 there were 215,809 shares of the
Company's common stock reserved for future issuance under the plan.
17. STOCK OPTION PLANS
The Company has five stock option plans, the 1995, 1997 and
2000 Invitrogen Corporation Stock Option Plans and the 1996 and 1998 NOVEX
Stock Option/Stock Issuance Plans. Under these plans, incentive stock
options and non-qualified stock options are granted to eligible employees
to purchase shares of the Company's common stock at an exercise price equal
to no less than the estimated fair market value of such stock as determined
by the Board of Directors on the date of grant.
The Company recognizes as compensation expense any
difference between the exercise price and the fair market value of the
common stock on the date of grant based on subsequent valuations of the
stock. Stock based compensation expense is deferred and recognized over the
vesting period of the stock option. During the years ended December 31,
1999, 1998 and 1997 the Company recognized $322,000, $216,000 and $169,000,
respectively, in stock based compensation expense.
The Company has adopted the disclosure only provisions of
Statement of Financial Accounting Standards No 123, "Accounting for
Stock-Based Compensation." Accordingly, no compensation cost has been
recognized for the fixed stock option or stock purchase plans. Had
compensation cost for the Company's stock-based compensation plans been
determined based on the fair value at the grant dates for awards under
those plans consistent with the method of SFAS 123, the Company's results
of operations would have been reduced to the pro forma amounts indicated
below:
<TABLE>
<CAPTION>
(in thousands, except per share amounts) 1999 1998 1997
-------- -------- ----------
<S> <C> <C> <C>
Income (loss) available to common stockholders:
As reported............................... $9,808 $4,415 $(12,223)
Pro forma................................. 7,781 4,181 (12,247)
Basic earnings per share:
As reported............................... $0.51 $0.29 $(0.83)
Pro forma................................. 0.41 0.27 (0.84)
Diluted earnings per share:
As reported............................... $0.45 $0.26 $(0.83)
Pro forma................................. 0.36 0.24 (0.84)
</TABLE>
Under these four Plans, the Company may grant up to
5,962,875 options, of which 3,430,800 are outstanding and 1,365,359 are
available for future issuance at December 31, 1999. Options vest
immediately or over a period of time ranging up to five years, are
exercisable in whole or in installments, and expire ten years from date of
grant.
A summary of the status of the Company's stock option plans
at December 31, 1997, 1998 and 1999 and changes during the periods then
ended is presented in the tables below:
<TABLE>
<CAPTION>
(in thousands, except per share amounts) WTD. AVG.
SHARES EX. PRICE
-------- ------------
<S> <C> <C>
Outstanding at December 31, 1996...................... 3,605 $1.01
Granted....................................... 393 $3.88
Exercised..................................... (179) $0.90
Canceled...................................... (1,579) $0.90
--------
Outstanding at December 31, 1997...................... 2,240 $1.60
Granted....................................... 1,429 $8.00
Exercised..................................... (20) $1.66
Canceled...................................... (29) $2.80
--------
Outstanding at December 31, 1998...................... 3,620 $4.12
Granted....................................... 1,155 $25.69
Exercised..................................... (953) $2.75
Canceled...................................... (391) $15.89
--------
Outstanding at December 31, 1999...................... 3,431 $10.40
--------
Exercisable at December 31, 1999...................... 1,540 $4.76
</TABLE>
At December 31, 1999:
(options in thousands)
WTD. AVG.
REMAINING
OPTIONS OPTIONS EXERCISE CONTRACTUAL
OUTSTANDING EXERCISABLE PRICE LIFE IN YEARS
--------------- -------------- ---------------- --------------
1,024 916 $0.84-$1.78 5.1
1,108 403 $3.28-$8.63 8.0
489 110 $12.00-$19.44 9.0
787 111 $24.56-$29.75 9.6
23 $47.88-$48.00 10.0
--------------- --------------
3,431 1,540 $10.40 7.7
--------------- -------------- ---------------- --------------
The fair value of each option grant is estimated on the date
of grant using the present value pricing method as described in SFAS No.
123. The underlying assumptions used to estimate the fair values of options
granted during the years ended December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Weighted average risk free interest rate......... 5.55% 5.48% 5.89%
Expected option life............................. 5.4 yrs 8.7 yrs 7.0 yrs
Expected stock price volatility.................. 45% 0% 0%
Expected dividend yield.......................... - - -
Weighted average fair value of options granted... $12.47 $3.04 $1.26
</TABLE>
18. SUBSEQUENT EVENT
Convertible Subordinated Notes
In March 2000, we issued $172.5 million principal amount of
5.5% convertible subordinated notes (the "Convertible Notes") due March 1,
2007. After expenses, the company received net proceeds of $167.0 million.
Interest on the Convertible Notes is payable semi-annually on March 1st and
September 1st, commencing in September 2000. The notes were issued at 100%
of principal value, and are convertible into 2,024,648 shares of stock at
the option of the holder at any time at a price of $85.20 per share. The
notes may be redeemed, in whole or in part, at our option on or after March
1, 2003 at a premium of 103.143% of par value which declines annually to
par value at maturity date.
Costs incurred to issue the debt will be deferred and
included in other assets in the consolidated balance sheet. These costs
will be amortized over the term of the related debt using the effective
interest method.
The Convertible Notes are subordinate to substantially all
of the current and future outstanding debt of Invitrogen, including all our
secured debt and all debts and liabilities of our subsidiaries. The
Convertible Notes are not subordinate to amounts we owe for employee
compensation, goods or services we purchase or to amounts we may owe to our
subsidiaries.
<TABLE>
<CAPTION>
INVITROGEN CORPORATION AND SUBSIDIARIES INTERIM CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value data)
MARCH 31, DECEMBER 31,
2000 1999
------------ -------------
(UNAUDITED) (AUDITED)
ASSETS
Current Assets:
<S> <C> <C>
Cash and cash equivalents...................................... $265,411 $102,221
Accounts and notes receivable, net of allowance for doubtful
accounts of $835............................................. 14,092 11,518
Inventories.................................................... 7,536 7,490
Deferred income taxes.......................................... 11,923 3,561
Prepaid expenses and other current assets...................... 3,770 5,547
------------ -------------
Total current assets.............................. 302,732 130,337
Property and Equipment, net...................................... 22,833 21,581
Intangible Assets, net........................................... 4,124 4,199
Deferred income taxes............................................ 117 117
Other Assets..................................................... 5,859 441
------------ -------------
Total assets...................................... $335,665 $156,675
------------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable to bank.......................................... $-- $415
Current portion of long term obligations....................... 813 6,211
Accounts payable............................................... 2,456 4,300
Accrued expenses............................................... 7,055 5,181
Income taxes payable........................................... 766 1,681
------------ -------------
Total current liabilities......................... 11,090 17,788
------------ -------------
Long term obligations............................................ 3,024 7,695
------------ -------------
5.5% Convertible subordinated notes due March 1, 2007............ 172,500
------------ -------------
Commitments and contingencies
Stockholders' Equity:
Common stock; $0.01 par value, 50,000,000 shares authorized;
23,297,420 and 22,271,140 shares issued and
outstanding at March 31, 2000 and December 31,
1999, respectively................................ 233 223
Additional paid-in-capital..................................... 140,937 121,269
Deferred compensation.......................................... (595) (746)
Accumulated other comprehensive loss........................... (730) (520)
Retained earnings.............................................. 9,206 10,966
------------ -------------
Total stockholders' equity........................ 149,051 131,192
------------ -------------
Total liabilities and stockholders' equity........ $335,665 $156,675
------------ -------------
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
<TABLE>
<CAPTION>
INVITROGEN CORPORATION AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
2000 1999
---------- ----------
FOR THE THREE MONTHS
ENDED
MARCH 31,
-------------------------
<S> <C> <C>
Revenues............................................................... $27,286 $21,585
Cost of Revenues....................................................... 9,090 8,097
---------- ----------
Gross margin........................................................ 18,196 13,488
Operating Expenses:
Sales and marketing................................................. 4,778 3,995
General and administrative.......................................... 3,595 3,036
Research and development............................................ 3,521 3,455
Merger costs........................................................ 6,427 --
---------- ----------
Total operating expenses............................................ 18,321 10,486
---------- ----------
Income (loss) from operations.................................... (125) 3,002
---------- ----------
Other Income (Expense):
Net losses on foreign currency transactions......................... (157) (61)
Interest and other expense.......................................... (1,036) (183)
Interest and other income........................................... 2,005 229
---------- ----------
812 (15)
---------- ----------
Income before provision for income taxes............................... 687 2,987
Provision for income taxes............................................. 2,447 1,093
Net income (loss)...................................................... (1,760) 1,894
Less: Preferred stock dividends..................................... - (163)
Accretion of non-voting redeemable common stock.................. - (56)
---------- ----------
Adjustment to beneficial conversion feature related to
convertible preferred stock................................. - 985
---------- ----------
Net income (loss) applicable to common shares.................... $(1,760) $2,660
---------- ----------
Earnings (loss) per share:
Basic............................................................... $(0.08) $0.16
---------- ----------
Diluted............................................................. $(0.08) $0.14
---------- ----------
Weighted average shares used in per share calculation:
Basic............................................................... 22,776 16,628
Diluted............................................................. 22,776 18,914
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<TABLE>
<CAPTION>
INVITROGEN CORPORATION AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Dollars in thousands)
2000 1999
----------- -----------
FOR THE THREE MONTHS
ENDED MARCH 31,
-------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss)................................................. $(1,760) $1,894
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization..................................... 1,240 954
Amortization of deferred compensation............................. 46 131
Deferred income taxes............................................. 3,298 (25)
Non-cash merger related costs..................................... 2,208 -
Other non-cash adjustments........................................ 21 (266)
Changes in operating assets and liabilities:
Accounts receivable............................................ (2,857) (2,356)
Inventories.................................................... (132) 16
Prepaid expenses and other current assets...................... 1,762 (552)
Other assets................................................... 81 236
Accounts payable............................................... (1,819) (624)
Accrued expenses............................................... 2,082 333
Income taxes payable........................................... (899) 458
----------- -----------
Net cash provided by operating activities................... 3,271 199
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment received on note receivable from officer.................. - (500)
Purchases of property and equipment............................... (2,445) (1,247)
Payments for intangible assets.................................... (96) (312)
Investment in related party....................................... (3)
----------- -----------
Net cash used in investing activities............................. (2,544) (2,059)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances (principal payments) on lines of credit, net............. (415) 2,003
Proceeds from long term obligations............................... 166,999 -
Principal payments on long term obligations....................... (9,641) (288)
Proceeds from sale of common stock................................ 5,476 48,569
----------- -----------
Redemption of preferred and common stock and payment of accrued - (15,553)
dividends......................................................
----------- -----------
Net cash provided by financing activities................... 162,419 34,731
Effect of exchange rate changes on cash........................... 44 (33)
----------- -----------
Net increase in cash and cash equivalents................... 163,190 32,838
Cash and cash equivalents, beginning of period.................... 102,221 6,543
----------- -----------
Cash and cash equivalents, end of period.......................... $265,411 $39,381
----------- -----------
NONCASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for merger costs..................................... $2,208 $ -
----------- -----------
Conversion of Convertible Redeemable Preferred Stock into
Redeemable Preferred Stock....................................... $ - $14,015
----------- -----------
Conversion of Redeemable Preferred Stock into Common Stock........ $ - $751
----------- -----------
Preferred dividends declared...................................... $ - $163
----------- -----------
Accretion of redemption value for redeemable common stock......... $ - $56
----------- -----------
Accretion of beneficial conversion feature of convertible
preferred stock ................................................ $ - $985
----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
----------- -----------
Cash paid for interest............................................ $171 $141
----------- -----------
Cash paid for income taxes........................................ $74 $706
----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
INVITROGEN CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
GENERAL
The consolidated financial statements include the accounts of
Invitrogen Corporation and its 100% controlled subsidiaries, Invitrogen
B.V., Invitrogen Export Company, Ltd., NOVEX Electrophoresis GmbH (formerly
known as Anamed GmbH), Serva GmbH, NOVEX International Sales Corporation,
and Research Genetics, Inc. All significant intercompany accounts and
transactions have been eliminated in consolidation. The interim financial
statements have been prepared by Invitrogen, without audit, according to
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, the accompanying unaudited
financial statements contain all adjustments, which include only normal
recurring adjustments, necessary to state fairly the financial position,
results of operations and cash flows as of and for the periods indicated.
It is suggested that these financial statements be read in
conjunction with the audited financial statements and the notes thereto
included in our form 10-K, filed with the Securities and Exchange
Commission on March 14, 2000.
Reclassifications
Certain reclassifications of prior year amounts have been made to
conform to the current year presentation.
1. INVENTORIES
Inventories include material, labor and overhead costs and consist
of the following:
<TABLE>
<CAPTION>
(in thousands) MARCH 31, DECEMBER 31,
2000 1999
----------- --------------
<S> <C> <C>
Raw materials and components Inc..................... $1,563 $2,186
Work in process...................................... 1,948 1,175
Finished goods....................................... 4,025 4,129
----------- --------------
$7,536 $7,490
</TABLE>
2. ACCUMULATED DEPRECIATION AND AMORTIZATION
Accumulated depreciation and amortization of property, plant and
equipment was $14.8 million and $13.8 million at March 31, 2000 and
December 31, 1999, respectively. Accumulated amortization of intangible
assets was $1.1 million and $.9 million at March 31, 2000 and December 31,
1999.
3. EARNINGS (LOSS) PER SHARE
Earnings (loss) per share is calculated as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 2000
---------------- ------------------ ----------
INCOME SHARES
(NUMERATOR) (DENOMINATOR) AMOUNT
---------------- ---------------- ----------
(in thousands, except per share amounts)
Basic and Diluted EPS:
<S> <C> <C> <C>
Income (loss) available to common stockholders $(1,760) 22,776 $(0.08)
---------------- ---------------- ----------
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, 2000
---------------- ----------------- -- ----------
INCOME SHARES
(NUMERATOR) (DENOMINATOR) AMOUNT
---------------- --------------- ----------
(in thousands, except per share amounts)
Basic EPS:
<S> <C> <C> <C>
Income available to common stockholders $2,660 16,628 $0.16
----------
Stock options......................... 2,286
---------------- ---------------
Diluted EPS:
Income available to common stockholders $2,660 18,914 $0.14
plus assumed conversions......
---------------- --------------- ----------
</TABLE>
4. COMPREHENSIVE INCOME (LOSS)
Total comprehensive loss for the three months ended March 31, 2000
was $2.0 million and total comprehensive income for the three months ended
March 31, 1999 was $1.7 million, respectively. The adjustments to income or
loss to arrive at total comprehensive income or loss for the three months
ended March 31, 2000 and 1999 were $209,865, and $212,260, respectively,
and represent foreign currency translation adjustments.
5. RESEARCH GENETICS MERGER
On February 2, 2000, the Company completed a merger with Research
Genetics, a privately held U.S. company that supplies products and services
for functional genomics and gene-based drug discovery research. The Company
issued 3.2 million shares of common stock for all of the outstanding common
stock of Research Genetics. The merger has been accounted for as a pooling
of interests and is intended to qualify as a tax-free exchange. Costs
incurred as a result of the merger and related integration are expected to
be $6.4 million and are subject to change. These costs were expensed in
February 2000 upon completion of the merger. As of March 31, 2000 the
company had $.5 million remaining in accrued merger related costs.
The combined financial information is presented to show the
combined results of operations of Invitrogen and Research Genetics as if
the merger had occurred at the beginning of the periods presented.
6. ISSUANCE OF CONVERTIBLE SUBORDINATED DEBT
In March 2000, the Company issued $172.5 million principal amount
of 5.5% convertible subordinated notes (the "Convertible Notes") due March
1, 2007. After expenses, the Company received net proceeds of $167.0
million. Interest on the Convertible Notes is payable semi-annually on
March 1st and September 1st, commencing in September 2000. The notes were
issued at 100% of principal value, and are convertible into 2,024,648
shares of stock at the option of the holder at any time at a price of
$85.20 per share. The notes may be redeemed, in whole or in part, at our
option on or after March 1, 2003 at a premium of 103.143% of par value
which declines annually to par value at maturity date.
Costs incurred to issue the debt have been deferred and are
included in other assets in the consolidated balance sheet. These costs are
being amortized over the term of the related debt using the effective
interest method.
The Convertible Notes are subordinate to substantially all of the
current and future outstanding debt of Invitrogen, including all our
secured debt and all debts and liabilities of our subsidiaries. The
Convertible Notes are not subordinate to amounts we owe for employee
compensation, goods or services we purchase or to amounts we may owe to our
subsidiaries.
7. SUBSEQUENT EVENT
In July 2000, the Company signed a definitive agreement to acquire
all of the outstanding shares of both Life Technologies, a supplier of
molecular biology and cell culture products for the life sciences industry,
and Dexter Corporation, which currently owns approximately 75% of the Life
Technologies outstanding stock.
Under the terms of the agreements, the Company will acquire all of
the outstanding common stock of Dexter for $62.50 per share or
approximately $1.5 billion and all of the outstanding common stock of Life
Technologies, other than the shares held by Dexter, for $60.00 per share or
approximately $400 million. The consideration will consist of Invitrogen
common stock and cash. The maximum cash available is approximately $410
million for Dexter stockholders and approximately $105 million for Life
Technologies stockholders, or 28% of the aggregate merger consideration for
each company.
Dexter stockholders who elect to receive stock will receive between
1.0417 and 0.7813 shares of Invitrogen common stock per Dexter share and
Life Technologies stockholders who elect to receive stock will receive
between 1.0000 and 0.7500 shares of Invitrogen common stock per Life
Technologies share. The ratio will be determined based on the average
closing price of Invitrogen's common stock for the 20 consecutive trading
days ending three days prior to the shareholder meetings to approve the
transactions. The company will assume the outstanding options of Life
Technologies which will be converted into options to purchase approximately
800,000 shares of common stock of the Company.
The transaction will be accounted for as a purchase. Consummation
of the transaction is subject to the closing of the previously announced
pending sales of Dexter's chemical businesses and usual and customary
closing conditions and approvals including the approval of both companies'
stockholders and regulatory approvals, and is expected to close in the Fall
of 2000. The estimated direct costs of the transaction to be incurred by
Invitrogen and included in the purchase price of the transaction are
estimated to be $36.4 million and are subject to change. Certain costs
associated with the restructuring of existing Invitrogen operations and
costs necessary to integrate the businesses of Invitrogen and Life
Technologies that are expected to benefit future operations are estimated
to range from $5 million to $10 million. These estimated costs will be
expensed as restructuring costs after the completion of the mergers and
after management has completed and approved the restructuring plans and
associated costs.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of
Life Technologies, Inc.
In our opinion, the accompanying consolidated balance sheets and related
consolidated statements of income, comprehensive income, changes in
stockholders' equity and cash flows present fairly, in all material
respects, the consolidated financial position of Life Technologies, Inc.
and subsidiaries at December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States. These financial statements are the
responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States, which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
McLean, Virginia
January 24, 2000
<TABLE>
<CAPTION>
LIFE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
(amounts in thousands, except share data)
December 31, 1999 1998
==============================================================================================
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 51,489 $ 56,047
Trade accounts receivable, net 79,301 67,797
Inventories:
FIFO 84,172 75,739
LIFO reserve (1,226) (1,420)
----------------------------------------------------------------------------------------------
Total inventory 82,946 74,319
Prepaid and other current assets 17,384 16,121
Current deferred tax assets 8,491 5,871
----------------------------------------------------------------------------------------------
Total current assets 239,611 220,155
Property, plant and equipment, net 128,827 107,374
Investments and other assets 22,973 15,392
Excess of cost over net assets of businesses
acquired, net 11,560 10,666
----------------------------------------------------------------------------------------------
Total assets $402,971 $353,587
==============================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 848 $ 2,210
Accounts payable 28,364 23,916
Accrued and deferred income taxes 11,145 2,755
Accrued liabilities and expenses 27,494 30,871
----------------------------------------------------------------------------------------------
Total current liabilities 67,851 59,752
Long-term debt 3,259 -
Pension liabilities 11,471 9,103
Deferred income taxes 6,164 5,173
Minority interests 4,131 3,451
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, one million
shares authorized; none issued
Common stock, $.01 par value, 50 million shares
authorized; issued and outstanding 25,003,681
in 1999 and 24,941,180 in 1998 250 249
Additional paid-in capital 96,362 94,067
Retained earnings 223,986 188,202
Accumulated other comprehensive income (loss) (10,503) (6,410)
----------------------------------------------------------------------------------------------
Total stockholders' equity 310,095 276,108
----------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $402,971 $353,587
==============================================================================================
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
LIFE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(amounts in thousands, except per share data)
For the years ended December 31, 1999 1998 1997
==============================================================================================
Revenues:
<S> <C> <C> <C>
Net sales $407,199 $361,726 $330,967
Net royalties 2,410 2,480 1,841
----------------------------------------------------------------------------------------------
Total revenues 409,609 364,206 332,808
----------------------------------------------------------------------------------------------
Expenses:
Cost of sales 186,667 167,862 152,547
Marketing and administrative 138,795 118,620 108,046
Research and development 23,836 21,880 21,281
Provision for contract settlement 3,870 - -
Shareholder acquisition expenses - 5,335 -
----------------------------------------------------------------------------------------------
Total operating expenses 353,168 313,697 281,874
----------------------------------------------------------------------------------------------
Operating income 56,441 50,509 50,934
----------------------------------------------------------------------------------------------
Other income, net 493 606 404
----------------------------------------------------------------------------------------------
Income before income taxes 56,934 51,115 51,338
Income taxes 17,583 19,168 18,481
----------------------------------------------------------------------------------------------
Income before minority interests 39,351 31,947 32,857
Minority interests 1,074 644 622
----------------------------------------------------------------------------------------------
Net income $ 38,277 $ 31,303 $ 32,235
==============================================================================================
Earnings per share:
Basic $ 1.53 $ 1.32 $ 1.39
Diluted $ 1.53 $ 1.29 $ 1.35
Average shares outstanding:
Basic 24,954 23,687 23,171
Diluted 25,040 24,204 23,945
Cash dividends declared per share $ .10 $ .20 $ .18
==============================================================================================
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
LIFE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(amounts in thousands)
For the years ended December 31, 1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Net income $38,277 $31,303 $32,235
Other comprehensive income (loss)
Currency translation effects (4,082) 1,292 (8,414)
Minimum pension liability (11) - -
----------------------------------------------------------------------------------------------
Comprehensive income $34,184 $32,595 $23,821
==============================================================================================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
<CAPTION>
LIFE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(amounts in thousands, except per share data)
Accumulated
Other
Additional Comprehensive
Common Stock Paid-in Retained Income
Shares Amount Capital Earnings (Loss) Total
Balances at
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996 22,951 $230 $48,344 $133,633 $712 $182,919
Net income 32,235 32,235
Dividends-$.18 per share (4,179) (4,179)
Shares issued under
stock option and stock
grant plans 400 4 4,124 4,128
Tax benefit on stock
option plans 2,035 2,035
Currency effects (8,414) (8,414)
-------------------------------------------------------------------------------------------------
Balances at
December 31, 1997 23,351 234 54,503 161,689 (7,702) $208,724
Net income 31,303 31,303
Dividends-$.20 per share (4,790) (4,790)
Shares issued under
stock option and stock
grant plans 1,590 15 28,585 28,600
Tax benefit on stock
option plans 10,979 10,979
Currency effects 1,292 1,292
-------------------------------------------------------------------------------------------------
Balances at
December 31, 1998 24,941 249 94,067 188,202 (6,410) $276,108
Net income 38,277 38,277
Dividends-$.10 per share (2,493) (2,493)
Shares issued under
stock option and stock
grant plans 63 1 1,643 1,644
Tax benefit on stock
option plans 652 652
Other comprehensive income:
Minimum pension liability (11) (11)
Currency Effects (4,082) (4,082)
-------------------------------------------------------------------------------------------------
Balances at
December 31, 1999 25,004 $250 $96,362 $223,986 $(10,503) $310,095
=================================================================================================
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF CONSOLIDATION AND PRESENTATION
The consolidated financial statements include the accounts of Life
Technologies, Inc. (the "Company" or "Life Technologies") and its majority
owned or controlled subsidiaries. Intercompany accounts, transactions, and
profits have been eliminated in the consolidated financial statements.
Investments in affiliated companies (20% to 50% Life Technologies'
ownership) are recorded in the consolidated financial statements using the
equity method of accounting except in cases where the Company can
effectively exercise control. In these cases, the accounts of the affiliate
are included in the Company's consolidated financial statements. Certain
amounts for prior years have been reclassified to conform to, and be
consistent with, the 1999 presentation.
Management has made estimates and assumptions in the preparation of these
financial statements that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from
those estimates.
NATURE OF OPERATIONS
Life Technologies is a multinational firm that develops, manufactures, and
sells cell culture and cell and molecular biology products used principally
in life sciences research and commercial manufacture of genetically
engineered products. The Company's principal customers consist of
laboratories generally associated with universities, medical research
centers, and government institutions as well as biotechnology,
pharmaceutical, energy, agricultural and chemical companies.
BUSINESS ACQUISITIONS
On May 17, 1999, the Company acquired the process chromatography and
research products businesses of BioSepra Inc., in an all cash transaction
of $11.6 million, including transaction costs and net of cash acquired.
Based upon the net assets purchased and the net cash paid of $11.6 million,
the Company recorded $2.3 million of goodwill, $2.0 million of deferred tax
assets consisting of net operating loss carryforwards, net of a valuation
allowance, and $2.9 million of other intangibles. The intangibles are being
amortized over a ten year period on a straight-line basis.
In January 1996, the Company paid $7.1 million to purchase 75% of the
common stock of Custom Primers, Inc. ("CPI"), a California-based producer
of oligonucleotides, increasing the Company's ownership to 100%. The
Company had acquired 25% of CPI in several transactions prior to 1996
valued at $0.8 million. Based upon the net assets purchased in January 1996
and the total cash paid of $7.9 million, the Company recorded $7.4 million
of acquisition costs in excess of net assets acquired in 1996. The January
1996 purchase agreement provides for additional earn-out contingencies
based on the sales of oligonucleotides over the five year period following
the date of the purchase agreement. For the years 1999, 1998 and 1997, the
Company recorded additional earn-outs of $1.4 million, $1.1 million and
$1.0 million, respectively. The Company is amortizing the goodwill related
to CPI on a straight-line basis over six years.
None of the businesses acquired during the period, individually or in the
aggregate, constitute a significant subsidiary of the Company.
TECHNOLOGY AGREEMENTS
The Company has obtained rights to products and technologies under a number
of licensing agreements or patents. Where the agreement requires the
Company to pay royalties on sales of licensed products or technologies, the
Company includes the royalty expense in cost of sales in the period of the
sale. Where the Company acquires technologies from outside sources for
incorporation into its own development efforts or products, the cost of the
technology is capitalized and amortized over the legal or expected useful
life when the technology is commercially available at the time acquired by
the Company. Where considerable development effort is required to have
acquired technologies become part of the Company's product lines, the cost
of the acquired technologies is reported as research and development
expense in the period the technology is acquired. Internal efforts to
develop or patent technologies are expensed when incurred.
The Company also licenses technology it has developed to others. The
Company recognizes revenue on these licenses when payment is reasonably
certain. Revenues are reduced by related transaction expenses.
EARNINGS PER SHARE
Basic earnings per common share have been computed by dividing net income
by the weighted-average number of common shares outstanding during the
period. Diluted earnings per common share have been computed by dividing
net income by the weighted-average number of common shares outstanding plus
an assumed increase in common shares outstanding for dilutive securities.
Net income as reported is available to common stockholders and is not
adjusted for basic or diluted earnings per share. Dilutive securities
consist entirely of options to acquire common stock for a specified price
and their dilutive effect is measured using the treasury method.
The following table reconciles the weighted-average number of common shares
outstanding during each period for basic earnings per share with the
comparable amount for diluted earnings per share.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
(amounts in thousands) 1999 1998 1997
=============================================================================================
<S> <C> <C> <C>
Weighted average shares outstanding-basic 24,954 23,687 23,171
Stock options 86 517 774
---------------------------------------------------------------------------------------------
Weighted average shares outstanding-diluted 25,040 24,204 23,945
=============================================================================================
</TABLE>
RELATED PARTY - DEXTER
At December 31, 1999, Dexter Corporation ("Dexter") owned approximately
71.5% of the outstanding shares of the Company's common stock. Dexter
acquired approximately 22% of the outstanding shares of the Company through
a tender offer consummated on December 22, 1998. On January 20, 2000 Dexter
announced a proposal to acquire for $49.00 per share the 28.5% of Life
Technologies that it did not then own in a merger transaction subject to
acceptance by a group of minority interest stockholders who control most of
the shares not owned by Dexter.
Most transactions with Dexter are administrative in nature (e.g.,
insurance) and are not significant in amount. The Company has no
significant product sales to Dexter or its affiliates. The Company's nine
member board of directors currently includes three executives of Dexter,
two members of the Dexter board of directors and a retired Dexter
executive.
In 1999 the Company engaged Bain & Company ("Bain"), a consulting firm, for
a fee of $750,000 to evaluate the Company's strategic opportunities.
Dexter, the Company's majority shareholder, engaged Bain to evaluate
opportunities for Dexter to increase its participation in the life sciences
market. Dexter received a report from Bain that was based in part on Bain's
evaluation of the Company's strategic opportunities. The Company's
transaction with Bain was funded solely by Company funds, although Dexter
separately paid a fee to Bain for services provided to Dexter.
The Company can borrow up to $8.0 million under a revolving line of credit
from Dexter to finance short-term working capital needs. There have been no
amounts outstanding under this line of credit since prior to 1997.
NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued, SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities - Deferral of
the Effective Date of FASB Statement No. 133. This statement amends SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities to be
effective for all fiscal quarters of all fiscal years beginning after June
15, 2000. SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, requires that every derivative instrument be recorded in the
balance sheet as either an asset or liability measured at its fair value.
The statement requires that changes in the derivative's fair value be
recognized in earnings unless specific hedge accounting criteria are met.
The Company believes that the effect of adoption of SFAS No. 133 will not
have a material effect on the Company's financial statements.
CASH AND CASH EQUIVALENTS
Cash equivalents are highly liquid short-term investments readily
convertible into cash. Cash equivalents consist primarily of time deposits
and certificates of deposit with various financial institutions throughout
the world. These investments are carried at cost, which approximates
market, and mature within 90 days and, therefore, are subject to minimal
risk.
TRADE ACCOUNTS RECEIVABLE
Trade accounts receivable are reduced by allowances of $3.2 million, $2.0
million and $1.6 million at December 31, 1999, 1998, and 1997,
respectively.
INVENTORIES
Inventories are valued at the lower of cost or market. Inventories valued
at cost using the LIFO method were approximately 28% and 29% of total
inventories at December 31, 1999 and 1998, respectively. Inventories were
as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998
==============================================================================================
<S> <C> <C>
Materials and supplies $16,519 $12,946
Work-in-process 14,595 11,291
Finished goods 53,058 51,502
----------------------------------------------------------------------------------------------
Total FIFO value 84,172 75,739
LIFO reserve (1,226) (1,420)
----------------------------------------------------------------------------------------------
Total inventory $82,946 $74,319
==============================================================================================
</TABLE>
Inventories were reduced by allowances, other than the LIFO reserve, of
$6.1 million, $4.7 million and $3.5 million at December 31, 1999, 1998, and
1997 respectively.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried at cost. Depreciation is provided
by the straight-line method for financial reporting purposes based upon the
estimated useful lives of the assets which range from 3 to 50 years. The
cost of assets sold or retired and the related amounts of accumulated
depreciation are eliminated from the accounts and the resulting gain or
loss is included in income. Renewals and betterments are capitalized.
Repairs and maintenance are charged to expense when incurred and were $5.6
million in 1999, $4.7 million in 1998 and $4.5 million in 1997.
Amounts under a capital lease included in property, plant and equipment at
December 31,1999 included $0.4 million of land and $2.9 million for a
building. Accumulated depreciation on the building as of December 31, 1999
was $0.1 million.
Interest expense is capitalized in connection with the construction of
major facilities. Capitalized interest is recorded as part of the cost of
the asset to which it relates and is amortized over the asset's estimated
useful life. The Company capitalized $0.1 million of interest cost in 1999,
$0.1 million of interest cost in 1998 and $0.3 million of interest cost in
1997, all of which interest related to debt associated with capital leases.
The cost and accumulated depreciation of property, plant and equipment were
as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998
==============================================================================================
<S> <C> <C>
Land and land improvements $ 14,148 $ 11,527
Buildings and leasehold improvements 76,656 67,244
Machinery and equipment 84,245 75,979
Construction-in-progress 17,113 4,790
----------------------------------------------------------------------------------------------
Total cost 192,162 159,540
Accumulated depreciation (63,335) (52,166)
----------------------------------------------------------------------------------------------
Property, plant and equipment, net $128,827 $107,374
==============================================================================================
</TABLE>
LEASES
The Company leases buildings, automobiles and equipment under operating
lease arrangements. These leases contain various renewal options, purchase
options and escalation clauses. The total rental expense of all operating
leases was $10.1 million in 1999, $8.9 million in 1998, and $6.3 million in
1997.
The future minimum rental payments required under noncancellable leases as
of December 31, 1999 were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) Operating Leases
For the years ending
<S> <C> <C>
2000 $ 8,066
2001 5,473
2002 3,441
2003 1,478
2004 994
2005 and thereafter 1,630
----------------------------------------------------------------------------------------------
Total minimum lease payments $21,082
==============================================================================================
</TABLE>
INVESTMENTS AND OTHER ASSETS
Significant components of investments and other assets were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998
==============================================================================================
<S> <C> <C>
Pension and retirement related $ 4,753 $ 6,018
Software, net of amortization 3,953 4,196
Deferred tax assets 9,884 3,571
Patents, net of amortization 2,825 -
Other 1,558 1,607
----------------------------------------------------------------------------------------------
Investments and other assets $22,973 $15,392
==============================================================================================
</TABLE>
EXCESS ACQUISITION COSTS
The excess of costs over the net asset values of businesses acquired prior
to 1992 are being amortized on a straight-line basis principally over 30
years. The excess of costs over net asset values of businesses acquired
since 1992 are being amortized on a straight-line basis over no more than
10 years. The Company assesses the recoverability of net cost in excess of
net assets of acquired businesses by determining whether the amortization
of this intangible asset over its remaining life can be recovered through
future operating cash flows. The Company makes a specific provision against
the asset when impairment is identified. The Company did not make an
impairment charge in 1999, 1998 or 1997. Future acquisitions will be
evaluated using this method and an appropriate useful life will be
determined for amortization of the excess of costs over the net asset value
of businesses acquired, if any.
Accumulated amortization at December 31, 1999 and 1998 amounted to $13.4
million and $10.8 million, respectively.
ACCRUED LIABILITIES AND EXPENSES
Accrued liabilities and expenses were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998
==============================================================================================
<S> <C> <C>
Salaries, wages and benefits $10,096 $11,400
Royalties 4,632 5,867
Shareholder acquisition expenses - 3,973
Taxes, other than income 2,117 1,779
Dividends payable - 1,245
Deferred purchase payments (CPI) 1,429 1,225
Contract settlement reserve 2,795 -
Other 6,425 5,382
----------------------------------------------------------------------------------------------
Accrued liabilities and expenses $27,494 $30,871
==============================================================================================
</TABLE>
DEBT
The following is a summary of the outstanding debt at December 31, 1999 and
1998.
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998
==============================================================================================
Short-term debt:
<S> <C> <C>
Japanese Yen bank borrowings $391 $ 2,210
French Franc bank borrowings 17 -
Current portion of long-term debt 245 -
Current portion of obligations under a capital lease 195 -
----------------------------------------------------------------------------------------------
Short-term debt $ 848 $ 2,210
==============================================================================================
</TABLE>
Short-term debt consisted of notes payable to various banks denominated in
Japanese Yen and French Francs. The carrying value of short-term borrowings
approximates fair value. The average interest rate on the Japanese Yen bank
borrowings during the year was .97% in 1999 and 1.53% in 1998. The average
interest rate on the French Franc borrowings in 1999 was 5.25%. The
year-end weighted average interest rates on the Japanese Yen bank
borrowings were 1.20% in 1999 and 1.47% in 1998. The year-end weighted
average interest rate on the French bank borrowings was 5.25%.
The Company exercised an option to purchase a parcel of land previously
under a capital lease in the first quarter of 1998 for $4.6 million. The
parcel of land is used for the new corporate R&D center and administrative
office facility, including the Company's headquarters.
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998
==============================================================================================
Long-term debt:
<S> <C> <C>
Unsecured notes $ 814 -
(Less) current portion (245) -
Capital lease obligation 2,885 -
(Less) current portion (195) -
Long-term debt $ 3,259 -
==============================================================================================
</TABLE>
In May of 1999, the Company acquired BioSepra, SA. At acquisition BioSepra,
SA was obligated under a French Franc denominated capital lease as well as
several long-term unsecured notes. The capital lease is used to maintain an
administration and manufacturing facility in Cergy, France. At December 31,
1999, the capital lease had a carrying value of approximately $2.9 million.
The lease is a 12-year lease with payments of approximately $0.1 million
due at the beginning of each quarter. The unsecured long-term notes have an
aggregate principal of approximately $0.8 million. The note's interest
rates range from 3.9% to 5.8% and have maturity dates between 2001 and
2005. The approximate yearly payments on these notes are as follows: 2001 -
$0.2 million, 2002 - $0.1 million, 2003 - $0.1 million, 2004 - $0.1
million, and 2005 - less than $0.1 million.
INCOME TAXES
The differences between the U.S. federal statutory tax rate and the Company's
effective tax rate are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Statutory U.S. federal income tax rate 35.0% 35.0% 35.0%
State income taxes 2.2 2.0 1.7
Non-U.S. tax rate differences 0.1 (.8) 0.8
Repatriation of foreign earnings,
net of related benefits (0.3) (1.3) (0.7)
Non-deductible expenses 2.0 5.1 1.5
Tax settlements (4.1) - -
Other, including tax credits (4.0) (2.5) (2.3)
----------------------------------------------------------------------------------------------
Effective income tax rate 30.9% 37.5% 36.0%
==============================================================================================
</TABLE>
The provision (benefit) for taxes on income for 1999, 1998, and 1997 is
summarized below:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
==============================================================================================
Current:
<S> <C> <C> <C>
United States $ 13,942 $ 9,443 $ 9,540
International 6,833 7,684 8,569
State 2,891 1,560 999
----------------------------------------------------------------------------------------------
Total current 23,666 18,687 19,108
----------------------------------------------------------------------------------------------
Deferred:
United States (5,191) 270 (497)
International 55 162 (46)
State (947) 49 (84)
----------------------------------------------------------------------------------------------
Total deferred (6,083) 481 (627)
----------------------------------------------------------------------------------------------
Total provision for income taxes $ 17,583 $19,168 $18,481
==============================================================================================
</TABLE>
Deferred tax assets and liabilities were comprised of the following:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998
==============================================================================================
Deferred tax assets:
<S> <C> <C>
Expenses not currently deductible $6,805 $2,081
Retirement benefits 4,251 3,038
Net operating loss carryforward 3,336 19
Intercompany profits 2,868 1,937
Inventory reserves 1,889 1,645
Other 716 722
----------------------------------------------------------------------------------------------
Total deferred tax assets 19,865 9,442
Less: valuation allowance (1,490) -
----------------------------------------------------------------------------------------------
Net deferred tax assets 18,375 9,442
Deferred tax liabilities:
Fixed assets, principally depreciation 5,682 4,768
Inventory 555 582
Retirement benefits 473 399
Other 9 25
----------------------------------------------------------------------------------------------
Total deferred tax liabilities 6,719 5,774
Net deferred tax asset $11,656 $3,668
</TABLE>
Management has determined that tax benefits associated with the net
deferred tax asset, other than the net operating loss ("NOL") carryforward
at BioSepra, SA, will more likely than not be realized based on the
availability of taxable income in prior carryback years against which
future tax deductions may be offset and on expectations that future
operating income of the Company will be sufficient to fully realize the net
deferred tax asset. At December 31, 1999, BioSepra, SA had an NOL
carryforward totaling $3.3 million, of which $1.8 million expires at
December 31, 2000 and the remainder has no expiration date. Due to the
uncertainty of the realization of the expiring NOL carryforward at
BioSepra, SA, management has established a valuation allowance in the
amount of $1.5 million.
In 1999, 1998 and 1997, income tax benefits of $0.7 million, $11.0 million
and $2.0 million, respectively, attributable to employee stock option
transactions were allocated to stockholders' equity.
U.S. and international withholding taxes have not been provided on
approximately $88.1 million of undistributed earnings of foreign
subsidiaries. The Company remits only those earnings which are considered
to be in excess of the reasonably anticipated working capital needs of the
foreign subsidiaries, with the balance considered to be permanently
reinvested in the operations of such subsidiaries. It is impractical to
estimate the total tax liability, if any, until such a distribution is
made. Pretax income from international operations amounted to $24.1 million
in 1999, $27.2 million in 1998, and $26.6 million in 1997.
RETIREMENT BENEFITS
The Company has a qualified pension plan ("defined benefit") and a 401(k)
plan ("employee deferral" and "defined contribution") for substantially all
United States employees. With respect to the defined benefit, the Company's
policy is to deposit with an independent trustee amounts as are necessary
on an actuarial basis to provide for benefits in accordance with the
requirements of the Employee Retirement Income Security Act and any other
applicable Federal laws and regulations. The U.S. pension plan provides
benefits that are generally based upon the employee's highest average
compensation in any consecutive five year period in the ten years before
retirement. The Company's 401(k) plan allows employees to contribute, on a
tax-deferred basis, up to fifteen percent of their annual base compensation
subject to certain regulatory and plan limitations. The Company matches one
half of the employee's 401(k) deferral up to a maximum Company match of
three percent of annual base compensation.
The Company also sponsors an unfunded, nonqualified supplementary
retirement plan for certain senior management. The Company has purchased
life insurance on the lives of participants designed to provide sufficient
funds to recover all costs of the plan. In addition to the above plans, the
Company sponsors an unfunded, nonqualified executive supplemental plan that
provides for a target benefit based upon the average annual compensation
during the highest five consecutive years of the last ten years before
retirement, which benefit is then offset by other work related benefits
payable to the participant.
The retirement benefits for most employees of non-U.S. operations are
generally provided by government sponsored or insured programs and, in
certain countries, by defined benefit plans. The only significant non-U.S.
defined benefit plan is for United Kingdom employees. The Company's policy
with respect to its U.K. pension plan is to fund amounts as are necessary
on an actuarial basis to provide for benefits under the plan in accordance
with local laws and income tax regulations. The U.K. pension plan provides
benefits based upon the employee's highest average base compensation over
three consecutive years.
The funded status of the Company's domestic pension plans and amounts
recognized at December 31, 1999, 1998, and 1997 was as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
==============================================================================================
Change in benefit obligation:
<S> <C> <C> <C>
Benefit obligation at beginning of year $33,776 $26,569 $22,821
Service cost 2,672 2,244 2,098
Interest cost 2,208 1,900 1,615
Amendments - 1,567 437
Actuarial (gain)/loss (8,977) 2,317 295
Benefits paid (638) (692) (535)
Expenses paid (109) (129) (162)
--------------------------------------------------------------------------------------------
Benefit obligation at end of year 28,932 33,776 26,569
--------------------------------------------------------------------------------------------
Change in plan assets:
Fair value of plan assets at
beginning of year 22,233 19,611 15,567
Actual return on plan assets 7,683 3,032 3,058
Employer contribution 173 411 1,683
Benefits paid (638) (692) (535)
Expenses paid (109) (129) (162)
--------------------------------------------------------------------------------------------
Fair value of plan assets at end of year 29,342 22,233 19,611
--------------------------------------------------------------------------------------------
Funded status: 411 (11,543) (6,958)
Unrecognized actuarial (gain)/loss (14,254) 401 (604)
Unrecognized prior service cost 3,086 3,544 2,295
--------------------------------------------------------------------------------------------
Net amount recognized $(10,757) $( 7,598) $( 5,267)
============================================================================================
Amounts recognized in the statement
of financial position consist of:
Accrued benefit liability (11,617) (9,265) (5,772)
Intangible asset 849 1,667 505
Accumulated other comprehensive income 11 - -
--------------------------------------------------------------------------------------------
Net amount recognized $(10,757) $( 7,598) $( 5,267)
============================================================================================
</TABLE>
The weighted average assumptions used in accounting for the domestic pension
plans in 1999, 1998, and 1997 was as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Discount rate 8.00% 6.75% 7.00%
Expected return on plan assets 9.00% 9.00% 9.00%
Rate of compensation increase 4.83% 4.83% 4.83%
==============================================================================================
</TABLE>
The discount rate is the estimated rate at which the obligation for pension
benefits could effectively be settled. The expected return on plan assets
reflects the average rate of earnings that the Company estimates will be
generated on the assets of the plans. The rate of compensation increase
reflects the Company's best estimate of the future compensation levels of
the individual employees covered by the plans.
The components of net periodic pension cost for the Company's domestic pension
plans for the years 1999, 1998, and 1997 are provided in the following table:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
(amounts in thousands) 1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Service cost $2,672 $2,244 $2,098
Interest cost 2,208 1,900 1,615
Expected return on plan assets (1,978) (1,743) (1,375)
Amortization of:
Prior service cost 459 318 270
Actuarial (gain)/loss (27) 23 108
---------------------------------------------------------------------------------------------
Net periodic pension cost $3,334 $2,742 $2,716
=============================================================================================
</TABLE>
The funded status of the Company's U.K. pension plan and amounts recognized
at December 31, 1999, 1998, and 1997 were as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
(amounts in thousands) 1999 1998 1997
==============================================================================================
Change in benefit obligation:
<S> <C> <C> <C>
Benefit obligation at beginning of year $12,664 $9,026 $5,777
Service cost 976 513 319
Interest cost 789 682 504
Plan participants' contributions 320 160 154
Amendments - - (9)
Actuarial (gain)/loss (323) 2,270 2,527
Benefits paid (150) (110) (12)
Foreign currency exchange rate changes (369) 123 (234)
---------------------------------------------------------------------------------------------
Benefit obligation at end of year 13,907 12,664 9,026
---------------------------------------------------------------------------------------------
Change in plan assets:
Fair value of plan assets at
beginning of year 8,831 7,217 6,147
Actual return on plan assets 751 1,000 724
Employer contribution 942 471 453
Plan participants' contributions 320 160 154
Benefits paid (150) (110) (12)
Foreign currency exchange rate changes (258) 93 (249)
---------------------------------------------------------------------------------------------
Fair value of plan assets at end of year 10,436 8,831 7,217
Funded status: (3,471) (3,833) (1,809)
Unrecognized actuarial loss 4,037 4,749 2,943
Unrecognized portion of net obligation
at transition (256) 654 (307)
Unrecognized prior service cost 587 (287) 697
Fourth quarter contribution - 293 112
---------------------------------------------------------------------------------------------
Net amount recognized $897 $1,576 $1,636
=============================================================================================
Amounts recognized in the statement
of financial position consist of:
Prepaid benefit cost 897 1,576 1,636
---------------------------------------------------------------------------------------------
Net amount recognized $897 $1,576 $1,636
=============================================================================================
</TABLE>
The weighted average assumptions used in accounting for the U.K. pension plan
in 1999, 1998, and 1997 were as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Discount rate 6.50% 6.00% 7.50%
Expected return on plan assets 8.00% 8.00% 8.00%
Rate of compensation increase 5.00% 5.00% 6.00%
=============================================================================================
</TABLE>
The components of net periodic pension costs for the Company's U.K. pension
plan for the years 1999, 1998, and 1997 are provided in the following table:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
(amounts in thousands) 1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Service cost $976 $513 $319
Interest cost 789 682 504
Expected return on plan assets (708) (592) (487)
Amortization of:
Transition obligation (23) (23) (23)
Prior service cost 49 50 50
Actuarial loss 209 119 31
----------------------------------------------------------------------------------------------
Net periodic pension cost $1,292 $749 $394
==============================================================================================
</TABLE>
The projected benefit obligations, accumulated benefit obligations and fair
value of plan assets for the pension plans with accumulated benefit obligations
in excess of plan assets were as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
(amounts in thousands) 1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Projected benefit obligation $3,974 $4,466 $2,418
Accumulated benefit obligation $3,321 $3,512 $2,034
Fair value of plan assets - - -
=============================================================================================
</TABLE>
The Company's match to the 401(k) plan totaled $1.3 million, $1.1 million
and $1.1 million in 1999, 1998, and 1997, respectively. The Company's
contribution to its remaining plans totaled $0.3 million, $0.3 million and
$0.6 million in 1999, 1998, and 1997, respectively.
CONTINGENCIES
In September 1999, the Company submitted a report in connection with a
voluntary disclosure to the Department of Veterans Affairs ("VA") regarding
matters involving the management of the Company's Federal Supply Schedule
contract with the VA that has been in effect since April 1992. As part of
the disclosure the Company offered to provide a refund to the government in
the amount of $3.9 million. The Company expensed this amount in September
1999. The Company has made a cash payment of $1.1 million to the VA and had
an accrued liability of $2.8 million at December 31, 1999 related to this
matter. There can be no assurance that the government will agree with the
Company's assessment of this matter or accept the Company's offered refund
amount. Consequently, it is possible the final resolution of this matter
could materially differ from the Company's proposal and could have a
material adverse effect on the Company's consolidated financial position,
operating results or cash flows when resolved in a future reporting period.
Apart from the matter above, the Company is subject to other potential
liabilities under government regulations and various claims and legal
actions which are pending or may be asserted. These matters have arisen in
the ordinary course and conduct of the Company's business and some are
expected to be covered, at least partly, by insurance. Estimated amounts
for claims that are probable and can be reasonably estimated are reflected
as liabilities of the Company. The ultimate resolution of these matters is
subject to many uncertainties. It is reasonably possible that some of the
matters which are pending or may be asserted could be decided unfavorably
to the Company. Although the amount of liability at December 31, 1999 with
respect to these matters can not be ascertained with certainty, the Company
believes that any resulting liability should not materially affect the
Company's consolidated financial statements.
CURRENCY EFFECTS
The financial statements of the Company's non-U.S. operations are
translated to U.S. dollars for consolidation using exchange rates at period
end for assets and liabilities and average exchange rates during each
reporting period for results of operations. Net exchange gains or losses
resulting from the translation of foreign financial statements, the effect
of exchange rate changes on intercompany transactions of a long-term
investment nature, and net exchange rate gains and losses on foreign
currency transactions that are designated as, and are effective as,
economic hedges of the net investment in a foreign entity are recorded as a
separate component of stockholder's equity. These adjustments will affect
net income only upon sale or liquidation of the underlying non-U.S.
investment.
Many of the Company's reporting entities conduct a portion of their
business in currencies other than the entity's functional currency. These
transactions give rise to receivables or payables that are denominated in
currencies other than the entity's functional currency. Changes in the
exchange rates between the functional currency and the currency in which
the transaction is denominated result in currency transaction gains and
losses that are included in the determination of income. Currency exchange
gains and losses realized on business transactions were $1.4 million of net
losses in 1999, $0.3 million of net gains in 1998, and $1.0 million of net
losses in 1997. In addition to the net losses on business transactions
above, operating income in 1999 was reduced by $1.0 million related to
devaluation in cash held in non-functional currencies in the Company's U.K.
subsidiary.
The Company utilizes forward exchange contracts to hedge non-local currency
transactions and commitments. Gains and losses on forward exchange
contracts that hedge specific currency commitments are deferred and
recognized in income in the same period as the hedged transaction. Gains
and losses on forward contracts that do not hedge an identifiable currency
commitment are included in income as the gain or loss arises.
The market risk associated with forward exchange contracts is caused by
fluctuations in exchange rates subsequent to entering into the forward
exchange contracts. Forward exchange contracts outstanding at year-end 1999
were short-term in nature and related to non-local currency transactions of
the Company's Japanese and U.S. operations. The equivalent U.S. dollar
purchase amounts of all forward contracts outstanding were $4.2 million,
$3.1 million, and $2.9 million as of December 31, 1999, 1998, and 1997,
respectively. The equivalent U.S. dollar sale amount of all forward
contracts outstanding was $18.5 million as of December 31, 1999. There were
no sale amounts outstanding as of December 31, 1998 and 1997. Deferred
unrealized gains and losses at December 31, 1999, 1998 and 1997 were not
significant.
STOCK INCENTIVE PLANS
In 1997, the Company established a Long-term Incentive Plan for certain key
management and other personnel. The Company's 1997 Long-term Incentive Plan
provides that up to 1,000,000 shares of common stock may be awarded through
various stock and stock related awards. For options awarded under the Plan,
the option price cannot be less than 100 percent of the fair market value
of common stock at the time the option is granted. Through December 31,
1999 the Company has granted 983,255 stock options under this Plan, net of
forfeitures.
In 1996, the Company established a Non-Employee Directors' Annual Retainer
Stock Plan enabling members of the Board of Directors who are not officers
or employees of the Company to receive common stock in lieu of all or a
portion of the annual cash retainer fee and to receive an automatic annual
amount of 300 shares of common stock for services rendered. The plan
provides that up to 112,500 shares may be granted based on the fair market
value of the common stock at the date of issue. There have been 6,035
shares granted through December 31, 1999 under this plan. The plan was
frozen, effective as of February 2, 1999. Consequently, there will be no
future grants under this plan.
In 1996, the Company established a Non-Employee Directors' Stock Option
Plan that provides for each of the Company's non- employee directors to
receive an automatic, annual option to purchase 6,750 shares of common
stock. The plan provides that up to 750,000 shares may be granted based on
the fair market value of the common stock at the annual grant date. There
have been 121,500 stock options granted through December 31, 1999 under
this plan. The plan was frozen, effective as of February 2, 1999.
Consequently, there will be no future grants under this plan.
All other stock option plans have been frozen and no further grants under
the frozen plans can be made. These plans are listed under "Former Plans No
Longer Granting Options."
Most options become exercisable on a cumulative basis over a three year
period of service and are generally exercisable for a period not exceeding
ten years from the date of grant. At December 31, 1999 there were 16,745
shares of common stock available for future grant under the 1997 stock
option plan.
The options outstanding and transactions under the stock option plans were
as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
1997 1996 Former Plans
Long-term Non-Employee No Longer
Incentive Directors' Granting
Plan Plan Options
==== ==== =======
<S> <C> <C> <C>
Options outstanding at
December 31, 1996 40,500 2,055,281
Granted at average price
of $34.26 per share 524,000 33,750
Expired or canceled at average
price of $21.10 per share (4,500) (6,241)
Exercised at average price
of $10.96 per share (2,250) (413,186)
----------------------- ------- ---------
Options outstanding at
December 31, 1997 524,000 67,500 1,635,854
Granted at average price
of $35.56 per share 16,000 47,250
Expired or canceled at average
price of $27.45 per share (30,916) (6,750) (39,729)
Exercised at average price
of $18.00 per share (148,557) (27,000) (1,418,493)
----------------------- ------- ---------
Options outstanding at
December 31, 1998 360,527 81,000 177,632
GRANTED AT AVERAGE PRICE
OF $36.73 PER SHARE 484,000
EXPIRED OR CANCELED AT AVERAGE
PRICE OF $31.45 PER SHARE (9,829) (33,750) (1,831)
EXERCISED AT AVERAGE PRICE
OF $26.31 PER SHARE (16,046) (46,455)
----------------------- ------- ---------
OPTIONS OUTSTANDING AT
December 31, 1999 818,652 47,250 129,346
======================= ======= ====== =======
Price range:
MINIMUM $34.41 $22.88 $4.83
Maximum $38.19 $38.28 $25.00
Weighted average price $34.53 $30.86 $23.86
======================= ======= ====== =======
Exercisable 167,461 22,500 129,346
======================= ======= ====== =======
</TABLE>
Information with respect to stock options outstanding at December 31, 1999
is as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Weighted
Average Weighted Weighted
Number of Remaining Average Number of Average
Options Contractual Exercise Options Exercise
Price Range Outstanding Life Price Exercisable Price
==============================================================================================
<S> <C> <C> <C> <C> <C>
$12.25 to $22.88 24,300 5.7 $18.32 24,300 $18.32
$25.00 to $25.00 111,796 6.8 $25.00 111,796 $25.00
$31.88 to $33.25 27,000 8.5 $32.91 11,250 $32.70
$34.41 to $34.41 323,552 7.8 $34.41 162,127 $34.41
$36.72 to $36.72 465,600 9.1 $36.72 - -
$37.00 to $38.28 43,000 8.7 $37.83 9,834 $38.21
----------------------------------------------------------------------------------------------
$12.25 to $38.28 995,248 8.3 $34.15 319,307 $29.95
==============================================================================================
</TABLE>
The Company has elected the disclosure-only presentation of SFAS No. 123,
Accounting for Stock-Based Compensation, and consequently, makes no charge
against income in the financial statements with respect to options granted
at fair market value. To measure stock-based compensation in accordance
with SFAS No. 123, the fair value of each option grant was estimated on the
date of grant using the Black-Scholes option-pricing model. The following
table sets forth the assumptions used and the pro forma net income and
earnings per share resulting from applying SFAS No. 123.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
1999 1998 1997
==============================================================================================
<S> <C> <C> <C>
Net income (amounts in thousands)
As reported $38,277 $31,303 $32,235
Pro forma $35,499 $28,784 $30,501
Basic earnings per share (in dollars)
As reported $1.53 $1.32 $1.39
Pro forma $1.42 $1.22 $1.32
Diluted earnings per share (in dollars)
As reported $1.53 $1.29 $1.35
Pro forma $1.42 $1.19 $1.27
Average Shares Outstanding (in thousands)
Actual 24,954 23,687 23,171
Assuming Dilution 25,040 24,204 23,945
Risk-free interest rate 6.2% 4.6% 5.8%
Dividend yield 0.2% 0.5% 0.5%
Expected life in years 3.0 3.4 5.0
Volatility 27% 28% 29%
Weighted average remaining contractual
life in years 8.3 8.5 7.0
Weighted average fair value at date
of grant(in dollars) $10.13 $9.82 $11.93
==============================================================================================
</TABLE>
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL INFORMATION
(amounts in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
(quarterly amounts are unaudited) First Second Third Fourth Year
================================= ===== ====== ===== ====== ====
1999:
Net sales $99,537 $99,814 $101,798 $106,050 $407,199
Net royalties 447 497 509 957 2,410
Cost of sales 44,283 45,187 46,472 50,725 186,667
Provision for contract settlement - - 3,870 - 3,870
Operating income 17,290 14,891 10,957 13,303 56,441
Net income 10,492 9,756 9,412 8,617 38,277
Basic earnings per share $.42 $.39 $.38 $.35 $1.53
Diluted earnings per share $.42 $.39 $.38 $.34 $1.53
Shares outstanding
Basic 24,944 24,947 24,918 24,976 24,954
Stock options 70 69 93 122 86
Diluted 25,014 25,016 25,011 25,098 25,040
Market price per share:
High $40 3/4 $381/2 $41 $43 $43
Low $34 $341/2 $36 1/8 $38 $34
================================= ===== ====== ===== ====== ====
1998:
Net sales $88,355 $91,544 $89,084 $92,743 $361,726
Net royalties 437 689 518 836 2,480
Cost of sales 41,076 42,701 40,833 43,252 167,862
Shareholder acquisition expenses - - 310 5,025 5,335
Operating income 13,489 14,675 13,319 9,026 50,509
Net income 8,625 9,447 8,754 4,477 31,303
Basic earnings per share $.37 $.40 $.37 $.19 $1.32
Diluted earnings per share $.36 $.39 $.36 $.18 $1.29
Shares outstanding
Basic 23,447 23,575 23,668 24,050 23,687
Stock options 582 547 541 401 517
Diluted 24,029 24,122 24,209 24,451 24,204
Market price per share:
High $381/2 $391/2 $39 3/8 $40 $40
Low $30 $30 3/4 $301/2 $29 3/8 $29 3/8
================================= ====== ======= ======= ======= =======
</TABLE>
SEGMENT REPORTING AND RELATED INFORMATION
Operating segments are components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker, or decision making group, in deciding how to
allocate resources and in assessing performance. Life Technologies is
managed in a matrixed fashion with some organizational units focused on
delivering the Company's product and service offerings to customers. These
organizational units have been established primarily by geography. Other
organizational units are focused on developing and managing various
components of the product and service offerings. While the chief operating
decision maker reviews financial information with respect to all of these
organization units, the units based on geography are most routinely
reviewed by the chief operating decision maker in terms of assessing
performance with respect to revenues and related expenses.
The Company has four operating segments. The Americas Research segment
serves universities, medical research centers, government institutions and
other related "not-for-profit" research institutions in the United States
as well as all customers in Canada, Mexico, and Latin and South America.
The U.S. Bioindustrial segment delivers products and services to
biotechnology, pharmaceutical, chemical and related "for-profit" companies
in the United States. The European segment serves customers in Europe,
Africa and the Middle East. The Asia Pacific segment serves customers in
Asia, including Japan, Australasia, China and India. All four of the
operating segments offer essentially the same products and services.
The accounting policies of the operating segments are the same as those
described earlier in the notes to the consolidated financial statements.
Intercompany transactions between geographic areas are eliminated prior to
reporting operating segment financial information to the chief operating
decision maker. All profit related to intercompany transactions between
geographic areas is reported in the operating segment in which the sale to
the Company's trade customer occurs. Expenses related to developing and
managing the Company's product and service offerings, as well as some
expenses managed globally or not related to operating segments, are not
included in operating segment results. Operating segment identifiable
assets are primarily inventories and receivables. Long-lived assets are
principally related to manufacturing or developing products and services
and are not allocated to operating segments.
Operating segment revenues for the years ended December 31, 1999, 1998, and
1997 were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
====================== ==== ==== ====
<S> <C> <C> <C>
Americas Research $139,619 $129,428 $118,095
U.S. Bioindustrial 84,289 71,634 61,335
Europe 128,987 116,996 105,682
Asia Pacific 54,304 43,915 45,756
Other, principally royalties 2,410 2,233 1,940
---------------------------- -------- -------- --------
Total revenues $409,609 $364,206 $332,808
============================ ======== ======== ========
</TABLE>
Operating segment profit and a reconciliation to reported operating income
for the years ended December 31, 1999, 1998, and 1997 were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
====================== ==== ==== ====
<S> <C> <C> <C>
Americas Research $ 45,120 43,012 42,035
U.S. Bioindustrial 31,293 26,163 20,790
Europe 30,397 29,607 29,045
Asia Pacific 12,520 10,371 11,041
Research and development (23,836) (21,880) (21,281)
Other non-segment expenses (39,053) (31,429) (30,696)
Shareholder acquisition expenses - (5,335) -
Operating income $ 56,441 $50,509 $50,934
================ ======== ======= =======
</TABLE>
Identifiable operating segment assets and a reconciliation to total assets
as of December 31, 1999, 1998, and 1997 were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
====================== ==== ==== ====
<S> <C> <C> <C>
Americas Research $ 52,957 $ 48,544 $ 45,088
U.S. Bioindustrial 33,555 28,136 23,761
Europe 56,151 50,351 39,856
Asia Pacific 30,681 24,866 21,939
Property, plant & equipment, net 128,827 107,374 100,098
Other long-lived assets 34,533 26,057 24,718
Cash and cash equivalents 51,489 56,047 19,076
Other, principally tax-related 14,778 12,212 7,059
------------------------------ -------- -------- --------
Total assets $402,971 $353,587 $281,595
============ ======== ======== ========
</TABLE>
Life Technologies offers numerous products, services and technologies that
can be characterized broadly into two categories: cell culture and cell and
molecular biology. Cell culture products and services are used to grow
cells under laboratory conditions and for the commercial manufacture of
pharmaceuticals and other life sciences products. Cell culture products
include cell and tissue culture media, reagents, fetal bovine ("FBS") and
other animal sera, growth and attachment factors, and plasticware. Cell and
molecular biology products, services and technologies are used to identify,
isolate, and manipulate the metabolic processes and genetic material of
living organisms. Cell and molecular biology products include enzymes,
nucleic acids, lipids, competent cells, custom oligonucleotides, and
related products.
The major product line components of revenues for 1999, 1998, and 1997
compare as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
---------------------- ---- ---- ----
<S> <C> <C> <C>
Cell culture $201,597 $182,411 $173,643
Cell and molecular biology 208,012 181,795 159,165
-------------------------- -------- -------- --------
Total revenues $409,609 $364,206 $332,808
========================== ======== ======== =========
</TABLE>
Sales of FBS accounted for 11% of net sales in 1999, 12% of net sales in
1998 and 13% of net sales in 1997. Historically, the availability and price
of FBS have been volatile and periodically have had a significant effect on
the Company's results.
The Company earns revenues from customers in many countries. Other than the
United States, the Company's country of domicile, there is no individual
country in which revenues from external customers represent 10% or more of
the Company's consolidated revenues. Revenues attributed to customers based
in the United States, as well as revenues from customers in all other
countries combined, were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
====================== ==== ==== ====
<S> <C> <C> <C>
United States $205,424 $181,765 $161,863
All other countries 204,185 182,441 170,945
------------------- -------- -------- --------
Total revenues $409,609 $364,206 $332,808
============== ======== ======== ========
</TABLE>
Long-lived assets by geographic area as of December 31, 1999, 1998, and
1997 were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 1999 1998 1997
====================== ==== ==== ====
<S> <C> <C> <C>
United States $118,164 $104,598 $98,394
United Kingdom 19,353 16,736 15,841
All other 15,960 8,526 7,806
--------- -------- -------- --------
Total long-lived assets $153,477 $129,860 $122,041
======================= ======== ======== ========
</TABLE>
LIFE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
(amounts in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $53,131 $51,489
Trade accounts receivable, net 83,180 79,301
Inventories:
Materials and supplies 17,120 16,519
In process and finished 71,980 67,653
LIFO reserve (1,396) (1,226)
-------- --------
Total inventory 87,704 82,946
Prepaid and other current assets 18,138 17,384
Current deferred tax assets 8,471 8,491
-------- --------
Total current assets 250,624 239,611
Property, plant and equipment 194,422 192,162
Less accumulated depreciation (65,439) (63,335)
-------- --------
Total property, plant and equipment 128,983 128,827
Investments and other assets 22,672 22,973
Excess of cost over net assets of
businesses acquired, net 11,485 11,560
-------- --------
Total assets $413,764 $402,971
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 956 $ 848
Accounts payable 25,863 28,364
Accrued and deferred income tax liabilities 15,026 11,145
Accrued liabilities and expenses 26,811 27,494
-------- --------
Total current liabilities 68,656 67,851
Long-term debt 3,057 3,259
Pension liabilities 11,849 11,471
Deferred income tax liabilities 6,363 6,164
Minority interests 4,526 4,131
Stockholders' equity:
Common stock 250 250
Additional paid-in capital 97,595 96,362
Retained earnings 234,969 223,986
Accumulated other comprehensive income (loss) (13,501) (10,503)
--------- ---------
Total stockholders' equity 319,313 310,095
-------- --------
Total liabilities and stockholders' equity $413,764 $402,971
======== ========
</TABLE>
LIFE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three month ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Revenues:
Net sales $108,764 $99,537
Net royalties 525 447
------- -------
109,289 99,984
Operating expenses:
Cost of sales 49,585 44,283
Marketing and administrative 36,274 32,574
Research and development 6,148 5,837
------- -------
Total operating expenses 92,007 82,694
------- -------
Operating income 17,282 17,290
Other income (expense), net 496 (693)
------- -------
Income before income taxes 17,778 16,597
Income taxes 6,400 5,808
------- -------
Income before minority interests 11,378 10,789
Minority interests (395) (297)
------- -------
Net income $10,983 $10,492
======= =======
Earnings per share:
Basic $0.44 $0.42
Diluted $0.44 $0.42
Average shares outstanding:
Basic 25,015 24,944
Diluted 25,231 25,014
Dividends declared per share $ - $0.05
Amounts are unaudited.
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
LIFE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(amounts in thousands)
<TABLE>
<CAPTION>
Three month ended
March 31,
2000 1999
---- ----
<S> <C> <C>
CASH INFLOWS (OUTFLOWS)
Operations:
Net income $10,983 $10,492
Non-cash items:
Depreciation and amortization 4,228 3,931
Other 310 355
Changes in assets and liabilities (9,782) (8,742)
------- -------
5,739 6,036
Investing:
Capital expenditures (4,340) (10,504)
Acquisitions (1,090) (1,122)
------- -------
(5,430) (11,626)
Financing:
Dividends paid - (1,245)
Proceeds from exercise of stock options 948 1,593
Short-term borrowings (net) 178 (1,892)
Long-term debt repayments (126) -
------- -------
1,000 (1,544)
Effect of exchange rate changes on cash 333 377
------- -------
Increase (decrease) in cash and cash equivalents 1,642 (6,757)
Cash and cash equivalents at beginning of period 51,489 56,047
------- --------
Cash and cash equivalents at end of period $53,131 $49,290
======= =======
Amounts are unaudited.
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
LIFE TECHNOLOGIES, INC.
STATEMENT OF COMPREHENSIVE INCOME
(amounts in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Net income $10,983 $10,492
Other comprehensive income (loss)
Currency translation effects (2,997) (2,099)
------- -------
Comprehensive income $ 7,986 $ 8,393
======= =======
Amounts are unaudited.
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS:
-----------------------------
BASIS OF PRESENTATION
In the opinion of the Company's management, the unaudited financial
statements reflect all adjustments (which consist of normal recurring
adjustments) necessary to present a fair statement of the results for the
interim periods. The results for the three-month period ended March 31,
2000 are not necessarily indicative of the results for the year ending
December 31, 2000.
EARNINGS PER SHARE
Basic earnings per common share have been computed by dividing net income
by the weighted-average number of common shares outstanding during the
period. Diluted earnings per common share have been computed by dividing
net income by the weighted-average number of common shares outstanding plus
an assumed increase in common shares outstanding for dilutive securities.
The following table reconciles the weighted average number of common shares
outstanding during each period for basic earnings per share with the
comparable amount for diluted earnings per share.
<TABLE>
<CAPTION>
Three months ended
March 31,
--------
(amounts in thousands) 2000 1999
====================== ==== ====
<S> <C> <C>
Weighted average shares outstanding-basic 25,015 24,944
Stock options 216 70
------------- ------ ------
Weighted average shares outstanding-diluted 25,231 25,014
=========================================== ====== ======
</TABLE>
COMPREHENSIVE INCOME
The following are included as components of accumulated other comprehensive
income (loss).
<TABLE>
<CAPTION>
Total
Foreign comprehensive
Pension currency income
liability translation (loss)
--------- ----------- ------
<S> <C> <C> <C>
(amounts in thousands)
======================
Beginning balance (January 1, 2000) (11) (10,492) (10,503)
Current period change - (2,998) (2,998)
--------------------- --------- ----------- ---------
Ending balance (March 31, 2000) (11) (13,490) (13,501)
=============================== ========= =========== =========
</TABLE>
U.S. and international withholding taxes have not been provided on
undistributed earnings of foreign subsidiaries. The Company remits only
those earnings which are considered to be in excess of the reasonably
anticipated working capital needs of the foreign subsidiaries, with the
balance considered to be permanently reinvested in the operations of such
subsidiaries. It is impractical to estimate the total tax liability, if
any, until such a distribution is made.
SEGMENT REPORTING AND RELATED INFORMATION
Operating segment revenues for the quarters ended March 31, 2000 and 1999
were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 2000 1999
---------------------- ---- ----
<S> <C> <C>
Americas Research $37,626 $33,645
U.S. Bioindustrial 22,688 19,973
Europe 32,366 32,485
Asia Pacific 16,084 13,434
Other 525 447
Total Revenue $109,289 $99,984
</TABLE>
Operating segment profit and a reconciliation to reported operating income
for the quarters ended March 31, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
(amounts in thousands) 2000 1999
---------------------- ---- ----
<S> <C> <C>
Americas Research $14,154 $12,539
U.S. Bioindustrial 8,781 7,456
Europe 6,504 9,942
Asia Pacific 4,653 4,052
Research and development (6,148) (5,837)
Other non-segment expenses (10,662) (10,862)
-------------------------- ------- -------
Operating income $17,282 $17,290
</TABLE>
CONTINGENCIES
In September 1999, the Company submitted a report in connection with a
voluntary disclosure to the Department of Veterans Affairs ("VA") regarding
matters involving the management of the Company's Federal Supply Schedule
contract with the VA that has been in effect since April 1992. As part of
the disclosure the Company offered to provide a refund to the government in
the amount of $3.9 million. The Company expensed this amount in September
1999. The Company has made a cash payment of $1.1 million to the VA and had
an accrued liability of $2.8 million at March 31, 2000. There can be no
assurance that the government will agree with the Company's assessment of
this matter or accept the Company's offered refund amount. Consequently, it
is possible the final resolution of this matter could materially differ
from the Company's proposal and could have a material adverse effect on the
Company's consolidated financial position, operating results or cash flows
when resolved in a future reporting period.
Apart from the matter above, the Company is subject to other potential
liabilities under government regulations and various claims and legal
actions which are pending or may be asserted. These matters have arisen in
the ordinary course and conduct of the Company's business and some are
expected to be covered, at least partly, by insurance. Estimated amounts
for claims that are probable and can be reasonably estimated are reflected
as liabilities of the Company. The ultimate resolution of these matters is
subject to many uncertainties. It is reasonably possible that some of the
matters which are pending or may be asserted could be decided unfavorably
to the Company. Although the amount of liability at March 31, 2000 with
respect to these matters can not be ascertained with certainty, the Company
believes that any resulting liability should not materially affect the
Company's consolidated financial statements.
ACCOUNTANTS' REPORT
The unaudited financial data included herein as of March 31, 2000 and 1999,
and for the three-month periods then ended, have been reviewed by the
registrant's independent accountants, PricewaterhouseCoopers LLP, and their
report is attached. This report is not a report within the meaning of
Section 7 and 11 of the Securities Act of 1933 and the independent
accountants' liability under Section 11 does not extend to it.
ANNEX A
AGREEMENT AND PLAN OF MERGER
between
INVITROGEN CORPORATION
and
LIFE TECHNOLOGIES, INC.
Dated as of July 7, 2000
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
Section 1.1 The Merger.........................................2
Section 1.2 Closing............................................2
Section 1.3 Effective Time.....................................2
Section 1.4 Effects of the Merger..............................3
Section 1.5 Certificate of Incorporation; Bylaws...............3
Section 1.6 Directors; Officers of Surviving Corporation;
Headquarters.......................................3
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities...........................4
Section 2.2 Exchange of Certificates...........................6
Section 2.3 Adjustments to Prevent Dilution....................9
Section 2.4 Appraisal Rights...................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Organization, Qualification, Etc..................11
Section 3.2 Capital Stock.....................................12
Section 3.3 Corporate Authority Relative to this Agreement;
No Violation......................................13
Section 3.4 Reports and Financial Statements..................15
Section 3.5 No Undisclosed Liabilities........................16
Section 3.6 No Violation of Law...............................16
Section 3.7 Environmental Matters.............................16
Section 3.8 Employee Benefit Plans; ERISA.....................18
Section 3.9 Absence of Certain Changes or Events..............20
Section 3.10 Proxy Statement/Prospectus;Registration Statement.20
Section 3.11 Tax Matters.......................................21
Section 3.12 Title and Related Matters.........................23
Section 3.13 Contracts.........................................24
Section 3.14 Patents, Trademarks and Similar Rights............25
Section 3.15 Legal Proceedings, etc............................25
Section 3.16 Disclosure........................................25
Section 3.17 Opinion of Financial Advisors.....................26
Section 3.18 Bidder Share Ownership............................26
ARTICLE IV
COVENANTS AND AGREEMENTS
Section 4.1 Conduct of Business by the Company................26
Section 4.2 Bidder Interim Operations.........................29
Section 4.3 Access; Confidentiality...........................31
Section 4.4 Stockholders Meeting; Proxy Statement;
Registration Statement............................32
Section 4.5 Commercially Reasonable Efforts;
Further Assurances................................33
Section 4.6 Employee Stock Options and Other
Employee Benefits.................................34
Section 4.7 Takeover Statute..................................37
Section 4.8 Public Announcements..............................37
Section 4.9 Affiliates........................................38
Section 4.10 Nasdaq National Market Quotation..................38
Section 4.11 Tax-Free Reorganization...........................38
Section 4.13 Indemnification; Insurance........................39
Section 4.14 Additional Reports and Information................40
ARTICLE V
CONDITIONS TO THE MERGER
Section 5.1 Conditions to Each Party's Obligation to
Effect the Merger.................................40
Section 5.2 Conditions to Obligation of the Bidder to
Effect the Merger.................................41
Section 5.3 Conditions to Obligation of the Company to
Effect the Merger.................................42
ARTICLE VI
TERMINATION
Section 6.1 Termination.......................................43
Section 6.2 Effect of Termination.............................45
ARTICLE VII
MISCELLANEOUS
Section 7.1 No Survival of Representations and Warranties.....45
Section 7.2 Expenses..........................................45
Section 7.3 Counterparts; Effectiveness.......................45
Section 7.4 Governing Law.....................................45
Section 7.5 Notices...........................................45
Section 7.6 Assignment; Binding Effect........................47
Section 7.7 Severability......................................47
Section 7.8 Enforcement of Agreement..........................47
Section 7.9 Entire Agreement; Third-Party Beneficiaries.......48
Section 7.10 Headings..........................................48
Section 7.11 Definitions.......................................48
Section 7.12 Finders or Brokers................................48
Section 7.13 Amendment or Supplement...........................49
Section 7.14 Extension of Time, Waiver, Etc....................49
INDEX OF DEFINED TERMS
DEFINED TERM SECTION
Affiliated Group.....................................................3.11(a)
affiliates..............................................................7.11
Agreement.......................................................Introduction
Average Bidder Trading Price..........................................2.1(a)
Bidder..........................................................Introduction
Bidder Common Stock.................................................Recitals
Bidder Disclosure Schedule..........................Article III Introduction
Bidder Stockholder Approval...........................................3.3(b)
Bidder Stockholders Meeting...........................................4.4(a)
Cash Election.........................................................2.1(b)
Cash Election Proration Factor .......................................2.1(b)
Certificate of Merger....................................................1.3
Certificates..........................................................2.2(a)
Charter Amendment.....................................................4.4(a)
Closing..................................................................1.2
Closing Date.............................................................1.2
Code................................................................Recitals
Company.........................................................Introduction
Company Common Stock................................................Recitals
Company Disclosure Schedule.........................Article III Introduction
Company Employee......................................................4.5(b)
Company Equity Plan.................................................4.1(vii)
Company Option Plans..................................................4.6(a)
Company Policies.....................................................4.13(b)
Company Stock Options.................................................4.6(a)
Company Stockholder Approval..........................................3.3(a)
Company Stockholders Meeting..........................................4.4(a)
Dexter..............................................................Recitals
Dexter Merger.......................................................Recitals
Dexter Merger Agreement.............................................Recitals
DGCL................................................................Recitals
Dissenting Shares........................................................2.4
Effective Time...........................................................1.3
Election Deadline.....................................................2.2(a)
Election Form.........................................................2.2(a)
Environmental Claim................................................3.7(d)(i)
Environmental Law.................................................3.7(d)(ii)
Environmental Permits.................................................3.7(a)
ERISA.................................................................3.8(a)
ERISA Affiliate......................................................3.8(a)
ESP...................................................................4.6(c)
Exchange Act..........................................................3.3(c)
Exchange Agent........................................................2.2(a)
Exchange Fund.........................................................2.2(a)
Exchange Ratio........................................................2.1(b)
Expiration Date.......................................................6.1(b)
GAAP.....................................................................3.4
Governmental Entity...................................................3.3(c)
Hazardous Materials..............................................3.7(d)(iii)
HSR Act...............................................................3.3(c)
including...............................................................7.11
Indemnified Parties.....................................................4.13
Intellectual Property...................................................3.14
International Plans...................................................3.8(i)
Lien..................................................................3.1(b)
Material................................................................3.16
Material Adverse Effect...............................................3.1(a)
Material Contracts...................................................3.13(a)
Merger..............................................................Recitals
Merger Consideration..................................................2.1(b)
Person..................................................................7.11
Plans.................................................................3.8(a)
Proxy Statement.......................................................4.3(b)
Registration Statement...............................................3.10(b)
Representing Party..................................Article III Introduction
Representing Party's Disclosure Schedule............Article III Introduction
SEC...................................................................3.4(a)
SEC Reports..............................................................3.4
Securities Act........................................................3.3(c)
Shares..............................................................Recitals
Significant Subsidiaries................................................7.11
Special Committee...................................................Recitals
Standard Election.....................................................2.1(b)
Standard Election Consideration.......................................2.1(b)
Stock Election........................................................2.1(b)
Stock Election Consideration..........................................2.1(b)
Stockholders Meeting..................................................4.4(a)
Subsidiaries............................................................7.11
Surviving Corporation....................................................1.1
Tax Return...........................................................3.11(f)
Taxes................................................................3.11(f)
Termination Date.........................................................4.1
Trading Day...........................................................2.1(b)
AGREEMENT AND PLAN OF MERGER, dated as of July 7, 2000 (the
"Agreement"), between INVITROGEN CORPORATION, a Delaware corporation (the
"Bidder"), and LIFE TECHNOLOGIES, INC., a Delaware corporation (the "Com
pany").
WHEREAS, the Boards of Directors of the Bidder and the Company
and a special committee (the "Special Committee") of the Board of Directors
of the Company consisting of members of the Board of Directors who are
"Continuing Directors" as such term is defined in Article Eighth of the
Certificate of Incorporation of the Company deem it advisable and in the
best interests of their respective stockholders that the Company be merged
with and into the Bidder (the "Merger") upon the terms and subject to the
conditions provided for in this Agreement, whereby each outstanding share
of common stock, par value $0.01 per share, of the Company (the "Company
Common Stock" or the "Shares") will be converted into (i) shares of common
stock, par value $.01 per share, of the Bidder (the "Bidder Common Stock"),
(ii) cash or (iii) a combination of Bidder Common Stock and cash;
WHEREAS, immediately after the execution and delivery of this
Agreement, the Bidder is entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Dexter Merger Agreement"), between the
Bidder and Dexter Corporation, a Connecticut corporation ("Dexter"),
pursuant to which Dexter will be merged with and into the Bidder (the
"Dexter Merger") simultaneously with the Merger upon the terms and subject
to the conditions set forth in the Dexter Merger Agreement, whereby each
share of common stock, par value $1 per share, of Dexter will be converted
into (i) shares of Bidder Common Stock, (ii) cash or (iii) a combination of
Bidder Common Stock and cash;
WHEREAS, the obligations of the parties hereto to consummate
this Agreement are expressly conditioned on the consummation of the
transactions contemplated by the Dexter Merger Agreement;
WHEREAS, for U.S. federal income tax purposes, it is intended
that the Merger and the Dexter Merger contemplated hereby shall each
qualify as a reorganiza tion within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that this
Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368 of the Code; and
WHEREAS, the Boards of Directors of the Bidder and the Company
have each approved this Agreement and approved the Merger in accordance
with the General Corporation Law of the State of Delaware (the "DGCL"), and
upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, and
intending to be legally bound hereby, the Bidder and the Company agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, at
the Effective Time the Company shall merge with and into the Bidder, and
the separate corporate existence of the Company shall thereupon cease, and
the Bidder shall be the surviving corporation in the Merger (the "Surviving
Corporation"). The Surviving Corporation shall possess all the rights,
privileges, powers and franchises of a public as well as of a private
nature and shall be subject to all of the restrictions, disabilities,
duties, debts and obligations of the Company and the Bidder, all as
provided in the DGCL.
Section 1.2 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article V, unless
another time or date, or both, are agreed to by the parties hereto. The
Closing will be held at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, Four Times Square, New York, New York, unless another place is agreed
to by the parties hereto.
Section 1.3 Effective Time. Subject to the provisions of this
Agreement, on the Closing Date the parties shall file with the Secretary of
State of the State of Delaware a certificate of merger (the "Certificate of
Merger"), executed in accordance with the relevant provisions of the DGCL,
and shall make all other filings or recordings required under the DGCL in
order to effect the Merger. The Merger shall become effective upon the
filing of the Certificate of Merger or at such other time as is agreed by
the parties hereto and specified in the Certificate of Merger (the time at
which the Merger becomes fully effective being hereinafter referred to as
the "Effective Time"); provided, that the Merger and the Dexter Merger
shall occur simultaneously.
Section 1.4 Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
Section 1.5 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of
Incorporation of the Bidder, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by the DGCL and such
Certificate of Incorporation; provided, however, the first paragraph of
Article IV of the Certificate of Incorporation of the Bidder shall be
amended to read in its entirety to read as follows:
"The total number of shares of capital stock which the
Corporation shall have authority to issue is 131,405,884, of
which (a) 6,405,884 shares shall be preferred stock, par value
$.01 per share ("Preferred Stock"), and (b) 125,000,000 shares
shall be common stock, par value $.01 per share."
(b) At the Effective Time, the Bylaws of the Bidder, as
in effect immediately prior to the Effective Time, shall be the Bylaws of
the Surviving Corporation until thereafter amended as provided by the DGCL,
the Certificate of Incorporation of the Surviving Corporation and such
Bylaws.
Section 1.6 Directors; Officers of Surviving Corporation;
Headquarters.
(a) The directors of the Bidder at the Effective Time
shall be the directors of the Surviving Corporation until their respective
successors are duly elected and qualified or their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and Bylaws of the Surviving Corporation. Prior to the Effective Time, the
Bidder shall take all action necessary to appoint J. Stark Thompson and
Thomas H. Adams to the Board of Directors of the Bidder, such appointments
to be effective as of the Effective Time.
(b) The officers of the Bidder at the Effective Time
shall be the officers of the Surviving Corporation until their respective
successors are duly elected and qualified or their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and Bylaws of the Surviving Corporation. After the Effective Time, J. Stark
Thompson shall continue to be the President and Chief Executive Officer of
the Company's operations and shall also hold a senior executive management
position with the Bidder.
(c) After the Effective Time, the Company's operations
will continue to be headquartered at the site of the Company's current
headquarters in Rockville, Maryland.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders of
any securities of the Bidder or the Company:
(a) Each issued and outstanding Share that is owned by
the Bidder, Dexter or the Company or any of their respective Subsidiaries
shall automati cally be cancelled and retired and shall cease to exist and
no consideration shall be delivered in exchange therefor.
(b) Subject to the provisions of Sections 2.2(h) and 2.4,
each issued and outstanding Share, other than Shares cancelled and retired
in accordance with Section 2.1(a) and Dissenting Shares, shall be
converted, at the election of the holder thereof in accordance with the
procedures set forth herein, into one of the following (as adjusted
pursuant to the provisions of this Section 2.1, the "Merger
Consideration"):
(A) for each such Share with respect to which an
election to receive only Bidder Common Stock has been effectively
made and not revoked or lost pursuant to Section 2.2(a) (a "Stock
Election"), the right to receive that fraction of a share of Bidder
Common Stock calculated by dividing (x) $60.00 by (y) the Average
Bidder Trading Price (as hereinafter defined), rounded to four
decimal places (the "Exchange Ratio"). As used herein, the "Average
Bidder Trading Price" shall mean the average of the reported closing
sales prices per share of Bidder Common Stock as reported in The Wall
Street Journal for the 20 consecutive Nasdaq National Market trading
days (each, a "Trading Day") ending on (and including) the third
Trading Day prior to the date of the Company Shareholders Meeting;
provided, however, that if the quotient obtained as prescribed in the
preceding sentence exceeds 1.0, then for all purposes the Exchange
Ratio shall be 1.0, and if such quotient is less than 0.7500, then
for all purposes the Exchange Ratio shall be 0.7500 (the "Stock
Election Consideration").
(B) for each such Share with respect to which an
election to receive only cash has been effectively made and not
revoked or lost pursuant to Section 2.2(a) (a "Cash Election"), (i)
the right to receive an amount in cash equal to $60.00 multiplied by
the Cash Election Proration Factor, without interest except as set
forth in Section 2.2(b), plus (ii) if the Cash Election Proration
Factor is less than 1, a fraction of a share of Bidder Common Stock
equal to the Exchange Ratio multiplied by a fraction the numerator of
which is $60.00 minus the cash determined pursuant to clause (i) and
the denominator of which is $60.00. As used herein, the "Cash
Election Proration Factor" means the lesser of (x) 1.00 or (y) a
fraction (i) the numerator of which is (1) the product of the total
number of Shares outstanding multiplied by $16.80 minus (2) $16.80
multiplied by the number of Shares for which Standard Elections have
been effectively made and not revoked or lost, and (ii) the
denominator of which is the product of $60.00 multiplied by the
number of Shares for which Cash Elections have been effectively made
and not revoked or lost.
(C) for each such Share as to which neither a Stock
Election nor a Cash Election has been effectively made and not
revoked or lost pursuant to Section 2.2(a) (a "Standard Election"),
the right to receive $16.80 in cash, plus a fraction of a share of
Bidder Common Stock equal to the Exchange Ratio multiplied by 0.7200
(the "Standard Election Consideration").
(c) Each Person who, at the Effective Time, is a record
holder of Shares (other than Shares to be cancelled as set forth in Section
2.1(a) or Dissenting Shares) shall have the right to submit an Election
Form specifying the number of Shares that such Person desires to have
converted into shares of Bidder Common Stock, the number of Shares that
such Person desires to have converted into the right to receive cash and
Bidder Common Stock, if any, and the number of Shares that such Person
desires to have converted into the right to receive the Standard Election
Consideration. Any Person who fails properly to submit an Election Form on
or prior to the Election Deadline in accordance set forth in Section 2.2(a)
shall be deemed to have made a Standard Election.
(d) Each share of Bidder Common Stock issued and
outstanding immediately prior to the Effective Time shall on and after the
Effective Time continue to be issued and outstanding as an identical share
of Bidder Common Stock.
(e) Each share of Bidder Common Stock issued and held in
the treasury or by any Subsidiary of the Bidder as of the Effective Time,
if any, shall, on and after the Effective Time, continue to be issued and
held in the treasury of the Bidder or by such Subsidiary unaffected by the
Merger.
Section 2.2 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, the
Bidder shall appoint an agent (the "Exchange Agent") for the purpose of (i)
exchanging certificates representing Shares (the "Certificates") for the
Merger Consideration. At the Effective Time the Bidder will deposit with
the Exchange Agent the Merger Consider ation and cash in the amount
required by Section 2.2(g) (the "Exchange Fund"). Upon receipt, the
Exchange Agent will invest the cash portion of the Exchange Fund in United
States government securities maturing at the Election Deadline or such
other government securities maturing at the Election Deadline or such other
investments as the Bidder and the Company may mutually agree. Any interest
and other income resulting from such investments shall be paid to the
Bidder. Promptly after the Effective Time, the Exchange Agent will send to
each holder of Shares a letter of transmittal and instructions (which shall
specify that the delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent) for use in such exchange, and to each holder of Shares an election
form (the "Election Form") providing for such holders to make the Standard
Election, the Cash Election or the Stock Election. Any Standard Election
(other than a deemed Standard Election), Cash Election or Stock Election
shall be validly made only if the Exchange Agent shall have received by
5:00 p.m., New York City Time, on a date (the "Election Deadline") to be
mutually agreed upon by the Bidder and the Company (which date shall not be
later than the twentieth Business Day after the Effective Time), an
Election Form properly completed and executed (with the signature or
signatures thereon guaranteed to the extent required by the Election Form)
by such holder accompanied by such holder's Certificates, or by appropriate
guarantees of delivery of such Certificates from a member of any national
securities exchange or of the National Association of Securities Dealers or
a commercial bank or trust company in the United States as set forth in
such Election Form. Any holder of Shares who has made an election by
submitting an Election Form to the Exchange Agent may at any time prior to
the Election Deadline change such holder's election by submitting a revised
Election Form, properly completed and signed that is received by the
Exchange Agent prior to the Election Deadline. Any holder of Shares may at
any time prior to the Election Deadline revoke his election by written
notice to the Exchange Agent received by the close of business on the day
prior to the Election Deadline, and such holder will receive the Standard
Election Consideration.
(b) Letter of Transmittal. Upon surrender to the Exchange
Agent of its Certificate, together with a properly completed letter of
transmittal, each holder of Shares will be entitled to receive promptly
after the Election Deadline the Merger Consideration in respect of the
Shares represented by its Certificate. In addition, each such holder of
Shares shall be entitled to receive any dividends and distributions payable
pursuant to Section 2.2(g). Until so surrendered, each such Certificate
shall represent after the Effective Time, for all purposes, only the right
to receive the Merger Consideration.
(c) Payment to Non-Registered Owners. If any portion of
the Merger Consideration is to be paid to a Person other than the Person in
whose name the Certificate so surrendered is registered, it shall be a
condition to such payment that such Certificate shall be properly endorsed
or otherwise be in proper form for transfer and the Person requesting such
payment shall pay to the Exchange Agent any transfer or other Taxes
required as a result of such payment to a Person other than the registered
holder of such Certificate, or establish to the satisfaction of the
Exchange Agent that such Tax has been paid or is not payable.
(d) No Further Registration of Transfers. After the
Effective Time there shall be no further registration of transfers of
Shares. If after the Effective Time Certificates are presented to the
Surviving Corporation, they shall be cancelled and exchanged for the Merger
Consideration in accordance with the procedures set forth in this Article
II.
(e) Termination of Exchange Fund; No Liability. At any
time following the first anniversary of the Effective Time, the Surviving
Corporation shall be entitled to require the Exchange Agent to deliver to
it any remaining portion of the Exchange Fund (including any interest
received with respect thereto), and holders shall be entitled to look only
to the Surviving Corporation (subject to abandoned property, escheat or
other similar laws) with respect to the Merger Consideration, any cash in
lieu of fractional shares of Bidder Common Stock and any dividends or other
distributions with respect to Bidder Common Stock payable upon due
surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, neither the Surviving Corporation nor the
Exchange Agent shall be liable to any holder of a Certificate for Merger
Consideration (or dividends or distributions with respect thereto) or cash
from the Exchange Fund in each case delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(f) Lost, Stolen or Destroyed Certificates. In the event
any Certificates for Shares shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming such
Certificate(s) to be lost, stolen or destroyed and, if required by the
Bidder, the posting by such Person of a bond in such sum as the Bidder may
reasonably direct as indemnity against any claim that may be made against
it or the Surviving Corporation with respect to such Certificate(s), the
Exchange Agent will issue the Merger Consideration pursuant to Section
2.1(b) deliverable in respect of the Shares represented by such lost,
stolen or destroyed Certificates.
(g) Dividends; Distributions. No dividends or other
distributions with respect to Bidder Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Bidder Common Stock represented
thereby, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 2.2(h), and all such dividends, other
distributions and cash in lieu of fractional shares of Bidder Common Stock
shall be paid by the Bidder to the Exchange Agent and shall be included in
the Exchange Fund, in each case until the surrender of such Certificate in
accordance with this Article II. Subject to the effect of applicable
abandoned property, escheat or similar laws, following surrender of any
such Certificate there shall be paid to the holder of a Bidder Certificate
representing whole shares of Bidder Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount
of dividends or other distributions with a record date after the Effective
Time theretofore paid with respect to such whole shares of Bidder Common
Stock and the amount of any cash payable in lieu of a fractional share of
Bidder Common Stock to which such holder is entitled pursuant to Section
2.2(h), and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but
prior to such surrender and with a payment date subsequent to such
surrender payable with respect to such whole shares of Bidder Common Stock.
The Bidder shall make available to the Exchange Agent cash for these
purposes, if necessary.
(h) No Fractional Shares. No Bidder Certificates or scrip
representing fractional shares of Bidder Common Stock shall be issued upon
the surrender for exchange of Certificates; no dividend or distribution by
the Bidder shall relate to such fractional share interests; and such
fractional share interests will not entitle the owner thereof to vote or to
any rights as a shareholder of the Bidder. In lieu of any such fractional
shares, each holder of Certificate who would otherwise have been entitled
to receive a fractional share interest in exchange for such Certificate
pursuant to this Section shall receive from the Exchange Agent an amount in
cash equal to the product obtained by multiplying (A) the fractional share
interest to which such holder (after taking into account all Shares held by
such holder at the Effective Time) would otherwise be entitled by (B) the
average reported closing sales price for a share of Bidder Common Stock as
reported in The Wall Street Journal (or if not reported thereby, any other
authoritative source) for five consecutive Trading Days immediately
preceding the Closing Date. The Bidder shall provide the Exchange Agent the
aggregate amount of cash payable pursuant to this Section 2.2(h) promptly
following the Effective Time.
Section 2.3 Adjustments to Prevent Dilution. In the event that
the Bidder changes the number of outstanding shares of Bidder Common Stock
or the number of outstanding securities convertible or exchangeable into or
exercisable for shares of Bidder Common Stock prior to the Effective Time
as a result of a reclassifica tion, stock split (including a reverse
split), stock dividend or distribution, recapitaliza tion, subdivision, or
other similar transaction, or declares or pays any dividend or distribution
(including of rights) other than any regular quarterly cash dividends, the
Stock Election Consideration and the Standard Election Consideration will
be correspondingly and equitably adjusted to reflect such stock dividend,
subdivision, split, combination of shares or other specified transaction.
Section 2.4 Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, Shares that are issued and outstanding
immediately prior to the Effective Time and which are held by shareholders
who did not vote in favor of the Merger and who comply with all the
relevant provisions of Section 262 of the DGCL (the "Dissenting
Shareholders") shall not be converted into or be exchangeable for the right
to receive the Merger Consideration (the "Dissenting Shares"), unless and
until the holder or holders thereof shall have failed to perfect or shall
have effectively withdrawn or lost their rights to appraisal under the
DGCL. If any Dissenting Shareholder shall have failed to perfect or shall
have effectively withdrawn or lost such right, such holder's Shares shall
thereupon be converted into and become exchangeable for the right to
receive, as of the Effective Time, the Merger Consideration for each Share
without any interest thereon. The Company shall give the Bidder (i) prompt
notice of any written demands for appraisal of any Shares, attempted
withdrawals of such demands and any other instruments served pursuant to
the DGCL and received by the Company relating to shareholders' rights of
appraisal, and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the DGCL; provided,
however, the Company shall have the right to participate in any such
negotiations and proceed ings. The Company shall not, except with the prior
written consent of the Bidder, voluntarily make any payment with respect
to, or settle or offer to settle, any such demand for payment. If any
Dissenting Shareholder shall fail to perfect or shall have effectively
withdrawn or lost the right to dissent, the Shares held by such Dissenting
Shareholder shall thereupon be treated as though such Shares had been
converted into the right to receive the Standard Election Consideration
pursuant to Section 2.1(b).
Section 2.5 Withholding Rights. The Bidder shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person
pursuant to this Article II such amounts as it is required to deduct and
withhold with respect to the making of such payment under any provision of
federal, state, local or foreign Tax law. If the Bidder so withholds
amounts, such amounts shall be treated for all purposes of this Agreement
as having been paid to the holders of Shares in respect of which the Bidder
made such deduction and withholding.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as set forth on the schedule delivered by the Company to
the Bidder in connection with the execution and delivery of this Agreement
(the "Company Disclosure Schedule") the Company hereby represents and
warrants to the Bidder, and except as set forth in the disclosure schedule
delivered by the Bidder to the Company in connection with the execution and
delivery of this Agreement (the "Bidder Disclosure Schedule"), the Bidder
hereby represents and warrants to the Company, in each case as set forth in
this Article III, with the party making such representations and warranties
being referred to as the "Representing Party" and such Representing Party's
Disclosure Schedule as the "Representing Party's Disclosure Schedule."
Notwithstanding the foregoing, any representation or warranty which
expressly refers to the Bidder or its Subsidiaries is being made solely by
the Bidder and any representation or warranty which expressly refers to the
Company or its Subsidiaries is being made solely by the Company.
Section 3.1 Organization, Qualification, Etc.
(a) The Representing Party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorpora tion and has the corporate power and
authority required for it to own its properties and assets and to carry on
its business as it is now being conducted. The Representing Party is duly
qualified to do business and is in good standing in each jurisdiction in
which the ownership of its properties or the conduct of its business
requires such qualification, except for jurisdictions in which the failure
to be so qualified or in good standing would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party or substantially delay consummation of the transac tions
contemplated by this Agreement or otherwise prevent the Representing Party
from performing its obligations hereunder. As used in this Agreement, any
reference to any state of facts, event, change or effect having a "Material
Adverse Effect" on or with respect to the Representing Party means a
material adverse effect on the financial condition, assets, liabilities or
results of operations of the Representing Party and its Subsidiaries, taken
as a whole, excluding any such effect resulting from or arising in
connection with (A) changes or conditions generally affecting the
industries in which the Representing Party and its Subsidiaries operate,
unless, in the case of the Company, such changes or conditions have a
disproportionate effect on the Company and its Subsidiaries, taken as a
whole, or (B) changes in general economic, regulatory or political
conditions, unless, in the case of the Company, such changes have a
disproportionate effect on the Company and its Subsidiaries, taken as a
whole. Each Representing Party has made available to the other copies of
its certificate of incorporation and bylaws. Such copies of each
Representing Party's certificate of incorporation and bylaws are complete
and correct and in full force and effect, and the Representing Party is not
in violation of any of the provisions of its certificate of incorporation
or bylaws.
(b) Each of the Representing Party's Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Each of the
Representing Party's Subsidiaries has the corporate power and authority
required for it to own its properties and assets and to carry on its
business as it is now being conducted and is duly qualified to do business
and is in good standing in each jurisdiction in which the ownership of its
properties or the conduct of its business requires such qualification,
except for jurisdictions in which the failure to be so qualified or in good
standing would not, individually or in the aggregate, be reasonably likely
to have a Material Adverse Effect on the Representing Party. All the
outstanding shares of capital stock of, or other ownership interests in,
the Representing Party's Subsidiaries are duly authorized, validly issued,
fully paid and non-assessable and, with respect to such shares or ownership
interests that are owned by the Representing Party and its Subsidiaries,
are owned free and clear of all liens, claims, mortgages, encumbrances,
pledges and security interests of any kind (each, a "Lien"). All the
outstanding shares of capital stock of, or other ownership interests in,
the Representing Party's Subsidiaries are wholly owned by the Representing
Party, directly or indirectly.
Section 3.2 Capital Stock.
(a) Section 3.2(a) of the Representing Party's Disclosure
Schedule sets forth as of June 30, 2000:
(i) the number of authorized shares of each class or
series of capital stock of the Representing Party;
(ii) the number of shares of each class or series of capital
stock of the Representing Party which are issued and outstanding;
(iii) the number of shares of each class or series of
capital stock which are held in the treasury of such Representing Party;
(iv) the number of shares of each class or series of
capital stock of the Representing Party which are reserved for issuance,
indicating each specific reservation; and
(v) the number of shares of each class or series of
capital stock of such Representing Party which are subject to employee
stock options or other rights to purchase or receive capital stock granted
under such Person's stock option or other stock based employee or
non-employee director benefit plans, and, with respect to the Company,
indicating the name of the plan, the date of grant, the number of shares
and the exercise price thereof.
(b) All the outstanding shares of capital stock of the
Representing Party are, and all shares of Bidder Common Stock to be issued
in the Merger will be when issued in accordance with the terms of this
Agreement, duly authorized, validly issued, fully paid and non-assessable
and issued in compliance with all applicable U.S. state and federal and
foreign securities laws. Except as set forth in Section 3.2(a) of the
Representing Party's Disclosure Schedule and for the transactions
contemplated by this Agreement, (1) there are no shares of capital stock of
the Representing Party authorized, or as of the date of this Agreement
issued or outstanding, (2) as of the date of this Agreement there are no
authorized or outstanding options, warrants, calls, preemptive rights,
subscriptions or other rights, agreements, arrange ments or commitments of
any character relating to the issued or unissued capital stock of the
Representing Party or any of its Subsidiaries, obligating the Representing
Party or any of its Subsidiaries to issue, transfer or sell or cause to be
issued, transferred or sold any shares of capital stock or other equity
interest in the Representing Party or any of its Subsidiaries or securities
convertible into or exchangeable for such shares or equity interests, or
obligating the Representing Party or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, subscription or other
right, agreement, arrangement or commitment, and (3) there are no
outstanding contractual obligations of the Representing Party or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Representing Party or any Subsidiary of the
Representing Party or to provide funds to make any investment (in the form
of a loan, capital contribution or otherwise) in any Subsidiary of the
Representing Party or other entity.
Section 3.3 Corporate Authority Relative to this Agreement; No
Violation.
(a) The Company has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of the Company and, except for obtaining the
requisite approval of the stockholders of the Company (the "Company
Stockholder Approval") and the filing of the Certificate of Merger, no
other corporate proceedings on the part of the Company are necessary to
authorize the consummation of the transactions contemplated hereby. The
Board of Directors of the Company has taken all appropriate action so that
Section 203 of the DGCL will not be applicable to the Company or to the
Bidder for any purpose. This Agreement has been duly and validly executed
and delivered by the Company and, assuming this Agreement constitutes a
valid and binding agreement of Bidder, constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
(b) The Bidder has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of the Bidder, and other than the obtaining the
requisite approval of the stockholders of the Bidder (the "Bidder
Stockholder Approval") and the filing of the Certificate of Merger no other
corporate proceedings on the part of the Bidder are necessary to authorize
the consummation of the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Bidder and,
assuming this Agreement constitutes a valid and binding agreement of the
Company, constitutes a valid and binding agreement of the Bidder,
enforceable against the Bidder in accordance with its terms.
(c) Except for the filings, permits, authorizations,
consents and approvals set forth in Section 3.3(c) of the Representing
Party's Disclosure Schedule or as may be required under, and other
applicable requirements of, the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (the "Securities Act") (in the
case of the Bidder only ), the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the "Exchange Act"),
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), state securities or blue sky laws, and the rules and
regulations of the Nasdaq National Market, or the anti-competition laws or
regulations of the European Union or any foreign jurisdiction in which the
Company or the Bidder (directly or through Subsidiaries, in each case) has
material assets or conducts material operations, and the filing of the
Certificate of Merger under the DGCL, none of the execution, delivery or
performance of this Agreement by the Representing Party, the consummation
by the Representing Party of the transactions contemplated hereby or
compliance by the Representing Party with any of the provisions hereof will
(i) conflict with or result in any breach of any provision of the
certificate of incorporation, bylaws or similar organizational documents of
the Representing Party or any of its Subsidiaries, (ii) require any filing
with, or permit, authorization, consent or approval of, any federal,
regional, state or local court, arbitrator, tribunal, administrative agency
or commission or other governmental or other regulatory authority or
agency, whether U.S. or foreign (a "Governmental Entity"), (iii) result in
a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Representing Party or any of its Subsidiaries is a party or by which any of
them or any of their properties or assets may be bound, or (iv) violate any
order, writ, injunction, decree, judgment, permit, license, ordinance, law,
statute, rule or regulation applicable to the Representing Party, any of
its Subsidiaries or any of their properties or assets, excluding from the
foregoing clauses (ii), (iii) and (iv) such filings, permits,
authorizations, consents, approvals, violations, breaches or defaults which
are not, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on the Representing Party or prevent or
substantially delay the consummation of the transactions contemplated
hereby.
Section 3.4 Reports and Financial Statements. The Representing
Party has previously furnished or otherwise made available (by electronic
filing or otherwise) to the Bidder true and complete copies of:
(a) Annual Reports on Form 10-K filed with the Securities
and Exchange Commission (the "SEC") for each of the years ended December
31, 1998 and 1999 in the case of the Company and the year ended December
31, 1999 in the case of Bidder.
(b) the Quarterly Report on Form 10-Q filed with the SEC
for the quarter ended March 31, 2000, for each of the Representing Parties;
(c) each definitive proxy statement filed with the SEC
since December 31, 1998, for each of the Representing Parties;
(d) each final prospectus filed with the SEC since
December 31, 1998, except any final prospectus on Form S-8, for each of the
Representing Parties; and
(e) all Current Reports on Form 8-K filed with the SEC
since January 1, 2000, for each of the Representing Parties.
As of their respective dates, such reports, proxy statements and
prospectuses filed with the SEC by the Representing Party (collectively
with, and giving effect to, all amendments, supplements and exhibits
thereto, the "SEC Reports") (i) complied as to form in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. None of the Representing
Party's Subsidiaries is required to file any forms, reports or other
documents with the SEC. The audited consolidated financial statements and
unaudited consolidated interim financial statements included in the
Representing Party's SEC Reports (including any related notes and
schedules) fairly present in all material respects the financial position
of the Bidder or the Company and its consolidated Subsidiaries, as the case
may be, as of the dates thereof and the results of operations and cash
flows for the periods or as of the dates then ended (subject, in the case
of the unaudited interim financial statements, to normal recurring
adjustments), in each case in accordance with past practice and generally
accepted accounting principles in the United States ("GAAP") consistently
applied during the periods involved (except as otherwise disclosed in the
notes thereto). Since the date of Bidder's initial public offering, the
Bidder has timely filed all reports, registration statements and other
filings required to be filed by it with the SEC under the rules and
regulations of the SEC. Since January 1, 1999, the Company has timely filed
all reports, registration statements and other filings required to be filed
by it with the SEC under the rules and regulations of the SEC.
Section 3.5 No Undisclosed Liabilities. Neither the
Representing Party nor any of its Subsidiaries has any liabilities or
obligations of any nature required to be set forth on a balance sheet of
the Representing Party under GAAP, whether or not accrued, contingent or
otherwise, and there is no existing condition, situation or set of
circumstances which would be expected to result in such a liability or
obligation, except (a) liabilities or obligations reflected in the
Representing Party's SEC Reports or (b) liabilities and obligations which
are not, individually or in the aggregate, reasonably expected to have a
Material Adverse Effect on the Representing Party.
Section 3.6 No Violation of Law. The businesses of the
Representing Party and its Subsidiaries are not being conducted in
violation of any order, writ, injunction, decree, judgment, permit,
license, ordinance, law, statute, rule or regulation of any Governmental
Entity (provided that no representation or warranty is made in this Section
3.6 with respect to Environmental Laws), except (a) as described in the
Representing Party's SEC Reports, and (b) for violations or possible
violations which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Representing Party.
Section 3.7 Environmental Matters.
(a) Each of the Representing Party and its Subsidiaries
has obtained all licenses, permits, authorizations, approvals and consents
from Governmen tal Entities which are required under any applicable
Environmental Law and necessary for it to carry on its business or
operations as now conducted ("Environmental Permits"), except for such
failures to have Environmental Permits which, individually or in the
aggregate, are not reasonably expected to have a Material Adverse Effect on
the Representing Party. Each of such Environmental Permits is in full force
and effect, and each of the Representing Party and its Subsidiaries is in
compliance with the terms and conditions of all such Environmental Permits
and with all applicable Environmental Laws, except for such failures to be
in full force and effect or to be in compliance which, individually or in
the aggregate, are not reasonably likely to have a Material Adverse Effect
on the Representing Party.
(b) There are no Environmental Claims pending, or to the
knowledge of the Representing Party, threatened, against the Representing
Party or any of its Subsidiaries, or, to the knowledge of the Representing
Party, any Person whose liability for any such Environmental Claim the
Representing Party or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation of law for which reserves have
not been established in accordance with GAAP, that, individually or in the
aggregate, would have a Material Adverse Effect on the Representing Party.
(c) There are no past or present actions, activities,
circum stances, conditions, events or incidents, including, without
limitation, the release, threatened release or presence of any Hazardous
Material, that would form the basis of any Environmental Claim against the
Representing Party or any of its Subsidiaries, or for which the
Representing Party or any of its Subsidiaries is liable, except for such
liabilities which, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on the Representing Party.
(d) As used in this Agreement:
(i) "Environmental Claim" means any claim, action,
lawsuit or proceeding by any Person which seeks to impose liability
(including, without limitation, liability for investigatory costs,
cleanup costs, governmental response costs, natural resources,
damages, property damages, personal injuries or penalties) arising
out of, based on or resulting from (A) the presence, or release or
threatened release, of any Hazardous Materials at any location,
whether or not owned or operated by the Representing Party or any of
its Subsidiaries, or (B) circumstances which would give rise to any
violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Law" means any law or order of
any Governmental Entity relating to (A) the generation, treatment,
storage, disposal, use, handling, manufacturing, transportation or
shipment of, or (B) the environment or to emissions, discharges,
releases or threatened releases of, Hazardous Materials, into the
environment.
(iii) "Hazardous Materials" means (A) any petroleum
or petroleum products, radioactive materials or friable asbestos; (B)
any chemicals or other materials or substances which are now defined
as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," or "toxic
pollutants" under any Environmental Law; and (C) pesticides.
Section 3.8 Employee Benefit Plans; ERISA.
(a) Section 3.8(a) of the Representing Party's Disclosure
Schedule contains a true and complete list of each material deferred
compensation, incentive compensation or equity compensation plan; "welfare"
plan, fund or program (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")); "pension"
plan, fund or program (within the meaning of Section 3(2) of ERISA); each
material employment, termination or severance agreement; and each other
material employee benefit plan, fund, program, agreement or arrangement, in
each case, that is sponsored, maintained or contributed to or required to
be contributed to by the Representing Party or by any trade or business,
whether or not incorporated (an "ERISA Affiliate"), that together with the
Representing Party would be deemed at any relevant time a "single employer"
within the meaning of Section 4001(b) of ERISA, for the benefit of any
employee or former employee of the Representing Party or any Subsidiary
(the "Plans").
(b) In respect of Plans that are not International Plans,
the Representing Party has made available to the other Party: (i) correct
and complete copies of all documents embodying each Plan including (without
limitation) all amendments thereto and all related trust documents; (ii)
the most recent annual reports (Form Series 5500 and all schedules and
financial statements attached thereto), if any, required under ERISA or the
Code in connection with each Plan; and (iii) if the Plan is funded, the
most recent annual and periodic accounting Plan assets.
(c) No liability under Title IV or Section 312 of ERISA
has been incurred by the Representing Party or any ERISA Affiliate of the
Representing Party that has not been satisfied in full, and no condition
exists that presents a material risk to the Representing Party or any ERISA
Affiliate of the Representing Party of incurring any such liability, other
than liability for premiums due the Pension Benefits Guaranty Corporation
(which premiums have been paid when due), except as are not reasonably
likely to have a Material Adverse Effect on the Representing Party. To the
knowledge of the Representing Party, each Plan subject to Title IV of ERISA
or Section 412 of the Code is fully-funded on a termination basis.
(d) Neither the Representing Party nor any ERISA
Affiliate of the Representing Party has any liability to any Pension Plan
which is a "multiemployer plan" as defined in Section 3(37) of ERISA.
(e) Each Plan of the Representing Party has been operated
and administered in accordance with its terms and applicable law, including
but not limited to ERISA and the Code, except as are not reasonably likely
to have a Material Adverse Effect on the Representing Party, and each Plan
of the Representing Party intended to be "qualified" within the meaning of
Section 401(a) of the Code is so qualified and the trusts maintained
thereunder are exempt from taxation under Section 501(a) of the Code,
except for failures to so qualify or be exempt which are not, individually
or in the aggregate, reasonably likely to have a Material Adverse Effect on
the Representing Party.
(f) Section 3.8(f) of the Representing Party's Disclosure
Schedule sets forth each Plan of the Representing Party under which as a
result of the consummation of the transactions contemplated by this
Agreement, either alone or in combination with another event, (i) any
current or former employee or officer of the Representing Party or any
ERISA Affiliate of the Representing Party may become entitled to severance
pay or any other payment, except as expressly provided in this Agreement,
or (ii) any compensation due any such employee or officer may be increased
or the time of payment or vesting may become accelerated.
(g) Except as set forth in Section 3.8(g) of the
Representing Party's Disclosure Schedule, no Plan of the Representing Party
which is not an International Plan provides, or reflects or represents any
liability to provide, retiree life insurance, retiree health or other
retiree employee welfare benefits to any Person for any reason, except as
may be required by COBRA or other applicable law. The program described by
this Section 3.8(g) has at all times provided that the Representing Party
may amend and/or terminate such program without liability (except in
respect of current obligations outstanding for current retired employees
receiving benefits).
(h) There are no pending or, to the knowledge of the
Representing Party, threatened claims by of on behalf of any Plan of the
Representing Party, by any employee or beneficiary covered under any such
Plan, or otherwise involving any such Plan (other than routing claims for
benefits), except as would not, individually or in the aggregate be
reasonably likely to have a Material Adverse Effect on the Representing
Party.
(i) Each Plan of the Representing Party that has been
adopted or maintained by the Representing Party or any of its Subsidiaries,
whether formally or informally, for the benefit of employees outside the
United States ("International Plans") has been established, maintained and
administered in material compliance with its terms and conditions and with
the requirements prescribed by any and all statutory or regulatory laws
that are applicable to such International Plans. No International Plan of
the Representing Party has unfunded liabilities that would, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect on
the Representing Party.
(j) Except as set forth in Section 3.8(j) of the
Representing Party's Disclosure Schedule, the Representing Party is not
bound by or obligated under any labor, collective bargaining or union
agreements.
Section 3.9 Absence of Certain Changes or Events. Except as
disclosed in the Representing Party's SEC Reports, since December 31, 1999
(a) the businesses of the Representing Party and its Subsidiaries have been
conducted in all material respects in the ordinary course and (b) there has
not been any event, occurrence, development or state of circumstances or
facts that has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the Representing Party.
Section 3.10 Proxy Statement/Prospectus; Registration Statement.
(a) The Proxy Statement (or any amendment or supplement
thereto) will not, on the date the Proxy Statement is mailed to
stockholders of the Company and to stockholders of the Bidder and at the
time of the Stockholders Meetings, contain any untrue statement of a
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading. None
of the information supplied by or on behalf of the Company or any of its
Subsidiaries for inclusion or incorporation by reference in the
Registration Statement will, at the date it becomes effective and at the
time of the Stockholders Meetings contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy
Statement will, when filed by the Company and the Bidder with the SEC,
comply as to form in all material respects with the applicable provisions
of the Exchange Act. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to the statements made in any of
the foregoing documents based on and in conformity with information
supplied by or on behalf of the Bidder for inclusion or incorporation by
reference therein.
(b) The Registration Statement on Form S-4 to be filed
with the SEC by the Bidder in connection with the Merger, as amended or
supplemented from time to time (as so amended and supplemented, the
"Registration Statement"), will not, on the date of filing with the SEC or
at the time it becomes effective under the Securities Act, and on the date
the Proxy Statement is first mailed to stockholders of the Company and
stockholders of the Bidder and at the time of the Stockholders Meetings,
contain any untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they are made, not misleading. None of the information supplied by or on
behalf of the Bidder or any of its Subsidiaries for inclusion or
incorporation by reference in the Proxy Statement will, at the date mailed
to the stockholders of the Bidder and at the time of the Stockholders
Meetings, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances they were made,
not misleading. The Proxy Statement will, when filed by the Bidder and the
Company with the SEC , and the Registration Statement will, when filed by
the Bidder with the SEC, comply as to form in all material respects with
the applicable provisions of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, the Bidder makes no
representation or warranty with respect to the statements made in the
Registration Statement based on and in conformity with information supplied
by or on behalf of the Company specifically for inclusion or incorporation
by reference therein.
Section 3.11 Tax Matters.
(a) All federal, state, local and foreign Tax Returns
required to be filed by or on behalf of the Representing Party, each
affiliated, combined, consolidated or unitary group of which the
Representing Party is a member (an "Affiliated Group") have been timely
filed or requests for extensions have been timely filed and any such
extension has been granted and has not expired, and all such filed Tax
Returns are complete and accurate except to the extent any failure to file
or any inaccuracies in filed Tax Returns would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party. All Taxes due and owing by the Representing Party or
any Representing Party's Affiliated Group have been paid, or adequately
reserved for, except to the extent any failure to pay or reserve for would
not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on the Representing Party. There is no audit or
examination and there is no deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any Taxes due and owing
by the Representing Party or any Representing Party's Affiliated Group
which if determined adversely would, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on the Representing
Party. All assessments for Taxes due and owing by the Representing Party or
any Representing Party's Affiliated Group with respect to completed and
settled examinations or concluded litigation have been paid, except to the
extent that any failures to pay would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party.
(b) The Representing Party has not (i) entered into a
closing agreement or other similar agreement with a taxing authority
relating to Taxes of the Representing Party or any Representing Party's
Affiliated Group with respect to a taxable period for which the statute of
limitations is still open, or (ii) with respect to U.S. federal income
Taxes, granted any waiver of any statute of limitations with respect to, or
any extension of a period for the assessment of, any income Tax, in either
case, that is still outstanding. There are no Liens relating to material
Taxes upon the assets of the Representing Party or any Representing Party's
Affiliated Group other than Liens relating to Taxes not yet due and Liens
that would not, individually or in the aggregate, have a Material Adverse
Effect on the Representing Party. Neither the Representing Party, any
Representing Party's Affiliated Group is a party to or is bound by any Tax
sharing agreement, Tax indemnity obligation or similar agreement in respect
of Taxes (other than with respect to agreements solely between or among
members of the consolidated group of which the Representing Party is the
common parent and agreements and obligations that would not, individually
or in the aggregate, have a Material Adverse Effect on the Representing
Party). Neither the Representing Party nor any Representing Party's
Affiliated Group has taken any action or knows of any fact, agreement, plan
or other circumstance that is reasonably likely to prevent either the
Merger or the Dexter Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
(c) Section 3.11(c) of the Company Disclosure Schedule
lists each Tax Return of the Company or any Affiliated Group for which an
accurate copy of the actual Tax Return as filed with the relevant taxing
authority has been made available by the Company to the Bidder on or before
the date hereof.
(d) Neither the Company nor any Affiliated Group has
received any private letter ruling from the Internal Revenue Service within
the three-year period ending on the date hereof.
(e) Neither the Company nor any member of any Affiliated
Group has constituted either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of stock (to any Person or entity that is not a member of any
Affiliated Group) qualifying for tax-free treatment under Section 355 of
the Code (i) within the two-year period ending on the date hereof or (ii)
in a distribution which could otherwise constitute part of a "plan" or
"series of related transactions" (within the meaning of Section 355(e) of
the Code) in conjunction with the Merger or the Dexter Merger.
(f) For purposes of this Agreement: (i) "Taxes" means any
and all federal, state, local, foreign or other taxes of any kind (together
with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any taxing authority,
including, without limitation, taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property,
sales, use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net worth, and taxes or other
charges in the nature of excise, withholding, ad valorem or value added,
and (ii) "Tax Return" means any return, report or similar statement
(including the attached schedules) required to be filed with respect to any
Tax, including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
Section 3.12 Title and Related Matters. Except as set forth in
Section 3.12(a) of the Company Disclosure Schedule, the Company or one of
its Subsidiaries has good and valid title to, or a valid leasehold or
contractual interest in, all of the properties and assets reflected in the
latest balance sheet included in the SEC Reports or acquired after the date
thereof (except for properties or assets sold or otherwise disposed of
since the date thereof), free and clear of all Liens, except for those
exceptions to title listed in Section 3.12(a) of the Company Disclosure
Schedule, statutory Liens securing payments not yet due or delinquent or
the validity of which is being contested in good faith by appropriate
proceedings, and such imperfections or irregularities in title that do not
materially and adversely affect the current use of the properties or assets
subject thereto or affected thereby or otherwise materially impair the
business operations currently conducted at such properties. As of the date
hereof, Section 3.12(b) of the Company Disclosure Schedule contains a
complete and correct list of all real property owned by the Company or any
of its Subsidiaries, and a complete and correct list of each title
insurance policy insuring title to any of such real properties.
Section 3.13 Contracts.
(a) Schedule 3.13 (a) of the Company Disclosure Schedule
sets forth a complete and correct list of each contract (the "Material
Contracts") to which the Company or any of the Subsidiaries is a party
which, as of the date hereof, (i) is a collective bargaining agreement or
any agreement that contains any severance pay liabilities or obligations;
(ii) is an employment or consulting agreement or contract with an employee
or individual consultant or a consulting agreement or contract with a
consulting firm or other organization (other than employment agreements
that are created as a matter of Law); (iii) is a note, bond or debenture or
other agreement or instrument relating to borrowed money or an agreement of
guarantee or indemnification running to any Person other than a Subsidiary;
(iv) is an agreement or contract containing any covenant limiting the
freedom of the Company or any of its Subsidiaries to engage in any line of
business or compete with any person; (v) provides for aggregate future
payments of more than $250,000; (vi) provides for aggregate future payments
in excess of $100,000, has a term exceeding one year and which may not be
cancelled upon 90 or fewer days' notice without any liability, penalty or
premium (other than a nominal cancellation fee or charge); or (vii) is
material to the business, operations or financial condition of the Company
and its Subsidiaries, taken as a whole; provided that Schedule 3.13(a) does
not list any contract for the purchase or sale of goods or services entered
into in the ordinary course of business which may be cancelled on 90 or
fewer days' notice without any liability, penalty or premium (other than a
nominal cancellation fee or charge).
(b) Except as set forth in Section 3.13(b) of the Company
Disclosure Schedule, (i) each Material Contract is in full force and
effect, and (ii) there is not, with respect to the Material Contracts, any
existing default, or event of default, or event which with or without due
notice or lapse of time or both would constitute a default or event of
default, on the part of the Company or any of its Subsidiaries or to the
best knowledge of the Company any other party thereto, except where the
failure to be in full force and effect or where such default or event of
default is not reasonably likely to have a Material Adverse Effect on the
Company.
Section 3.14 Patents, Trademarks and Similar Rights. Section
3.14 of the Representing Party's Disclosure Schedule sets forth a complete
and correct list of all worldwide patents, trademarks, trade names, service
marks, copyrights, copyright registrations and applications, together with
appropriate registration numbers, that are necessary for the conduct of the
business of the Representing Party and its Subsidiaries as presently
conducted (other than commercially available software) (the "Intellectual
Property"). Subject to the licenses and other restrictions listed in
Section 3.14 of the Representing Party's Disclosure Schedule, the
Representing Party or one of its Subsidiaries owns or holds the
Intellectual Property in each case free and clear of all Liens, except
where the failure to so own or hold would not have a Material Adverse
Effect on the Representing Party. Except as set forth in Section 3.14 of
the Representing Party's Disclosure Schedule, to the best knowledge of the
Representing Party: (i) none of the Intellectual Property presently being
sold or used in the business of the Representing Party and its Subsidiaries
as presently conducted infringes upon or conflicts with any rights owned or
held by any other Person; (ii) no Person is infringing any Intellectual
Property; or (iii) there is not pending or threatened in writing any claim
or litigation against the Representing Party or any of its Subsidiaries
contesting the rights of the Representing Party or any of its Subsidiaries
to the Intellectual Property, except for any claims or litigation which
would not have a Material Adverse Effect on the Representing Party.
Section 3.15 Legal Proceedings, etc. As of the date hereof,
except as set forth in Section 3.15 of the Company Disclosure Schedule and
except for matters involving only monetary recovery in which the damages
sought to be imposed do not exceed $200,000 individually or $1 million in
the aggregate, there are no legal, administrative, arbitration or other
proceedings or governmental investigations pending or, to the best
knowledge of the Company, threatened in writing against the Company or any
of its Subsidiaries.
Section 3.16 Disclosure. The representations and warranties by
the Representing Party in this Agreement and the statements contained in
the schedules, certificates and other writings furnished and to be
furnished by the Representing Party to the other party pursuant to this
Agreement, when considered as a whole and giving effect to any supplements
or amendments thereof prior to the time of signing on the date hereof, do
not and will not contain any untrue statement of a material fact and do not
and will not omit to state any material fact necessary to make the
statements herein or therein not misleading, it being understood that as
used in this Section 3.16 "material" means material to the Representing
Party and its Subsidiaries, taken as a whole.
Section 3.17 Opinion of Financial Advisors.
(a) The Special Committee has received the opinion of
Credit Suisse First Boston Corporation, dated the date of this Agreement,
substantially to the effect that, as of such date, the Merger Consideration
to be received in the Merger by the holders of Shares (other than Dexter
and its subsidiaries, officers and directors) is fair to such holders from
a financial point of view.
(b) The Board of Directors of the Bidder has received the
opinion of Donaldson, Lufkin & Jenrette Securities Corporation, dated the
date of this Agreement, substantially to the effect that, as of such date,
the consideration to be issued and delivered by the Bidder in the Merger
and the Dexter Merger, taken together, is fair to the Bidder from a
financial point of view.
Section 3.18 Bidder Share Ownership. As of the date hereof, the
Bidder does not own any securities of the Company.
ARTICLE IV
COVENANTS AND AGREEMENTS
Section 4.1 Conduct of Business by the Company. From and after
the date hereof and prior to the Effective Time or the date, if any, on
which this Agreement is earlier terminated pursuant to Section 6.1 (the
"Termination Date"), and except with the prior written consent of the
Bidder (which consent will not be unreasonably withheld or delayed), as set
forth in Section 4.1 of the Company Disclosure Schedule or as may be
expressly permitted pursuant to this Agreement, the Company:
(i) shall, and shall cause each of its Subsidiaries
to, conduct its operations according to their ordinary and usual
course of business consistent with past practice;
(ii) shall use its reasonable best efforts, and
cause each of its Subsidiaries to use its reasonable best efforts, to
preserve intact its present business organization and goodwill, keep
available the services of its current officers and other key
employees and preserve its relationships with those Persons having
material business dealings with the Company and its Subsidiaries;
(iii) shall not, and shall not permit its
Subsidiaries to, authorize or pay any dividends on or make any
distribution with respect to its outstanding shares of capital stock
(other than any dividends or distribution by a wholly owned
Subsidiary of the Company to the Company or any of its wholly owned
Subsidiaries);
(iv) shall not, and shall not permit any of its
Subsidiaries to establish, enter into or amend any severance plan,
agreement or arrangement or any Plan of the Company or increase the
compensation payable or to become payable or the benefits provided to
its officers, directors or employees, other than as contemplated by
law or any existing contract, employee benefit or welfare plan or
policy, or in the ordinary course of business consistent with past
practice (1) with respect to employees who are not officers of the
Company, and (2) with respect to annual bonuses and other incentive
awards for employees including officers;
(v) shall not, and shall not permit any of its
Subsidiaries to, authorize, or announce an intention to authorize, or
enter into an agreement with respect to, any merger, consolidation or
business combination, any acquisition of a material amount of assets
or securities, any disposition of a material amount of assets or
securities or any other similar extraordinary transaction;
(vi) shall not, and shall not permit any of its
Subsidiaries to, propose or adopt any amendments to its certificate
of incorporation or bylaws (or other similar organizational
documents);
(vii) shall not, and shall not permit any of its
Subsidiaries to, issue or authorize the issuance of, or agree to
issue or sell any shares of capital stock of any class (whether
through the issuance or granting of options, warrants, commitments,
convertible securities, subscriptions, rights to purchase or
otherwise), except for (1) the issuance of Life Technologies Common
Stock pursuant to options and grants outstanding as of the date
hereof under the Company's 1997 Long-Term Incentive Plan, 1996
Non-Employee Directors Stock Option Plan, 1995 Long-Term Incentive
Plan and 1991 Stock Option Plan (each such plan, a "Company Equity
Plan") or (2) options and other equity awards granted in the ordinary
course of business consistent with past practice to any new employee
hired after the date hereof but before the Closing Date or pursuant
to formula awards, in either case under a Company Equity Plan;
(viii) shall not, and shall not permit any of its
Subsidiaries to, reclassify, combine, split, purchase or redeem any
shares of its capital stock or purchase or redeem any rights,
warrants or options to acquire any such shares;
(ix) shall not, and shall not permit any of its
Subsidiaries to, (A) incur, assume or prepay any indebtedness or any
other liabilities for borrowed money or issue any debt securities
other than incurrences and repayments of indebtedness under the
Company's or its Subsidiaries' credit facilities in existence on the
date of this Agreement, or (B) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contin-
gently or otherwise) for the obligations of any other Person (other
than wholly owned Subsidiaries), except for guarantees by
Subsidiaries of the Company indebtedness permitted under the
preceding clause (A);
(x) shall not, and shall not permit any of its
Subsidiaries to (or consent to any proposal by any Person in which
the Company has an investment to), make or forgive any loans,
advances or capital contributions to, or investments in, any other
Person other than the Company or any wholly owned Subsidiary of the
Company (including any intercompany loans, advances or capital
contributions to, or investments in, any affiliate) other than
advances to employees in the ordinary course of business in
accordance with the Company's or its Subsidiaries' established
policies;
(xi) shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any material lease, license,
contract or agreement or otherwise subject to any material Lien any
of its properties or assets (including securitizations), other than
in the ordinary course of business consistent with past practice; (B)
modify, amend in any material respect, or terminate any of its
material contracts; (C) waive, release or assign any rights that are
material to the Company and its Subsidiaries taken as a whole; or (D)
permit any insurance policy naming it as a beneficiary or a loss
payable payee to lapse, be cancelled or expire unless a new policy
with substantially identical coverage is in effect as of the date of
lapse, cancellation or expiration;
(xii) shall not, and shall not permit any of its
Subsidiaries to, change any of the financial accounting methods or
practices used by it unless required by GAAP;
(xiii)shall not, and shall not permit any of its
Subsidiaries to, make any Tax election that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect on
the Company or settle or compro mise any material Tax liability;
(xiv) shall not, and shall not permit any of its
Subsidiaries to, take any action that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a)
of the Code; and
(xv) shall not, and shall not permit any of its
Subsidiaries to, agree, in writing or otherwise, to take any of the
foregoing actions or take any action which would result in any of the
conditions to the Merger set forth in Article V hereof not being
satisfied.
Section 4.2 Bidder Interim Operations. Except as otherwise
expressly contemplated hereby, without the prior consent of the Company
(which consent will not be unreasonably withheld or delayed), from the date
hereof until the earlier of the Effective Time or the Termination Date, the
Bidder shall, and shall cause each of its Subsidiaries to, conduct their
business in all material respects in the ordinary and usual course
consistent with past practice and use all reasonable efforts to (i)
preserve intact its present business organization and goodwill, (ii) keep
available the services of its current officers and other key employees,
(iii) maintain in effect all material licenses, approvals and
authorizations from Governmental Entities, including, without limitation,
all material licenses and permits that are required for the Bidder or any
of its Subsidiaries to carry on its business as presently conducted and
(iv) preserve existing relationships with its material partners, lenders,
suppliers and others having material business relationships with it so that
the business of the Bidder and its Subsidiaries shall not be impaired in
any material respect at the Effective Time. Without limiting the generality
of the foregoing, except as otherwise expressly contemplated by this
Agreement, from the date hereof until the earlier of the Effective Time or
the Termination Date, without the prior consent of the Company (which
consent will not be unreasonably withheld or delayed), the Bidder shall
not, nor shall it permit any Subsidiary to:
(a) amend its certificate of incorporation or bylaws (or
other similar organizational documents);
(b) amend in any respect the terms of the capital stock
of the Bidder;
(c) split, combine, subdivide or reclassify any shares of
Bidder Common Stock or declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of Bidder Common Stock, except for (i) regular
quarterly cash dividends by the Bidder consistent in timing and amount with
past practice, or (ii) dividends paid by any Subsidiary to the Bidder or
any Subsidiary that is, directly or indirectly, wholly owned by the Bidder;
(d) change any of the financial accounting methods or
practices used by it unless required by GAAP;
(e) enter into or acquire any new line of business that
(i) is material to the Bidder and its Subsidiaries, taken as a whole, and
(ii) is not strategically related to the current business or operations of
the Bidder and its Subsidiaries;
(f) incur indebtedness outside of the ordinary course or
for acquisitions (other than in order to consummate the transactions
contemplated by this Agreement or the Dexter Merger Agreement);
(g) engage in any merger, consolidation, share exchange,
business combination, reorganization, recapitalization or other similar
transaction or any disposition, directly or indirectly, of assets,
securities or ownership interests representing a material portion of the
total assets of the Bidder and its Subsidiaries taken as a whole;
(h) shall not, and shall not permit any of its
Subsidiaries to, take any action that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code; or
(i) agree, in writing or otherwise, to take any of the
foregoing actions or take any action which would result in any of the
conditions to the Merger set forth in Article V hereof not being satisfied.
Section 4.3 Access; Confidentiality.
(a) Except for competitively sensitive information and
subject to legal and contractual restrictions, the Company shall (and shall
cause its Subsidiaries to) afford to the Bidder's officers, employees,
accountants, counsel and other authorized representatives reasonable access
during normal business hours upon reasonable notice, throughout the period
prior to the earlier of the Effective Time or the Termination Date, to its
properties, offices, employees, contracts, commitments, books and records
and any report, schedule or other document filed or received by it pursuant
to the requirements of federal or state securities laws and shall (and
shall cause each of its Subsidiaries to) furnish to the Bidder such
additional financial and operating data and other information as to its and
its Subsidiaries' respective businesses and properties as the Bidder may
from time to time reasonably request. The Bidder will make all reasonable
best efforts to minimize any disruption to the businesses of the Company
and the Company's Subsidiaries which may result from the requests for
access, data and information hereunder. The Bidder shall afford to the
Company's officers, employees, accountants, counsel and other authorized
representatives reasonable access during normal business hours upon
reasonable notice, to its officers, employees, and books and records to the
extent reasonably necessary in connection with the preparation of the Proxy
Statement. No investigation pursuant to this Section 4.3 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto. All requests for access
and information shall be coordinated through designated senior executives
of each of the parties.
(b) The Bidder will hold all information provided under
this Section 4.2 that is non-public in confidence to the extent required
by, and in accordance with, the provisions of the letter dated February 27,
2000, between Dexter and the Bidder. Except as required by law, the Company
will hold, and will cause its officers, employees, accountants, counsel and
other authorized representatives to hold, confidential, all information and
documents obtained pursuant to this Section 4.3 except for information (i)
the Company can show by tangible evidence to have been in its possession
prior to your receipt thereof from the Bidder; provided that such
information is not subject to another confidentiality agreement with, or
other obligation (legal, fiduciary or contractual) of secrecy to, the
Bidder or another party; (ii) is as of the date of this Agreement or
hereafter becomes generally available to the public, other than as a result
of a disclosure by the Company or its representatives; (iii) was or may
after the date of this Agreement be available to the Company on a
non-confidential basis from a third party that is not under any
confidentiality obligation (legal, fiduciary or contractual) to the Bidder
regarding such information; or (iv) is independently acquired or developed
by the Company or its representatives without violating any of the
Company's obligations under this Section 4.3(b).
Section 4.4 Stockholders Meeting; Proxy Statement; Registration
Statement.
(a) As promptly as practicable following the date of this
Agreement, (i) the Company shall, acting through its Board of Directors and
subject to the Company's Board of Directors' fiduciary duties under
applicable law, duly call, give notice of, solicit proxies for, convene and
hold an annual or special meeting of its stockholders (the "Company
Stockholders Meeting") in accordance with applicable law, its certificate
of incorporation and its bylaws, and (ii) the Bidder shall, acting through
its Board of Directors, duly call, give notice of, solicit proxies for,
convene and hold an annual or special meeting of its stockholders (the
"Bidder Stockholders Meeting" and, together with the Company Stockholders
Meeting, the "Stockholders Meetings") in accordance with applicable law,
its certificate of incorporation and bylaws, for the purposes of, among
other actions, in each case, considering and taking action upon the
approval of the Merger and the approval and adoption of this Agreement.
Each of the Company (subject to the Company's Board of Directors' fiduciary
duties under applicable law) and the Bidder shall include in the Proxy
Statement the recommendation of its respective Board of Directors that its
respective stockholders vote in favor of the approval of the Merger and the
approval and adoption of this Agreement and, in the case of the Bidder, in
favor of the approval of an amendment to the Bidder's certificate of
incorporation to authorize a sufficient number of shares of Bidder Common
Stock to issue the Merger Consideration (the "Charter Amendment") and an
increase in the number of shares issuable by the Bidder under the Bidder's
option plans. The Bidder and the Company shall cause their respective
Stockholders Meetings to be held on the same date, which date shall be the
same as the date of the Company Shareholders Meeting (as defined in the
Dexter Merger Agreement).
(b) As promptly as practicable following the date of this
Agreement, the Company and the Bidder shall (x) prepare and file with the
SEC a preliminary joint proxy statement relating to the Merger, this
Agreement and the Charter Amendment, and (y) obtain and furnish the
information required to be included by the SEC in the Proxy Statement and,
after consulting with one another respond promptly to any comments made by
the SEC with respect to the preliminary joint proxy statement and cause a
definitive joint proxy statement, including any amendments or supplements
thereto, to be mailed to their respective stockholders at the earliest
practicable date; provided that no amendments or supplements to the Proxy
Statement will be made by either party without consultation with the other
party and its counsel. Such definitive joint proxy statement shall also
constitute the prospectus of the Bidder with respect to shares of Bidder
Common Stock to be issued in connection with the transactions contemplated
by this Agreement (such joint proxy statement and prospectus is referred to
herein as the "Proxy Statement"), which prospectus is to be filed with the
SEC as part of the Registration Statement for the purpose of registering
Bidder Common Stock under the Securities Act. Each of the parties agrees to
provide the other party and its counsel with any comments, whether written
or oral, that such party may receive from time to time from the SEC or its
staff with respect to the Proxy Statement or the Registration Statement, as
the case may be, promptly after the receipt of such comments and to consult
with the other party and its counsel prior to responding to any such
comments.
(c) As promptly as practicable following the date of this
Agreement, the Bidder shall prepare and file with the SEC the Registration
Statement, and shall use its reasonable best efforts to have the
Registration Statement declared effective by the SEC as promptly as
practicable. The Bidder shall obtain and furnish the information required
to be included by the SEC in the Registration Statement and, after
consultation with the Company, respond promptly to any comments made by the
SEC with respect to the Registration Statement and cause the prospectus
included therein, including any amendments or supplements thereto, to be
mailed to the Company's stockholders at the earliest practicable date after
the Registration Statement is declared effective by the SEC, provided that
no amendments or supplements to the Registration Statement will be made by
the Bidder without consultation with the Company and its counsel. The
Bidder shall also take any action required to be taken under state blue sky
or other securities laws in connection with the issuance of Bidder Common
Stock in the Merger.
Section 4.5 Commercially Reasonable Efforts; Further Assurances.
(a) Subject to the terms and conditions of this Agreement
and applicable law, each of the parties shall act in good faith and use
commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement as soon as practicable. Without limiting the foregoing, the
parties shall, and shall cause their respective Subsidiaries to, and the
parties shall use commercially reasonable efforts to cause their (and their
respective Subsidiaries') directors, officers, employees, agents,
attorneys, accountants and representatives, to (i) consult and cooperate
with and provide assistance to each other in the preparation and filing
with the SEC of the preliminary Proxy Statement, the Proxy Statement and
the Registration Statement and all necessary amendments or supplements
thereto; (ii) obtain all consents, approvals, waivers, licenses, permits,
authorizations, registrations, qualifications or other permissions or
actions by, and give all necessary notices to, and make all filings with
and applications and submissions to, any Governmental Entity or other
Person necessary in connection with the consummation of the transactions
contemplated by this Agreement as soon as reasonably practicable; (iii)
provide all such information concerning such party, its Subsidiaries and
its officers, directors, employees, partners and affiliates as may be
necessary or reasonably requested in connection with any of the foregoing;
(iv) avoid the entry of, or have vacated or terminated, any injunction,
decree, order, or judgment that would restrain, prevent, or delay the
consummation of the Merger, including but not limited to defending through
litigation on the merits any claim asserted in any court by any Person; and
(v) take any and all reasonable steps necessary to avoid or eliminate every
impediment under any antitrust, competition, or trade regulation law that
is asserted by any Governmental Entity with respect to the Merger so as to
enable the consummation of the Merger to occur as expeditiously as
possible. Prior to making any application to or filing with a Governmental
Entity or other entity in connection with this Agreement (other than filing
under the HSR Act), each party shall provide the other party with drafts
thereof and afford the other party a reasonable opportunity to comment on
such drafts.
(b) The Company and the Bidder shall keep the other
reasonably apprised of the status of matters relating to the completion of
the transactions contemplated hereby, including promptly furnishing the
other with copies of notices or other communications received by the Bidder
or the Company, as the case may be, or by any of their respective
Subsidiaries, from any third party and/or any Governmental Entity with
respect to the transactions contemplated by this Agreement.
Section 4.6 Employee Stock Options and Other Employee Benefits.
(a) Simultaneously with the Merger, (i) each outstanding
option (each a "Company Stock Option") to purchase or acquire a share of
Company Common Stock under employee incentive or benefit plans, programs or
arrangements and non-employee director plans presently maintained by the
Company (the "Company Option Plans") shall be assumed by the Bidder and
converted into an option to purchase the number of shares (rounded down to
the nearest full share) of Bidder Common Stock equal to the product of (x)
the Exchange Ratio multiplied by (y) the number of shares of Company Common
Stock which could have been issued prior to the Effective Time upon the
exercise of such option and were not previously exercised, at an exercise
price per share (rounded upward to the nearest cent) equal to the exercise
price for each share of Company Common Stock subject to such option divided
by the Exchange Ratio, with all references in each such option to the
Company being deemed to refer to the Bidder, where appropriate, provided,
however, that with respect to any Common Stock Option which, immediately
prior to the Merger, is an "incentive stock option," within the meaning of
Section 422 of the Code, the adjustments provided in this Section 4.6
shall, if applicable, be modified in a manner so that the adjustments are
consistent with requirements of Section 424(a) of the Code, and (ii) the
Bidder shall assume the obligations of the Company under the Company Option
Plans. The other terms of each such option, and the plans under which they
were issued, shall continue to apply in accordance with their terms,
including any provisions providing for acceleration of vesting and
exercisability. At or prior to the Effective Time, the Bidder shall take
all corporate action necessary to reserve for issuance a sufficient number
of shares of Bidder Common Stock for delivery upon exercise of Company
Stock Options assumed by it in accordance with this Section 4.6. As soon as
practicable after the Effective Time, if necessary, the Bidder shall file a
registration statement on Form S-8 (or any successor or other appropriate
forms), or another appropriate form with respect to the Bidder Common Stock
subject to such Company Stock Options, and shall use its best efforts to
maintain the effectiveness of such registration statements (and maintain
the current status of the prospectus or prospectuses contained therein) for
so long as the Company Stock Options remain outstanding. The Company shall
take such steps as may be required to cause the transactions contemplated
by this Section 4.6(a) and any other dispositions of Company equity
securities (including derivative securities) in connection with this
Agreement or the transactions contemplated hereby by any individual who is
a director or officer of the Company to be exempt under Rule 16b-3
promulgated under the Exchange Act. The Bidder shall take such steps as may
be required to cause the transactions contemplated by this Section 4.6(a)
and any other acquisitions of Bidder equity securities (including
derivative securities) in connection with this Agreement or the
transactions contemplated hereby by any individual who is or becomes at or
before Closing a director or officer of the Bidder to be exempt under Rule
16b-3 promulgated under the Exchange Act. The steps to taken by the Company
and the Bidder in connection with the exemption under Rule 16b-3 described
above shall be taken in accordance with the interpretative letter dated
January 12, 1999, issued by the SEC to Skadden, Arps, Slate, Meagher & Flom
LLP.
(b) For the period through and including December 31,
2001, the Bidder shall, or shall cause its Subsidiaries to, maintain (i)
employee benefit plans, programs, policies and arrangements, wages or
salaries, as applicable, and bonus and other incentive compensation plans,
programs, policies and arrangements for each individual who was an employee
of the Company or any Subsidiary of the Company immediately prior to the
Effective Time, which are, in the aggregate, no less favorable than those
provided by the Company and its Subsidiaries as of immediately before the
Effective Time and (ii) contribution levels and loan provisions under the
defined contribution plans of the Company and its Subsidiaries, in each
case, at levels and subject to terms and conditions which are no less
favorable that those provided by the Company and its Subsidiaries as of
immediately prior to the Effective Time. Each Person who is an employee or
former employee of the Company or its Subsidiaries immediately prior to the
Effective Time (a "Company Employee") shall be given credit for all service
with the Company or any of its Subsidiaries (and service credited by the
Company or any of its Subsidiaries) prior to the Effective Time, using the
same methodology utilized by the Company as of immediately before the
Effective Time for crediting service and determining levels of benefits,
(i) for all purposes (other than benefit accrual under any defined benefit
pension plan) under all employee benefit plans, programs and arrangements
maintained by or contributed to by the Bidder and its Subsidiaries in which
such Company Employees become participants for purposes of eligibility to
participate, vesting and determination of level of benefits, and (ii) for
purposes of calculating the amount of each Company Employee's benefits
under all severance and vacation pay plans, programs, policies and
arrangements. The Bidder shall (x) waive, or cause to be waived, all
limitations as to preexisting conditions exclusions and waiting periods
with respect to participation and coverage requirements applicable to the
Company Employees under any welfare benefit plans that such Company
Employees may be eligible to participate in after the Effective Time,
except to the extent such limitations or waiting periods are already in
effect with respect to such employees and have not been satisfied as of the
Effective Time under any welfare benefit plan maintained for the Company
Employees immediately prior to the Effective Time, and (y) provide each
Company Employee with credit for any co-payments, deductibles and other
out-of-pocket expenses incurred prior to the Effective Time in satisfying
any applicable co-payment, deductible and other out-of-pocket expense
requirements under any welfare plans that such Company Employees are
eligible to participate in after the Effective Time, as if those
deductibles, co-payments and other out-of-pocket expenses had been incurred
under the welfare plans in which such employees are eligible to participate
after the Effective Time. Without limiting the generality of the foregoing,
the Bidder shall, and shall cause its Subsidiaries to, assume and honor all
employment, consulting, termination and severance agreements to which the
Company or any of its Subsidiaries is a party.
(c) At the direction of the Bidder, the Company shall
terminate the Life Technologies, Inc. Extra Savings Plan (the "ESP"). The
Bidder shall notify the Company at least (3) days prior to the Closing of
its decision to terminate the ESP. If the Bidder has notified the Company
of its decision to terminate the ESP, the Bidder shall receive from the
Company evidence (in a form satisfactory to the Bidder) that the ESP shall
be terminated effective as of the day immediately preceding the Closing.
The Bidder shall, consistent with the terms of its 401(k) plan, and
applicable law, allow individuals who were employees of the Company or any
Subsidiary of the Company as of immediately prior to the Closing to
participate in the Bidder's 401(k) plan and the Bidder shall cause such
plan to accept direct rollovers and rollover contributions (each, to the
extent requested by a ESP participant) in respect of the ESP account
balances (including any outstanding loans) held by such individuals.
(d) Promptly following the Effective Time, to the extent
permitted by applicable law (and pending shareholder approval, which the
Bidder shall use its best efforts to obtain), the Bidder will (after
consultation with the Company's current senior management team) issue
awards pursuant to the Bidder's stock option plan to the Company's
employees, which awards are consistent in terms of depth and amount of
participation with the policies presently employed by the Bidder after
giving consideration to relevant differences in total benefits between the
Company and the Bidder.
Section 4.7 Takeover Statute. If any "fair price,"
"moratorium," "control share acquisition" or other form of anti-takeover
statute or regulation shall become applicable to the transactions
contemplated hereby, each of the Company and the Bidder and the members of
their respective Boards of Directors shall grant such approvals and take
such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the
terms contemplated hereby and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated
hereby.
Section 4.8 Public Announcements. The Bidder and the Company
agree that neither one of them will issue any press release or otherwise
make any public statement or respond to any press inquiry with respect to
this Agreement or the transactions contemplated hereby without the prior
approval of the other party (which approval will not be unreasonably
withheld), except as may be required by applicable law or the rules of any
applicable stock exchange on which such party's securities are listed.
Section 4.9 Affiliates. As soon as practicable, the Company
shall deliver to the Bidder a list identifying, to the best of the
Company's knowledge, all persons who will be, at the time of the Company
Stockholder Approval, deemed to be "affiliates" of the Company for purposes
of Rule 145 under the Securities Act. The Company shall advise the Bidder
of any additions or deletions to or from such list from time to time
thereafter. The Company shall use its reasonable best efforts to cause each
such person to deliver to the Bidder at least 30 days prior to the Closing
Date a written "affiliates" agreement in customary form and substance.
Section 4.10 Nasdaq National Market Quotation. The Bidder shall
use its best efforts to cause the shares of Bidder Common Stock to be
issued in connection with the transactions contemplated by this Agreement
to be approved for quotation on Nasdaq National Market, subject to official
notice of issuance, prior to the Closing Date.
Section 4.11 Tax-Free Reorganization. The Bidder and the Company
intend that the Merger will qualify as a reorganization within the meaning
of Section 368(a) of the Code. The Bidder and the Company shall each use
all reasonable efforts to cause the Merger to so qualify and to obtain the
opinions of their respective tax counsel referred to in Sections 5.2(a) and
5.3(a), including the execution of the representation letters referred to
therein. Neither the Bidder nor the Company shall knowingly take any
action, or knowingly fail to take any action, that would cause the Merger
not to qualify as a reorganization within the meaning of Section 368(a) of
the Code, unless otherwise required pursuant to a "determination" within
the meaning of Section 1313(a) of the Code.
Section 4.12 Disclosure Schedule Supplements. From time to time
after the date of this Agreement and prior to the Effective Time, the
Company will promptly supplement or amend the Company Disclosure Schedule
with respect to any matter hereafter arising which, if existing or
occurring at or prior to the date of this Agreement, would have been
required to be set forth or described in the Company Disclosure Schedule or
which is necessary to correct any information in a schedule or in any
representation and warranty of the Company which has been rendered
inaccurate thereby in any material respect. From time to time after the
date of this Agreement and prior to the Effective Time, the Bidder will
promptly supplement or amend the Bidder Disclosure Schedule with respect to
any matter hereafter arising which, if existing or occurring at or prior to
the date of this Agreement, would have been required to be set forth or
described in the Bidder Disclosure Schedule or which is necessary to
correct any information in a schedule or in any representation and warranty
of the Bidder which has been rendered inaccurate thereby in any material
respect. For purposes of determining the accuracy of the representations
and warranties of the Company contained in this Agreement and the accuracy
of the representations and warranties of the Bidder contained in this
Agreement in order to determine the fulfillment of the conditions set forth
in Sections 5.2(b) and 5.3(b), the Company Disclosure Schedule and the
Bidder Disclosure Schedule shall be deemed to include only that information
contained therein on the date of this Agreement and shall be deemed to
exclude any information contained in any subsequent supplement or amendment
thereto.
Section 4.13 Indemnification; Insurance. (a) From and after the
Effective Time, the Bidder will indemnify and hold harmless each present
and former director and officer of the Company and its Subsidiaries (the
"Indemnified Parties"), against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages or liabilities incurred in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, by reason of the
fact that such individual is or was a director, officer, employee or agent
of the Company or any of its Subsidiaries, or is or was serving at the
request of the Company or any of its Subsidiaries as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, whether asserted or claimed prior to, at or after the
Effective Time, to the fullest extent permitted under applicable law, and
the Bidder shall also advance fees and expenses (including attorneys fees)
as incurred to the fullest extent permitted under applicable law; provided,
that to the extent the Company or any of its Subsidiaries and any
Indemnified Party are parties to an existing indemnification agreement, the
indemnification provided for pursuant to this Section 4.13(a) shall be
provided by the Bidder in accordance with the procedures prescribed in such
indemnification agreement.
(b) For six years from the Effective Time, the Bidder
shall maintain in effect the Company's and its Subsidiaries' current
directors' and officers' liability insurance policies (the "Company
Policies") covering those Persons who are currently covered by the Company
Policies; provided, however, that in no event shall the Bidder be required
to expend in any one year an amount in excess of 150% of the annual
premiums currently paid by the Company or its Subsidiaries for such
insurance, and provided further, that if the annual premiums of such
insurance coverage exceeds such amount, the Bidder shall be obligated to
obtain a policy with the greatest coverage available for a cost not
exceeding such amount; and provided further that the Bidder may meet its
obligations under this paragraph by covering the above Persons under the
Bidder's insurance policy or policies on the terms described above.
Section 4.14 Additional Reports and Information. The Bidder
shall furnish to the Company copies of all reports of the type referred to
in Section 3.4 which it files with the SEC on or after the date hereof, and
the Bidder represents and warrants that as of the respective dates thereof,
such reports will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The audited consolidated financial statements
and the unaudited consolidated interim financial statements included in
such reports (including any related notes and schedules) will fairly
present the financial position of the Bidder and its consolidated
Subsidiaries as of the dates thereof and the results of operations and cash
flows or other information included therein for the periods or as of the
date then ended (subject, in the case of the interim financial statements,
to normal, recurring adjustments), in each case in accordance with past
practice and GAAP consistently applied during the periods involved (except
as otherwise disclosed in the notes thereto).
ARTICLE V
CONDITIONS TO THE MERGER
Section 5.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of the
following conditions:
(a) The Company Stockholder Approval shall have been
obtained.
(b) The Bidder Stockholder Approval shall have been
obtained.
(c) All of the conditions to the effectiveness of the
Dexter Merger shall have been satisfied or waived in accordance with the
terms of the Dexter Merger Agreement and the Dexter Merger shall be
effective simultaneously with the Effective Time. The condition set forth
in this paragraph (c) shall not be waivable by either party.
(d) No statute, rule, regulation, executive order,
decree, ruling or permanent injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits the
consummation of the Merger substantially on the terms contemplated hereby;
provided that the party seeking to rely upon this condition has fully
complied with and performed its obligations pursuant to Section 4.3.
(e) The applicable waiting period under the HSR Act shall
have expired or been terminated.
(f) The shares of Bidder Common Stock to be issued in the
Merger shall have been approved for quotation on the Nasdaq National
Market, subject to official notice of issuance.
(g) The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act and no
stop order suspending such effectiveness shall have been issued and remain
in effect.
Section 5.2 Conditions to Obligation of the Bidder to Effect
the Merger. The obligation of the Bidder to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by the Bidder:
(a) The Bidder shall have received an opinion of Gray
Cary Ware & Freidenrich LLP, special tax counsel to the Bidder, dated as of
the Effective Time, to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code. The
issuance of such opinion shall be conditioned upon the receipt by such tax
counsel of customary representation letters from each of the Bidder and the
Company, in each case, in form and substance reasonably satisfactory to
such tax counsel and the issuance of the opinion of counsel to the Company
provided in Section 5.3(a). The specific provisions of each such
representation letter shall be in form and substance reasonably
satisfactory to such tax counsel, and each such representation letter shall
be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect. The opinion condition
referred to in this Section 5.2(a) shall not be waivable after receipt of
the Company Stockholder Approval and the Bidder Stockholder Approval
referred to in Sections 5.1(a) and 5.1(b), unless further Company
Stockholder Approval is obtained with appropriate disclosure.
(b) The representations and warranties of the Company set
forth in this Agreement that are qualified by materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of the Company set forth in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case
as if such representations or warranties were made as of the Effective Time
(other than those that speak as of a specific date or as of the date
hereof, which representations and warranties shall be true and correct or
true and correct in all material respects, as the case may be, as of such
specific date or as of the date hereof, respec tively).
(c) The Company shall have performed and complied in all
material respects with all agreements and obligations required by this
Agreement to be performed and complied with by it on or prior to the
Closing Date.
(d) The Company shall have furnished a certificate of an
executive officer to evidence compliance with the conditions set forth in
Sections 5.2(b) and (c) of this Agreement.
Section 5.3 Conditions to Obligation of the Company to Effect
the Merger. The obligation of the Company to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by the Company
(but only with the prior approval of the Special Committee):
(a) The Company shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel to the
Company, dated as of the Effective Time, to the effect that the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Code. The issuance of such opinion shall be conditioned upon the receipt by
such tax counsel of customary representation letters from each of the
Bidder and the Company, in each case, in form and substance reasonably
satisfactory to such tax counsel. The specific provisions of each such
representation letter shall be in form and substance reasonably
satisfactory to such tax counsel, and each such representation letter shall
be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect. The opinion condition
referred to in this Section 5.3(a) shall not be waivable after receipt of
the Company Stockholder Approval and the Bidder Stockholder Approval
referred to in Sections 5.1(a) and 5.1(b), unless further Company
stockholder approval is obtained with appropriate disclosure.
(b) The representations and warranties of the Bidder set
forth in this Agreement that are qualified by materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of the Company set forth in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case,
as if such representations or warranties were made as of the Effective Time
(other than those that speak as of a specific date or as of the date
hereof, which representations and warranties shall be true and correct or
true and correct in all material respects, as the case may be, as of such
specific date or as of the date hereof, respectively).
(c) The Bidder shall have performed and complied in all
material respects with all agreements and obligations required by this
Agreement to be performed and complied with by it on or prior to the
Closing Date.
(d) The Bidder shall have furnished a certificate of an
executive officer of the Bidder to evidence compliance with the conditions
set forth in Section 5.3(b) and (c) of this Agreement.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after obtaining the
Company Stockholder Approval and the Bidder Stockholder Approval:
(a) by the mutual written consent of the Company and the
Bidder;
(b) by either the Bidder or the Company, if the Merger
has not been consummated by October 31, 2000 (the "Expiration Date");
provided, however, that in the event either the condition set forth in
Section 5.1(e) shall not have been satisfied or, prior to September 15,
2000, the Registration Statement shall not have been declared effective,
the Expiration Date shall be extended to the earlier of (x) the later of
(1) the date which is three business days after the date on which the
condition set forth in Section 5.1(e) is satisfied and (2) the date which
is three business days following the date of the Company Shareholders
Meeting and (y) December 31, 2000; provided further, that the right to
terminate this Agreement under this clause (b) shall not be available to
any party whose failure to fulfill any of its obligations under this
Agreement has been the cause of or resulted in the failure to consummate
the Merger by such date;
(c) by either the Bidder or the Company if (i) a statute,
rule, regulation or executive order shall have been enacted, entered,
promulgated or enforced by any Governmental Entity prohibiting the
consummation of the Merger substantially on the terms contemplated hereby;
or (ii) an order, decree, ruling or injunction shall have been entered
permanently restraining, enjoining or otherwise prohibiting the
consummation of the Merger substantially on the terms contemplated hereby
and such order, decree, ruling or injunction shall have become final and
non-appealable; provided, that the party seeking to terminate this
Agreement pursuant to this Section 6.1(c)(ii) shall have used its
reasonable best efforts to remove such order, decree, ruling or injunction
and shall not be in violation of Section 4.4;
(d) by the Bidder or the Company, if after the Bidder
convenes and holds the Bidder Stockholders Meeting and certifies the vote
with respect to the Merger and the amendment of the Bidder's certificate of
incorporation, the Bidder's stockholders shall have failed to deliver the
stockholder approval required by law to be given by the Bidder's
stockholders;
(e) by the Bidder or the Company, if the Dexter Merger
Agreement shall have been terminated in accordance with its terms;
(f) by the Bidder, if there has been a material violation
or breach by the Company of any agreement, representation or warranty
contained in this Agreement that has rendered the satisfaction of any
condition to the obligations of the Bidder impossible and such violation or
breach has not been waived by the Bidder;
(g) by the Company, if there has been a material
violation or breach by the Bidder of any agreement, representation or
warranty contained in this Agreement that has rendered the satisfaction of
any condition to the obligations of the Company impossible and such
violation or breach has not be waived by the Company; or
(h) in the event that the Expiration Date is extended
beyond October 31, 2000, by the Bidder or the Company, at any time after
the tenth business day following the termination of either the Asset
Purchase Agreement, dated as of June 20, 2000, between Dexter and Loctite
Corporation or the Asset Purchase Agreement, dated as of June 20, 2000,
between Dexter and Ahlstrom Paper Group Oy, in accordance with its terms.
Section 6.2 Effect of Termination. In the event of termination
of this Agreement pursuant to Section 6.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
terminate and be of no further force and effect (except for the provisions
of Section 7.2), and there shall be no other liability on the part of the
Bidder or the Company except liability arising out of a willful breach of
this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 No Survival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time.
Section 7.2 Expenses. Except as otherwise expressly
contemplated by this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses.
Section 7.3 Counterparts; Effectiveness. This Agreement may be
executed in two or more separate counterparts, each of which shall be
deemed to be an original but all of which shall constitute one and the same
agreement. This Agreement shall become effective when each party hereto
shall have received a counterpart hereof signed by the other party hereto.
Section 7.4 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of laws thereof.
Section 7.5 Notices. All notices and other communications
hereunder shall be in writing (including telecopy or similar writing) and
shall be effective (a) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section 7.5 and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section 7.5:
To the Bidder:
Invitrogen Corporation
1600 Faraday Avenue
Carlsbad, California 92008
Attention: Chief Financial Officer
Telecopy: (760) 602-6505
copy to:
Gray Cary Ware & Freidenrich LLP
4365 Executive Drive, Suite 1600
San Diego, California 92121-2189
Attention: Cameron Jay Rains, Esq.
Telecopy: (858) 677-1477
To the Company or to the Special Committee:
Life Technologies, Inc.
9800 Medical Center Drive
Rockville, Maryland 20850
Attention: General Counsel
Telecopy: (301) 610-8606
with a copy to:
Life Technologies, Inc.
9800 Medical Center Drive
Rockville, Maryland 20850
Attention: Chairman, Special Committee
Telecopy: (301) 610-8606
with a further copy to:
Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096-2334
Attention: General Counsel
Telecopy: (860) 292-7669
a further copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: J. Michael Schell, Esq.
Margaret L. Wolff, Esq.
Telecopy: (212) 735-2000
and a further copy to:
Wachtell Lipton Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
Attention: David A. Katz, Esq.
Telecopy: (212) 403-2000
Section 7.6 Assignment; Binding Effect. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned
by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the
first sentence of this Section 7.6, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Any assignment not permitted under this
Section 7.6 shall be null and void.
Section 7.7 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as
to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
Section 7.8 Enforcement of Agreement. The parties hereto agree
that money damages or other remedy at law would not be sufficient or
adequate remedy for any breach or violation of, or a default under, this
Agreement by them and that in addition to all other remedies available to
them, each of them shall be entitled to the fullest extent permitted by law
to an injunction restraining such breach, violation or default or
threatened breach, violation or default and to any other equitable relief,
including, without limitation, specific performance, without bond or other
security being required.
Section 7.9 Entire Agreement; Third-Party Beneficiaries. This
Agreement together with the Dexter Merger Agreement, the Confidentiality
Agreement, dated February 27, 2000, between the Bidder and Dexter, the
Company Disclosure Schedule, the Bidder Disclosure Schedule and exhibits
hereto constitute the entire agreement, and supersede all other prior
agreements and understandings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof and thereof and,
except for the provisions of Section 4.6(a), (b) and (c) and Section 4.13,
is not intended to and shall not confer upon any Person other than the
parties hereto any rights or remedies hereunder.
Section 7.10 Headings. Headings of the Articles and Sections of
this Agreement are for convenience of the parties only, and shall be given
no substantive or interpretive effect whatsoever.
Section 7.11 Definitions. References in this Agreement to (a)
"Subsidiaries" of the Company or the Bidder shall mean any corporation or
other form of legal entity of which more than 50% of the outstanding voting
securities are on the date hereof directly or indirectly owned by the
Company or the Bidder or in which the Company or the Bidder has the right
to elect a majority of the members of the board of directors or other
similar governing body; (b) "Significant Subsidiaries" shall mean
Subsidiaries which constitute "significant subsidiaries" under Rule 405
promulgated by the SEC under the Securities Act; (c) "affiliates" shall
mean, as to any Person, any other Person which, directly or indirectly,
controls, or is controlled by, or is under common control with, such
Person; and (d) "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including, without limitation, a Governmental Entity. As used in the
definition of "affiliates," "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person, whether through the
ownership of securities or partnership or other ownership interests, by
contract or otherwise. "Including," as used herein, shall mean "including,
without limitation."
Section 7.12 Finders or Brokers. Except for Lehman Brothers Inc.
and Credit Suisse First Boston Corporation with respect to the Company, and
Donaldson, Lufkin & Jenrette Securities Corporation with respect to the
Bidder, neither the Company nor the Bidder nor any of their respective
Subsidiaries has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who
might be entitled to any fee or any commission in connection with or upon
consummation of the Merger.
Section 7.13 Amendment or Supplement. At any time prior to the
Effective Time, this Agreement may be amended or supplemented in any and
all respects, whether before or after the Company Stockholder Approval and
the Bidder Stockholder Approval, by written agreement of the parties hereto
by action taken by their respective Boards of Directors (which in the case
of the Company may be taken only upon the recommendation of the Special
Committee) with respect to any of the terms contained in this Agreement;
provided, however that following the Company Stockholder Approval and the
Bidder Stockholder Approval there shall be no amendment or change to the
provisions hereof which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of
the Merger or other change requiring stockholder approval without further
approval by the stockholders of the Company.
Section 7.14 Extension of Time, Waiver, Etc. At any time prior
to the Effective Time, any party may (a) extend the time for the
performance of any of the obligations or acts of any other party hereto;
(b) waive any inaccuracies in the representations and warranties of any
other party hereto contained herein or in any document delivered pursuant
hereto; or (c) subject to the proviso of Section 7.13 waive compliance with
any of the agreements or conditions of any other party hereto contained
herein; provided that the waiver of any of the conditions to the Company's
obligations to effect the Merger shall be authorized only upon the
recommendation of the Special Committee; and provided, further, that any
waiver on the part of the Company of the Bidder's compliance with the
provisions of Section 4.2 may be authorized only by the affirmative vote of
at least six members of the Board of Directors of the Company.
Notwithstanding the foregoing no failure or delay by the Company or the
Bidder in exercising any right hereunder shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right hereunder. Any
agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above
written.
INVITROGEN CORPORATION
By: /s/ Lyle C. Turner
Name: Lyle C. Turner
Title: Chairman & CEO
LIFE TECHNOLOGIES, INC.
By: /s/ J. Stark Thompson
Name: J. Stark Thompson
Title: President & CEO
By: /s/ Thomas H. Adams
Name: Thomas H. Adams
Title: Director
ANNEX B
AGREEMENT AND PLAN OF MERGER
between
INVITROGEN CORPORATION
and
DEXTER CORPORATION
Dated as of July 7, 2000
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
Section 1.1 The Merger.........................................2
Section 1.2 Closing............................................2
Section 1.3 Effective Time.....................................2
Section 1.4 Effects of the Merger..............................3
Section 1.5 Certificate of Incorporation; Bylaws...............3
Section 1.6 Directors; Officers of Surviving Corporation.......3
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities...........................4
Section 2.2 Surrender and Payment..............................6
Section 2.3 Adjustments to Prevent Dilution....................9
Section 2.4 Appraisal Rights...................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Organization, Qualification, Etc..................10
Section 3.2 Capital Stock.....................................12
Section 3.3 Equity Investments................................13
Section 3.4 Corporate Authority Relative to this Agreement;
No Violation......................................14
Section 3.5 Reports and Financial Statements..................15
Section 3.6 No Undisclosed Liabilities........................17
Section 3.7 No Violation of Law...............................17
Section 3.8 Environmental Matters.............................17
Section 3.9 Employee Benefit Plans; ERISA.....................19
Section 3.10 Absence of Certain Changes or Events..............21
Section 3.11 Proxy Statement/Prospectus;
Registration Statement............................21
Section 3.12 Disclosure........................................22
Section 3.13 Tax Matters.......................................23
Section 3.14 Opinion of Financial Advisors.....................25
Section 3.15 Required Vote of Shareholders.....................25
Section 3.16 Rights Agreement..................................26
Section 3.17 Loctite Acquisition Agreement;
Ahlstrom Acquisition Agreement....................26
Section 3.19 Contracts.........................................26
ARTICLE IV
COVENANTS AND AGREEMENTS
Section 4.1 Conduct of Business by the Company................27
Section 4.2 Bidder Interim Operations.........................31
Section 4.3 Access; Confidentiality...........................32
Section 4.4 Shareholders Meetings; Proxy Statement;
Registration Statement............................33
Section 4.5 Commercially Reasonable Efforts;
Further Assurances................................35
Section 4.6 Employee Matters..................................36
Section 4.7 Takeover Statute..................................38
Section 4.8 No Solicitation by the Company....................38
Section 4.9 Public Announcements..............................40
Section 4.10 Indemnification; Insurance........................40
Section 4.11 Additional Reports and Information................41
Section 4.12 Affiliates........................................42
Section 4.13 Nasdaq National Market Quotation..................42
Section 4.14 Tax-Free Reorganization...........................42
ARTICLE V
CONDITIONS TO THE MERGER
Section 5.1 Conditions to Each Party's Obligation to
Effect the Merger..................................44
Section 5.2 Conditions to Obligation of the Bidder to
Effect the Merger..................................45
Section 5.3 Conditions to Obligation of the Company to
Effect the Merger..................................46
ARTICLE VI
TERMINATION
Section 6.1 Termination.......................................47
Section 6.2 Effect of Termination.............................49
Section 6.3 Termination Fee...................................49
ARTICLE VII
MISCELLANEOUS
Section 7.1 No Survival of Representations and Warranties.....49
Section 7.2 Expenses..........................................50
Section 7.3 Counterparts; Effectiveness.......................50
Section 7.4 Governing Law.....................................50
Section 7.5 Notices...........................................50
Section 7.6 Assignment; Binding Effect........................51
Section 7.7 Severability......................................51
Section 7.8 Enforcement of Agreement..........................51
Section 7.9 Entire Agreement; Third-Party Beneficiaries.......52
Section 7.10 Headings..........................................52
Section 7.11 Definitions.......................................52
Section 7.12 Finders or Brokers................................52
Section 7.13 Amendment or Supplement...........................53
Section 7.14 Extension of Time, Waiver, Etc....................53
INDEX OF DEFINED TERMS
DEFINED TERM SECTION
Acquisition Agreement.................................................4.8(b)
Acquisition Proposal..................................................4.8(a)
Affiliated Group.....................................................3.13(a)
affiliates..............................................................7.11
Agreement.......................................................Introduction
Ahlstrom Acquisition Agreement..........................................3.17
Asset Transaction.....................................................4.8(a)
Average Bidder Trading Price..........................................4.6(a)
Bidder..........................................................Introduction
Bidder Common Stock.................................................Recitals
Bidder Disclosure Schedule..........................Article III Introduction
Bidder Shareholders Meeting...........................................4.4(a)
Business Combination Transaction......................................4.8(a)
Cancellation Price.......................................................4.6
Cash Election......................................................2.1(b)(B)
Cash Election Proration Factor.....................................2.1(b)(B)
CBCA................................................................Recitals
Certificate of Merger....................................................1.3
Certificates..........................................................2.2(a)
Charter Amendment.....................................................4.4(a)
Closing..................................................................1.2
Closing Date.............................................................1.2
Code................................................................Recitals
Company.........................................................Introduction
Company Common Stock................................................Recitals
Company Disclosure Schedule.........................Article III Introduction
Company Equity Plan.................................................4.1(vii)
Company Option Plans.....................................................4.6
Company Policies.....................................................4.10(b)
Company Representatives...............................................4.8(a)
Company Shareholder Approval.........................................3.15(a)
Company Shareholder Meeting...........................................4.4(a)
Connecticut Certificate of Merger........................................1.3
Delaware Certificate of Merger...........................................1.3
DGCL................................................................Recitals
Dissenting Shareholders..................................................2.4
Dissenting Shares........................................................2.4
Effective Time...........................................................1.3
Election Deadline.....................................................2.2(a)
Election Form.........................................................2.2(a)
Employee Stock Options...................................................4.6
Environmental Claim................................................3.8(d)(i)
Environmental Law.................................................3.8(d)(ii)
Environmental Permits.................................................3.8(a)
ERISA.................................................................3.9(a)
ERISA Affiliate.......................................................3.9(a)
Exchange Act..........................................................3.4(c)
Exchange Agent........................................................2.2(a)
Exchange Fund.........................................................2.2(a)
Exchange Ratio.....................................................2.1(b)(A)
Expiration Date.......................................................6.1(b)
GAAP.....................................................................3.5
Governmental Entity...................................................3.4(c)
Hazardous Materials..............................................3.8(d)(iii)
HSR Act...............................................................3.4(c)
including...............................................................7.11
Indemnified Parties..................................................4.10(a)
International Plans...................................................3.9(i)
Lien..................................................................3.1(b)
Life Technologies...................................................Recitals
Life Technologies Common Stock......................................Recitals
Life Technologies Equity Plan.......................................4.1(vii)
Life Technologies Merger............................................Recitals
Life Technologies Merger Agreement..................................Recitals
Loctite Acquisition Agreement...........................................3.17
Material Adverse Effect...............................................3.1(a)
Material Contracts......................................................3.19
Merger..............................................................Recitals
Merger Consideration..................................................2.1(b)
NASDAQ.............................................................2.1(b)(A)
NYSE..................................................................3.4(c)
Person..................................................................7.11
Plans.................................................................3.9(a)
Proxy Statement.......................................................4.4(b)
Registration Statement...............................................3.11(b)
Representing Party..................................Article III Introduction
Representing Party's Disclosure Schedule............Article III Introduction
Rights Agreement....................................................Recitals
Savings Plans.........................................................4.6(c)
SEC...................................................................3.5(a)
SEC Reports..............................................................3.5
Securities Act........................................................3.4(c)
Shareholders Meeting..................................................4.4(a)
Shares..............................................................Recitals
Significant Subsidiaries................................................7.11
Standard Election..................................................2.1(b)(C)
Standard Election Consideration....................................2.1(b)(C)
Stock Election.....................................................2.1(b)(A)
Stock Election Consideration.......................................2.1(b)(A)
Subsidiaries............................................................7.11
Superior Proposal.....................................................4.8(a)
Surviving Corporation....................................................1.1
Tax Return...........................................................3.13(g)
Taxes................................................................3.13(g)
Termination Date.........................................................4.1
Termination Fee..........................................................6.3
Trading Day........................................................2.1(b)(A)
AGREEMENT AND PLAN OF MERGER, dated as of July 7, 2000 (the
"Agreement"), between INVITROGEN CORPORATION, a Delaware corporation (the
"Bidder"), and DEXTER CORPORATION, a Connecticut corporation (the "Com
pany").
WHEREAS, the Boards of Directors of the Bidder and the Company
deem it advisable and in the best interests of their respective
shareholders that the Company be merged with and into the Bidder (the
"Merger") upon the terms and subject to the conditions provided for in this
Agreement, whereby each outstanding share of common stock, par value $1 per
share, of the Company (together with the rights associated with such shares
issued pursuant to the Rights Agreement, dated as of August 23, 1996, as
amended, between the Company and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent (the "Rights Agreement"), the "Company Common Stock" or the
"Shares") will be converted, at the holder's election, into (i) shares of
common stock, par value $.01 per share, of the Bidder (the "Bidder Common
Stock"), (ii) cash or (iii) a combination of Bidder Common Stock and cash;
WHEREAS, immediately prior to the execution and delivery of
this Agreement, the Bidder entered into an Agreement and Plan of Merger,
dated as of the date hereof (the "Life Technologies Merger Agreement"),
between the Bidder and Life Technologies, Inc., a Delaware corporation and
a Subsidiary of the Company ("Life Technologies"), pursuant to which Life
Technologies will be merged with and into the Bidder (the "Life
Technologies Merger") simultaneously with the Merger upon the terms and
subject to the conditions set forth in the Life Technologies Merger
Agreement, whereby each share of common stock, par value $.01 per share, of
Life Technologies (the "Life Technologies Common Stock") will be converted
into (i) shares of Bidder Common Stock, (ii) cash or (iii) a combination of
Bidder Common Stock and cash;
WHEREAS, the obligations of the parties hereto to consummate
this Agreement are expressly conditioned on the consummation of the
transactions contemplated by the Life Technologies Merger Agreement;
WHEREAS, for U.S. federal income tax purposes, it is intended
that the Merger and the Life Technologies Merger contemplated hereby shall
each qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and that this
Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368 of the Code; and
WHEREAS, the Boards of Directors of the Bidder and the Company
have each approved and adopted this Agreement and approved the Merger in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), in the case of the Bidder, and in accordance with the Connecticut
Business Corporation Act (the "CBCA"), in the case of the Company, and upon
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, and
intending to be legally bound hereby, the Bidder and the Company agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL and
the CBCA, at the Effective Time the Company shall merge with and into the
Bidder, and the separate corporate existence of the Company shall thereupon
cease, and the Bidder shall be the surviving corporation in the Merger (the
"Surviving Corporation"). The Surviving Corporation shall possess all the
rights, privileges, powers and franchises of a public as well as of a
private nature and shall be subject to all of the restrictions,
disabilities, duties, debts and obligations of the Company and the Bidder,
all as provided in the DGCL and the CBCA.
Section 1.2 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article V, unless
another time or date, or both, are agreed to by the parties hereto. The
Closing will be held at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, Four Times Square, New York, New York, unless another place is agreed
to by the parties hereto.
Section 1.3 Effective Time. Subject to the provisions of this
Agreement, on the Closing Date the parties shall (i) file with the
Secretary of State of the State of Delaware a certificate of merger (the
"Delaware Certificate of Merger") and (ii) file with the Secretary of State
of the State of Connecticut a certificate of merger (the "Connecticut
Certificate of Merger" and together with the Delaware Certificate of
Merger, the "Certificates of Merger"), in each case, executed in accordance
with the relevant provisions of the DGCL or the CBCA, as the case may be,
and shall make all other filings or recordings required under the DGCL and
the CBCA in order to effect the Merger. The Merger shall become effective
upon the filing of the Certificates of Merger or at such other time as is
agreed by the parties hereto and specified in the Certificates of Merger
(the time at which the Merger becomes fully effective being hereinafter
referred to as the "Effective Time"); provided that the Merger and the Life
Technologies Merger shall occur simultaneously.
Section 1.4 Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL and Section 33-820 of the
CBCA.
Section 1.5 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of
Incorporation of the Bidder, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by the DGCL and such
Certificate of Incorporation; provided, however, the first paragraph of
Article IV of the Certificate of Incorporation of the Bidder shall be
amended to read in its entirety to read as follows:
"The total number of shares of capital stock which the
Corporation shall have authority to issue is 131,405,884, of
which (a) 6,405,884 shares shall be preferred stock, par value
$.01 per share ("Preferred Stock"), and (b) 125,000,000 shares
shall be common stock, par value $.01 per share."
(b) At the Effective Time, the Bylaws of the Bidder, as
in effect immediately prior to the Effective Time, shall be the Bylaws of
the Surviving Corporation until thereafter amended as provided by the DGCL,
the Certificate of Incorporation of the Surviving Corporation and such
Bylaws.
Section 1.6 Directors; Officers of Surviving Corporation.
(a) The directors of the Bidder at the Effective Time
shall be the directors of the Surviving Corporation until their respective
successors are duly elected and qualified or their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and Bylaws of the Surviving Corporation.
(b) The officers of the Bidder at the Effective Time
shall be the officers of the Surviving Corporation until their respective
successors are duly elected and qualified or their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and Bylaws of the Surviving Corporation.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders of
any securities of the Bidder or the Company:
(a) Each issued and outstanding Share that is owned by
the Bidder or the Company or any of their respective Subsidiaries shall
automatically be cancelled and retired and shall cease to exist and no
consideration shall be delivered in exchange therefor.
(b) Subject to the provisions of Sections 2.2(h) and 2.4,
each issued and outstanding Share, other than Shares cancelled and retired
in accordance with Section 2.1(a) and Dissenting Shares, shall be
converted, at the election of the holder thereof in accordance with the
procedures set forth herein, into one of the following (as adjusted
pursuant to the provisions of this Section 2.1, the "Merger
Consideration"):
(A) for each such Share with respect to which an
election to receive only Bidder Common Stock has been effectively
made and not revoked or lost pursuant to Section 2.2(a) (a "Stock
Election"), the right to receive that fraction of a share of Bidder
Common Stock calculated by dividing (x) $62.50 by (y) the Average
Bidder Trading Price (as hereinafter defined), rounded to four
decimal places (the "Exchange Ratio"). As used herein, the "Average
Bidder Trading Price" shall mean the average of the reported closing
sales prices per share of Bidder Common Stock as reported in The Wall
Street Journal for the 20 consecutive Nasdaq National Market trading
days (each, a "Trading Day") ending on (and including) the third
Trading Day prior to the date of the Company Shareholders Meeting;
provided, however, that if the quotient obtained as prescribed in the
preceding sentence exceeds 1.0417, then for all purposes the Exchange
Ratio shall be 1.0417, and if such quotient is less than 0.7813, then
for all purposes the Exchange Ratio shall be 0.7813 (the "Stock
Election Consideration").
(B) for each such Share with respect to which an
election to receive only cash has been effectively made and not
revoked or lost pursuant to Section 2.2(a) (a "Cash Election"), (i)
the right to receive an amount in cash equal to $62.50 multiplied by
the Cash Election Proration Factor, without interest except as set
forth in Section 2.2(b), plus (ii) if the Cash Election Proration
Factor is less than 1, a fraction of a share of Bidder Common Stock
equal to the Exchange Ratio multiplied by a fraction the numerator of
which is $62.50 minus the cash determined pursuant to clause (i) and
the denominator of which is $62.50. As used herein, the "Cash
Election Proration Factor" means the lesser of (x) 1.00 or (y) a
fraction (i) the numerator of which is (1) the product of the total
number of Shares outstanding multiplied by $17.50 minus (2) $17.50
multiplied by the number of Shares for which Standard Elections have
been effectively made and not revoked or lost, and (ii) the
denominator of which is the product of $62.50 multiplied by the
number of Shares for which Cash Elections have been effectively made
and not revoked or lost.
(C) for each such Share as to which neither a Stock
Election nor a Cash Election has been effectively made and not
revoked or lost pursuant to Section 2.2(a) (a "Standard Election"),
the right to receive $17.50 in cash, plus a fraction of a share of
Bidder Common Stock equal to the Exchange Ratio multiplied by .7200
(the "Standard Election Consideration").
(c) Each Person who, at the Effective Time, is a record
holder of Shares (other than Shares to be cancelled as set forth in Section
2.1(a) or Dissenting Shares) shall have the right to submit an Election
Form specifying the number of Shares that such Person desires to have
converted into shares of Bidder Common Stock, the number of Shares that
such Person desires to have converted into the right to receive cash and
Bidder Common Stock, if any, and the number of Shares that such Person
desires to have converted into the right to receive the Standard Election
Consideration. Any Person who fails properly to submit an Election Form on
or prior to the Election Deadline in accordance set forth in Section 2.2(a)
shall be deemed to have made a Standard Election.
(d) Each share of Bidder Common Stock issued and
outstanding immediately prior to the Effective Time shall on and after the
Effective Time continue to be issued and outstanding as an identical share
of Bidder Common Stock.
(e) Each share of Bidder Common Stock issued and held in
the treasury or by any Subsidiary of the Bidder as of the Effective Time,
if any, shall, on and after the Effective Time, continue to be issued and
held in the treasury of the Bidder or such Subsidiary unaffected by the
Merger.
Section 2.2 Surrender and Payment.
(a) Exchange Agent. Prior to the Effective Time, the
Bidder shall appoint an agent (the "Exchange Agent") for the purpose of (i)
exchanging certificates representing Shares (the "Certificates") for the
Merger Consideration. At the Effective Time the Bidder will deposit with
the Exchange Agent the Merger Consideration and cash in the amount
required by Section 2.2(g) (the "Exchange Fund"). Upon receipt, the
Exchange Agent will invest the cash portion of the Exchange Fund in United
States government securities maturing at the Election Deadline or such
other government securities maturing at the Election Deadline or such other
investments as the Bidder and the Company may mutually agree. Any interest
and other income resulting from such investments shall be paid to the
Bidder. Promptly after the Effective Time, the Exchange Agent will send to
each holder of Shares a letter of transmittal and instructions (which shall
specify that the delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent) for use in such exchange, and to each holder of Shares an election
form (the "Election Form") providing for such holders to make the Standard
Election, the Cash Election or the Stock Election. Any Standard Election
(other than a deemed Standard Election), Cash Election or Stock Election
shall be validly made only if the Exchange Agent shall have received by
5:00 p.m., New York City Time, on a date (the "Election Deadline") to be
mutually agreed upon by the Bidder and the Company (which date shall not be
later than the twentieth Business Day after the Effective Time), an
Election Form properly completed and executed (with the signature or
signatures thereon guaranteed to the extent required by the Election Form)
by such holder accompanied by such holder's Certificates, or by appropriate
guarantees of delivery of such Certificates from a member of any national
securities exchange or of the National Association of Securities Dealers or
a commercial bank or trust company in the United States as set forth in
such Election Form. Any holder of Shares who has made an election by
submitting an Election Form to the Exchange Agent may at any time prior to
the Election Deadline change such holder's election by submitting a revised
Election Form, properly completed and signed that is received by the
Exchange Agent prior to the Election Deadline. Any holder of Shares may at
any time prior to the to the Election Deadline revoke his election and
withdraw his Certificates deposited with the Exchange Agent by written
notice to the Exchange Agent received by the close of business on the day
prior to the Election Deadline, and such holder will receive the Standard
Election Consideration.
(b) Letter of Transmittal. Upon surrender to the Exchange
Agent of its Certificate, together with a properly completed letter of
transmittal, each holder of Shares will be entitled to receive promptly
after the Election Deadline the Merger Consideration in respect of the
Shares represented by its Certificate. In addition, each such holder of
Shares shall be entitled to receive any dividends and distributions payable
pursuant to Section 2.2(g). Until so surrendered, each such Certificate
shall represent after the Effective Time, for all purposes, only the right
to receive the Merger Consideration.
(c) Payment to Non-Registered Owners. If any portion of
the Merger Consideration is to be paid to a Person other than the Person in
whose name the Certificate so surrendered is registered, it shall be a
condition to such payment that such Certificate shall be properly endorsed
or otherwise be in proper form for transfer and the Person requesting such
payment shall pay to the Exchange Agent any transfer or other Taxes
required as a result of such payment to a Person other than the registered
holder of such Certificate, or establish to the satisfaction of the
Exchange Agent that such Tax has been paid or is not payable.
(d) No Further Registration of Transfers. After the
Effective Time there shall be no further registration of transfers of
Shares. If after the Effective Time Certificates are presented to the
Surviving Corporation, they shall be cancelled and exchanged for the Merger
Consideration in accordance with the procedures set forth in this Article
II.
(e) Termination of Exchange Fund; No Liability. At any
time following the first anniversary of the Effective Time, the Surviving
Corporation shall be entitled to require the Exchange Agent to deliver to
it any remaining portion of the Exchange Fund (including any interest
received with respect thereto), and holders shall be entitled to look only
to the Surviving Corporation (subject to abandoned property, escheat or
other similar laws) with respect to the Merger Consideration, any cash in
lieu of fractional shares of Bidder Common Stock and any dividends or other
distributions with respect to Bidder Common Stock payable upon due
surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, neither the Surviving Corporation nor the
Exchange Agent shall be liable to any holder of a Certificate for Merger
Consideration (or dividends or distributions with respect thereto) or cash
from the Exchange Fund in each case delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(f) Lost, Stolen or Destroyed Certificates. In the event
any Certificates for Shares shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming such
Certificate(s) to be lost, stolen or destroyed and, if required by the
Bidder, the posting by such Person of a bond in such sum as the Bidder may
reasonably direct as indemnity against any claim that may be made against
it or the Surviving Corporation with respect to such Certificate(s), the
Exchange Agent will issue the Merger Consideration pursuant to Section
2.1(b) deliverable in respect of the Shares represented by such lost,
stolen or destroyed Certificates.
(g) Dividends; Distributions. No dividends or other
distributions with respect to Bidder Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Bidder Common Stock represented
thereby, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 2.2(h), and all such dividends, other
distributions and cash in lieu of fractional shares of Bidder Common Stock
shall be paid by the Bidder to the Exchange Agent and shall be included in
the Exchange Fund, in each case until the surrender of such Certificate in
accordance with this Article II. Subject to the effect of applicable
abandoned property, escheat or similar laws, following surrender of any
such Certificate there shall be paid to the holder of a Bidder Certificate
representing whole shares of Bidder Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount
of dividends or other distributions with a record date after the Effective
Time theretofore paid with respect to such whole shares of Bidder Common
Stock and the amount of any cash payable in lieu of a fractional share of
Bidder Common Stock to which such holder is entitled pursuant to Section
2.2(h), and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but
prior to such surrender and with a payment date subsequent to such
surrender payable with respect to such whole shares of Bidder Common Stock.
The Bidder shall make available to the Exchange Agent cash for these
purposes, if necessary.
(h) No Fractional Shares. No Bidder Certificates or scrip
representing fractional shares of Bidder Common Stock shall be issued upon
the surrender for exchange of Certificates; no dividend or distribution by
the Bidder shall relate to such fractional share interests; and such
fractional share interests will not entitle the owner thereof to vote or to
any rights as a shareholder of the Bidder. In lieu of any such fractional
shares, each holder of Certificate who would otherwise have been entitled
to receive a fractional share interest in exchange for such Certificate
pursuant to this Section shall receive from the Exchange Agent an amount in
cash equal to the product obtained by multiplying (A) the fractional share
interest to which such holder (after taking into account all Shares held by
such holder at the Effective Time) would otherwise be entitled by (B) the
average reported closing sales price for a share of Bidder Common Stock as
reported in The Wall Street Journal (or if not reported thereby, any other
authoritative source) for five consecutive Trading Days immediately
preceding the Closing Date. The Bidder shall provide the Exchange Agent the
aggregate amount of cash payable pursuant to this Section 2.2(h) promptly
following the Effective Time.
Section 2.3 Adjustments to Prevent Dilution. In the event that
the Bidder changes the number of outstanding shares of Bidder Common Stock
or the number of outstanding securities convertible or exchangeable into or
exercisable for shares of Bidder Common Stock prior to the Effective Time
as a result of a reclassification, stock split (including a reverse
split), stock dividend or distribution, recapitalization, subdivision, or
other similar transaction, or declares or pays any dividend or distribution
(including of rights) other than any regular quarterly cash dividends, the
Stock Election Consideration and the Standard Election Consideration will
be correspondingly and equitably adjusted to reflect such stock dividend,
subdivision, split, combination of shares or other specified transaction.
Section 2.4 Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, Shares that are issued and outstanding
immediately prior to the Effective Time and which are held by shareholders
who did not vote in favor of the Merger and who comply with all the
relevant provisions of Section 33-861 of the CBCA (the "Dissenting
Shareholders") shall not be converted into or be exchangeable for the right
to receive the Merger Consideration (the "Dissenting Shares"), unless and
until the holder or holders thereof shall have failed to perfect or shall
have effectively withdrawn or lost their rights to appraisal under the
CBCA. If any Dissenting Shareholder shall have failed to perfect or shall
have effectively withdrawn or lost such right, such holder's Shares shall
thereupon be converted into and become exchangeable for the right to
receive, as of the Effective Time, the Merger Consideration for each Share
without any interest thereon. The Company shall give the Bidder (i) prompt
notice of any written demands for appraisal of any Shares, attempted
withdrawals of such demands and any other instruments served pursuant to
the CBCA and received by the Company relating to shareholders' rights of
appraisal, and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the CBCA; provided,
however, the Company shall have the right to participate in any such
negotiations and proceedings. The Company shall not, except with the prior
written consent of the Bidder, voluntarily make any payment with respect
to, or settle or offer to settle, any such demand for payment. If any
Dissenting Shareholder shall fail to perfect or shall have effectively
withdrawn or lost the right to dissent, the Shares held by such Dissenting
Shareholder shall thereupon be treated as though such Shares had been
converted into the right to receive the Standard Election Consideration
pursuant to Section 2.1(b).
Section 2.5 Withholding Rights. The Bidder shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person
pursuant to this Article II such amounts as it is required to deduct and
withhold with respect to the making of such payment under any provision of
federal, state, local or foreign Tax law. If the Bidder so withholds
amounts, such amounts shall be treated for all purposes of this Agreement
as having been paid to the holders of Shares in respect of which the Bidder
made such deduction and withholding.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as set forth on the schedule delivered by the Company to
the Bidder in connection with the execution and delivery of this Agreement
(the "Company Disclosure Schedule") the Company hereby represents and
warrants to the Bidder, and except as set forth in the disclosure schedule
delivered by the Bidder to the Company in connection with the execution and
delivery of this Agreement (the "Bidder Disclosure Schedule), the Bidder
hereby represents and warrants to the Company, in each case as set forth in
this Article III, with the party making such representations and warranties
being referred to as the "Representing Party" and such Representing Party's
Disclosure Schedule as the "Representing Party's Disclosure Schedule."
Notwithstanding the foregoing, any representation or warranty which
expressly refers to the Bidder or its Subsidiaries is being made solely by
the Bidder and any representation or warranty which expressly refers to the
Company or Life Technologies or their respective Subsidiaries is being made
solely by the Company.
Section 3.1 Organization, Qualification, Etc.
(a) The Representing Party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power and
authority required for it to own its properties and assets and to carry on
its business as it is now being conducted. The Representing Party is duly
qualified to do business and is in good standing in each jurisdiction in
which the ownership of its properties or the conduct of its business
requires such qualification, except for jurisdictions in which the failure
to be so qualified or in good standing would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party or substantially delay consummation of the transactions
contemplated by this Agreement or otherwise prevent the Representing Party
from performing its obligations hereunder. As used in this Agreement, any
reference to any state of facts, event, change or effect having a "Material
Adverse Effect" on or with respect to the Representing Party means a
material adverse effect on the financial condition, assets, liabilities or
results of operations of the Representing Party and its Subsidiaries, taken
as a whole, excluding any such effect resulting from or arising in
connection with (A) changes or conditions generally affecting the
industries in which the Representing Party and its Subsidiaries operate
unless, in the case of the Company, such changes or effects have a
disproportionate effect on the Company and its Subsidiaries, taken as a
whole, or (B) changes in general economic, regulatory or political
conditions, unless, in the case of the Company, such changes have a
disproportionate effect on the Company and its Subsidiaries, taken as a
whole. Each Representing Party has made available to the other copies of
its certificate of incorporation and bylaws. Such copies of each
Representing Party's certificate of incorporation and bylaws are complete
and correct and in full force and effect, and the Representing Party is not
in violation of any of the provisions of its certificate of incorporation
or bylaws.
(b) Each of the Representing Party's Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Each of the
Representing Party's Subsidiaries has the corporate power and authority
required for it to own its properties and assets and to carry on its
business as it is now being conducted and is duly qualified to do business
and is in good standing in each jurisdiction in which the ownership of its
properties or the conduct of its business requires such qualification,
except for jurisdictions in which the failure to be so qualified or in good
standing would not, individually or in the aggregate, be reasonably likely
to have a Material Adverse Effect on the Representing Party. All the
outstanding shares of capital stock of, or other ownership interests in,
the Representing Party's Subsidiaries are duly authorized, validly issued,
fully paid and non-assessable and, with respect to such shares or ownership
interests that are owned by the Representing Party and its Subsidiaries,
are owned free and clear of all liens, claims, mortgages, encumbrances,
pledges and security interests of any kind (each, a "Lien"). All the
outstanding shares of capital stock of, or other ownership interests in,
the Representing Party's Subsidiaries are wholly owned by the Representing
Party, directly or indirectly, except for the Life Technologies Common
Stock of which the Company beneficially owns as of the date hereof
18,815,447 shares. Section 3.1(b) of the Company Disclosure Schedule sets
forth a list of each Subsidiary of the Company.
Section 3.2 Capital Stock.
(a) Section 3.2(a) of the Representing Party's Disclosure
Schedule sets forth as of June 30, 2000:
(i) the number of authorized shares of each class or
series of capital stock of the Representing Party and, in the case of the
Company Disclosure Schedule, Life Technologies;
(ii) the number of shares of each class or series of
capital stock of the Representing Party and, in the case of the Company
Disclosure Schedule, Life Technologies, which are issued and outstanding;
(iii) the number of shares of each class or series of
capital stock which are held in the treasury of such Representing Party
and, in the case of the Company Disclosure Schedule, Life Technologies;
(iv) the number of shares of each class or series of
capital stock of the Representing Party and, in the case of the Company
Disclosure Schedule, Life Technologies, which are reserved for issuance,
indicating each specific reservation; and
(v) the number of shares of each class or series of
capital stock of such Representing Party and, in the case of the Company
Disclosure Schedule, Life Technologies, which are subject to employee stock
options or other rights to purchase or receive capital stock granted under
such Person's stock option or other stock based employee or non-employee
director benefit plans, and, with respect to the Company, indicating the
name of the plan, the date of grant, the number of shares and the exercise
price thereof.
(b) All the outstanding shares of capital stock of the
Representing Party are, and all shares of Bidder Common Stock to be issued
in the Merger will be when issued in accordance with the terms of this
Agreement, duly authorized, validly issued, fully paid and non-assessable
and issued in compliance with all applicable U.S. state and federal and
foreign securities laws. Except as set forth in Section 3.2(a) of the
Representing Party's Disclosure Schedule, for the Company's obligations
under the Rights Agreement, and for the transactions contemplated by this
Agreement, (1) there are no shares of capital stock of the Representing
Party authorized, or as of the date of this Agreement issued or
outstanding, (2) as of the date of this Agreement there are no authorized
or outstanding options, warrants, calls, preemptive rights, subscriptions
or other rights, agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock of the Representing Party
or any of its Subsidiaries, obligating the Representing Party or any of its
Subsidiaries to issue, transfer or sell or cause to be issued, transferred
or sold any shares of capital stock or other equity interest in the
Representing Party or any of its Subsidiaries or securities convertible
into or exchangeable for such shares or equity interests, or obligating the
Representing Party or any of its Subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right,
agreement, arrangement or commitment, and (3) there are no outstanding
contractual obligations of the Representing Party or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Representing Party or any Subsidiary of the
Representing Party or to provide funds to make any investment (in the form
of a loan, capital contribution or otherwise) in any Subsidiary of the
Representing Party or other entity.
Section 3.3 Equity Investments.
(a) Section 3.3(a) of the Company's Disclosure Schedule
sets forth: (i) the name of each corporation, partnership, joint venture or
other entity (other than the Subsidiaries) in which the Company or Life
Technologies has, or pursuant to any agreement has the right to acquire by
any means, directly or indirectly, an equity interest or investment; (ii)
in the case of each of such Person described in the foregoing clause (i),
either (x) a listing of relevant agreement or agreements pursuant to which
the Company has acquired such right or such interest or investment or (y)
(A) the jurisdiction of incorporation and (B) the authorized and
outstanding capitalization thereof and the percentage of each class of
voting capital stock owned, directly or indirectly, by the Company.
(b) Except as set forth in Schedule 3.3(b), Life
Technologies' interest, if any, in any of the Persons listed on Schedule
3.3(a) which are stated to be owned directly or indirectly by Life
Technologies (except for directors' qualifying shares, if any, which the
Company will cause to be transferred at the Effective Time to nominees of
the Bidder), will, after giving effect to the transactions contemplated
hereby, be owned by the Bidder, directly or indirectly, in each case, free
and clear of all Liens.
Section 3.4 Corporate Authority Relative to this Agreement; No
Violation.
(a) The Company has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of the Company and, except for obtaining the Company
Shareholder Approval and the filing of the Connecticut Certificate of
Merger, no other corporate proceedings on the part of the Company are
necessary to authorize the consummation of the transactions contemplated
hereby. The Board of Directors of the Company has approved the entry into
this Agreement and the consummation of the transactions contemplated hereby
by the Company and has taken all appropriate action such that Sections
33-841 and 33-844 of the CBCA will not be applicable to the Company or to
the Bidder by virtue of either the Company's or the Bidder's entering into
this Agreement or consummating the transactions contemplated hereby. The
Board of Directors of Life Technologies has taken all appropriate action so
that Section 203 of the DGCL, with respect to Life Technologies, will not
be applicable to the Bidder for any purpose. This Agreement has been duly
and validly executed and delivered by the Company and, assuming this
Agreement constitutes a valid and binding agreement of the Bidder,
constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(b) The Bidder has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of the Bidder, and other than the Bidder Shareholder
Approval and the filing of the Connecticut Certificate of Merger and the
Delaware Certificate of Merger no other corporate proceedings on the part
of the Bidder are necessary to authorize the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Bidder and, assuming this Agreement
constitutes a valid and binding agreement of the Company, constitutes a
valid and binding agreement of each of the Bidder, enforceable against the
Bidder in accordance with its terms.
(c) Except for the filings, permits, authorizations,
consents and approvals set forth in Section 3.4(c) of the Representing
Party's Disclosure Schedule or as may be required under, and other
applicable requirements of, the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (the "Securities Act") (in the
case of the Bidder only), the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the "Exchange Act"),
the Hart- Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), state securities or blue sky laws and the rules and regulations
of the New York Stock Exchange (the "NYSE") (in the case of the Company
only), state securities or blue sky laws and the rules and regulations of
the Nasdaq National Market (in the case of the Bidder), or the
anti-competition laws or regulations of the European Union or any foreign
jurisdiction in which the Company or the Bidder (directly or through
Subsidiaries, in each case) has material assets or conducts material
operations, and the filing of the Certificates of Merger under the DGCL and
the CBCA, none of the execution, delivery or performance of this Agreement
by the Representing Party, the consummation by the Representing Party of
the transactions contemplated hereby or compliance by the Representing
Party with any of the provisions hereof will (i) conflict with or result in
any breach of any provision of the certificate of incorporation, bylaws or
similar organizational documents of the Representing Party or any of its
Subsidiaries, (ii) require any filing with, or permit, authorization,
consent or approval of, any federal, regional, state or local court,
arbitrator, tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, whether U.S. or
foreign (a "Governmental Entity"), (iii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation
or acceleration) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Representing Party or any of
its Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound, or (iv) violate any order, writ,
injunction, decree, judgment, permit, license, ordinance, law, statute,
rule or regulation applicable to the Representing Party, any of its
Subsidiaries or any of their properties or assets, excluding from the
foregoing clauses (ii), (iii) and (iv) such filings, permits,
authorizations, consents, approvals, violations, breaches or defaults which
are not, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on the Representing Party or prevent or
substantially delay the consummation of the transactions contemplated
hereby.
Section 3.5 Reports and Financial Statements. The Representing
Party has previously furnished or otherwise made available (by electronic
filing or otherwise) to the Bidder true and complete copies of:
(a) Annual Reports on Form 10-K filed with the Securities
and Exchange Commission (the "SEC") for each of the years ended December
31, 1998 and 1999 in the case of the Company and Life Technologies and the
year ended December 31, 1999 in the case of Bidder.
(b) the Quarterly Report on Form 10-Q filed with the SEC
for the quarter ended March 31, 2000, for each of the Representing Parties
and, in the case of the Company, for Life Technologies;
(c) each definitive proxy statement filed with the SEC
since December 31, 1998, for each of the Representing Parties and, in the
case of the Company, for Life Technologies;
(d) each final prospectus filed with the SEC since
December 31, 1998, except any final prospectus on Form S-8, for each of the
Representing Parties and, in the case of the Company, for Life
Technologies; and
(e) all Current Reports on Form 8-K filed with the SEC
since January 1, 2000, for each of the Representing Parties and, in the
case of the Company, for Life Technologies.
As of their respective dates, such reports, proxy statements and
prospectuses filed with the SEC by the Representing Party (collectively
with, and giving effect to, all amendments, supplements and exhibits
thereto, the "SEC Reports") (i) complied as to form in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Other than Life Technologies
which is registered under Section 12 of the Exchange Act, none of the
Representing Party's Subsidiaries is required to file any forms, reports or
other documents with the SEC. The audited consolidated financial statements
and unaudited consolidated interim financial statements included in the
Representing Party's (and in the case of the Company, Life Technologies')
SEC Reports (including any related notes and schedules) fairly present in
all material respects the financial position of the Bidder, the Company or
Life Technologies and its consolidated Subsidiaries, as the case may be, as
of the dates thereof and the results of operations and cash flows for the
periods or as of the dates then ended (subject, in the case of the
unaudited interim financial statements, to normal recurring year-end
adjustments), in each case in accordance with past practice and generally
accepted accounting principles in the United States ("GAAP") consistently
applied during the periods involved (except as otherwise disclosed in the
notes thereto). Since the date of Bidder's initial public offering, the
Bidder has timely filed all reports, registration statements and other
filings required to be filed by it with the SEC under the rules and
regulations of the SEC. Since January 1, 1999, each of the Company and Life
Technologies has timely filed all reports, registration statements and
other filings required to be filed by it with the SEC under the rules and
regulations of the SEC.
Section 3.6 No Undisclosed Liabilities. Neither the
Representing Party nor any of its Subsidiaries has any liabilities or
obligations of any nature required to be set forth on a balance sheet of
the Representing Party under GAAP, whether or not accrued, contingent or
otherwise, and there is no existing condition, situation or set of
circumstances which would be expected to result in such a liability or
obligation, except (a) liabilities or obligations reflected in the
Representing Party's SEC Reports or (b) liabilities and obligations which
are not, individually or in the aggregate, reasonably expected to have a
Material Adverse Effect on the Representing Party.
Section 3.7 No Violation of Law. The businesses of the
Representing Party and its Subsidiaries are not being conducted in
violation of any order, writ, injunction, decree, judgment, permit,
license, ordinance, law, statute, rule or regulation of any Governmental
Entity (provided that no representation or warranty is made in this Section
3.7 with respect to Environmental Laws), except (a) as described in the
Representing Party's SEC Reports, and (b) for violations or possible
violations which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Representing Party.
Section 3.8 Environmental Matters.
(a) Each of the Representing Party and its Subsidiaries
has obtained all licenses, permits, authorizations, approvals and consents
from Governmental Entities which are required under any applicable
Environmental Law and necessary for it to carry on its business or
operations as now conducted ("Environmental Permits"), except for such
failures to have Environmental Permits which, individually or in the
aggregate, are not reasonably expected to have a Material Adverse Effect on
the Representing Party. Each of such Environmental Permits is in full force
and effect, and each of the Representing Party and its Subsidiaries is in
compliance with the terms and conditions of all such Environmental Permits
and with all applicable Environmental Laws, except for such failures to be
in full force and effect or to be in compliance which, individually or in
the aggregate, are not reasonably likely to have a Material Adverse Effect
on the Representing Party.
(b) There are no Environmental Claims pending, or to the
knowledge of the Representing Party, threatened, against the Representing
Party or any of its Subsidiaries, or, to the knowledge of the Representing
Party, any Person whose liability for any such Environmental Claim the
Representing Party or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation of law for which reserves have
not been established in accordance with GAAP, that, individually or in the
aggregate, would have a Material Adverse Effect on the Representing Party.
As of the date of this Agreement, the Company has available cash resources
that are adequate to fund the GAAP reserves that the Company has
established in respect of Environmental Claims, and such cash resources
will be adequate for such purpose at the Effective Time; provided that
there shall have been no change outside the ordinary course of business in
the capitalization or asset base of the Company's captive insurance
companies.
(c) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, threatened release or presence of any Hazardous
Material, that would form the basis of any Environmental Claim against the
Representing Party or any of its Subsidiaries, or for which the
Representing Party or any of its Subsidiaries is liable, except for such
liabilities which, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on the Representing Party.
(d) As used in this Agreement:
(i) "Environmental Claim" means any claim, action,
lawsuit or proceeding by any Person which seeks to impose liability
(including, without limitation, liability for investigatory costs,
cleanup costs, governmental response costs, natural resources,
damages, property damages, personal injuries or penalties) arising
out of, based on or resulting from (A) the presence, or release or
threatened release, of any Hazardous Materials at any location,
whether or not owned or operated by the Representing Party or any of
its Subsidiaries, or (B) circumstances which would give rise to any
violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Law" means any law or order of
any Governmental Entity relating to (A) the generation, treatment,
storage, disposal, use, handling, manufacturing, transportation or
shipment of, or (B) the environment or to emissions, discharges,
releases or threatened releases of, Hazardous Materials, into the
environment.
(iii) "Hazardous Materials" means (A) any petroleum
or petroleum products, radioactive materials or friable asbestos; (B)
any chemicals or other materials or substances which are now defined
as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," or "toxic
pollutants" under any Environmental Law; and (C) pesticides.
Section 3.9 Employee Benefit Plans; ERISA.
(a) Section 3.9(a) of the Representing Party's Disclosure
Schedule contains a true and complete list of each material deferred
compensation, incentive compensation or equity compensation plan; "welfare"
plan, fund or program (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")); "pension"
plan, fund or program (within the meaning of Section 3(2) of ERISA); each
material employment, termination or severance agreement; and each other
material employee benefit plan, fund, program, agreement or arrangement, in
each case, that is sponsored, maintained or contributed to or required to
be contributed to by the Representing Party (and, in the case of the
Company, Life Technologies) or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), that together with the Representing
Party (or Life Technologies) would be deemed at any relevant time a "single
employer" within the meaning of Section 4001(b) of ERISA, for the benefit
of any employee or former employee of the Representing Party or any
Subsidiary (the "Plans").
(b) In respect of Plans that are not International Plans,
the Representing Party has made available to the other Party: (i) correct
and complete copies of all documents embodying each Plan including (without
limitation) all amendments thereto and all related trust documents; (ii)
the most recent annual reports (Form Series 5500 and all schedules and
financial statements attached thereto), if any, required under ERISA or the
Code in connection with each Plan; and (iii) if the Plan is funded, the
most recent annual and periodic accounting Plan assets.
(c) No liability under Title IV or Section 312 of ERISA
has been incurred by the Representing Party or any ERISA Affiliate of the
Representing Party that has not been satisfied in full, and no condition
exists that presents a material risk to the Representing Party or any ERISA
Affiliate of the Representing Party of incurring any such liability, other
than liability for premiums due the Pension Benefits Guaranty Corporation
(which premiums have been paid when due), except as are not reasonably
likely to have a Material Adverse Effect on the Representing Party. To the
knowledge of the Representing Party, each Plan subject to Title IV of ERISA
or Section 412 of the Code is fully-funded on a termination basis.
(d) Neither the Representing Party nor any ERISA
Affiliate of the Representing Party has any liability to any Pension Plan
which is a "multiemployer plan" as defined in Section 3(37) of ERISA.
(e) Each Plan of the Representing Party has been operated
and administered in accordance with its terms and applicable law, including
but not limited to ERISA and the Code, except as are not reasonably likely
to have a Material Adverse Effect on the Representing Party, and each Plan
of the Representing Party intended to be "qualified" within the meaning of
Section 401(a) of the Code is so qualified and the trusts maintained
thereunder are exempt from taxation under Section 501(a) of the Code,
except for failures to so qualify or be exempt which are not, individually
or in the aggregate, reasonably likely to have a Material Adverse Effect on
the Representing Party.
(f) Section 3.9(f) of the Representing Party's Disclosure
Schedule sets forth each Plan of the Representing Party under which as a
result of the consummation of the transactions contemplated by this
Agreement, either alone or in combination with another event, (i) any
current or former employee or officer of the Representing Party or any
ERISA Affiliate of the Representing Party may become entitled to severance
pay or any other payment, except as expressly provided in this Agreement,
or (ii) any compensation due any such employee or officer may be increased
or the time of payment or vesting may become accelerated.
(g) Except as set forth in Section 3.9(g) of the
Representing Party's Disclosure Schedule, no Plan of the Representing Party
which is not an International Plan provides, or reflects or represents any
liability to provide, retiree life insurance, retiree health or other
retiree employee welfare benefits to any Person for any reason, except as
may be required by COBRA or other applicable law. The program described by
this Section 3.9(g) has at all times provided that the Representing Party
may amend and/or terminate such program without liability (except in
respect of current obligations outstanding for current retired employees
receiving benefits).
(h) There are no pending or, to the knowledge of the
Representing Party, threatened claims by or on behalf of any Plan of the
Representing Party, by any employee or beneficiary covered under any such
Plan, or otherwise involving any such Plan (other than routing claims for
benefits), except as would not, individually or in the aggregate be
reasonably likely to have a Material Adverse Effect on the Representing
Party.
(i) Each Plan of the Representing Party that has been
adopted or maintained by the Representing Party or any of its Subsidiaries,
whether formally or informally, for the benefit of employees outside the
United States ("International Plans") has been established, maintained and
administered in material compliance with its terms and conditions and with
the requirements prescribed by any and all statutory or regulatory laws
that are applicable to such International Plans. No International Plan of
the Representing Party has unfunded liabilities that would, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect on
the Representing Party.
(j) Except as set forth in Section 3.9(j) of the
Representing Party's Disclosure Schedule, the Representing Party is not
bound by or obligated under any labor, collective bargaining or union
agreements.
Section 3.10 Absence of Certain Changes or Events. Except as
disclosed in the Representing Party's SEC Reports, since December 31, 1999
(a) the businesses of the Representing Party and its Subsidiaries have been
conducted in all material respects in the ordinary course and (b) there has
not been any event, occurrence, development or state of circumstances or
facts that has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the Representing Party.
Section 3.11 Proxy Statement/Prospectus; Registration Statement.
(a) The Proxy Statement (or any amendment or supplement
thereto) will not, on the date the Proxy Statement is mailed to
shareholders of the Company and to shareholders of the Bidder and at the
time of the Shareholders Meetings, contain any untrue statement of a
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading. None
of the information supplied by or on behalf of the Company or any of its
Subsidiaries for inclusion or incorporation by reference in the
Registration Statement will, at the date it becomes effective and at the
time of the Shareholders Meetings, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy
Statement will, when filed by the Company and the Bidder with the SEC,
comply as to form in all material respects with the applicable provisions
of the Exchange Act. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to the statements made in any of
the foregoing documents based on and in conformity with information
supplied by or on behalf of the Bidder for inclusion or incorporation by
reference therein.
(b) The Registration Statement on Form S-4 to be filed
with the SEC by the Bidder in connection with the Merger, as amended or
supplemented from time to time (as so amended and supplemented, the
"Registration Statement"), will not, on the date of filing with the SEC or
at the time it becomes effective under the Securities Act, and on the date
the Proxy Statement is first mailed to shareholders of the Company and
shareholders of the Bidder and at the time of the Shareholders Meetings,
contain any untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they are made, not misleading. None of the information supplied by or on
behalf of the Bidder or any of its Subsidiaries for inclusion or
incorporation by reference in the Proxy Statement will, at the date mailed
to the shareholders of the Bidder and at the time of the Shareholders
Meetings, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances they were made,
not misleading. The Proxy Statement will, when filed by the Bidder and the
Company, and the Registration Statement will, when filed by the Bidder with
the SEC, comply as to form in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, the Bidder makes no representation or
warranty with respect to the statements made in the Registration Statement
based on and in conformity with information supplied by or on behalf of the
Company specifically for inclusion or incorporation by reference therein.
Section 3.12 Disclosure. The representations and warranties by
the Company in this Agreement and the statements contained in the
schedules, certificates and other writings furnished and to be furnished by
the Company to the Bidder pursuant to this Agreement, when considered as a
whole and giving effect to any supplements or amendments thereof prior to
the time of signing on the date hereof, do not and will not contain any
untrue statement of a material fact and do not and will not omit to state
any material fact necessary to make the statements herein or therein not
misleading, it being understood that as used in this Section 3.12
"material" means material to the Company and its Subsidiaries, taken as a
whole.
Section 3.13 Tax Matters.
(a) All federal, state, local and foreign Tax Returns
required to be filed by or on behalf of the Representing Party, each
affiliated, combined, consolidated or unitary group of which the
Representing Party is a member (an "Affiliated Group") have been timely
filed or requests for extensions have been timely filed and any such
extension has been granted and has not expired, and all such filed Tax
Returns are complete and accurate except to the extent any failure to file
or any inaccuracies in filed Tax Returns would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party. All Taxes due and owing by the Representing Party or
any Representing Party's Affiliated Group have been paid, or adequately
reserved for, except to the extent any failure to pay or reserve for would
not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on the Representing Party. There is no audit or
examination and there is no deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any Taxes due and owing
by the Representing Party or any Representing Party's Affiliated Group
which if determined adversely would, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on the Representing
Party. All assessments for Taxes due and owing by the Representing Party or
any Representing Party's Affiliated Group with respect to completed and
settled examinations or concluded litigation have been paid, except to the
extent that any failures to pay would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party.
(b) The Representing Party has not (i) entered into a
closing agreement or other similar agreement with a taxing authority
relating to Taxes of the Representing Party or any Representing Party's
Affiliated Group with respect to a taxable period for which the statute of
limitations is still open, or (ii) with respect to U.S. federal income
Taxes, granted any waiver of any statute of limitations with respect to, or
any extension of a period for the assessment of, any income Tax, in either
case, that is still outstanding. There are no Liens relating to material
Taxes upon the assets of the Representing Party or any Representing Party's
Affiliated Group other than Liens relating to Taxes not yet due and Liens
that would not, individually or in the aggregate, have a Material Adverse
Effect on the Representing Party. Neither the Representing Party, any
Representing Party's Affiliated Group is a party to or is bound by any Tax
sharing agreement, Tax indemnity obligation or similar agreement in respect
of Taxes (other than with respect to agreements solely between or among
members of the consolidated group of which the Representing Party is the
common parent and agreements and obligations that would not, individually
or in the aggregate, have a Material Adverse Effect on the Representing
Party). Neither the Representing Party nor any Representing Party's
Affiliated Group has taken any action or knows of any fact, agreement, plan
or other circumstance that is reasonably likely to prevent either the
Merger or the Life Technologies Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(c) Section 3.13(c) of the Company Disclosure Schedule
lists each Tax Return of the Company or any Affiliated Group for which an
accurate copy of the actual Tax Return as filed with the relevant taxing
authority has been made available by the Company to the Bidder on or before
the date hereof.
(d) Section 3.13(d) of the Company Disclosure Schedule
lists, with respect to the Company, each unemployment, severance and
termination agreement, other compensation arrangements, or benefit plans
currently in effect which provide for the payment of any amount (whether in
cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement that individually or
collectively could give rise to a payment which is nondeductible by reason
of Section 280G of the Code.
(e) Neither the Company nor any Affiliated Group has
received any private letter ruling from the Internal Revenue Service within
the three-year period ending on the date hereof.
(f) Neither the Company nor any member of any Affiliated
Group has constituted either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of stock (to any Person or entity that is not a member of any
Affiliated Group) qualifying for tax-free treatment under Section 355 of
the Code (i) within the two-year period ending on the date hereof or (ii)
in a distribution which could otherwise constitute part of a "plan" or
"series of related transactions" (within the meaning of Section 355(e) of
the Code) in conjunction with the Merger or the Life Technologies Merger.
(g) Neither the Company nor any Affiliated Group is a
party to any contract, agreement or other arrangement which could result in
the payment of amounts that would be nondeductible by reason of Section
162(m) of the Code.
(h) For purposes of this Agreement: (i) "Taxes" means any
and all federal, state, local, foreign or other taxes of any kind (together
with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any taxing authority,
including, without limitation, taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property,
sales, use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net worth, and taxes or other
charges in the nature of excise, withholding, ad valorem or value added,
and (ii) "Tax Return" means any return, report or similar statement
(including the attached schedules) required to be filed with respect to any
Tax, including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
Section 3.14 Opinion of Financial Advisors.
(a) The Board of Directors of the Company has received
the opinion of Lehman Brothers Inc., dated the date of this Agreement,
substantially to the effect that, as of such date, the Merger Consideration
to be received by the Company's shareholders in the Merger is fair to such
holders from a financial point of view.
(b) The Board of Directors of the Bidder has received the
opinion of Donaldson, Lufkin & Jenrette Securities Corporation, dated the
date of this Agreement, substantially to the effect that, as of such date,
the consideration to be issued and delivered by the Bidder in the Merger
and the Life Technologies Merger, taken together, is fair to the Bidder
from a financial point of view.
Section 3.15 Required Vote of Shareholders.
(a) The affirmative vote of the holders of a two-thirds
of the outstanding shares of Company Common Stock (the "Company Shareholder
Approval") is the only vote of the holders of any class or series of the
Company's capital stock which is necessary to approve and adopt this
Agreement and the transactions contemplated hereby.
(b) As of the date hereof, the Bidder does not own any
securities of the Company or Life Technologies. The affirmative vote of the
holders of a majority of the outstanding shares of Bidder Common Stock in
favor of the approval and adoption of this Agreement and the affirmative
vote of the holders of a majority of the outstanding shares of Bidder
Common Stock in favor of the approval of an amendment to the Bidder's
certificate of incorporation to authorize a sufficient number of shares of
Bidder Common Stock to enable the Bidder to issue the Merger Consideration
are the only votes of the holders of any class or series of the Bidder's
capital stock which are necessary to approve and adopt this Agreement and
the transactions contemplated hereby.
Section 3.16 Rights Agreement. The Company has duly amended the
Rights Agreement so that the Rights Agreement will not be applicable to the
Bidder, this Agreement, the Merger or any other transaction contemplated by
this Agreement, in each case to the extent provided for and made consistent
with the terms of this Agreement.
Section 3.17 Loctite Acquisition Agreement; Ahlstrom Acquisition
Agreement. The Company has previously delivered to the Bidder complete and
correct copies of (i) the Asset Purchase Agreement, dated as of June 20,
2000, between the Company and Loctite Corporation (the "Loctite Acquisition
Agreement") and (ii) the Asset Purchase Agreement, dated as of June 20,
2000, between the Company and Ahlstrom Paper Group Oy (the "Ahlstrom
Acquisition Agreement").
Section 3.18 Legal Proceedings, etc. As of the date hereof,
except as set forth in Section 3.18 of the Company Disclosure Schedule and
except for matters involving only monetary recovery in which the damages
sought to be imposed do not exceed $200,000 individually or $1 million in
the aggregate, there are no legal, administrative, arbitration or other
proceedings or governmental investigations pending or, to the best
knowledge of the Company, threatened in writing against the Company or any
of its Subsidiaries.
Section 3.19 Contracts.
(a) Section 3.19 (a) of the Company Disclosure Schedule
sets forth a complete and correct list of each contract (the "Material
Contracts") to which the Company or any of its Subsidiaries is a party
which, as of the date hereof, (i) is a collective bargaining agreement or
any agreement that contains any severance pay liabilities or obligations;
(ii) is an employment or consulting agreement or contract with an employee
or individual consultant or a consulting agreement or contract with a
consulting firm or other organization (other than employment agreements
that are created as a matter of Law); (iii) is a note, bond or debenture or
other agreement or instrument relating to borrowed money or an agreement of
guarantee or indemnification running to any Person other than a Subsidiary;
(iv) is an agreement or contract containing any covenant limiting the
freedom of the Company or any of its Subsidiaries to engage in any line of
business or compete with any Person; (v) provides for aggregate future
payments of more than $250,000; (vi) provides for aggregate future payments
in excess of $100,000, has a term exceeding one year and which may not be
cancelled upon 90 or fewer days' notice without any liability, penalty or
premium (other than a nominal cancellation fee or charge); or (vii) is
material to the business, operations or financial condition of the Company
and its Subsidiaries, taken as a whole; provided that Section 3.13(a) of
the Company Disclosure Schedule does not list any contract for the purchase
or sale of goods or services entered into in the ordinary course of
business which may be cancelled on 90 or fewer days' notice without any
liability, penalty or premium (other than a nominal cancellation fee or
charge).
(b) Except as set forth in Section 3.19(b) of the Company
Disclosure Schedule, (i) each Material Contract is in full force and
effect, and (ii) there is not, with respect to the Material Contracts, any
existing default, or event of default, or event which with or without due
notice or lapse of time or both would constitute a default or event of
default, on the part of the Company or any of its Subsidiaries or to the
best knowledge of the Company any other party thereto, except where the
failure to be in full force and effect or where such default or event of
default would not have a Material Adverse Effect on the Company.
Section 3.20 Owned Real Property. Section 3.20 of the Company
Disclosure Schedule sets forth, as of the date of this Agreement, a
complete and correct list of real property which is owned by the Company or
any of its Subsidiaries and which will continue to be owned by the Company,
directly or indirectly, following consummation of the transactions
contemplated by the Loctite Acquisition Agreement and the Ahlstrom
Acquisition Agreement.
ARTICLE IV
COVENANTS AND AGREEMENTS
Section 4.1 Conduct of Business by the Company. From and after
the date hereof and prior to the Effective Time or the date, if any, on
which this Agreement is earlier terminated pursuant to Section 6.1 (the
"Termination Date"), and except (w) that the Company may take any and all
actions (subject to the provisions of Section 4.1(xiv)) required to
consummate the transactions contemplated by the Loctite Acquisition
Agreement and the Ahlstrom Acquisition Agreement, (x) that the Company may
sell or otherwise dispose of its coatings business, (y) with the prior
written consent of the Bidder (which consent will not be unreasonably
withheld or delayed) or (z) as may be expressly permitted pursuant to this
Agreement, the Company:
(i) shall, and shall cause each of its Subsidiaries
to, conduct its operations according to their ordinary and usual
course of business consistent with past practice;
(ii) shall use its reasonable best efforts, and
cause each of its Subsidiaries to use its reasonable best efforts, to
preserve intact its present business organization and goodwill, keep
available the services of its current officers and other key
employees and preserve its relationships with those Persons having
material business dealings with the Company and its Subsidiaries;
(iii) shall not, and shall not permit its
Subsidiaries to, authorize or pay any dividends on or make any
distribution with respect to its outstanding shares of capital stock
(other than (A) regular quarterly cash dividends by the Company
consistent in timing and amount with past practice or (B) any
dividends or distribution by a wholly owned Subsidiary of the Company
to the Company or any of its wholly owned Subsidiaries);
(iv) shall not, and shall not permit any of its
Subsidiaries to establish, enter into or amend any severance plan,
agreement or arrangement or any Plan of the Company or Life
Technologies or increase the compensation payable or to become
payable or the benefits provided to its directors, officers or
employees, other than as contemplated by law or any existing
contract, employee benefit or welfare plan or policy, or in the
ordinary course of business consistent with past practice (1) with
respect to employees who are not officers of the Company, and (2)
with respect to annual bonuses and other incentive awards for
employees including officers;
(v) shall not, and shall not permit any of its
Subsidiaries to, authorize, or announce an intention to authorize, or
enter into an agreement with respect to, any merger, consolidation or
business combination (other than the Merger and the Life Technologies
Merger), any acquisition of a material amount of assets or
securities, any disposition of a material amount of assets or
securities or any other similar extraordinary transaction.
(vi) shall not, and shall not permit any of its
Subsidiaries to, propose or adopt any amendments to its certificate
of incorporation or bylaws (or other similar organizational
documents);
(vii) shall not, and shall not permit any of its
Subsidiaries to, issue or authorize the issuance of, or agree to
issue or sell any shares of capital stock of any class (whether
through the issuance or granting of options, warrants, commitments,
convertible securities, subscriptions, rights to purchase or
otherwise), except for (1) the issuance of Company Common Stock
pursuant to options and grants outstanding as of the date hereof
under the Company's 1999 Long-Term Incentive Plan, or 1994 Long-Term
Incentive Plan and 1988 Long-Term Incentive Plan (each such plan, a
"Company Equity Plan"), (2) the issuance of Life Technologies Common
Stock pursuant to options and grants outstanding as of the date
hereof under Life Technologies' 1997 Long-Term Incentive Plan, 1996
Non-Employee Directors Stock Option Plan, 1995 Long-Term Incentive
Plan and 1991 Stock Option Plan (each such plan, a "Life Technologies
Equity Plan") or (3) options and other equity awards granted in the
ordinary course of business consistent with past practice to any new
employee hired after the date hereof but before the Closing Date or
pursuant to formula awards, in either case under a Company Equity
Plan or a Life Technologies Equity Plan;
(viii) shall not, and shall not permit any of its
Subsidiaries to, reclassify, combine, split, purchase or redeem any
shares of its capital stock or purchase or redeem any rights,
warrants or options to acquire any such shares;
(ix) shall not, and shall not permit any of its
Subsidiaries to, (A) incur, assume or prepay any indebtedness or any
other liabilities for borrowed money or issue any debt securities
other than incurrences and repayments of indebtedness under the
Company's or its Subsidiaries' credit facilities in existence on the
date of this Agreement or (B) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person (other than wholly
owned Subsidiaries), except for guarantees by Subsidiaries of the
Company indebtedness permitted under the preceding clause (A);
(x) shall not, and shall not permit any of its
Subsidiaries to (or consent to any proposal by any Person in which
the Company has an investment to), make or forgive any loans,
advances or capital contributions to, or investments in, any other
Person other than the Company or any wholly owned Subsidiary of the
Company (including any intercompany loans, advances or capital
contributions to, or investments in, any affiliate) other than
advances to employees in the ordinary course of business in
accordance with the Company's or its Subsidiaries' established
policies;
(xi) shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any material lease, license,
contract or agreement or otherwise subject to any material Lien any
of its properties or assets (including securitizations), other than
in the ordinary course of business consistent with past practice; (B)
modify, amend in any material respect, or terminate any of its
material contracts; (C) waive, release or assign any rights that are
material to the Company and its Subsidiaries taken as a whole; or (D)
permit any insurance policy naming it as a beneficiary or a loss
payable payee to lapse, be cancelled or expire unless a new policy
with substantially identical coverage is in effect as of the date of
lapse, cancellation or expiration;
(xii) shall not, and shall not permit any of its
Subsidiaries to, change any of the financial accounting methods or
practices used by it unless required by GAAP;
(xiii)shall not, and shall not permit any of its
Subsidiaries to, make any Tax election that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect on
the Company or settle or compromise any material Tax liability;
(xiv) shall not, without the prior consent of the
Bidder (which consent shall not be unreasonably withheld or delayed),
amend or modify (x) the Loctite Acquisition Agreement or (y) the
Ahlstrom Acquisition Agreement in any material respect;
(xv) shall not, and shall not permit any of its
Subsidiaries to, take any action that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a)
of the Code; and
(xvi) shall not, and shall not permit any of its
Subsidiaries to, agree, in writing or otherwise, to take any of the
foregoing actions or take any action which would result in any of the
conditions to the Merger set forth in Article V hereof not being
satisfied.
Section 4.2 Bidder Interim Operations. Except as otherwise
expressly contemplated hereby, without the prior consent of the Company
(which consent will not be unreasonably withheld or delayed), from the date
hereof until the earlier of the Effective Time or the Termination Date, the
Bidder shall, and shall cause each of its Subsidiaries to, conduct their
business in all material respects in the ordinary and usual course
consistent with past practice and use all reasonable efforts to (i)
preserve intact its present business organization and goodwill, (ii) keep
available the services of its current officers and other key employees,
(iii) maintain in effect all material licenses, approvals and
authorizations from Governmental Entities, including, without limitation,
all material licenses and permits that are required for the Bidder or any
of its Subsidiaries to carry on its business as presently conducted and
(iv) preserve existing relationships with its material partners, lenders,
suppliers and others having material business relationships with it so that
the business of the Bidder and its Subsidiaries shall not be impaired in
any material respect at the Effective Time. Without limiting the generality
of the foregoing, except as otherwise expressly contemplated by this
Agreement, from the date hereof until the earlier of the Effective Time or
the Termination Date, without the prior written consent of the Company
(which consent will not be unreasonably withheld or delayed), the Bidder
shall not, nor shall it permit any Subsidiary to:
(a) amend its certificate of incorporation or bylaws (or
other similar organizational documents);
(b) amend in any respect the terms of the capital stock
of the Bidder;
(c) split, combine, subdivide or reclassify any shares of
Bidder Common Stock or declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of Bidder Common Stock, except for (i) regular
quarterly cash dividends by the Bidder consistent in timing and amount with
past practice, or (ii) dividends paid by any Subsidiary to the Bidder or
any Subsidiary that is, directly or indirectly, wholly owned by the Bidder;
(d) change any of the financial accounting methods or
practices used by it unless required by GAAP;
(e) enter into or acquire any new line of business that
(i) is material to the Bidder and its Subsidiaries, taken as a whole, and
(ii) is not strategically related to the current business or operations of
the Bidder and its Subsidiaries;
(f) incur indebtedness outside of the ordinary course or
for acquisitions (other than in order to consummate the transactions
contemplated by this Agreement or the Life Technologies Merger Agreement);
(g) engage in any merger, consolidation, share exchange,
business combination, reorganization, recapitalization or other similar
transaction or any disposition, directly or indirectly, of assets,
securities or ownership interests representing a material portion of the
total assets of the Bidder and its Subsidiaries taken as a whole;
(h) shall not, and shall not permit any of its
Subsidiaries to, take any action that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code; or
(i) agree, in writing or otherwise, to take any of the
foregoing actions or take any action which would result in any of the
conditions to the Merger set forth in Article V hereof not being satisfied.
Section 4.3 Access; Confidentiality.
(a) Except for competitively sensitive information and
subject to legal and contractual restrictions, the Company shall (and shall
cause its Subsidiaries to) afford to the Bidder's officers, employees,
accountants, counsel and other authorized representatives reasonable access
during normal business hours upon reasonable notice, throughout the period
prior to the earlier of the Effective Time or the Termination Date,
to its properties, offices, employees, contracts, commitments, books and
records and any report, schedule or other document filed or received by it
pursuant to the requirements of federal or state securities laws and shall
(and shall cause each of its Subsidiaries to) furnish to the Bidder such
additional financial and operating data and other information as to its and
its Subsidiaries' respective businesses and properties as the Bidder may
from time to time reasonably request. The Bidder will make all reasonable
best efforts to minimize any disruption to the businesses of the Company
and the Company's Subsidiaries which may result from the requests for
access, data and information hereunder. The Bidder shall afford to the
Company's officers, employees, accountants, counsel and other authorized
representatives reasonable access during normal business hours upon
reasonable notice, to its officers, employees, and books and records to the
extent reasonably necessary in connection with the preparation of the Proxy
Statement. No investigation pursuant to this Section 4.3 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto. All requests for access
and information shall be coordinated through designated senior executives
of each of the parties.
(b) The Bidder will hold all information provided under
this Section 4.3 that is non-public in confidence to the extent required
by, and in accordance with, the provisions of the letter dated February 27,
2000, between the Company and the Bidder. Except as required by law, the
Company will hold, and will cause its officers, employees, accountants,
counsel and other authorized representatives to hold, confidential, all
information and documents obtained pursuant to this Section 4.3 in
accordance with the letter dated July 1, 2000 between the Company and the
Bidder.
Section 4.4 Shareholders Meetings; Proxy Statement; Registration
Statement.
(a) As promptly as practicable following the date of this
Agreement, (i) the Company shall, acting through its Board of Directors and
subject to Section 4.8, duly call, give notice of, solicit proxies for,
convene and hold an annual or special meeting of its shareholders (the
"Company Shareholders Meeting") in accordance with applicable law, its
certificate of incorporation and its bylaws, and (ii) the Bidder shall,
acting through its Board of Directors and subject to the Bidder's Board of
Directors fiduciary duties under applicable law duly call, give notice of,
solicit proxies for, convene and hold an annual or special meeting of its
shareholders (the "Bidder Shareholders Meeting" and, together with the
Company Shareholders Meeting, the "Shareholders Meetings") in accordance
with applicable law, its certificate of incorporation and bylaws, for the
purposes of, among other actions, in each case, considering and taking
action upon the approval of the Merger and the approval and adoption of
this Agreement. Each of the Company (subject to Section 4.8) and the Bidder
(subject to the Bidder's Board of Directors' fiduciary duties under
applicable law) shall include in the Proxy Statement the recommendation of
its respective Board of Directors that its respective shareholders vote in
favor of the approval of the Merger and the approval and adoption of this
Agreement and, in the case of the Bidder, in favor of the approval of an
amendment to the Bidder's certificate of incorporation to authorize a
sufficient number of shares of Bidder Common Stock to issue the Merger
Consideration (the "Charter Amendment"). The Bidder and the Company shall
cause their respective Shareholders Meetings to be held on the same date,
which date shall be the same as the date of the Company Stockholders
Meeting (as defined in the Life Technologies Merger Agreement).
(b) As promptly as practicable following the date of this
Agreement, the Company and the Bidder shall (x) prepare and file with the
SEC a preliminary joint proxy statement relating to the Merger, this
Agreement and the Charter Amendment, and (y) obtain and furnish the
information required to be included by the SEC in the Proxy Statement and,
after consulting with one another respond promptly to any comments made by
the SEC with respect to the preliminary joint proxy statement and cause a
definitive joint proxy statement, including any amendments or supplements
thereto, to be mailed to their respective shareholders at the earliest
practicable date; provided that no amendments or supplements to the Proxy
Statement will be made by either party without consultation with the other
party and its counsel. Such definitive joint proxy statement shall also
constitute the prospectus of the Bidder with respect to shares of Bidder
Common Stock to be issued in connection with the transactions contemplated
by this Agreement (such joint proxy statement and prospectus is referred to
herein as the "Proxy Statement"), which prospectus is to be filed with the
SEC as part of the Registration Statement for the purpose of registering
Bidder Common Stock under the Securities Act. Each of the parties agrees to
provide the other party and its counsel with any comments, whether written
or oral, that such party may receive from time to time from the SEC or its
staff with respect to the Proxy Statement or the Registration Statement, as
the case may be, promptly after the receipt of such comments and to consult
with the other party and its counsel prior to responding to any such
comments.
(c) As promptly as practicable following the date of this
Agreement, the Bidder shall prepare and file with the SEC the Registration
Statement, and shall use its reasonable best efforts to have the
Registration Statement declared effective by the SEC as promptly as
practicable. The Bidder shall obtain and furnish the information required
to be included by the SEC in the Registration Statement and, after
consultation with the Company, respond promptly to any comments made by the
SEC with respect to the Registration Statement and cause the prospectus
included therein, including any amendments or supplements thereto, to be
mailed to the Company's shareholders at the earliest practicable date after
the Registration Statement is declared effective by the SEC, provided that
no amendments or supplements to the Registration Statement will be made by
the Bidder without consultation with the Company and its counsel. The
Bidder shall also take any action required to be taken under state blue sky
or other securities laws in connection with the issuance of Bidder Common
Stock in the Merger.
Section 4.5 Commercially Reasonable Efforts; Further Assurances.
(a) Subject to the terms and conditions of this Agreement
and applicable law, each of the parties shall act in good faith and use
commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement as soon as practicable. Without limiting the foregoing, the
parties shall, and shall cause their respective Subsidiaries to, and the
parties shall use commercially reasonable efforts to cause their (and their
respective Subsidiaries') directors, officers, employees, agents,
attorneys, accountants and representatives, to (i) consult and cooperate
with and provide assistance to each other in the preparation and filing
with the SEC of the preliminary Proxy Statement, the Proxy Statement and
the Registration Statement and all necessary amendments or supplements
thereto; (ii) obtain all consents, approvals, waivers, licenses, permits,
authorizations, registrations, qualifications or other permissions or
actions by, and give all necessary notices to, and make all filings with
and applications and submissions to, any Governmental Entity or other
Person necessary in connection with the consummation of the transactions
contemplated by this Agreement as soon as reasonably practicable; (iii)
provide all such information concerning such party, its Subsidiaries and
its officers, directors, employees, partners and affiliates as may be
necessary or reasonably requested in connection with any of the foregoing;
(iv) avoid the entry of, or have vacated or terminated, any injunction,
decree, order, or judgment that would restrain, prevent, or delay the
consummation of the Merger, including but not limited to defending through
litigation on the merits any claim asserted in any court by any Person; and
(v) take any and all reasonable steps necessary to avoid or eliminate every
impediment under any antitrust, competition, or trade regulation law that
is asserted by any Governmental Entity with respect to the Merger so as to
enable the consummation of the Merger to occur as expeditiously as
possible. Prior to making any application to or filing with a Governmental
Entity or other entity in connection with this Agreement (other than filing
under the HSR Act), each party shall provide the other party with drafts
thereof and afford the other party a reasonable opportunity to comment on
such drafts.
(b) The Company and the Bidder shall keep the other
reasonably apprised of the status of matters relating to the completion of
the transactions contemplated hereby, including promptly furnishing the
other with copies of notices or other communications received by the Bidder
or the Company, as the case may be, or by any of their respective
Subsidiaries, from any third party and/or any Governmental Entity with
respect to the transactions contemplated by this Agreement.
Section 4.6 Employee Matters.
(a) The Company shall take all such actions as shall be
necessary to cause each outstanding stock option to purchase shares of
Company Common Stock (including any related alternative rights) granted
under any stock option or compensation plan or arrangement of the Company
or its Subsidiaries (collectively, the "Company Option Plans") (including
those granted to current or former employees and directors of the Company
or any of its Subsidiaries) (the "Employee Stock Options") to become fully
vested and exercisable immediately prior to the Effective Time, as
permitted pursuant to the terms and conditions of the applicable Company
Option Plan. The Company shall take all such actions as shall be necessary
to cause all Employee Stock Options that are outstanding immediately prior
to the Effective Time (whether or not then presently exercisable or vested)
to be cancelled. In exchange for the cancellation of each such Employee
Stock Option (whether or not presently exercisable or vested), the holder
thereof shall be entitled to receive from the Company (A) an amount in cash
equal to the product of (1) the Option Value Spread multiplied by (2)
0.2800 and (B) such number of shares of Bidder Common Stock (rounded to the
nearest full share) equal to product of (1) the quotient obtained by
dividing (x) the Option Value Spread by (y) Average Bidder Trading Price
multiplied by (2) 0.7200. For purposes of this Agreement the "Option Value
Spread" of an Employee Stock Option shall mean the product of (A) the
excess, if any, of (x) the Cancellation Price over (y) the per share
exercise price of such Employee Stock Option multiplied by (B) the number
of Shares subject to such Employee Stock Option and not previously
purchased upon exercise of such option. Any such payment shall be further
reduced by any income Tax or employment Tax witholding required under the
Code. The "Cancellation Price" shall be the dollar amount equal to the sum
of (i) $17.50 and (ii) the product of (A) 0.7200 and (B) the product of (x)
the Exchange Ratio multiplied by (y) the Average Bidder Trading Price. The
Company shall take such steps as may be required to cause the transactions
contemplated by this Section 4.6(a) and any other dispositions of Company
equity securities (including derivative securities) in connection with this
Agreement or the transactions contemplated hereby by any individual who is
a director or officer of the Company to be exempt under Rule 16b-3
promulgated under the Exchange Act. The Bidder shall take such steps as may
be required to cause the transactions contemplated by this Section 4.6(a)
and any other acquisitions of Bidder equity securities (including
derivative securities) in connection with this Agreement or the
transactions contemplated hereby by any individual who is or becomes at or
before Closing a director or officer of the Bidder to be exempt under Rule
16b-3 promulgated under the Exchange Act. The steps to taken by the Company
and the Bidder in connection with the exemption under Rule 16b-3 described
above shall be taken in accordance with the interpretative letter dated
January 12, 1999, issued by the SEC to Skadden, Arps, Slate, Meagher & Flom
LLP.
(b) Following the Effective Time, and to the extent not
provided for in an acquisition agreement that the Company is a party to as
of the Effective Time, or any agreement entered into after the Effective
Time by the Company and/or the Bidder with any purchaser of the Company's
coatings business or any other assets of the Company, the Bidder shall, or
shall cause a Bidder Subsidiary to, (i) provide to those former employees
of the Company whose employment terminated prior to the Effective Time (and
eligible dependents of such former employees) (collectively, "Retirees")
post-retirement welfare benefits substantially equivalent (both in terms of
the benefits provided and the cost of such benefits to a Retiree) to those
provided to such individuals under the post-retirement welfare benefit
program of the Company as in effect immediately prior to the Effective
Time, (ii) continue an arrangement pursuant to which such post-retirement
welfare benefits shall be provided upon any termination of employment with
the Bidder or a Bidder Subsidiary, to those employees (and their eligible
dependents) who elect to receive such benefits (substantially in accordance
with the procedures utilized by the Company or other such reasonable
procedures the Bidder may establish) and who immediately prior to the
Effective Time would be eligible for such benefits upon a termination of
employment with the Company (collectively, "Vested Eligible Employees") and
(iii) continue an arrangement pursuant to which such post-retirement
welfare benefits shall be provided to those individuals (and their eligible
dependents) who are not Retirees or Vested Eligible Employees, and who, as
of the Effective Time, had attained the age of 50 and had been credited
with at least five years of service with the Company (collectively,
"Potential Grow-In Employees"), but only if, at the time of termination of
any termination with the Bidder or a Bidder Subsidiary, (A) such Potential
Grow-In Employee would have been eligible to receive such post-retirement
welfare benefits under the Company's post-retirement welfare benefit
program as in effect immediately prior to the Effective Time (crediting
service with the Bidder or a Bidder Subsidiary as service with the Company)
and (B) such Potential Grow-In Employee elects to receive such benefits
(substantially in accordance with procedures currently utilized by the
Company or other such reasonable procedures the Bidder may establish). The
Bidder shall not, and shall not permit any Bidder Subsidiary to, terminate
or modify in any adverse manner the post-retirement welfare benefit it has
agreed to provide to Retirees, Vested Eligible Employees and Potential
Grow-In Employees pursuant to this Section 4.6(b).
(c) At the direction of the Bidder, and to the extent
permissible under any previous acquisition agreement entered into by the
Company, the Company shall terminate the Dexter Corporation 401(k) Plan and
or the Employees' Savings and Profit Sharing Retirement Income Plan of
Dexter Corporation and Dexter Corporation, Nonwoven (collectively, the
"Savings Plans"). The Bidder shall determine whether any such previous
acquisition agreement would affect the proposed plan terminations and shall
notify the Company at least three (3) days prior to the Closing of its
decision to, and may at that time, terminate a Savings Plan. Unless the
Bidder has not so directed the Company, the Bidder shall receive from the
Company evidence (in a form satisfactory to the Bidder) that the Savings
Plan shall be terminated effective as of the day immediately preceding the
Closing. The Bidder shall, consistent with the terms of the Bidder's 401(k)
plan, and applicable law, allow individuals who were employees of the
Company or any Subsidiary of the Company as of immediately prior to the
Closing to participate in the Bidder's 401(k) plan and the Bidder shall
cause its 401(k) plan to accept direct rollovers and rollover contributions
(each, to the extent requested by a Savings Plan participant) in respect of
the Savings Plan account balances (including any outstanding loans) held by
such individuals.
Section 4.7 Takeover Statute. If any "fair price,"
"moratorium," "control share acquisition" or other form of anti-takeover
statute or regulation shall become applicable to the transactions
contemplated hereby, each of the Company and the Bidder and the members of
their respective Boards of Directors shall grant such approvals and take
such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the
terms contemplated hereby and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated
hereby.
Section 4.8 No Solicitation by the Company.
(a) Neither the Company nor any of its Subsidiaries nor
any of the officers and directors of any of them shall, and the Company
shall direct and use its reasonable best efforts to cause its and its
Subsidiaries' employees, agents and representatives, including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries (the Company, its Subsidiaries and their respective officers,
directors, employees, agents and representatives being the "Company
Representatives") not to, directly or indirectly through another Person,
(i) initiate, solicit, encourage or otherwise knowingly facilitate any
inquiries (by way of furnishing information or otherwise) or the making of
any Acquisition Proposal or (ii) participate in any discussions or engage
in any negotiations concerning an Acquisition Proposal; provided, however,
that the Company's Board of Directors may, or may authorize the Company
Representatives to, in response to an Acquisition Proposal that the Board
of Directors of the Company concludes in good faith is, or is reasonably
likely to become, a Superior Proposal, (x) furnish information with respect
to the Company and its Subsidiaries to any Person making such Superior
Proposal and (y) participate in discussions or negotiations regarding such
Superior Proposal, provided that, prior to taking any such action, the
Company provides reasonable advance notice to the Bidder that it is taking
such action. For purposes of this Agreement "Acquisition Proposal" means
any direct or indirect inquiry, proposal or offer relating to the
acquisition or purchase of a business or shares of any class of equity
securities of the Company or any of its Subsidiaries, any tender offer or
exchange offer that, if consummated, would result in any Person
beneficially owning any class of equity securities of the Company or any of
its Subsidiaries, or any merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction (a "Business Combination Transaction")
involving the Company or any of its Subsidiaries, or any purchase or sale
of a substantial portion of the consolidated assets (including without
limitation stock of Subsidiaries owned directly or indirectly by the
Company) of the Company or any of its Subsidiaries (an "Asset
Transaction"); provided that the term Acquisition Proposal shall not
include the Loctite Acquisition Agreement, the Ahlstrom Acquisition
Agreement or communications relating to the sale of any business covered by
any such agreement or the Company's coatings business. For purposes of this
Agreement "Superior Proposal" means an unsolicited bona fide written
Acquisition Proposal that the Board of Directors of the Company concludes
in good faith (after consultation with the Company's legal and financial
advisors) would, if consummated, provide greater aggregate value to the
Company's shareholders from a financial point of view than the transactions
contemplated by this Agreement; provided that for purposes of this
definition the term "Acquisition Proposal" shall have the meaning set
forth above, except that (x) references to "shares of any class of equity
securities of the Company" shall be deemed to be references to "100% of the
outstanding Shares" and (y) an "Acquisition Proposal" shall be deemed to
refer only to a Business Combination Transaction involving the Company or,
with respect to an Asset Transaction, such transaction must involve the
assets of the Company and its Subsidiaries, taken as a whole, and not any
Subsidiary of the Company alone.
(b) Except as expressly permitted by this Section 4.8,
neither the Company's Board of Directors nor any committee thereof shall
(i) withdraw, modify or change, or propose publicly to withdraw, modify or
change, in a manner adverse to the Bidder, the recommendation by such Board
of Directors or such committee of the Merger or this Agreement unless the
Board of Directors of the Company shall have determined in good faith,
after consultation with its legal and financial advisors, that, the Merger
or this Agreement is no longer in the best interests of the Company's
shareholders and that such withdrawal, modification or change is,
therefore, required in order to satisfy its fiduciary duties to the
Company's shareholders under applicable law, (ii) approve or recommend, or
propose publicly to approve or recommend, any Acquisition Proposal, or
(iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, an
"Acquisition Agreement") related to any Acquisition Proposal.
Notwithstanding the foregoing, the Company may, in response to a Superior
Proposal, (x) take any of the actions described in clauses (i) or (ii)
above or (y) subject to this paragraph (b), terminate this Agreement (and
concurrently with or after such termination, if it so chooses, cause the
Company to enter into any Acquisition Agreement with respect to any
Superior Proposal) but only after the fifth business day following the
Bidder's receipt of written notice advising the Bidder that the Company's
Board of Directors is prepared to accept a Superior Proposal, and attaching
the most current version of any such Superior Proposal or any draft of an
Acquisition Agreement.
(c) Nothing contained in this Section 4.8 shall prohibit
the Company or its Board of Directors from at any time taking and
disclosing to its shareholders a position contemplated by Rule 14e-2
promulgated under the Exchange Act or from making any disclosure to the
Company's shareholders required by applicable law.
Section 4.9 Public Announcements. The Bidder and the Company
agree that neither one of them will issue any press release or otherwise
make any public statement or respond to any press inquiry with respect to
this Agreement or the transactions contemplated hereby without prior
consultation with the other party, except as may be required by applicable
law or the rules of any applicable stock exchange on which such party's
securities are listed.
Section 4.10 Indemnification; Insurance. (a) From and after the
Effective Time, the Bidder will indemnify and hold harmless each present
and former director and officer of the Company and its Subsidiaries (the
"Indemnified Parties"), against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages or liabilities incurred in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, by reason of the
fact that such individual is or was a director, officer, employee or agent
of the Company or any of its Subsidiaries, or is or was serving at the
request of the Company or any of its Subsidiaries as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, whether asserted or claimed prior to, at or after the
Effective Time, to the fullest extent permitted under applicable law, and
the Bidder shall also advance fees and expenses (including attorneys fees)
as incurred to the fullest extent permitted under applicable law; provided,
that to the extent the Company and any Indemnified Party are parties to an
existing indemnification agreement, the indemnification provided for
pursuant to this Section 4.10(a) shall be provided by the Bidder in
accordance with the procedures prescribed in such indemnification
agreement.
(b) For six years from the Effective Time, the Bidder
shall maintain in effect the Company's and its Subsidiaries' current
directors' and officers' liability insurance policies (the "Company
Policies") covering those Persons who are currently covered by the Company
Policies; provided, however, that in no event shall the Bidder be required
to expend in any one year an amount in excess of 150% of the annual
premiums currently paid by the Company for such insurance, and provided
further, that if the annual premiums of such insurance coverage exceeds
such amount, the Bidder shall be obligated to obtain a policy with the
greatest coverage available for a cost not exceeding such amount; and
provided further that the Bidder may meet its obligations under this
paragraph by covering the above Persons under the Bidder's insurance policy
or policies on the terms described above.
Section 4.11 Additional Reports and Information.
(a) The Company shall furnish to the Bidder copies of all
reports of the type referred to in Section 3.4 which it or Life
Technologies files with the SEC on or after the date hereof, and the
Company represents and warrants that as of the respective dates thereof,
such reports will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The audited consolidated financial statements
and the unaudited consolidated interim financial statements included in
such reports (including any related notes and schedules) will fairly
present the financial position of the Company and its consolidated
Subsidiaries or Life Technologies and its consolidated Subsidiaries, as the
case may be, as of the dates thereof and the results of operations and cash
flows or other information included therein for the periods or as of the
date then ended (subject, in the case of the interim financial statements,
to normal, recurring year-end adjustments), in each case in accordance with
GAAP consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto). The Company shall furnish to the Bidder on
a monthly basis a consolidating balance sheet for the Company and its
consolidated subsidiaries and the monthly internal financial report for
Life Technologies and its Subsidiaries which are currently being prepared
in the ordinary course of business (with deletions reasonably necessary to
comply with applicable antitrust laws).
(b) The Bidder shall furnish to the Company copies of all
reports of the type referred to in Section 3.4 which it files with the SEC
on or after the date hereof, and the Bidder represents and warrants that as
of the respective dates thereof, such reports will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The audited
consolidated financial statements and the unaudited consolidated interim
financial statements included in such reports (including any related notes
and schedules) will fairly present the financial position of the Bidder and
its consolidated Subsidiaries as of the dates thereof and the results of
operations and cash flows or other information included therein for the
periods or as of the date then ended (subject, in the case of the interim
financial statements, to normal, recurring year-end adjustments), in each
case in accordance with past practice and GAAP consistently applied during
the periods involved (except as otherwise disclosed in the notes thereto).
Section 4.12 Affiliates. As soon as practicable, the Company
shall deliver to the Bidder a list identifying, to the best of the
Company's knowledge, all Persons who will be, at the time of the Company
Shareholder Approval, deemed to be "affiliates" of the Company for purposes
of Rule 145 under the Securities Act. The Company shall advise the Bidder
of any additions or deletions to or from such list from time to time
thereafter. The Company shall use its reasonable best efforts to cause each
such Person to deliver to the Bidder at least 30 days prior to the Closing
Date a written "affiliates" agreement in customary form and substance.
Section 4.13 Nasdaq National Market Quotation. The Bidder shall
use its best efforts to cause the shares of Bidder Common Stock to be
issued in connection with the transactions contemplated by this Agreement
to be approved for quotation on the Nasdaq National Market, subject to
official notice of issuance, prior to the Closing Date.
Section 4.14 Tax-Free Reorganization. The Bidder and the Company
intend that the Merger will qualify as a reorganization within the meaning
of Section 368(a) of the Code. The Bidder and the Company shall each use
all reasonable efforts to cause the Merger to so qualify and to obtain the
opinions of their respective tax counsel referred to in Sections 5.2(a) and
5.3(a), including the execution of the representation letters referred to
therein. Neither the Bidder nor the Company shall knowingly take any
action, or knowingly fail to take any action, that would cause the Merger
not to qualify as a reorganization within the meaning of Section 368(a) of
the Code, unless otherwise required pursuant to a "determination" within
the meaning of Section 1313(a) of the Code.
Section 4.15 Disclosure Schedule Supplements. From time to time
after the date of this Agreement and prior to the Effective Time, the
Company will promptly supplement or amend the Company Disclosure Schedule
with respect to any matter hereafter arising which, if existing or
occurring at or prior to the date of this Agreement, would have been
required to be set forth or described in the Company Disclosure Schedule or
which is necessary to correct any information in a schedule or in any
representation and warranty of the Company which has been rendered
inaccurate thereby in any material respect. From time to time after the
date of this Agreement and prior to the Effective Time, the Bidder will
promptly supplement or amend the Bidder Disclosure Schedule with respect to
any matter hereafter arising which, if existing or occurring at or prior to
the date of this Agreement, would have been required to be set forth or
described in the Bidder Disclosure Schedule or which is necessary to
correct any information in a schedule or in any representation and warranty
of the Bidder which has been rendered inaccurate thereby in any material
respect. For purposes of determining the accuracy of the representations
and warranties of the Company contained in this Agreement and the accuracy
of the representations and warranties of the Bidder contained in this
Agreement in order to determine the fulfillment of the conditions set forth
in Sections 5.2(b) and 5.3(b), the Company Disclosure Schedule and the
Bidder Disclosure Schedule shall be deemed to include only that information
contained therein on the date of this Agreement and shall be deemed to
exclude any information contained in any subsequent supplement or amendment
thereto.
Section 4.16 Voting of Life Technologies Common Stock. Unless
this Agreement shall have been terminated in accordance with its terms, the
Company hereby agrees to vote all of the shares of Life Technologies Common
Stock beneficially owned by it in favor of the approval and adoption of the
Life Technologies Merger Agreement at any meeting of the shareholders of
Life Technologies held for that purpose.
ARTICLE V
CONDITIONS TO THE MERGER
Section 5.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of the
following conditions:
(a) The Company Shareholder Approval shall have been
obtained.
(b) The Bidder Shareholder Approval shall have been
obtained.
(c) All of the conditions to the Life Technologies Merger
shall have been satisfied or waived in accordance with the terms of the
Life Technologies Merger Agreement, and the Life Technologies Merger shall
be effective simultaneously with the Effective Time. The condition set
forth in this paragraph (c) shall not be waivable by either party.
(d) No statute, rule, regulation, executive order,
decree, ruling or permanent injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits the
consummation of the Merger substantially on the terms contemplated hereby;
provided that the party seeking to rely upon this condition has fully
complied with and performed its obligations pursuant to Section 4.3.
(e) The applicable waiting period under the HSR Act shall
have expired or been terminated.
(f) The shares of Bidder Common Stock to be issued in the
Merger shall have been approved for quotation on the Nasdaq National
Market, subject to official notice of issuance.
(g) The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act, and no
stop order suspending such effectiveness shall have been issued and remain
in effect.
Section 5.2 Conditions to Obligation of the Bidder to Effect
the Merger. The obligation of the Bidder to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by the Bidder:
(a) The Bidder shall have received an opinion of Gray
Cary Ware & Freidenrich LLP, special tax counsel to the Bidder, dated as of
the Effective Time, to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code. The
issuance of such opinion shall be conditioned upon the receipt by such tax
counsel of customary representation letters from each of the Bidder and the
Company, in each case, in form and substance reasonably satisfactory to
such tax counsel and the issuance of the opinion of counsel to the Company
provided in Section 5.3(a). The specific provisions of each such
representation letter shall be in form and substance reasonably
satisfactory to such tax counsel, and each such representation letter shall
be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect. The opinion condition
referred to in this Section 5.2(a) shall not be waivable after receipt of
the Company Shareholder Approval and the Bidder Shareholder Approval
referred to in Sections 5.1(a) and 5.1(b), unless further Company
shareholder approval is obtained with appropriate disclosure.
(b) The representations and warranties of the Company set
forth in this Agreement that are qualified by materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of the Company set forth in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case
as if such representations or warranties were made as of the Effective Time
(other than those that speak as of a specific date or as of the date
hereof, which representations and warranties shall be true and correct or
true and correct in all material respects, as the case may be, as of such
specific date or as of the date hereof, respectively).
(c) The Company shall have performed and complied in all
material respects with all agreements and obligations required by this
Agreement to be performed and complied with by it on or prior to the
Closing Date.
(d) The transactions contemplated by each of the Loctite
Acquisition Agreement and the Ahlstrom Acquisition Agreement shall have
been consummated substantially in accordance with the terms thereof.
(e) The Company shall have furnished a certificate of an
executive officer to evidence compliance with the conditions set forth in
Section 5.2(b) and (c) of this Agreement.
Section 5.3 Conditions to Obligation of the Company to Effect
the Merger. The obligation of the Company to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by the Company:
(a) The Company shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, special tax counsel to the
Company, dated as of the Effective Time, to the effect that the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Code. The issuance of such opinion shall be conditioned upon the receipt by
such tax counsel of customary representation letters from each of the
Bidder and the Company, in each case, in form and substance reasonably
satisfactory to such tax counsel. The specific provisions of each such
representation letter shall be in form and substance reasonably
satisfactory to such tax counsel, and each such representation letter shall
be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect. The opinion condition
referred to in this Section 5.3(a) shall not be waivable after receipt of
the Company Shareholder Approval and the Bidder Shareholder Approval
referred to in Sections 5.1(a) and 5.1(b), unless further Company
shareholder approval is obtained with appropriate disclosure.
(b) The representations and warranties of the Bidder set
forth in this Agreement that are qualified by materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of the Company set forth in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case,
as if such representations or warranties were made as of the Effective Time
(other than those that speak as of a specific date or as of the date
hereof, which representations and warranties shall be true and correct or
true and correct in all material respects, as the case may be, as of such
specific date or as of the date hereof, respectively).
(c) The Bidder shall have performed and complied in all
material respects with all agreements and obligations required by this
Agreement to be performed and complied with by it on or prior to the
Closing Date.
(d) The Bidder shall have furnished a certificate of an
executive officer of the Bidder to evidence compliance with the conditions
set forth in Section 5.3(b) and (c) of this Agreement.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after obtaining the
Company Shareholder Approval and the Bidder Shareholder Approval:
(a) by the mutual written consent of the Company and the
Bidder;
(b) by either the Bidder or the Company, if the Merger
has not been consummated by October 31, 2000 (the "Expiration Date"),
provided, however, that in the event either the condition set forth in
Section 5.1(e) shall not have been satisfied or, prior to September 15,
2000, the Registration Statement shall not have been declared effective,
the Expiration Date shall be extended to the earlier of (x) the later of
(1) the date which is three business days after the date on which the
condition set forth in Section 5.1(e) is satisfied and (2) the date which
is three business days following the date of the Company Shareholders
Meeting and (y) December 31, 2000; provided further, that the right to
terminate this Agreement under this clause (b) shall not be
available to any party whose failure to fulfill any of its obligations
under this Agreement has been the cause of or resulted in the failure to
consummate the Merger by such date;
(c) by either the Bidder or the Company if (i) a statute,
rule, regulation or executive order shall have been enacted, entered,
promulgated or enforced by any Governmental Entity prohibiting the
consummation of the Merger substantially on the terms contemplated hereby;
or (ii) an order, decree, ruling or injunction shall have been entered
permanently restraining, enjoining or otherwise prohibiting the
consummation of the Merger substantially on the terms contemplated hereby
and such order, decree, ruling or injunction shall have become final and
non-appealable; provided, that the party seeking to terminate this
Agreement pursuant to this Section 6.1(c)(ii) shall have used its
reasonable best efforts to remove such order, decree, ruling or injunction;
(d) by the Company in accordance with Section 4.8(b);
provided that the Company shall have complied with all provisions of
Section 4.8(b); and provided further that any such termination shall not be
effective unless the Termination Fee pursuant to Section 6.3 shall have
been paid contemporaneously with such termination;
(e) by the Bidder or the Company, if after the Company
convenes and holds the Company Shareholders Meeting and certifies the vote
with respect to the Merger the Company's shareholders have failed to
deliver the affirmative votes necessary to confer the Company Shareholder
Approval;
(f) by the Bidder or the Company, if after the Bidder
convenes and holds the Bidder Shareholders Meeting and certifies the vote
with respect to the Merger and the amendment of the Bidder's certificate of
incorporation, the Bidder's shareholders shall have failed to deliver the
affirmative votes necessary to confer the Bidder Shareholder Approval;
(g) by the Bidder, if there has been a material violation
or breach by the Company of any agreement, representation or warranty
contained in this Agreement that has rendered the satisfaction of any
condition to the obligations of the Bidder impossible and such violation or
breach has not been waived by the Bidder;
(h) by the Company, if there has been a material
violation or breach by the Bidder of any agreement, representation or
warranty contained in this Agreement that has rendered the satisfaction of
any condition to the obligations of the Company, impossible and such
violation or breach has not been waived by the Company;
(i) by the Bidder or the Company, if the Life Technologies
Merger Agreement shall have been terminated in accordance with its terms; or
(j) in the event that the Expiration Date is extended
beyond October 31, 2000, by the Bidder or the Company, at any time after
the tenth business day following the termination of either the Loctite
Acquisition Agreement or the Ahlstrom Acquisition Agreement, in accordance
with its terms.
Section 6.2 Effect of Termination. In the event of termination
of this Agreement pursuant to Section 6.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
terminate and be of no further force and effect (except for the provisions
of Sections 4.3(b), 6.3 and 7.2), and there shall be no other liability on
the part of the Bidder or the Company except liability arising out of a
willful breach of this Agreement.
Section 6.3 Termination Fee. In the event that (i) this
Agreement shall have been terminated pursuant to Section 6.1(d) or (ii) an
Acquisition Proposal for the Company shall have been publicly announced
and, following such announcement, this Agreement is terminated pursuant to
Section 6.1(e) and, within 12 months of such termination, a Business
Combination Transaction involving a change of control of the Company or an
Asset Transaction involving a sale of all or substantially all of the
assets of the Company and its consolidated subsidiaries is consummated,
then, the Company shall pay to the Bidder a fee equal to $65 million (the
"Termination Fee"), payable by wire transfer of same day funds or by
cashier's check, in accordance with the provisions of the next sentence. In
the event the Termination Fee is payable (x) pursuant to clause (i) of the
preceding sentence, payment of the termination fee shall be a condition to
the effectiveness of termination pursuant to Section 6.1(d) and (y)
pursuant to clause (ii) of the preceding sentence, the Termination Fee
shall be payable promptly, but in no event later than two days after the
date of consummation of the Business Combination Transaction or Asset
Transaction. The Company acknowledges that the agreements contained in this
Section 6.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Bidder would not enter
into this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 No Survival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time.
Section 7.2 Expenses. Except as otherwise expressly
contemplated by this Agreement, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses.
Section 7.3 Counterparts; Effectiveness. This Agreement may be
executed in two or more separate counterparts, each of which shall be
deemed to be an original but all of which shall constitute one and the same
agreement. This Agreement shall become effective when each party hereto
shall have received a counterpart hereof signed by the other party hereto.
Section 7.4 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of laws thereof, except to the extent
the provisions of this Agreement are expressly governed by or derive their
authority from the CBCA.
Section 7.5 Notices. All notices and other communications
hereunder shall be in writing (including telecopy or similar writing) and
shall be effective (a) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section 7.5 and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section 7.5:
To the Bidder:
Invitrogen Corporation
1600 Faraday Avenue
Carlsbad, California 92008
Attention: Chief Financial Officer
Telecopy: (760) 602-6505
copy to:
Gray Cary Ware & Freidenrich LLP
4365 Executive Drive, Suite 1600
San Diego, California 92121-2189
Attention: Cameron Jay Rains, Esq.
Telecopy: (858) 677-1477
To the Company:
Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096-2334
Attention: General Counsel
Telecopy: (860) 292-7669
copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: J. Michael Schell, Esq.
Margaret L. Wolff, Esq.
Telecopy: (212) 735-2000
Section 7.6 Assignment; Binding Effect. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned
by either of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the
first sentence of this Section 7.6, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Any assignment not permitted under this
Section 7.6 shall be null and void.
Section 7.7 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as
to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
Section 7.8 Enforcement of Agreement. The parties hereto agree
that money damages or other remedy at law would not be sufficient or
adequate remedy for any breach or violation of, or a default under, this
Agreement by them and that in addition to all other remedies available to
them, each of them shall be entitled to the fullest extent permitted by law
to an injunction restraining such breach, violation or default or
threatened breach, violation or default and to any other equitable relief,
including, without limitation, specific performance, without bond or other
security being required.
Section 7.9 Entire Agreement; Third-Party Beneficiaries. This
Agreement together with the Life Technologies Merger Agreement, the
Confidentiality Agreement, dated February 27, 2000, the Confidentiality
Agreement, dated July 1, 2000, the Company Disclosure Schedule, the Bidder
Disclosure Schedule and exhibits hereto constitute the entire agreement,
and supersede all other prior agreements and understandings, both written
and oral, among the parties, or any of them, with respect to the subject
matter hereof and thereof and except for the provisions of Section 4.6 and
Section 4.10, is not intended to and shall not confer upon any Person other
than the parties hereto any rights or remedies hereunder.
Section 7.10 Headings. Headings of the Articles and Sections of
this Agreement are for convenience of the parties only, and shall be given
no substantive or interpretive effect whatsoever.
Section 7.11 Definitions. References in this Agreement to
(a) "Subsidiaries" of the Company or the Bidder shall mean any corporation
or other form of legal entity of which more than 50% of the outstanding
voting securities are on the date hereof directly or indirectly owned by
the Company or the Bidder or in which the Company or the Bidder has the
right to elect a majority of the members of the board of directors or other
similar governing body; (b) "Significant Subsidiaries" shall mean
Subsidiaries which constitute "significant subsidiaries" under Rule 405
promulgated by the SEC under the Securities Act; (c) "affiliates" shall
mean, as to any Person, any other Person which, directly or indirectly,
controls, or is controlled by, or is under common control with, such
Person; and (d) "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including, without limitation, a Governmental Entity. As used in the
definition of "affiliates," "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person, whether through the
ownership of securities or partnership or other ownership interests, by
contract or otherwise. "Including," as used herein, shall mean "including,
without limitation."
Section 7.12 Finders or Brokers. Except for Lehman Brothers Inc.
with respect to the Company, and Donaldson, Lufkin & Jenrette Securities
Corporation with respect to the Bidder, neither the Company nor the Bidder
nor any of their respective Subsidiaries has employed any investment
banker, broker, finder or intermediary in connection with the transactions
contemplated hereby who might be entitled to any fee or any commission in
connection with or upon consummation of the Merger.
Section 7.13 Amendment or Supplement. At any time prior to the
Effective Time, this Agreement may be amended or supplemented in any and
all respects, whether before or after the Company Shareholder Approval and
the Bidder Shareholder Approval, by written agreement of the parties
hereto, by action taken by their respective Boards of Directors, with
respect to any of the terms contained in this Agreement; provided, however
that following the Company Shareholder Approval and the Bidder Shareholder
Approval there shall be no amendment or change to the provisions hereof
which would reduce the amount or change the type of consideration into
which each Share shall be converted upon consummation of the Merger or
other change requiring shareholder approval without further approval by the
shareholders of the Company.
Section 7.14 Extension of Time, Waiver, Etc. At any time prior
to the Effective Time, any party may (a) extend the time for the
performance of any of the obligations or acts of any other party hereto;
(b) waive any inaccuracies in the representations and warranties of any
other party hereto contained herein or in any document delivered pursuant
hereto; or (c) subject to the proviso of Section 7.13 waive compliance with
any of the agreements or conditions of any other party hereto contained
herein. Notwithstanding the foregoing no failure or delay by the Company or
the Bidder in exercising any right hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right hereunder.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above
written.
INVITROGEN CORPORATION
By: /s/ Lyle C. Turner
Name: Lyle C. Turner
Title: Chairman & CEO
DEXTER CORPORATION
By: /s/ K. Grahame Walker
Name: K. Grahame Walker
Title: Chairman & CEO
ANNEX C
[LETTERHEAD OF DONALDSON, LUFKIN & JENRETTE]
July 8, 2000
Board of Directors
Invitrogen Corporation
1600 Faraday Avenue
Carlsbad, CA 92008
Dear Sirs:
You have requested our opinion as to the fairness from a financial
point of view to Invitrogen Corporation (the "Company") of the
consideration to be paid by the Company pursuant to the terms of (i) the
Agreement and Plan of Merger, to be dated as of July 7, 2000 (the "Dexter
Agreement"), by and between the Company and Dexter Corporation ("Dexter")
pursuant to which Dexter will be merged (the "Dexter Merger") with and into
the Company, and (ii) the Agreement and Plan of Merger, to be dated as of
July 7, 2000 (the "Life Technologies Agreement" and together with the
Dexter Agreement, the "Merger Agreements"), by and between the Company and
Life Technologies, Inc. ("Life Technologies") pursuant to which Life
Technologies will be merged (the "Life Technologies Merger", and together
with the Dexter Merger, the "Transaction") with and into the Company.
Pursuant to the Dexter Agreement, each share of common stock of
Dexter will be converted into the right to receive, at the election of the
holder thereof, (i) the number of shares of common stock, par value $.01
per share of the Company ("Company Common Stock"), equal to the Dexter
Exchange Ratio (the "Dexter Stock Consideration") or (ii) $62.50 in cash
(the "Dexter Cash Consideration" and together with the Dexter Stock
Consideration, the "Dexter Merger Consideration"); provided that such
election shall be subject to proration as set forth in the Dexter
Agreement. The "Dexter Exchange Ratio" shall be calculated by dividing
$62.50 by the average closing sales price of the Company Common Stock for
the twenty (20) consecutive trading days ending on and including the third
trading day prior to the date of the Shareholder Meeting ("Average Trading
Price"); provided, however, that if the quotient of $62.50 divided by the
Average Trading Price exceeds 1.0417 then for all purposes the Dexter
Exchange Ratio shall be 1.0417, and if such quotient is less than 0.7813,
then for all purposes the Dexter Exchange Ratio shall be 0.7813.
Pursuant to the Life Technologies Agreement, each share of common
stock of Life Technologies that is not held by Dexter (the "Minority
Interest") will be converted into the right to receive, at the election of
the holder thereof, (i) the number of shares of Company Common Stock equal
to the Life Technologies Exchange Ratio (the "Life Technologies Stock
Consideration") or (ii) $60.00 in cash (the "Life Technologies Cash
Consideration" and together with the Life Technologies Stock Consideration,
the "Life Technologies Merger Consideration") (the Life Technologies Merger
Consideration and the Dexter Merger Consideration in the aggregate, the
"Aggregate Consideration"); provided that such election shall be subject to
proration as set forth in the Life Technologies Agreement. The "Life
Technologies Exchange Ratio" shall be calculated by dividing $60.00 by the
Average Trading Price; provided, however, that if the quotient of $60.00
divided by the Average Trading Price exceeds 1.0000 then for all purposes
the Exchange Ratio shall be 1.0000, and if such quotient is less than
0.7500, then for all purposes the Exchange Ratio shall be 0.7500.
In arriving at our opinion, we have reviewed the drafts dated July 6,
2000 of the Merger Agreements. We also have reviewed financial and other
information that was publicly available or furnished to us by the Company,
Dexter and Life Technologies including information provided during
discussions with their respective managements. Included in the information
provided during discussions with the respective managements were certain
financial projections of Dexter for the period beginning January 1, 2000
and ending December 31, 2004 prepared by the management of Dexter, certain
financial projections of Life Technologies for the period beginning January
1, 2000 and ending December 31, 2004 prepared by the management of Life
Technologies, and certain financial projections of the Company for the
period beginning January 1, 2000 and ending December 31, 2004 prepared by
the management of the Company. In addition, we have compared certain
financial and securities data of the Company, Dexter and Life Technologies
with various other companies whose securities are traded in public markets,
reviewed the historical stock prices and trading volumes of the common
stock of the Company, Dexter and Life Technologies, reviewed prices and
premiums paid in certain other business combinations and conducted such
other financial studies, analyses and investigations as we deemed
appropriate for purposes of this opinion.
In rendering our opinion, we have relied upon and assumed the
accuracy and completeness of all of the financial and other information
that was available to us from public sources, that was provided to us by
the Company, Dexter and Life Technologies or their respective
representatives, or that was otherwise reviewed by us. With respect to the
financial projections supplied to us, we have relied on representations
that they have been reasonably prepared on bases reflecting the best
currently available estimates and judgments of the management of the
Company, Dexter and Life Technologies as to the future operating and
financial performance of the Company, Dexter and Life Technologies,
respectively. We have assumed that the Transaction will be consummated in
accordance with the terms of the Merger Agreements, including the
consummation of the transactions contemplated by the Loctite Acquisition
Agreement and the Ahlstrom Acquisition Agreement (as such terms are defined
in the Dexter Agreement). We have not assumed any responsibility for making
any independent evaluation of any assets or liabilities or for making any
independent verification of any of the information reviewed by us and we
have made no such independent evaluation or verification. We have relied as
to certain legal matters on advice of counsel to the Company.
Our opinion is necessarily based on economic, market, financial and
other conditions as they exist on, and on the information made available to
us as of, the date of this letter. It should be understood that, although
subsequent developments may affect the conclusion reached in this opinion,
we do not have any obligation to update, revise or reaffirm this opinion.
Our opinion does not address the relative merits of the Transaction and the
other business strategies being considered by the Company's Board of
Directors, nor does it address the Board's decision to proceed with the
Transaction. Our opinion does not constitute a recommendation to any
stockholder as to how such stockholder should vote on the proposed
transaction.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as part
of its investment banking services, is regularly engaged in the valuation
of businesses and securities in connection with mergers, acquisitions,
underwritings, sales and distributions of listed and unlisted securities,
private placements and valuations for corporate and other purposes. DLJ has
performed investment banking and other services for the Company in the past
and has been compensated for such services. Most recently, DLJ served as
lead-manager of the Company's $172.5 million Convertible Subordinated Note
offering in February 2000, as lead-manager of the Company's $147.5 million
follow-on offering in October 1999 and as lead-manager of the Company's
$52.5 million public offering of common stock in February 1999. DLJ has
also performed investment banking and other services for Dexter in the past
and has been compensated for such services. Most recently, DLJ served as
financial advisor in the $33 million sale of Dexter's printing wiring board
business in November 1999. DLJ has also performed investment banking and
other services for Life Technologies in the past and has been compensated
for such services.
Based upon the foregoing and such other factors as we deem relevant,
we are of the opinion that the Aggregate Consideration to be paid by the
Company pursuant to the Merger Agreements is fair to the Company from a
financial point of view.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
--------------------------
Jeffrey A. Raich
Managing Director
ANNEX D
[LETTERHEAD OF CREDIT SUISSE FIRST BOSTON CORPORATION]
July 7, 2000
The Special Committee of the Board of Directors
Life Technologies, Inc.
9800 Medical Center Drive
Rockville, Maryland 20850
Members of the Special Committee:
You have asked us to advise you with respect to the fairness, from a
financial point of view, to the holders of the common stock of Life
Technologies, Inc. ("Life Technologies"), other than Dexter Corporation
("Dexter") and its subsidiaries, officers and directors, of the Merger
Consideration (as defined below) provided for in the Agreement and Plan of
Merger, dated as of July 7, 2000 (the "Merger Agreement"), between
Invitrogen Corporation ("Invitrogen") and Life Technologies. The Merger
Agreement provides for, among other things, the merger of Life Technologies
with and into Invitrogen (the "Merger") pursuant to which each outstanding
share of the common stock, par value $0.01 per share, of Life Technologies
("Life Technologies Common Stock") will be converted into the right to
receive (A) at the election of the holder thereof and subject to certain
election and proration procedures specified in the Merger Agreement (as to
which we express no opinion), (i) $60.00 in cash (the "Cash Consideration")
or (ii) that number of shares of the common stock, par value $0.01 per
share, of Invitrogen ("Invitrogen Common Stock") equal to the quotient
obtained by dividing (x) $60.00 by (y) the average of the reported closing
sales prices per share of Invitrogen Common Stock for the 20 consecutive
Nasdaq National Market trading days ending on, and including, the third
trading day prior to the date of the Life Technologies shareholders'
meeting in respect of the Merger (the "Exchange Ratio"), provided that if
such quotient exceeds 1.0, then the Exchange Ratio will be 1.0, and if such
quotient is less than 0.7500, then the Exchange Ratio will be 0.7500 (the
number of shares of Invitrogen Common Stock into which each share of Life
Technologies Common Stock will be so converted in the Merger, the "Stock
Consideration" and, together with the Cash Consideration, the "Election
Consideration"), or (B) if no such election is made, (i) $16.80 in cash
plus (ii) that number of shares of Invitrogen Common Stock equal to (x) the
Exchange Ratio multiplied by (y) 0.7200 (such cash amount and number of
shares of Invitrogen Common Stock into which shares of Life Technologies
Common Stock will be so converted in the Merger, collectively, the
"Non-election Consideration" and, together with the Election Consideration,
the "Merger Consideration").
In arriving at our opinion, we have reviewed the Merger Agreement and
certain related documents, as well as certain publicly available business
The Special Committee of the Board of Directors
Life Technologies, Inc.
July 7, 2000
Page 2
and financial information relating to Life Technologies and Invitrogen. We
have also reviewed certain other information relating to Life Technologies
and Invitrogen, including financial forecasts, provided to and discussed
with us by Life Technologies and Invitrogen, and have met with the
managements of Life Technologies and Invitrogen to discuss the businesses
and prospects of Life Technologies and Invitrogen. We have also considered
certain financial and stock market data of Life Technologies and
Invitrogen, and we have compared those data with similar data for other
publicly held companies in businesses similar to Life Technologies and
Invitrogen, and we have considered, to the extent publicly available, the
financial terms of certain other business combinations and other
transactions which have recently been effected. We also considered such
other information, financial studies, analyses and investigations and
financial, economic and market criteria which we deemed relevant.
In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have
relied on such information being complete and accurate in all material
respects. With respect to the financial forecasts, we have been advised,
and have assumed, that such forecasts have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of
the managements of Life Technologies and Invitrogen as to the future
financial performance of Life Technologies and Invitrogen. In addition, we
have relied, without independent verification, upon the assessments of the
managements of Life Technologies and Invitrogen as to the existing and
future technology and products of Life Technologies and Invitrogen and the
risks associated with such technology and products. We also have assumed,
with your consent, that the Merger will be treated as a tax-free
reorganization for federal income tax purposes. We have not been requested
to make, and have not made, an independent evaluation or appraisal of the
assets or liabilities (contingent or otherwise) of Life Technologies or
Invitrogen, nor have we been furnished with any such evaluations or
appraisals. Representatives of Life Technologies have advised us that,
concurrently with the consummation of the Merger, Invitrogen intends to
consummate a merger with Dexter, the controlling stockholder of Life
Technologies (the "Dexter Merger"). We have not been requested to, and our
opinion does not, address any aspects or implications of the Dexter Merger.
Our opinion is necessarily based upon information available to us, and
financial, economic, market and other conditions as they exist and can be
evaluated, on the date hereof. We are not expressing any opinion as to the
actual value of Invitrogen Common Stock when issued pursuant to the Merger
or the prices at which Invitrogen Common Stock will trade subsequent to the
Merger.
We were retained by the Special Committee of the Board of Directors of Life
Technologies solely for purposes of rendering this opinion. Accordingly, we
were not requested to, and we did not, solicit third party indications of
interest in the possible acquisition of all or a part of Life Technologies.
We have been advised, however, by representatives of Dexter that, in
connection with Dexter's public announcement of its plans to explore
alternatives to maximize shareholder value, including the possible sale of
assets, Dexter solicited indications of interest from, and held discussions
with, third parties regarding the possible acquisition of all or a part of
Dexter, including Life Technologies.
The Special Committee of the Board of Directors
Life Technologies, Inc.
July 7, 2000
Page 3
We will receive a fee in connection with our services with respect to this
opinion, a significant portion of which is payable upon delivery of this
opinion. In the ordinary course of business, we and our affiliates may
actively trade the debt and equity securities of Life Technologies,
Invitrogen and Dexter for our and such affiliates' own accounts and for the
accounts of customers and, accordingly, may at any time hold long or short
positions in such securities.
It is understood that this letter is for the information of the Special
Committee of the Board of Directors of Life Technologies in connection with
its evaluation of the Merger and does not constitute a recommendation to
any stockholder as to the form of Merger Consideration to be elected by
such stockholder or how such stockholder should vote with respect to any
matter relating to the Merger.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Merger Consideration is fair to the holders of Life
Technologies Common Stock, other than Dexter and its subsidiaries, officers
and directors, from a financial point of view.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
ANNEX E
LEHMAN BROTHERS
3 World Financial Center New York NY 10285
July 7, 2000
Board of Directors
Dexter Corporation
1 Elm Street
Windsor Locks, CT 06096
Members of the Board:
We understand that Dexter Corporation (the "Company") and
Invitrogen Corporation (the "Acquiror") have entered into an Agreement and
Plan of Merger dated as of July 7, 2000 (the "Agreement") pursuant to which
the Company will be merged (the "Merger") with and into the Acquiror. We
further understand that, immediately prior to the execution and delivery of
the Agreement, the Acquiror and Life Technologies, Inc., a company that is
approximately 75% owned by the Company ("Life Technologies"), have entered
into an Agreement and Plan of Merger dated as of July 7, 2000 (the "Life
Technologies Agreement") pursuant to which Life Technologies will be merged
(the "Life Technologies Merger") with and into the Acquiror simultaneously
with the Merger.
Pursuant to the Merger, each outstanding share of the Company's
common stock, par value $1.00 per share (the "Company Shares"), other than
Company Shares owned by the Company or by the Acquiror or any of their
subsidiaries, all of which shall be canceled, will be converted, at the
holder's election, into the right to receive (i) a fraction of a share (the
"Exchange Ratio") of the Acquiror's common stock, par value $0.01 per share
(the "Acquiror Shares"), calculated by dividing (a) $62.50 by (b) the
Average Acquiror Trading Price (as defined below), rounded to four decimal
places (a "Stock Election"), (ii) (x) an amount in cash equal to $62.50
multiplied by the Cash Election Proration Factor (as defined below) plus
(y) if the Cash Election Proration Factor is less than 1, a fraction of an
Acquiror Share equal to the Exchange Ratio multiplied by a fraction the
numerator of which is $62.50 minus the cash determined pursuant to clause
(x) above and the denominator of which is $62.50 (a "Cash Election") or
(iii) $17.50 in cash, plus a fraction of an Acquiror Share equal to the
Exchange Ratio multiplied by .7200 (a "Standard Election"), subject to the
terms, limitations and procedures set forth in the Agreement, which include
a limitation on the aggregate amount of cash available to be paid in the
Merger. The Agreement also provides that if the quotient obtained in clause
(i) above exceeds 1.0417, then the Exchange Ratio shall be 1.0417, and if
such quotient is less than 0.7813, then the Exchange Ratio shall be 0.7813.
The Acquiror Shares and cash offered to the holders of the Company Shares
in the Merger are collectively referred to herein as the "Consideration."
The terms and conditions of the Merger are more fully set forth in the
Agreement.
For purposes of our opinion, the term "Average Acquiror Trading
Price" means the average of the reported closing sales prices per share of
Acquiror Shares for the 20 consecutive trading days ending on the third
trading day prior to the date of the shareholders meeting to be held by the
Company in connection with the Merger, and the term "Cash Election
Proration Factor" means the lesser of (x) 1.00 or (y) a fraction (i) the
numerator of which is (1) the product of the total number of Company Shares
outstanding multiplied by $17.50 minus (2) $17.50 multiplied by the number
of Company Shares for which Standard Elections have been effectively made
and not revoked or lost and (ii) the denominator of which is the product of
$62.50 multiplied by the number of Company Shares for which Cash Elections
have been effectively made and not revoked or lost.
We have been requested by the Board of Directors of the Company to
render our opinion with respect to the fairness, from a financial point of
view, of the Consideration to be received by the holders of the Company
Shares pursuant to the Merger to such holders. We have not been requested
to opine as to, and our opinion does not in any manner address, the
Company's underlying business decision to proceed with or effect the
Merger.
In arriving at our opinion, we reviewed and analyzed: (1) the
Agreement and the specific terms of the Merger, (2) the Life Technologies
Agreement and the specific terms of the Life Technologies Merger, (3)
publicly available information concerning the Company, Life Technologies
and Invitrogen that we believe to be relevant to our analysis, (4)
financial and operating information with respect to the business,
operations and prospects of the Company and Life Technologies furnished to
us by the Company, including, without limitation, certain projections of
future financial performance of the Company and Life Technologies prepared
by management of the Company and Life Technologies, respectively, (5)
financial and operating information with respect to the business,
operations and prospects of Invitrogen furnished to us by Invitrogen,
including, without limitation, certain projections of future financial
performance of Invitrogen prepared by management of Invitrogen, (6) a
comparison of the historical financial results and present financial
condition of Life Technologies and Invitrogen with those of other companies
that we deemed relevant, (7) a trading history of the common shares of Life
Technologies and Invitrogen and a comparison of that trading history with
those of other companies that we deemed relevant, (8) the pro forma impact
of the Merger, including strategic benefits expected by the management of
the Company to result from a combination of the businesses of the Company
and the Acquiror, (9) the relative contributions of the Company and the
Acquiror to the combined company following the consummation of the Merger,
(10) a comparison of the financial terms of the Merger with the financial
terms of certain other recent transactions that we deemed relevant, (11)
the terms and conditions of the recently announced sale of the Company's
Electronic Materials, Adhesives and Specialty Polymer Systems businesses,
(12) the terms and conditions of the recently announced sale of the
Company's Nonwoven Materials business, and (13) efforts to solicit
potential buyers of the Company and the Company's interest in Life
Technologies. In addition, we have had discussions with the managements of
the Company, Life Technologies, and the Acquiror concerning their
respective businesses, operations, assets, financial conditions and
prospects and have undertaken such other studies, analyses and
investigations as we deemed appropriate.
In arriving at our opinion, we have assumed and relied upon the
accuracy and completeness of the financial and other information used by us
without assuming any responsibility for independent verification of such
information and have further relied upon the assurances of managements of
the Company and the Acquiror that they are not aware of any facts or
circumstances that would make such information inaccurate or misleading.
With respect to the financial projections of the Company, Life
Technologies, and the Acquiror, upon advice of the companies we have
assumed that such projections have been reasonably prepared on a basis
reflecting the best currently available estimates and judgments of the
managements of the Company, Life Technologies, and the Acquiror, as the
case may be, as to the future financial performance of the Company, Life
Technologies, and the Acquiror and that the Company, Life Technologies, and
the Acquiror will perform substantially in accordance with such
projections. In arriving at our opinion, we have not conducted a physical
inspection of the properties and facilities of the Company, Life
Technologies, or the Acquiror and have not made or obtained any evaluations
or appraisals of the assets or liabilities of the Company, Life
Technologies or the Acquiror. Our opinion necessarily is based upon market,
economic and other conditions as they exist on, and can be evaluated as of,
the date of this letter.
Based upon and subject to the foregoing, we are of the opinion as
of the date hereof that, from a financial point of view, the Consideration
to be received by the holders of the Company Shares pursuant to the Merger
is fair to such holders.
We have acted as financial advisor to the Company in connection
with the Merger and will receive a fee for our services which is contingent
upon the consummation of the Merger. In addition, the Company has agreed to
indemnify us for certain liabilities that may arise out of the rendering of
this opinion. We also have performed various investment banking services
for the Company in the past (including the pending sale of its Electronic
Materials, Adhesives and Specialty Polymer Systems businesses to Loctite
Corporation and the pending sale of its Nonwoven Materials business to
Ahlstrom Paper Group Oy) and have received customary fees for such
services. In the ordinary course of our business, we may actively trade in
the debt and equity securities of the Company and Acquiror for our own
account and for the accounts of our customers and, accordingly, may at any
time hold a long or short position in such securities.
This opinion is for the use and benefit of the Board of Directors
of the Company and is rendered to the Board of Directors in connection with
its consideration of the Merger. This opinion is not intended to be and
does not constitute a recommendation to any shareholder of the Company as
to how such shareholder should vote with respect to the Merger and whether
such shareholder should elect to receive the Stock Election, the Cash
Election or the Standard Election.
Very truly yours,
LEHMAN BROTHERS
ANNEX F
Delaware General Corporation Law
SECTION 262
'SS'262 APPRAISAL RIGHTS.- (a) Any stockholder of a corporation of
this State who holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to such shares, who
continuously holds such shares through the effective date of the merger or
consolidation, who has otherwise complied with subsection (d) of this
section and who has neither voted in favor of the merger or consolidation
nor consented thereto in writing pursuant to 'SS'228 of this title shall be
entitled to an appraisal by the Court of Chancery of the fair value of the
stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and
also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation;
and the words "depository receipt" mean a receipt or other instrument
issued by a depository representing an interest in one or more shares, or
fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class
or series of stock of a constituent corporation in a merger or
consolidation to be effected pursuant to 'SS'251 (other than a merger
effected pursuant to 'SS'251 (g) of this title), 'SS'252, 'SS'254, 'SS'257,
'SS'258, 'SS'263 or 'SS'264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series of stock,
which stock, or depository receipts in respect thereof, at the record date
fixed to determine the stockholders entitled to receive notice of and to
vote at the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of 'SS'251 of this title.
(2) Notwithstanding paragraph (l) of this subsection,
appraisal rights under this section shall be available for the shares of
any class or series of stock of a constituent corporation if the holders
thereof are required by the terms of an agreement of merger or
consolidation pursuant to 'SS'251, 252, 254, 257, 258, 263 and 264 of this
title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting
from such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or depository receipts
in respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a. and b. of
this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under 'SS'253 of this title is not
owned by the parent corporation immediately prior to the merger, appraisal
rights shall be available for the shares of the subsidiary Delaware
corporation.
(c) Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the shares
of any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this section,
including those set forth in subsections (d) and (e) of this section, shall
apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(l) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be submitted for
approval at a meeting of stockholders, the corporation, not less than 20
days prior to the meeting, shall notify each of its stockholders who was
such on the record date for such meeting with respect to shares for which
appraisal rights are available pursuant to subsections (b) or (c) hereof
that appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within l0 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to
'SS'228 or 'SS'253 of this title, each constituent corporation, either
before the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within l0 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder
who has complied with subsections (a) and (d) hereof and who is otherwise
entitled to appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any stockholder
shall have the right to withdraw his demand for appraisal and to accept the
terms offered upon the merger or consolidation. Within 120 days after the
effective date of the merger or consolidation, any stockholder who has
complied with the requirements of subsections (a) and (d) hereof, upon
written request, shall be entitled to receive from the corporation
surviving the merger or resulting from the consolidation a statement
setting forth the aggregate number of shares not voted in favor of the
merger or consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such shares. Such
written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service
of a copy thereof shall be made upon the surviving or resulting
corporation, which shall within 20 days after such service file in the
office of the Register in Chancery in which the petition was filed a duly
verified list containing the names and addresses of all stockholders who
have demanded payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or resulting
corporation. If the petition shall be filed by the surviving or resulting
corporation, the petition shall be accompanied by such a duly verified
list. The Register in Chancery, if so ordered by the Court, shall give
notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and
to the stockholders shown on the list at the addresses therein stated. Such
notice shall also by given by 1 or more publications at least 1 week before
the day of the hearing, in a newspaper of general circulation published in
the City of Wilmington, Delaware or such publication as the Court deems
advisable. The forms of the notices by mail and by publication shall be
approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become
entitled to appraisal rights. The Court may require the stockholders who
have demanded an appraisal for their shares and who hold stock represented
by certificates to submit their certificates of stock to the Register in
Chancery for notation thereon of the pendency of the appraisal proceedings;
and if any stockholder fails to comply with such direction, the Court may
dismiss the proceedings as to such stockholder.
(h) After determining the stockholders entitled to an appraisal,
the Court shall appraise the shares, determining their fair value exclusive
of any element of value arising from the accomplishment or expectation of
the merger or consolidation, together with a fair rate of interest, if any,
to be paid upon the amount determined to be the fair value. In determining
such fair value, the Court shall take into account all relevant factors. In
determining the fair rate of interest, the Court may consider all relevant
factors, including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency of
the proceeding. Upon application by the surviving or resulting corporation
or by any stockholder entitled to participate in the appraisal proceeding,
the Court may, in its discretion, permit discovery or other pretrial
proceedings and may proceed to trial upon the appraisal prior to the final
determination of the stockholder entitled to an appraisal. Any stockholder
whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has
submitted his certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that he is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and
the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock.
The Court's decree may be enforced as other decrees in the Court of
Chancery may be enforced, whether such surviving or resulting corporation
be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a portion of
the expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and
the fees and expenses of experts, to be charged pro rata against the value
of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded his appraisal rights as
provided in subsection (d) of this section shall be entitled to vote such
stock for any purpose or to receive payment of dividends or other
distributions on the stock (except dividends or other distributions payable
to stockholders of record at a date which is prior to the effective date of
the merger or consolidation); provided, however, that if no petition for an
appraisal shall be filed within the time provided in subsection (e) of this
section, or if such stockholder shall deliver to the surviving or resulting
corporation a written withdrawal of his demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the
effective date of the merger or consolidation as provided in subsection (e)
of this section or thereafter with the written approval of the corporation,
then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of
Chancery shall be dismissed as to any stockholder without the approval of
the Court, and such approval may be conditioned upon such terms as the
Court deems just.
(1) The shares of the surviving or resulting corporation to which
the shares of such objecting stockholders would have been converted had
they assented to the merger or consolidation shall have the status of
authorized and unissued shares of the surviving or resulting corporation.
(Last amended by Ch. 120, L. '97, eff. 7-1-97.)
ANNEX G
CONNECTICUT BUSINESS CORPORATION ACT
PART XIII. DISSENTERS' RIGHTS
(A) RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
33-855 DEFINITIONS.--As used in sections 33-855 to 33-872, inclusive:
(1) "Corporation" means the issuer of the shares held by a
dissenter before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 33-856 and who exercises that right when
and in the manner required by sections 33-860 to 33-868, inclusive.
(3) "Fair value", with respect to a dissenter's shares, means the
value of the shares immediately before the effectuation of the
corporate action to which the dissenter objects, excluding any
appreciation or depreciation in anticipation of the corporate action.
(4) "Interest" means interest from the effective date of the
corporate action until the date of payment, at the average rate
currently paid by the corporation on its principal bank loans or, if
none, at a rate that is fair and equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on
file with a corporation.
(6) "Beneficial shareholder" means the person who is a beneficial
owner of shares held in a voting trust or by a nominee as the record
shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
33-856 RIGHT TO DISSENT.--(a) A shareholder is entitled to dissent
from, and obtain payment of the fair value of his shares in the event of,
any of the following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a
party (A) if shareholder approval is required for the merger by section
33-817 or the certificate of incorporation and the shareholder is
entitled to vote on the merger or (B) if the corporation is a
subsidiary that is merged with its parent under section 33-818;
(2) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be
acquired, if the shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all, or substantially
all, of the property of the corporation other than in the usual and
regular course of business, if the shareholder is entitled to vote on
the sale or exchange, including a sale in dissolution, but not
including a sale pursuant to court order or a sale for cash pursuant to
a plan by which all or substantially all of the net proceeds of the
sale will be distributed to the shareholders within one year after the
date of sale;
(4) An amendment of the certificate of incorporation that
materially and adversely affects rights in respect of a dissenter's
shares because it: (A) Alters or abolishes a preferential right of the
shares; (B) creates, alters or abolishes a right in respect of
redemption, including a provision respecting a sinking fund for the
redemption or repurchase, of the shares; (C) alters or abolishes a
preemptive right of the holder of the shares to acquire shares or other
securities; (D) excludes or limits the right of the shares to vote on
any matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights; or (E) reduces the number of shares owned by the shareholder to
a fraction of a share if the fractional share so created is to be
acquired for cash under section 33-668; or
(5) Any corporate action taken pursuant to a shareholder vote to
the extent the certificate of incorporation, bylaws or a resolution of
the board of directors provides that voting or nonvoting shareholders
are entitled to dissent and obtain payment for their shares.
33-857 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.--(a) A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in his name only if he dissents with respect to all shares
beneficially owned by any one person and notifies the corporation in
writing of the name and address of each person on whose behalf he asserts
dissenters' rights. The rights of a partial dissenter under this subsection
are determined as if the shares as to which he dissents and his other
shares were registered in the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if: (1) He submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and (2) he does so with
respect to all shares of which he is the beneficial shareholder or over
which he has power to direct the vote.
33-858, 33-859 [Reserved for future use.]
(B) PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
33-860 NOTICE OF DISSENTERS' RIGHTS.--(a) If proposed corporate action
creating dissenters' rights under section 33-856 is submitted to a vote at
a shareholders' meeting, the meeting notice shall state that shareholders
are or may be entitled to assert dissenters' rights under sections 33-855
to 33-872, inclusive, and be accompanied by a copy of said sections.
(b) If corporate action creating dissenters' rights under section
33-856 is taken without a vote of shareholders, the corporation shall
notify in writing all shareholders entitled to assert dissenters' rights
that the action was taken and send them the dissenters' notice described in
section 33-862.
33-861 NOTICE OF INTENT TO DEMAND PAYMENT.--(a) If proposed corporate action
creating dissenters' rights under section 33-856 is submitted to a vote at
a shareholders' meeting, a shareholder who wishes to assert dissenters'
rights (1) shall deliver to the corporation before the vote is taken
written notice of his intent to demand payment for his shares if the
proposed action is effectuated and (2) shall not vote his shares in favor
of the proposed action.
(b) A shareholder who does not satisfy the requirements of subsection
(a) of this section is not entitled to payment for his shares under
sections 33-855 to 33-872, inclusive.
33-862 DISSENTERS' NOTICE.--(a) If proposed corporate action creating
dissenters' rights under section 33-856 is authorized at a shareholders'
meeting, the corporation shall deliver a written dissenters' notice to all
shareholders who satisfied the requirements of section 33-861.
(b) The dissenters' notice shall be sent no later than ten days after
the corporate action was taken and shall:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is received;
(3) Supply a form for demanding payment that includes the date of
the first announcement to news media or to shareholders of the terms of
the proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not he acquired beneficial
ownership of the shares before that date;
(4) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty nor more than sixty
days after the date the subsection (a) of this section notice is
delivered; and
(5) Be accompanied by a copy of sections 33-855 to 33-872, inclusive.
33-863 DUTY TO DEMAND PAYMENT.--(a) A shareholder sent a dissenters'
notice described in section 33-862 must demand payment, certify whether he
acquired beneficial ownership of the shares before the date required to be
set forth in the dissenters' notice pursuant to subdivision (3) of
subsection (b) of said section and deposit his certificates in accordance
with the terms of the notice.
(b) The shareholder who demands payment and deposits his share
certificates under subsection (a) of this section retains all other rights
of a shareholder until these rights are cancelled or modified by the taking
of the proposed corporate action.
(c) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for his shares under sections 33-855 to
33-872, inclusive.
33-864 SHARE RESTRICTIONS.--(a) The corporation may restrict the
transfer of uncertificated shares from the date the demand for their
payment is received until the proposed corporate action is taken or the
restrictions released under section 33-866.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are cancelled or modified by the taking of the proposed corporate
action.
33-865 PAYMENT.--(a) Except as provided in section 33-867, as soon as
the proposed corporate action is taken, or upon receipt of a payment
demand, the corporation shall pay each dissenter who complied with section
33-863 the amount the corporation estimates to be the fair value of his
shares plus accrued interest.
(b) The payment shall be accompanied by: (1) The corporation's balance
sheet as of the end of a fiscal year ending not more than sixteen months
before the date of payment, an income statement for that year, a statement
of changes in shareholders' equity for that year and the latest available
interim financial statements, if any; (2) a statement of the corporation's
estimate of the fair value of the shares; (3) an explanation of how the
interest was calculated; (4) a statement of the dissenter's right to demand
payment under section 33-868; and (5) a copy of sections 33-855 to 33-872,
inclusive.
33-866 FAILURE TO TAKE ACTION.--(a) If the corporation does not take
the proposed action within sixty days after the date set for demanding
payment and depositing share certificates, the corporation shall return the
deposited certificates and release the transfer restrictions imposed on
uncertificated shares.
(b) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 33-862 and repeat the payment demand
procedure.
33-867 AFTER-ACQUIRED SHARES.--(a) A corporation may elect to withhold
payment required by section 33-865 from a dissenter unless he was the
beneficial owner of the shares before the date set forth in the dissenters'
notice as the date of the first announcement to news media or to
shareholders of the terms of the proposed corporate action.
(b) To the extent the corporation elects to withhold payment under
subsection (a) of this section, after taking the proposed corporate action,
it shall estimate the fair value of the shares, plus accrued interest, and
shall pay this amount to each dissenter who agrees to accept it in full
satisfaction of his demand. The corporation shall send with its offer a
statement of its estimate of the fair value of the shares, an explanation
of how the interest was calculated and a statement of the dissenter's right
to demand payment under section 33-868.
33-868 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.--(a)
A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment
of his estimate, less any payment under section 33-865, or reject the
corporation's offer under section 33-867 and demand payment of the fair
value of his shares and interest due, if:
(1) The dissenter believes that the amount paid under section 33-865 or
offered under section 33-867 is less than the fair value of his shares
or that the interest due is incorrectly calculated;
(2) The corporation fails to make payment under section 33-865 within
sixty days after the date set for demanding payment; or
(3) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within sixty days after
the date set for demanding payment.
(b) A dissenter waives his right to demand payment under this section
unless he notifies the corporation of his demand in writing under
subsection (a) of this section within thirty days after the corporation
made or offered payment for his shares.
33-869, 33-870 [Reserved for future use.]
(C) JUDICIAL APPRAISAL OF SHARES
33-871 COURT ACTION.--(a) If a demand for payment under section 33-868
remains unsettled, the corporation shall commence a proceeding within sixty
days after receiving the payment demand and petition the court to determine
the fair value of the shares and accrued interest. If the corporation does
not commence the proceeding within the sixty-day period, it shall pay each
dissenter whose demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the superior court
for the judicial district where a corporation's principal office or, if
none in this state, its registered office is located. If the corporation is
a foreign corporation without a registered office in this state, it shall
commence the proceeding in the superior court for the judicial district
where the registered office of the domestic corporation merged with or
whose shares were acquired by the foreign corporation was located.
(c) The corporation shall make all dissenters, whether or not residents
of this state, whose demands remain unsettled parties to the proceeding as
in an action against their shares and all parties must be served with a
copy of the petition. Nonresidents may be served by registered or certified
mail or by publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) of this section is plenary and exclusive. The court
may appoint one or more persons as appraisers to receive evidence and
recommend decision on the question of fair value. The appraisers have the
powers described in the order appointing them, or in any amendment to it.
The dissenters are entitled to the same discovery rights as parties in
other civil proceedings.
(e) Each dissenter made a party to the proceeding is entitled to
judgment (1) for the amount, if any, by which the court finds the fair
value of his shares, plus interest, exceeds the amount paid by the
corporation, or (2) for the fair value, plus accrued interest, of his
after-acquired shares for which the corporation elected to withhold payment
under section 33-867.
33-872 COURT COSTS AND COUNSEL FEES.--(a) The court in an appraisal
proceeding commenced under section 33-871 shall determine all costs of the
proceeding, including the reason able compensation and expenses of
appraisers appointed by the court. The court shall assess the costs against
the corporation, except that the court may assess costs against all or some
of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiously or not in good
faith in demanding payment under section 33-868.
(b) The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of sections 33-860 to 33-868, inclusive; or (2) against either
the corporation or a dissenter, in favor of any other party, if the court
finds that the party against whom the fees and expenses are assessed acted
arbitrarily, vexatiously or not in good faith with respect to the rights
provided by sections 33-855 to 33-872, inclusive.
(c) If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and
that the fees for those services should not be assessed against the
corporation, the court may award to these counsel reasonable fees to be
paid out of the amounts awarded the dissenters who were benefited.
ANNEX H
AMENDMENT TO
ARTICLE IV OF THE RESTATED CERTIFICATE OF INCORPORATION OF
INVITROGEN CORPORATION
Proposed First Paragraph of the Article Four of the Restated Certificate of
Incorporation of Invitrogen Corporation
The text of the proposed First Paragraph of Article Four is as
follows:
The total number of shares of capital stock which the
Corporation shall have authority to issue is 131,405,884, of which
(a) 6,405,884 shares shall be preferred stock, par value $.01 per
share ("Preferred Stock"), and (b) 125,000,000 shares shall be
common stock, par value $.01 per share.
ANNEX I
INVITROGEN CORPORATION
1997 STOCK OPTION PLAN
1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
1.1 ESTABLISHMENT. The Invitrogen Corporation 1997 Stock Option
Plan (the "PLAN") is hereby established effective as of May 28, 1997 (the
"EFFECTIVE DATE").
1.2 PURPOSE. The purpose of the Plan is to advance the interests
of the Participating Company Group and its shareholders by providing an
incentive to attract, retain and reward persons performing services for the
Participating Company Group and by motivating such persons to contribute to
the growth and profitability of the Participating Company Group.
1.3 TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the
shares of Stock available for issuance under the Plan have been issued and
all restrictions on such shares under the terms of the Plan and the
agreements evidencing Options granted under the Plan have lapsed. However,
all Options shall be granted, if at all, within ten (10) years from the
earlier of the date the Plan is adopted by the Board or the date the Plan
is duly approved by the shareholders of the Company.
2. DEFINITIONS AND CONSTRUCTION.
2.1 DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:
(a) "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the
Plan, "Board" also means such Committee(s).
(b) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.
(c) "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having
such powers as shall be specified by the Board. Unless the powers of the
Committee have been specifically limited, the Committee shall have all of
the powers of the Board granted herein, including, without limitation, the
power to amend or terminate the Plan at any time, subject to the terms of
the Plan and any applicable limitations imposed by law.
(d) "COMPANY" means Invitrogen Corporation, a California
corporation, or any successor corporation thereto.
(e) "CONSULTANT" means any person, including an advisor,
engaged by a Participating Company to render services other than as an
Employee or a Director.
(f) "DIRECTOR" means a member of the Board or of the board
of directors of any other Participating Company.
(g) "EMPLOYEE" means any person treated as an employee
(including an officer or a Director who is also treated as an employee) in
the records of a Participating Company, and, with respect to any Incentive
Stock Option granted to such person, who is an employee for purposes of
Section 422 of the Code; provided, however, that neither service as a
Director nor payment of a director's fee shall be sufficient to constitute
employment for purposes of the Plan.
(h) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
(i) "FAIR MARKET VALUE" means, as of any date, the value of
a share of Stock or other property as determined by the Board, in its sole
discretion, or by the Company, in its sole discretion, if such
determination is expressly allocated to the Company herein, subject to the
following:
(i) If, on such date, there is a public market for the
Stock, the Fair Market Value of a share of Stock shall be the closing sale
price of a share of Stock (or the mean of the closing bid and asked prices
of a share of Stock if the Stock is so quoted instead) as quoted on the
Nasdaq National Market, the Nasdaq Small-Cap Market or such other national
or regional securities exchange or market system constituting the primary
market for the Stock, as reported in the WALL STREET JOURNAL or such other
source as the Company deems reliable. If the relevant date does not fall on
a day on which the Stock has traded on such securities exchange or market
system, the date on which the Fair Market Value shall be established shall
be the last day on which the Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the Board, in
its sole discretion.
(ii) If, on such date, there is no public market for
the Stock, the Fair Market Value of a share of Stock shall be as determined
by the Board without regard to any restriction other than a restriction
which, by its terms, will never lapse.
(j) "INCENTIVE STOCK OPTION" means an Option intended to be
(as set forth in the Option Agreement) and which qualifies as an incentive
stock option within the meaning of Section 422(b) of the Code.
(k) "INSIDER" means an officer or a Director of the Company
or any other person whose transactions in Stock are subject to Section 16
of the Exchange Act.
(l) "NONSTATUTORY STOCK OPTION" means an Option not intended
to be (as set forth in the Option Agreement) or which does not qualify as
an Incentive Stock Option.
(m) "OPTION" means a right to purchase Stock (subject to
adjustment as provided in Section 4.2) pursuant to the terms and conditions
of the Plan. An Option may be either an Incentive Stock Option or a
Nonstatutory Stock Option.
(n) "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee setting forth the terms, conditions and
restrictions of the Option granted to the Optionee and any shares acquired
upon the exercise thereof.
(o) "OPTIONEE" means a person who has been granted one or
more Options.
(p) "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.
(q) "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.
(r) "PARTICIPATING COMPANY GROUP" means, at any point in
time, all corporations collectively which are then Participating Companies.
(s) "RULE 16b-3" means Rule 16b-3 under the Exchange Act, as
amended from time to time, or any successor rule or regulation.
(t) "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 4.2.
(u) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of
the Code.
(v) "TEN PERCENT OWNER OPTIONEE" means an Optionee who, at
the time an Option is granted to the Optionee, owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of a Participating Company within the meaning of Section 422(b)(6) of
the Code.
2.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the
singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.
3. ADMINISTRATION.
3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered
by the Board. All questions of interpretation of the Plan or of any Option
shall be determined by the Board, and such determinations shall be final
and binding upon all persons having an interest in the Plan or such Option.
Any officer of a Participating Company shall have the authority to act on
behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is
allocated to the Company herein, provided the officer has apparent
authority with respect to such matter, right, obligation, determination or
election.
3.2 ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to
participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered pursuant to Section 12 of the
Exchange Act, the Plan shall be administered in compliance with the
requirements, if any, of Rule 16b-3.
3.3 POWERS OF THE BOARD. In addition to any other powers set
forth in the Plan and subject to the provisions of the Plan, the Board
shall have the full and final power and authority, in its sole discretion:
(a) to determine the persons to whom, and the time or times
at which, Options shall be granted and the number of shares of Stock to be
subject to each Option;
(b) to designate Options as Incentive Stock Options or
Nonstatutory Stock Options;
(c) to determine the Fair Market Value of shares of Stock or
other property;
(d) to determine the terms, conditions and restrictions
applicable to each Option (which need not be identical) and any shares
acquired upon the exercise thereof, including, without limitation, (i) the
exercise price of the Option, (ii) the method of payment for shares
purchased upon the exercise of the Option, (iii) the method for
satisfaction of any tax withholding obligation arising in connection with
the Option or such shares, including by the withholding or delivery of
shares of stock, (iv) the timing, terms and conditions of the
exercisability of the Option or the vesting of any shares acquired upon the
exercise thereof, (v) the time of the expiration of the Option, (vi) the
effect of the Optionee's termination of employment or service with the
Participating Company Group on any of the foregoing, and (vii) all other
terms, conditions and restrictions applicable to the Option or such shares
not inconsistent with the terms of the Plan;
(e) to approve one or more forms of Option Agreement;
(f) to amend, modify, extend, cancel, renew, or grant a new
Option in substitution for, any Option or to waive any restrictions or
conditions applicable to any Option or any shares acquired upon the
exercise thereof;
(g) to accelerate, continue, extend or defer the
exercisability of any Option or the vesting of any shares acquired upon the
exercise thereof, including with respect to the period following an
Optionee's termination of employment or service with the Participating
Company Group;
(h) to prescribe, amend or rescind rules, guidelines and
policies relating to the Plan, or to adopt supplements to, or alternative
versions of, the Plan, including, without limitation, as the Board deems
necessary or desirable to comply with the laws of, or to accommodate the
tax policy or custom of, foreign jurisdictions whose citizens may be
granted Options; and
(i) to correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Option Agreement and to make all other
determinations and take such other actions with respect to the Plan or any
Option as the Board may deem advisable to the extent consistent with the
Plan and applicable law.
4. SHARES SUBJECT TO PLAN.
4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock
that may be issued under the Plan shall be the sum of (a) six hundred nine
thousand six hundred eighty five (609,685) shares, and (b) the number of
shares of Stock, as of the Effective Date, subject to outstanding options
or reserved and available for grant pursuant to the Company's 1995 Stock
Option Plan (the "1995 PLAN OPTIONS") resulting in an aggregate total of
three million seven hundred thirty five thousand four hundred seventy nine
(3,735,479) shares (the "SHARE RESERVE") and shall consist of authorized
but unissued or reacquired shares of Stock or any combination thereof.
Notwithstanding the foregoing, the Share Reserve, determined at any time,
shall be reduced by (a) the number shares remaining subject to outstanding
1995 Plan Options, and (b) the number shares issued upon the exercise of
1995 Plan Options. If an outstanding Option for any reason expires or is
terminated or canceled, or if shares of Stock acquired, subject to
repurchase, upon the exercise of an Option are repurchased by the Company,
the shares of Stock allocable to the unexercised portion of such Option or
such repurchased shares of Stock shall again be available for issuance
under the Plan.
4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of
any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of
the Company, appropriate adjustments shall be made in the number and class
of shares subject to the Plan and to any outstanding Options and in the
exercise price per share of any outstanding Options. If a majority of the
shares which are of the same class as the shares that are subject to
outstanding Options are exchanged for, converted into, or otherwise become
(whether or not pursuant to an Ownership Change Event, as defined in
Section 8.1) shares of another corporation (the "NEW SHARES"), the Board
may unilaterally amend the outstanding Options to provide that such Options
are exercisable for New Shares. In the event of any such amendment, the
number of shares subject to, and the exercise price per share of, the
outstanding Options shall be adjusted in a fair and equitable manner as
determined by the Board, in its sole discretion. Notwithstanding the
foregoing, any fractional share resulting from an adjustment pursuant to
this Section 4.2 shall be rounded up or down to the nearest whole number,
as determined by the Board, and in no event may the exercise price of any
Option be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board
pursuant to this Section 4.2 shall be final, binding and conclusive.
5. ELIGIBILITY AND OPTION LIMITATIONS.
5.1 PERSONS ELIGIBLE FOR OPTIONS. Options may be granted only to
Employees, Consultants, and Directors. For purposes of the foregoing
sentence, "Employees," "Consultants," and "Directors" shall include
prospective Employees, prospective Consultants and prospective Directors to
whom Options are granted in connection with written offers of employment or
other service relationship with the Participating Company Group. Eligible
persons may be granted more than one (1) Option.
5.2 OPTION GRANT RESTRICTIONS. Any person who is not an Employee
on the effective date of the grant of an Option to such person may be
granted only a Nonstatutory Stock Option. An Incentive Stock Option granted
to a prospective Employee upon the condition that such person become an
Employee shall be deemed granted effective on the date such person
commences service as an Employee with a Participating Company, with an
exercise price determined as of such date in accordance with Section 6.1.
5.3 FAIR MARKET VALUE LIMITATION. To the extent that options
designated as Incentive Stock Options (granted under all stock option plans
of the Participating Company Group, including the Plan) become exercisable
by an Optionee for the first time during any calendar year for stock having
an aggregate Fair Market Value greater than One Hundred Thousand Dollars
($100,000), the portion of such options which exceeds such amount shall be
treated as Nonstatutory Stock Options. For purposes of this Section 5.3,
options designated as Incentive Stock Options shall be taken into account
in the order in which they were granted, and the Fair Market Value of stock
shall be determined as of the time the option with respect to such stock is
granted. If the Code is amended to provide for a different limitation from
that set forth in this Section 5.3, such different limitation shall be
deemed incorporated herein effective as of the date and with respect to
such Options as required or permitted by such amendment to the Code. If an
Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in
this Section 5.3, the Optionee may designate which portion of such Option
the Optionee is exercising. In the absence of such designation, the
Optionee shall be deemed to have exercised the Incentive Stock Option
portion of the Option first. Separate certificates representing each such
portion shall be issued upon the exercise of the Option.
6. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
Option Agreements specifying the number of shares of Stock covered thereby,
in such form as the Board shall from time to time establish. No Option or
purported Option shall be a valid and binding obligation of the Company
unless evidenced by a fully executed Option Agreement. Option Agreements
may incorporate all or any of the terms of the Plan by reference and shall
comply with and be subject to the following terms and conditions:
6.1 EXERCISE PRICE. The exercise price for each Option shall be
established in the sole discretion of the Board; provided, however, that
(a) the exercise price per share for an Incentive Stock Option shall be not
less than the Fair Market Value of a share of Stock on the effective date
of grant of the Option, (b) the exercise price per share for a Nonstatutory
Stock Option shall be not less than eighty-five percent (85%) of the Fair
Market Value of a share of Stock on the effective date of grant of the
Option, and (c) no Option granted to a Ten Percent Owner Optionee shall
have an exercise price per share less than one hundred ten percent (110%)
of the Fair Market Value of a share of Stock on the effective date of grant
of the Option. Notwithstanding the foregoing, an Option (whether an
Incentive Stock Option or a Nonstatutory Stock Option) may be granted with
an exercise price lower than the minimum exercise price set forth above if
such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section
424(a) of the Code.
6.2 EXERCISE PERIOD. Options shall be exercisable at such time or
times, or upon such event or events, and subject to such terms, conditions,
performance criteria, and restrictions as shall be determined by the Board
and set forth in the Option Agreement evidencing such Option; provided,
however, that (a) no Option shall be exercisable after the expiration of
ten (10) years after the effective date of grant of such Option, (b) no
Incentive Stock Option granted to a Ten Percent Owner Optionee shall be
exercisable after the expiration of five (5) years after the effective date
of grant of such Option, and (c) no Option granted to a prospective
Employee, prospective Consultant or prospective Director may become
exercisable prior to the date on which such person commences service with a
Participating Company.
6.3 PAYMENT OF EXERCISE PRICE.
(a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the exercise price for the number of shares of
Stock being purchased pursuant to any Option shall be made (i) in cash, by
check, or cash equivalent, (ii) by tender to the Company of shares of Stock
owned by the Optionee having a Fair Market Value (as determined by the
Company without regard to any restrictions on transferability applicable to
such stock by reason of federal or state securities laws or agreements with
an underwriter for the Company) not less than the exercise price, (iii) by
the assignment of the proceeds of a sale or loan with respect to some or
all of the shares being acquired upon the exercise of the Option
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System) (a "CASHLESS EXERCISE"), (iv) by
the Optionee's promissory note in a form approved by the Company, (v) by
such other consideration as may be approved by the Board from time to time
to the extent permitted by applicable law, or (vi) by any combination
thereof. The Board may at any time or from time to time, by adoption of or
by amendment to the standard forms of Option Agreement described in Section
7, or by other means, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise
price or which otherwise restrict one or more forms of consideration.
(b) TENDER OF STOCK. Notwithstanding the foregoing, an
Option may not be exercised by tender to the Company of shares of Stock to
the extent such tender of Stock would constitute a violation of the
provisions of any law, regulation or agreement restricting the redemption
of the Company's stock. Unless otherwise provided by the Board, an Option
may not be exercised by tender to the Company of shares of Stock unless
such shares either have been owned by the Optionee for more than six (6)
months or were not acquired, directly or indirectly, from the Company.
(c) CASHLESS EXERCISE. The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for
the exercise of Options by means of a Cashless Exercise.
(d) PAYMENT BY PROMISSORY NOTE. No promissory note shall be
permitted if the exercise of an Option using a promissory note would be a
violation of any law. Any permitted promissory note shall be on such terms
as the Board shall determine at the time the Option is granted. The Board
shall have the authority to permit or require the Optionee to secure any
promissory note used to exercise an Option with the shares of Stock
acquired upon the exercise of the Option or with other collateral
acceptable to the Company. Unless otherwise provided by the Board, if the
Company at any time is subject to the regulations promulgated by the Board
of Governors of the Federal Reserve System or any other governmental entity
affecting the extension of credit in connection with the Company's
securities, any promissory note shall comply with such applicable
regulations, and the Optionee shall pay the unpaid principal and accrued
interest, if any, to the extent necessary to comply with such applicable
regulations.
6.4 TAX WITHHOLDING. The Company shall have the right, but not
the obligation, to deduct from the shares of Stock issuable upon the
exercise of an Option, or to accept from the Optionee the tender of, a
number of whole shares of Stock having a Fair Market Value, as determined
by the Company, equal to all or any part of the federal, state, local and
foreign taxes, if any, required by law to be withheld by the Participating
Company Group with respect to such Option or the shares acquired upon the
exercise thereof. Alternatively or in addition, in its sole discretion, the
Company shall have the right to require the Optionee, through payroll
withholding, cash payment or otherwise, including by means of a Cashless
Exercise, to make adequate provision for any such tax withholding
obligations of the Participating Company Group arising in connection with
the Option or the shares acquired upon the exercise thereof.
The Company shall have no obligation to deliver shares of
Stock or to release shares of Stock from an escrow established pursuant to
the Option Agreement until the Participating Company Group's tax
withholding obligations have been satisfied by the Optionee.
7. STANDARD FORMS OF OPTION AGREEMENT.
7.1 INCENTIVE STOCK OPTIONS. Unless otherwise provided by the
Board at the time the Option is granted, an Option designated as an
"Incentive Stock Option" shall comply with and be subject to the terms and
conditions set forth in the form of Incentive Stock Option Agreement
adopted by the Board concurrently with its adoption of the Plan and as
amended from time to time.
7.2 NONSTATUTORY STOCK OPTIONS. Unless otherwise provided by the
Board at the time the Option is granted, an Option designated as a
"Nonstatutory Stock Option" shall comply with and be subject to the terms
and conditions set forth in the form of Nonstatutory Stock Option Agreement
adopted by the Board concurrently with its adoption of the Plan and as
amended from time to time.
7.3 STANDARD TERM OF OPTIONS. Except as otherwise provided in
Section 6.2 or by the Board in the grant of an Option, any Option granted
hereunder shall have a term of ten (10) years from the effective date of
grant of the Option.
7.4 AUTHORITY TO VARY TERMS. The Board shall have the authority
from time to time to vary the terms of any of the standard forms of Option
Agreement described in this Section 7 either in connection with the grant
or amendment of an individual Option or in connection with the
authorization of a new standard form or forms; provided, however, that the
terms and conditions of any such new, revised or amended standard form or
forms of Option Agreement are not inconsistent with the terms of the Plan.
8. TRANSFER OF CONTROL.
8.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange in a single
or series of related transactions by the shareholders of the Company of
more than fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is
a party;
(iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
(b) A "TRANSFER OF CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the shareholders of the Company immediately before
the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the
Company's voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were
transferred (the "TRANSFEREE CORPORATION(S)"), as the case may be. For
purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the
voting stock of one or more corporations which, as a result of the
Transaction, own the Company or the Transferee Corporation(s), as the case
may be, either directly or through one or more subsidiary corporations. The
Board shall have the right to determine whether multiple sales or exchanges
of the voting stock of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.
8.2 EFFECT OF TRANSFER OF CONTROL ON OPTIONS. In the event of a
Transfer of Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the
"ACQUIRING CORPORATION"), may either assume the Company's rights and
obligations under outstanding Options or substitute for outstanding Options
substantially equivalent options for the Acquiring Corporation's stock. For
purposes of this Section 8.2, an Option shall be deemed assumed if,
following the Transfer of Control, the Option confers the right to purchase
in accordance with its terms and conditions, for each share of Stock
subject to the Option immediately prior to the Transfer of Control, the
consideration (whether stock, cash or other securities or property) to
which a holder of a share of Stock on the effective date of the Transfer of
Control was entitled. Any Options which are neither assumed or substituted
for by the Acquiring Corporation in connection with the Transfer of Control
nor exercised as of the date of the Transfer of Control shall terminate and
cease to be outstanding effective as of the date of the Transfer of
Control. Notwithstanding the foregoing, shares acquired upon exercise of an
Option prior to the Transfer of Control and any consideration received
pursuant to the Transfer of Control with respect to such shares shall
continue to be subject to all applicable provisions of the Option Agreement
evidencing such Option except as otherwise provided in such Option
Agreement. Furthermore, notwithstanding the foregoing, if the corporation
the stock of which is subject to the outstanding Options immediately prior
to an Ownership Change Event described in Section 8.1(a)(i) constituting a
Transfer of Control is the surviving or continuing corporation and
immediately after such Ownership Change Event less than fifty percent (50%)
of the total combined voting power of its voting stock is held by another
corporation or by other corporations that are members of an affiliated
group within the meaning of Section 1504(a) of the Code without regard to
the provisions of Section 1504(b) of the Code, the outstanding Options
shall not terminate unless the Board otherwise provides in its sole
discretion.
9. PROVISION OF INFORMATION. At least annually, copies of the
Company's balance sheet and income statement for the just completed fiscal
year shall be made available to each Optionee and purchaser of shares of
Stock upon the exercise of an Option. The Company shall not be required to
provide such information to persons whose duties in connection with the
Company assure them access to equivalent information.
10. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the
Optionee, an Option shall be exercisable only by the Optionee or the
Optionee's guardian or legal representative. No Option shall be assignable
or transferable by the Optionee, except by will or by the laws of descent
and distribution.
11. INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority
to act for the Board or the Company is delegated shall be indemnified by
the Company against all reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan, or any right granted
hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected
by the Company) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such person is
liable for gross negligence, bad faith or intentional misconduct in duties;
provided, however, that within sixty (60) days after the institution of
such action, suit or proceeding, such person shall offer to the Company, in
writing, the opportunity at its own expense to handle and defend the same.
12. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend
the Plan at any time. However, subject to changes in applicable law,
regulations or rules that would permit otherwise, without the approval of
the Company's shareholders there shall be (a) no increase in the maximum
aggregate number of shares of Stock that may be issued under the Plan
(except by operation of the provisions of Section 4.2), (b) no change in
the class of persons eligible to receive Incentive Stock Options, and (c)
no other amendment of the Plan that would require approval of the Company's
shareholders under any applicable law, regulation or rule. In any event, no
termination or amendment of the Plan may adversely affect any then
outstanding Option or any unexercised portion thereof, without the consent
of the Optionee, unless such termination or amendment is required to enable
an Option designated as an Incentive Stock Option to qualify as an
Incentive Stock Option or is necessary to comply with any applicable law,
regulation or rule.
13. SHAREHOLDER APPROVAL. The Plan or any increase in the maximum
number of shares of Stock issuable thereunder as provided in Section 4.1
(the "MAXIMUM SHARES") shall be approved by the shareholders of the Company
within twelve (12) months of the date of adoption thereof by the Board.
Options granted prior to shareholder approval of the Plan or in excess of
the Maximum Shares previously approved by the shareholders shall become
exercisable no earlier than the date of shareholder approval of the Plan or
such increase in the Maximum Shares, as the case may be.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing Invitrogen Corporation 1997 Stock Option Plan was duly
adopted by the Board on May 28, 1997. Additionally, the Secretary notes
that the share reserve set forth in section 4.1 of the Plan reflects the
seven (7) for one (1) stock split which became effective upon the Company's
reincorporation into Delaware on June 17, 1997.
/s/ JOSEPH FERNANDEZ
----------------------------
Joseph Fernandez, Secretary
FIRST AMENDMENT TO THE
INVITROGEN CORPORATION
1997 STOCK OPTION PLAN
This First Amendment to Invitrogen Corporation 1997 Stock Option Plan
(the "Plan") is made pursuant to Section 12 of the Plan. Capitalized terms
not defined in this First Amendment shall have the meanings provided in the
Plan.
WHEREAS, it has been determined to be in the best interests of the
Company that the aggregate number of shares of Stock that may be issued
under the Plan be increased by seven hundred fifty thousand (750,000);
WHEREAS, the Company wishes to provide options to acquire Stock to
its Nonemployee Directors to strengthen the incentives of such directors to
act in the best interests of the Company;
WHEREAS, the Company has determined to provide Optionees with
additional rights in the event of a Transfer in Control.
Now therefore, the Plan is hereby amended as follows:
1. Section 4.1 shall be amended to state in its entirety as follows:
"4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as provided
in Section 4.2, the maximum aggregate number of shares of Stock that may be
issued under the Plan shall be the sum of (a) one million three hundred
fifty-nine thousand six hundred eighty-five (1,359,685) shares, and (b) the
number of shares of Stock, as of the date of this Amendment, subject to
outstanding options or reserved and available for grant pursuant to the
Company's 1995 Stock Option Plan (the "1995 PLAN OPTIONS") resulting in an
aggregate total of four million four hundred eighty five thousand four
hundred seventy nine (4,485,479) shares (the "SHARE RESERVE") and shall
consist of authorized and unissued or reacquired shares of Stock or any
combination thereof. Notwithstanding the foregoing, the Share Reserve,
determined at any time, shall be reduced by (a) the number of shares
remaining subject to outstanding 1995 Plan Options, and (b) the number of
shares issued upon the exercise of 1995 Plan Options. If an outstanding
option for any reason expires or is terminated or canceled, or if the
shares of Stock acquired, subject to repurchase, upon the exercise of an
Option are repurchased by the Company, the shares of Stock allocable to the
unexercised portion of such Option or such repurchased shares of Stock
shall again be available for issuance under the Plan."
2. A new Section 6.5 shall be added to the Plan which shall state in
its entirety as follows:
"6.5 NONEMPLOYEE DIRECTOR OPTIONS
(a) AUTOMATIC GRANT. Subject to the execution by a Nonemployee
Director of an appropriate Option Agreement, Nonemployee Director Options
shall be granted automatically and without further action of the Board, as
follows:
(i) INITIAL OPTION. Each person who first becomes a Nonemployee
Director on or after the date of this Amendment shall be granted on the
date such person first becomes a Nonemployee Director a Nonemployee
Director Option to purchase ten thousand (10,000) shares of Stock (an
"INITIAL OPTION"); provided, however, that an Initial Option shall not be
granted to a Director who previously did not qualify as a Nonemployee
Director but subsequently becomes a Nonemployee Director as a result of the
termination of his or her status as an Employee.
(ii) ANNUAL OPTION. Each Nonemployee Director (including any
Director who previously did not qualify as a Nonemployee Director but who
subsequently becomes a Nonemployee Director) shall be granted on the date
immediately following each annual meeting of the stockholders of the
Company which occurs on or after the date of this Amendment (an "ANNUAL
MEETING") a Nonemployee Director Option to purchase ten thousand (10,000)
shares of Stock (an "ANNUAL OPTION"); provided, however, that a Nonemployee
Director granted an Initial Option less than six months prior to date of an
Annual Meeting shall not be granted an Annual Option pursuant to this
Section on the date immediately following the same Annual Meeting.
(iii) RIGHT TO DECLINE NONEMPLOYEE DIRECTOR OPTION.
Notwithstanding the foregoing, any person may elect not to receive a
Nonemployee Director Option by delivering written notice of such election
to the Board no later than the day prior to the date such Nonemployee
Director Option would otherwise be granted. A person so declining a
Nonemployee Director Option shall receive no payment or other consideration
in lieu of such declined Nonemployee Director Option. A person who has
declined a Nonemployee Director Option may revoke such election by
delivering written notice of such revocation to the Board no later than the
day prior to the date such Nonemployee Director Option would be granted
pursuant to Section 6.5(a)(i) or 6.5(a)(ii), as the case may be.
(b) EXERCISE PRICE. The exercise price per share of Stock subject to
a Nonemployee Director Option shall be the Fair Market Value of a share of
Stock on the date the Nonemployee Director Option is granted.
(c) EXERCISE PERIOD. Each Nonemployee Director Option shall terminate
and cease to be exercisable on the date ten (10) years after the date of
grant of the Nonemployee Director Option unless earlier terminated pursuant
to the terms of the Plan or the Option Agreement.
(d) RIGHT TO EXERCISE NONEMPLOYEE DIRECTOR OPTIONS.
(i) INITIAL OPTIONS. Except as otherwise provided in the Option
Agreement, each Initial Option shall become vested and exercisable
cumulatively for 1/3 of the shares of Stock initially subject to the Option
on each of the first three (3) anniversaries of the date on which the
Initial Option was granted, provided that the Optionee's Service has not
terminated prior to the relevant date.
(ii) ANNUAL OPTIONS. Except as otherwise provided in the Option
Agreement, each Annual Option shall become fully vested and exercisable on
the first anniversary of the date of grant, provided the Optionee's Service
has not terminated prior to such date.
(e) EFFECT OF TERMINATION OF SERVICE ON NONEMPLOYEE DIRECTOR OPTIONS.
(i) OPTION EXERCISABILITY. Subject to earlier termination of the
Nonemployee Director Option as otherwise provided herein, a Nonemployee
Director Option shall be exercisable after an Optionee's termination of
Service as follows:
(A) DISABILITY. If the Optionee's Service with the
Participating Company Group is terminated because of the Disability of the
Optionee, the Nonemployee Director Option, to the extent unexercised and
exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee (or the Optionee's guardian or legal
representative) at any time prior to the expiration of twelve (12) months
after the date on which the Optionee's Service terminated, but in any event
no later than the date of expiration of the Option Expiration Date.
(B) DEATH. If the Optionee's Service with the
Participating Company Group is terminated because of the death of the
Optionee, the Nonemployee Director Option, to the extent unexercised and
exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee's legal representative or other person who
acquired the right to exercise the Nonemployee Director Option by reason of
the Optionee's death at any time prior to the expiration of twelve (12)
months after the date on which the Optionee's Service terminated, but in
any event no later than the Option Expiration Date. The Optionee's Service
shall be deemed to have terminated on account of death if the Optionee dies
within six (6) months after the Optionee's termination of Service.
(C) OTHER TERMINATION OF SERVICE. If the Optionee's
Service with the Participating Company Group terminates for any reason,
except Disability or death, the Nonemployee Director Option, to the extent
unexercised and exercisable by the Optionee on the date on which the
Optionee's Service terminated, may be exercised by the Optionee within six
(6) months after the date on which the Optionee's Service terminated, but
in any event no later than the Option Expiration Date.
(ii) EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b).
Notwithstanding the foregoing, if a sale within the applicable time periods
set forth in Section 6.5(e)(i) of shares acquired upon the exercise of the
Nonemployee Director Option would subject the Optionee to suit under
Section 16(b) of the Exchange Act, the Nonemployee Director Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Optionee's termination of Service, and (iii) the Option
Expiration Date.
3. Section 8.2 shall be amended to state in its entirety as follows:
"8.2 EFFECT OF TRANSFER OF CONTROL ON OPTIONS. In the event of a
Transfer of Control, the percentage of the Option that has vested shall be
adjusted to 100% (if not already at that percentage) on the date that the
Company mails the Optionee notice of the Transfer of Control at the last
address shown on the records of the Company for such Optionee (the
"NOTICE"), unless the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the
"ACQUIRING CORPORATION"), either assumes the Company's rights and
obligations under outstanding Options or substitutes for outstanding
Options substantially equivalent options for the Acquiring Corporation's
stock. Any Options which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Transfer of Control nor
exercised as of the date fifteen days after the Notice of the Transfer of
Control shall terminate and cease to be outstanding effective upon the
later of (i) the date of the Transfer of Control or (ii) fifteen days after
mailing of the Notice. For purposes of this Section 8.2, an Option shall be
deemed assumed if, following the Transfer of Control, the Option confers
the right to purchase in accordance with its terms and conditions, for each
share of Stock subject to the Option immediately prior to the Transfer of
Control, the consideration (whether stock, cash or other securities or
property) to which a holder of a share of Stock on the effective date of
the Transfer of Control was entitled. Notwithstanding the foregoing, shares
acquired upon exercise of an Option prior to the Transfer of Control and
any consideration received pursuant to the Transfer of Control with respect
to such shares shall continue to be subject to all applicable provisions of
the Option Agreement evidencing such Option except as otherwise provided in
such Option Agreement. Furthermore, notwithstanding the foregoing, if the
corporation the stock of which is subject to the outstanding Options
immediately prior to an Ownership Change Event described in Section
8.1(a)(i) constituting a Transfer of Control is the surviving or continuing
corporation and immediately after such Ownership Change Event less than
fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of
an affiliated group within the meaning of Section 1504(a) of the Code
without regard to the provisions of Section 1504(b) of the Code, the
outstanding Options shall not terminate unless the Board otherwise provides
in its sole discretion."
4. All other terms of the Plan shall remain the same.
IN WITNESS WHEREOF, the undersigned Secretary of Invitrogen
Corporation certifies that the foregoing amendment to the 1997 Stock Option
Plan was duly adopted by the Board of Directors on November 20, 1998.
Dated: November 20, 1998
INVITROGEN CORPORATION
By: /s/ JOSEPH FERNANDEZ
-----------------------
Joseph Fernandez
Its: Secretary
ANNEX J
INVITROGEN CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
1.1 ESTABLISHMENT. Invitrogen Corporation hereby establishes the
1998 Employee Stock Purchase Plan (the "PLAN"), effective as of the
effective date of the initial registration by the Company of its Stock
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"EFFECTIVE DATE").
1.2 PURPOSE. The purpose of the Plan is to advance the interests
of the Company and its stockholders by providing an incentive to attract,
retain and reward Eligible Employees of the Participating Company Group and
by motivating such persons to contribute to the growth and profitability of
the Participating Company Group. The Plan provides such Eligible Employees
with an opportunity to acquire a proprietary interest in the Company
through the purchase of Stock. The Company intends that the Plan qualify as
an "employee stock purchase plan" under Section 423 of the Code (including
any amendments or replacements of such section), and the Plan shall be so
construed.
1.3 TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the
shares of Stock available for issuance under the Plan have been issued.
2. DEFINITIONS AND CONSTRUCTION.
2.1 DEFINITIONS. Any term not expressly defined in the Plan but
defined for purposes of Section 423 of the Code shall have the same
definition herein. Whenever used herein, the following terms shall have
their respective meanings set forth below:
(a) "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the
Plan, "Board" also means such Committee(s).
(b) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.
(c) "COMMITTEE" means the Compensation Committee, or
another committee of the Board duly appointed to administer the Plan and
having such powers as shall be specified by the Board. Unless the powers of
the Committee have been specifically limited, the Committee shall have all
of the powers of the Board granted herein, including, without limitation,
the power to amend or terminate the Plan at any time, subject to the terms
of the Plan and any applicable limitations imposed by law.
(d) "COMPANY" means Invitrogen Corporation., a Delaware
corporation, or any successor corporation thereto.
(e) "COMPENSATION" means, with respect to any Offering
Period, base wages or salary, commissions, overtime, bonuses, annual
awards, other incentive payments, shift premiums, and all other
compensation paid in cash during such Offering Period before deduction for
any contributions to any plan maintained by a Participating Company and
described in Section 401(k) or Section 125 of the Code. Compensation shall
not include reimbursements of expenses, allowances, long-term disability,
workers' compensation or any amount deemed received without the actual
transfer of cash or any amounts directly or indirectly paid pursuant to the
Plan or any other stock purchase or stock option plan, or any compensation
other than base wages or salary.
(f) "ELIGIBLE EMPLOYEE" means an Employee who meets the
requirements set forth in Section 5 for eligibility to participate in the
Plan.
(g) "EMPLOYEE" means a person treated as an employee of a
Participating Company for purposes of Section 423 of the Code. A
Participant shall be deemed to have ceased to be an Employee either upon an
actual termination of employment or upon the corporation employing the
Participant ceasing to be a Participating Company. For purposes of the
Plan, an individual shall not be deemed to have ceased to be an Employee
while such individual is on any military leave, sick leave, or other bona
fide leave of absence approved by the Company of ninety (90) days or less.
In the event an individual's leave of absence exceeds ninety (90) days, the
individual shall be deemed to have ceased to be an Employee on the
ninety-first (91st) day of such leave unless the individual's right to
reemployment with the Participating Company Group is guaranteed either by
statute or by contract. The Company shall determine in good faith and in
the exercise of its discretion whether an individual has become or has
ceased to be an Employee and the effective date of such individual's
employment or termination of employment, as the case may be. For purposes
of an individual's participation in or other rights, if any, under the Plan
as of the time of the Company's determination, all such determinations by
the Company shall be final, binding and conclusive, notwithstanding that
the Company or any governmental agency subsequently makes a contrary
determination.
(h) "FAIR MARKET VALUE" means, as of any date, if there is
then a public market for the Stock, the closing price of a share of Stock
(or the mean of the closing bid and asked prices if the Stock is so quoted
instead) as quoted on the Nasdaq National Market, the Nasdaq Small-Cap
Market or such other national or regional securities exchange or market
system constituting the primary market for the Stock, as reported in THE
WALL STREET JOURNAL or such other source as the Company deems reliable. If
the relevant date does not fall on a day on which the Stock has traded on
such securities exchange or market system, the date on which the Fair
Market Value shall be established shall be the last day on which the Stock
was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Board, in its sole discretion. If there is then
no public market for the Stock, the Fair Market Value on any relevant date
shall be as determined by the Board. Notwithstanding the foregoing, the
Fair Market Value per share of Stock on the Effective Date shall be deemed
to be the public offering price set forth in the final prospectus filed
with the Securities and Exchange Commission in connection with the public
offering of the Stock on the Effective Date.
(i) "OFFERING" means an offering of Stock as provided in
Section 6.
(j) "OFFERING DATE" means, for any Offering, the first day
of the Offering Period with respect to such Offering.
(k) "OFFERING PERIOD" means a period established in
accordance with Section 6.1.
(l) "PARENT CORPORATION" means any present or future
"parent corporation" of the Company, as defined in Section 424(e) of the
Code.
(m) "PARTICIPANT" means an Eligible Employee who has become
a participant in an Offering Period in accordance with Section 7 and
remains a participant in accordance with the Plan.
(n) "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation designated by the Board as a
corporation the Employees of which may, if Eligible Employees, participate
in the Plan. The Board shall have the sole and absolute discretion to
determine from time to time which Parent Corporations or Subsidiary
Corporations shall be Participating Companies. Invitrogen BV, the Company's
Netherlands subsidiary shall be a Participating Company unless and until
the Board decides otherwise.
(o) "PARTICIPATING COMPANY GROUP" means, at any point in
time, the Company and all other corporations collectively which are then
Participating Companies.
(p) "PURCHASE DATE" means, for any Purchase Period, the
last day of such period.
(q) "PURCHASE PERIOD" means a period, if any, established
in accordance with Section 6.2.
(r) "PURCHASE PRICE" means the price at which a share of
Stock may be purchased under the Plan, as determined in accordance with
Section 9.
(s) "PURCHASE RIGHT" means an option granted to a
Participant pursuant to the Plan to purchase such shares of Stock as
provided in Section 8, which the Participant may or may not exercise during
the Offering Period in which such option is outstanding. Such option arises
from the right of a Participant to withdraw any accumulated payroll
deductions of the Participant not previously applied to the purchase of
Stock under the Plan and to terminate participation in the Plan at any time
during an Offering Period.
(t) "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 4.2.
(u) "SUBSCRIPTION AGREEMENT" means a written agreement in
such form as specified by the Company, stating an Employee's election to
participate in the Plan and authorizing payroll deductions under the Plan
from the Employee's Compensation.
(v) "SUBSCRIPTION DATE" means the last business day prior
to the Offering Date of an Offering Period or such earlier date as the
Company shall establish.
(w) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of
the Code.
2.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the
singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.
3. ADMINISTRATION.
3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered
by the Board. All questions of interpretation of the Plan, of any form of
agreement or other document employed by the Company in the administration
of the Plan, or of any Purchase Right shall be determined by the Board and
shall be final and binding upon all persons having an interest in the Plan
or the Purchase Right. Subject to the provisions of the Plan, the Board
shall determine all of the relevant terms and conditions of Purchase Rights
granted pursuant to the Plan; provided, however, that all Participants
granted Purchase Rights pursuant to the Plan shall have the same rights and
privileges within the meaning of Section 423(b)(5) of the Code. All
expenses incurred in connection with the administration of the Plan shall
be paid by the Company.
3.2 AUTHORITY OF OFFICERS. Any officer of the Company shall have
the authority to act on behalf of the Company with respect to any matter,
right, obligation, determination or election that is the responsibility of
or that is allocated to the Company herein, provided that the officer has
apparent authority with respect to such matter, right, obligation,
determination or election.
3.3 POLICIES AND PROCEDURES ESTABLISHED BY THE COMPANY. The
Company may, from time to time, consistent with the Plan and the
requirements of Section 423 of the Code, establish, change or terminate
such rules, guidelines, policies, procedures, limitations, or adjustments
as deemed advisable by the Company, in its sole discretion, for the proper
administration of the Plan, including, without limitation, (a) a minimum
payroll deduction amount required for participation in an Offering, (b) a
limitation on the frequency or number of changes permitted in the rate of
payroll deduction during an Offering, (c) an exchange ratio applicable to
amounts withheld in a currency other than United States dollars, (d) a
payroll deduction greater than or less than the amount designated by a
Participant in order to adjust for the Company's delay or mistake in
processing a Subscription Agreement or in otherwise effecting a
Participant's election under the Plan or as advisable to comply with the
requirements of Section 423 of the Code, and (e) determination of the date
and manner by which the Fair Market Value of a share of Stock is determined
for purposes of administration of the Plan.
4. SHARES SUBJECT TO PLAN.
4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock
that may be issued under the Plan shall be two hundred fifty thousand
(250,000) and shall consist of authorized but unissued or reacquired shares
of Stock, or any combination thereof. If an outstanding Purchase Right for
any reason expires or is terminated or canceled, the shares of Stock
allocable to the unexercised portion of such Purchase Right shall again be
available for issuance under the Plan.
4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of
any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of
the Company, or in the event of any merger (including a merger effected for
the purpose of changing the Company's domicile), sale of assets or other
reorganization in which the Company is a party, appropriate adjustments
shall be made in the number and class of shares subject to the Plan and
each Purchase Right and in the Purchase Price. If a majority of the shares
which are of the same class as the shares that are subject to outstanding
Purchase Rights are exchanged for, converted into, or otherwise become
(whether or not pursuant to an Ownership Change Event) shares of another
corporation (the "NEW SHARES"), the Board may unilaterally amend the
outstanding Purchase Rights to provide that such Purchase Rights are
exercisable for New Shares. In the event of any such amendment, the number
of shares subject to, and the Purchase Price of, the outstanding Purchase
Rights shall be adjusted in a fair and equitable manner, as determined by
the Board, in its sole discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 4.2
shall be rounded down to the nearest whole number, and in no event may the
Purchase Price be decreased to an amount less than the par value, if any,
of the stock subject to the Purchase Right. The adjustments determined by
the Board pursuant to this Section 4.2 shall be final, binding and
conclusive.
5. ELIGIBILITY.
5.1 EMPLOYEES ELIGIBLE TO PARTICIPATE. Each Employee of a
Participating Company is eligible to participate in the Plan and shall be
deemed an Eligible Employee as of the first Offering Date following the
commencement of his/her service with a Participating Company.
5.2 EXCLUSION OF CERTAIN STOCKHOLDERS. Notwithstanding any
provision of the Plan to the contrary, no Employee shall be granted a
Purchase Right under the Plan if, immediately after such grant, such
Employee would own or hold options to purchase stock of the Company or of
any Parent Corporation or Subsidiary Corporation possessing five percent
(5%) or more of the total combined voting power or value of all classes of
stock of such corporation, as determined in accordance with Section
423(b)(3) of the Code. For purposes of this Section 5.2, the attribution
rules of Section 424(d) of the Code shall apply in determining the stock
ownership of such Employee.
6. OFFERINGS.
6.1 OFFERING PERIODS. Except as otherwise set forth below, the
Plan shall be implemented by sequential Offerings of approximately
twenty-four (24) months duration (an "OFFERING PERIOD"). The first Offering
Period shall commence on the Effective Date and end on January 31, 2001.
Subsequent Offering Periods shall commence on the first day of February,
May, August, and November of each year and end on the last day of the 24th
month of such Offering Period. Notwithstanding the foregoing, the Board may
establish a different duration for one or more future Offering Periods or
different commencing or ending dates for such Offering Periods; provided,
however, that no Offering Period may have a duration exceeding twenty-seven
(27) months. If the first or last day of an Offering Period is not a day on
which the national or regional securities exchange or market system
constituting the primary market for the Stock is open for trading, the
Company shall specify the trading day that will be deemed the first or last
day, as the case may be, of the Offering Period.
6.2 PURCHASE PERIODS. Generally, each Offering Period will
consist of eight (8) quarterly Purchase Periods which begin on the first
day of February, May, August and November of each year and end on the last
day of the third month of each such Purchase Period (i.e. the following
April, July, October and January). The Purchase Period commencing on the
Effective Date shall end on the last day of April, 1999. The Board may
establish different Purchase Periods which may consist of two (2) or more
consecutive Purchase Periods having such duration as the Board shall
specify. The last day of each Purchase Period shall be a Purchase Date. If
the first or last day of a Purchase Period is not a day on which the
national or regional securities exchange or market system constituting the
primary market for the Stock is open for trading, the Company shall specify
the trading day that will be deemed the first or last day, as the case may
be, of the Purchase Period.
7. PARTICIPATION IN THE PLAN.
7.1 INITIAL PARTICIPATION. An Eligible Employee may become a
Participant in an Offering Period by delivering a properly completed
Subscription Agreement to the office designated by the Company not later
than the close of business for such office on the Subscription Date
established by the Company for such Offering Period. An Eligible Employee
who does not deliver a properly completed Subscription Agreement to the
Company's designated office on or before the Subscription Date for an
Offering Period shall not participate in the Plan for that Offering Period
or for any subsequent Offering Period unless such Eligible Employee
subsequently delivers a properly completed Subscription Agreement to the
appropriate office of the Company on or before the Subscription Date for
such subsequent Offering Period. An Employee who becomes an Eligible
Employee after the Offering Date of an Offering Period shall not be
eligible to participate in such Offering Period but may participate in any
subsequent Offering Period provided such Employee is still an Eligible
Employee as of the Offering Date of such subsequent Offering Period.
7.2 CONTINUED PARTICIPATION. A Participant shall automatically
participate in the next Offering Period commencing immediately after the
final Purchase Date of each Offering Period in which the Participant
participates provided that such Participant remains an Eligible Employee on
the Offering Date of the new Offering Period and has not either (a)
withdrawn from the Plan pursuant to Section 12.1 or (b) terminated
employment as provided in Section 13. A Participant who may automatically
participate in a subsequent Offering Period, as provided in this Section,
is not required to deliver any additional Subscription Agreement for the
subsequent Offering Period in order to continue participation in the Plan.
However, a Participant may deliver a new Subscription Agreement for a
subsequent Offering Period in accordance with the procedures set forth in
Section 7.1 if the Participant desires to change any of the elections
contained in the Participant's then effective Subscription Agreement.
7.3 ONE OFFERING PERIOD PER PARTICIPANT. A Participant may
participate in only one Offering Period at any given time. A Participant's
delivery to the Company of a Subscription Agreement for any given Offering
Period shall constitute Participant's withdrawal from any concurrent
Offering Period and termination of any Purchase Right granted pursuant
thereto.
8. RIGHT TO PURCHASE SHARES.
8.1 GRANT OF PURCHASE RIGHT. Except as set forth below, on the
Offering Date of each Offering Period, each Participant in such Offering
Period shall be granted automatically a Purchase Right consisting of an
option to purchase the lesser of (a) that number of whole shares of Stock
determined by dividing Fifty Thousand Dollars ($50,000) by the Fair Market
Value of a share of Stock on such Offering Date, reduced by the aggregate
purchase price of any Stock purchased during any concurrent Offering
Period(s) or (b) five thousand (5,000) shares of Stock, reduced by the
number of shares of Stock purchased during any concurrent Offering
Period(s). No Purchase Right shall be granted on an Offering Date to any
person who is not, on such Offering Date, an Eligible Employee.
8.2 PRO RATA ADJUSTMENT OF PURCHASE RIGHT. Notwithstanding the
provisions of Section 8.1, if the Board establishes an Offering Period of
any duration other than twenty four months, then (a) the dollar amount in
Section 8.1 shall be determined by multiplying $2,083.33 by the number of
months (rounded to the nearest whole month) in the Offering Period and
rounding to the nearest whole dollar, and (b) the share amount in Section
8.1 shall be determined by multiplying 208.33 shares by the number of
months (rounded to the nearest whole month) in the Offering Period and
rounding to the nearest whole share.
8.3 CALENDAR YEAR PURCHASE LIMITATION. Notwithstanding any
provision of the Plan to the contrary, no Participant shall be granted a
Purchase Right which permits his or her right to purchase shares of Stock
under the Plan to accrue at a rate which, when aggregated with such
Participant's rights to purchase shares under all other employee stock
purchase plans of a Participating Company intended to meet the requirements
of Section 423 of the Code, exceeds Twenty-Five Thousand Dollars ($25,000)
in Fair Market Value (or such other limit, if any, as may be imposed by the
Code) for each calendar year in which such Purchase Right is outstanding at
any time. For purposes of the preceding sentence, the Fair Market Value of
shares purchased during a given Offering Period shall be determined as of
the Offering Date for such Offering Period. The limitation described in
this Section 8.3 shall be applied in conformance with applicable
regulations under Section 423(b)(8) of the Code.
9. PURCHASE PRICE.
The Purchase Price at which each share of Stock may be acquired
in an Offering Period upon the exercise of all or any portion of a Purchase
Right shall be established by the Board; provided, however, that the
Purchase Price shall not be less than eighty-five percent (85%) of the
lesser of (a) the Fair Market Value of a share of Stock on the Offering
Date of the Offering Period or (b) the Fair Market Value of a share of
Stock on the Purchase Date. Unless otherwise provided by the Board prior to
the commencement of an Offering Period, the Purchase Price for that
Offering Period shall be eighty-five percent (85%) of the lesser of (a) the
Fair Market Value of a share of Stock on the Offering Date of the Offering
Period, or (b) the Fair Market Value of a share of Stock on the Purchase
Date.
10. ACCUMULATION OF PURCHASE PRICE THROUGH PAYROLL DEDUCTION.
Shares of Stock acquired pursuant to the exercise of all or any
portion of a Purchase Right may be paid for only by means of payroll
deductions from the Participant's Compensation accumulated during the
Offering Period for which such Purchase Right was granted, subject to the
following:
10.1 AMOUNT OF PAYROLL DEDUCTIONS. Except as otherwise provided
herein, the amount to be deducted under the Plan from a Participant's
Compensation on each payday during an Offering Period shall be determined
by the Participant's Subscription Agreement. The Subscription Agreement
shall set forth the percentage of the Participant's Compensation to be
deducted on each payday during an Offering Period in whole percentages of
not less than one percent (1%) (except as a result of an election pursuant
to Section 10.3 to stop payroll deductions made effective following the
first payday during an Offering) or more than fifteen percent (15%).
Notwithstanding the foregoing, the Board may change the limits on payroll
deductions effective as of any future Offering Date.
10.2 COMMENCEMENT OF PAYROLL DEDUCTIONS. Payroll deductions shall
commence on the first payday following the Offering Date and shall continue
to the end of the Offering Period unless sooner altered or terminated as
provided herein.
10.3 ELECTION TO CHANGE OR STOP PAYROLL DEDUCTIONS. During an
Offering Period, a Participant may elect to increase or decrease the rate
of or to stop deductions from his or her Compensation by delivering to the
Company's designated office an amended Subscription Agreement authorizing
such change on or before the "Change Notice Date." The "CHANGE NOTICE DATE"
shall be a date prior to the beginning of the first pay period for which
such election is to be effective as established by the Company from time to
time and announced to the Participants. A Participant who elects to
decrease the rate of his or her payroll deductions to zero percent (0%)
shall nevertheless remain a Participant in the current Offering Period
unless such Participant withdraws from the Plan as provided in Section
12.1.
10.4 ADMINISTRATIVE SUSPENSION OF PAYROLL DEDUCTIONS. The Company
may, in its sole discretion, suspend a Participant's payroll deductions
under the Plan as the Company deems advisable to avoid accumulating payroll
deductions in excess of the amount that could reasonably be anticipated to
purchase the maximum number of shares of Stock permitted during a calendar
year under the limit set forth in Section 8.3. Payroll deductions shall be
resumed at the rate specified in the Participant's then effective
Subscription Agreement at the beginning of the next Purchase Period the
Purchase Date of which falls in the following calendar year.
10.5 PARTICIPANT ACCOUNTS. Individual bookkeeping accounts shall
be maintained for each Participant. All payroll deductions from a
Participant's Compensation shall be credited to such Participant's Plan
account and shall be deposited with the general funds of the Company. All
payroll deductions received or held by the Company may be used by the
Company for any corporate purpose.
10.6 NO INTEREST PAID. Interest shall not be paid on sums
deducted from a Participant's Compensation pursuant to the Plan.
10.7 VOLUNTARY WITHDRAWAL FROM PLAN ACCOUNT. A Participant may
withdraw all or any portion of the payroll deductions credited to his or
her Plan account and not previously applied toward the purchase of Stock by
delivering to the Company's designated office a written notice on a form
provided by the Company for such purpose. A Participant who withdraws the
entire remaining balance credited to his or her Plan account shall be
deemed to have withdrawn from the Plan in accordance with Section 12.1.
Amounts withdrawn shall be returned to the Participant as soon as
practicable after the withdrawal and may not be applied to the purchase of
shares in any Offering under the Plan. The Company may from time to time
establish or change limitations on the frequency of withdrawals permitted
under this Section, establish a minimum dollar amount that must be retained
in the Participant's Plan account, or terminate the withdrawal right
provided by this Section.
11. PURCHASE OF SHARES.
11.1 EXERCISE OF PURCHASE RIGHT. On each Purchase Date of an
Offering Period, each Participant who has not withdrawn from the Plan and
whose participation in the Offering has not terminated before such Purchase
Date shall automatically acquire pursuant to the exercise of the
Participant's Purchase Right the number of whole shares of Stock determined
by dividing (a) the total amount of the Participant's payroll deductions
accumulated in the Participant's Plan account during the Offering Period
and not previously applied toward the purchase of Stock by (b) the Purchase
Price. However, in no event shall the number of shares purchased by the
Participant during an Offering Period exceed the number of shares subject
to the Participant's Purchase Right. No shares of Stock shall be purchased
on a Purchase Date on behalf of a Participant whose participation in the
Offering or the Plan has terminated before such Purchase Date.
11.2 PRO RATA ALLOCATION OF SHARES. In the event that the number
of shares of Stock which might be purchased by all Participants in the Plan
on a Purchase Date exceeds the number of shares of Stock available in the
Plan as provided in Section 4.1, the Company shall make a pro rata
allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Company shall determine to be equitable. Any
fractional share resulting from such pro rata allocation to any Participant
shall be disregarded.
11.3 DELIVERY OF CERTIFICATES. As soon as practicable after each
Purchase Date, the Company shall arrange the delivery to each Participant,
as appropriate, of a certificate representing the shares acquired by the
Participant on such Purchase Date; provided that the Company may deliver
such shares to a broker that holds such shares in street name for the
benefit of the Participant. Shares to be delivered to a Participant under
the Plan shall be registered in the name of the Participant, or, if
requested by the Participant, in the name of the Participant and his or her
spouse, or, if applicable, in the names of the heirs of the Participant.
11.4 RETURN OF CASH BALANCE. Any cash balance remaining in a
Participant's Plan account following any Purchase Date shall be refunded to
the Participant as soon as practicable after such Purchase Date. However,
if the cash to be returned to a Participant pursuant to the preceding
sentence is an amount less than the amount that would have been necessary
to purchase an additional whole share of Stock on such Purchase Date, the
Company may retain such amount in the Participant's Plan account to be
applied toward the purchase of shares of Stock in the subsequent Purchase
Period or Offering Period, as the case may be.
11.5 TAX WITHHOLDING. At the time a Participant's Purchase Right
is exercised, in whole or in part, or at the time a Participant disposes of
some or all of the shares of Stock he or she acquires under the Plan, the
Participant shall make adequate provision for the foreign, federal, state
and local tax withholding obligations of the Participating Company Group,
if any, which arise upon exercise of the Purchase Right or upon such
disposition of shares, respectively. The Participating Company Group may,
but shall not be obligated to, withhold from the Participant's compensation
the amount necessary to meet such withholding obligations.
11.6 EXPIRATION OF PURCHASE RIGHT. Any portion of a Participant's
Purchase Right remaining unexercised after the end of the Offering Period
to which the Purchase Right relates shall expire immediately upon the end
of the Offering Period.
11.7 REPORTS TO PARTICIPANTS. Each Participant who has exercised
all or part of his or her Purchase Right shall receive, as soon as
practicable after the Purchase Date, a report of such Participant's Plan
account setting forth the total payroll deductions accumulated prior to
such exercise, the number of shares of Stock purchased, the Purchase Price
for such shares, the date of purchase and the cash balance, if any,
remaining immediately after such purchase that is to be refunded or
retained in the Participant's Plan account pursuant to Section 11.4. The
report required by this Section may be delivered in such form and by such
means, including by electronic transmission, as the Company may determine.
12. WITHDRAWAL FROM THE PLAN.
12.1 VOLUNTARY WITHDRAWAL FROM THE PLAN. A Participant may
withdraw from the Plan by signing and delivering to the Company's
designated office a written notice of withdrawal on a form provided by the
Company for such purpose. Such withdrawal may be elected at any time prior
to the end of an Offering Period. A Participant who voluntarily withdraws
from the Plan is prohibited from resuming participation in the Plan in the
same Offering from which he or she withdrew, but may participate in any
subsequent Offering by again satisfying the requirements of Sections 5 and
7.1. The Company may impose, from time to time, a requirement that the
notice of withdrawal from the Plan be on file with the Company's designated
office for a reasonable period prior to the effectiveness of the
Participant's withdrawal.
12.2 RETURN OF PAYROLL DEDUCTIONS. Upon a Participant's voluntary
withdrawal from the Plan pursuant to Sections 12.1 or 10.7 or an automatic
withdrawal pursuant to Section 12.3, the Participant's accumulated payroll
deductions which have not been applied toward the purchase of shares of
Stock shall be refunded to the Participant as soon as practicable after the
withdrawal, without the payment of any interest, and the Participant's
interest in the Plan shall terminate. Such accumulated payroll deductions
to be refunded in accordance with this Section may not be applied to any
other Offering under the Plan.
12.3 AUTOMATIC WITHDRAWAL FROM AN OFFERING. If the Fair Market
Value of a share of Stock on a Purchase Date (other than the final Purchase
Date of an Offering Period) is less that the Fair Market Value of a share
of Stock on the Offering Date for such Offering Period, then every
Participant shall automatically be (a) withdrawn from such Offering Period
after the acquisition of shares of Stock on the Purchase Date and (b)
enrolled in the new Offering Period effective on its Offering Date. A
Participant may elect not to be automatically withdrawn from an Offering
Period pursuant to this Section 12.2 by delivering to the Company's
designated office not later than the close of business on the Offering Date
of the new Offering Period a written notice indicating such decision.
13. TERMINATION OF EMPLOYMENT OR ELIGIBILITY.
Upon a Participant's ceasing, prior to a Purchase Date, to be an
Employee of the Participating Company Group for any reason, including
retirement, disability or death, or the failure of a Participant to remain
an Eligible Employee, the Participant's participation in the Plan shall
terminate immediately. In such event, the payroll deductions credited to
the Participant's Plan account since the last Purchase Date shall, as soon
as practicable, be returned to the Participant or, in the case of the
Participant's death, to the Participant's legal representative, and all of
the Participant's rights under the Plan shall terminate. Interest shall not
be paid on sums returned pursuant to this Section 13. A Participant whose
participation has been so terminated may again become eligible to
participate in the Plan by again satisfying the requirements of Sections 5
and 7.1.
14. CHANGE IN CONTROL.
14.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i)
the direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent
(50%) of the voting stock of the Company; (ii) a merger or consolidation in
which the Company is a party; (iii) the sale, exchange, or transfer of all
or substantially all of the assets of the Company; or (iv) a liquidation or
dissolution of the Company.
(b) A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the stockholders of the Company immediately before
the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the
Company's voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were
transferred (the "TRANSFEREE CORPORATION(S)"), as the case may be. For
purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the
voting stock of one or more corporations which, as a result of the
Transaction, own the Company or the Transferee Corporation(s), as the case
may be, either directly or through one or more subsidiary corporations. The
Board shall have the right to determine whether multiple sales or exchanges
of the voting stock of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.
14.2 EFFECT OF CHANGE IN CONTROL ON PURCHASE RIGHTS. In the event
of a Change in Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the
"ACQUIRING CORPORATION"), may assume the Company's rights and obligations
under the Plan. If the Acquiring Corporation elects not to assume the
Company's rights and obligations under outstanding Purchase Rights, the
Purchase Date of the then current Offering Period (or Purchase Period)
shall be accelerated to a date before the date of the Change in Control
specified by the Board, but the number of shares of Stock subject to
outstanding Purchase Rights shall not be adjusted. All Purchase Rights
which are neither assumed by the Acquiring Corporation in connection with
the Change in Control nor exercised as of the date of the Change in Control
shall terminate and cease to be outstanding effective as of the date of the
Change in Control.
15. NONTRANSFERABILITY OF PURCHASE RIGHTS.
A Purchase Right may not be transferred in any manner otherwise
than by will or the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant.
16. COMPLIANCE WITH SECURITIES LAW.
The issuance of shares under the Plan shall be subject to
compliance with all applicable requirements of federal, state and foreign
law with respect to such securities. A Purchase Right may not be exercised
if the issuance of shares upon such exercise would constitute a violation
of any applicable federal, state or foreign securities laws or other law or
regulations or the requirements of any securities exchange or market system
upon which the Stock may then be listed. In addition, no Purchase Right may
be exercised unless (a) a registration statement under the Securities Act
of 1933, as amended, shall at the time of exercise of the Purchase Right be
in effect with respect to the shares issuable upon exercise of the Purchase
Right, or (b) in the opinion of legal counsel to the Company, the shares
issuable upon exercise of the Purchase Right may be issued in accordance
with the terms of an applicable exemption from the registration
requirements of said Act. The inability of the Company to obtain from any
regulatory body having jurisdiction the authority, if any, deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of
any shares under the Plan shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such
requisite authority shall not have been obtained. As a condition to the
exercise of a Purchase Right, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to
evidence compliance with any applicable law or regulation, and to make any
representation or warranty with respect thereto as may be requested by the
Company.
17. RIGHTS AS A STOCKHOLDER AND EMPLOYEE.
A Participant shall have no rights as a stockholder by virtue of
the Participant's participation in the Plan until the date of the issuance
of a certificate for the shares purchased pursuant to the exercise of the
Participant's Purchase Right (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 4.2. Nothing herein shall confer upon
a Participant any right to continue in the employ of the Participating
Company Group or interfere in any way with any right of the Participating
Company Group to terminate the Participant's employment at any time.
18. LEGENDS.
The Company may at any time place legends or other identifying
symbols referencing any applicable federal, state or foreign securities law
restrictions or any provision convenient in the administration of the Plan
on some or all of the certificates representing shares of Stock issued
under the Plan. The Participant shall, at the request of the Company,
promptly present to the Company any and all certificates representing
shares acquired pursuant to a Purchase Right in the possession of the
Participant in order to carry out the provisions of this Section.
19. NOTIFICATION OF SALE OF SHARES.
The Company may require the Participant to give the Company
prompt notice of any disposition of shares acquired by exercise of a
Purchase Right within two years from the date of granting such Purchase
Right or one year from the date of exercise of such Purchase Right. The
Company may require that until such time as a Participant disposes of
shares acquired upon exercise of a Purchase Right, the Participant shall
hold all such shares in the Participant's name (or, if elected by the
Participant, in the name of the Participant and his or her spouse but not
in the name of any nominee) until the lapse of the time periods with
respect to such Purchase Right referred to in the preceding sentence. The
Company may direct that the certificates evidencing shares acquired by
exercise of a Purchase Right refer to such requirement to give prompt
notice of disposition.
20. NOTICES.
All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt
thereof.
21. INDEMNIFICATION.
In addition to such other rights of indemnification as they may
have as members of the Board or officers or employees of the Participating
Company Group, members of the Board and any officers or employees of the
Participating Company Group to whom authority to act for the Board or the
Company is delegated shall be indemnified by the Company against all
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding,
or in connection with any appeal therein, to which they or any of them may
be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such person is liable for gross negligence,
bad faith or intentional misconduct in duties; provided, however, that
within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Company, in writing, the
opportunity at its own expense to handle and defend the same.
22. AMENDMENT OR TERMINATION OF THE PLAN.
The Board may at any time amend or terminate the Plan, except
that (a) such termination shall not affect Purchase Rights previously
granted under the Plan, except as permitted under the Plan, provided
however that the Board may terminate the Plan (and any Offerings and future
Purchase Rights) on any Purchase Date if the Board determines that such
termination is in the best interests of the Company and its stockholders;
and (b) no amendment may adversely affect a Purchase Right previously
granted under the Plan (except to the extent permitted by the Plan or as
may be necessary to qualify the Plan as an employee stock purchase plan
pursuant to Section 423 of the Code or to obtain qualification or
registration of the shares of Stock under applicable federal, state or
foreign securities laws). In addition, an amendment to the Plan must be
approved by the stockholders of the Company within twelve (12) months of
the adoption of such amendment if such amendment would authorize the sale
of more shares than are authorized for issuance under the Plan or would
change the definition of the corporations that may be designated by the
Board as Participating Companies. In the event that the Board approves an
amendment to increase the number of shares authorized for issuance under
the Plan (the "ADDITIONAL SHARES"), the Board, in its sole discretion, may
specify that such Additional Shares may only be issued pursuant to Purchase
Rights granted after the date on which the stockholders of the Company
approve such amendment, and such designation by the Board shall not be
deemed to have adversely affected any Purchase Right granted prior to the
date on which the stockholders approve the amendment.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing Invitrogen Corporation 1998 Employee Stock Purchase Plan
was duly adopted by the Board of Directors of the Company on January 15,
1999.
/s/ Joseph M. Fernandez
---------------------------------
Joseph M. Fernandez
PLAN HISTORY
November 20, 1998 Board adopts the Plan, with an initial reserve of 250,000
shares.
January 15, 1999 Stockholders approve Plan, with an initial reserve of
250,000 shares.
INVITROGEN CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
NAME (Please print): __________________________________________________
(Last) (First) (Middle)
/ / Original Application for the Offering Period beginning ___________,
199__.
/ / Change in Payroll Deduction rate effective with the pay period
ending _________, 199__.
I hereby elect to participate in the 1998 Employee Stock Purchase Plan
(the "PLAN") of Invitrogen Corporation (the "COMPANY") and subscribe to
purchase shares of the Company's Stock in accordance with this Subscription
Agreement and the Plan.
I hereby authorize payroll deductions in the amount of ________
percent (in whole percentages not less than 1% (unless an election to stop
deductions is being made) or more than 10%) of my "COMPENSATION" on each
payday throughout the "OFFERING PERIOD" in accordance with the Plan. I
understand that these payroll deductions will be accumulated for the
purchase of shares of Stock at the applicable purchase price determined in
accordance with the Plan. I understand that, except as otherwise provided
by the Plan, I will automatically purchase shares on each Purchase Date
under the Plan unless I withdraw from the Plan by giving written notice on
a form provided by the Company or unless my employment terminates.
I understand that I will automatically participate in each subsequent
Offering that commences immediately after the last day of an Offering in
which I am participating until I withdraw from the Plan by giving written
notice on a form provided by the Company or I cease to be eligible to
participate in the Plan.
Shares I purchase under the Plan should be issued in the name(s) set
forth below. (Shares may be issued in the participant's name alone or
together with the participant's spouse as community property or in joint
tenancy.)
NAME(S): _______________________________________________________________
ADDRESS: _______________________________________________________________
MY SOCIAL SECURITY NUMBER: _____________________________________________
I agree to make adequate provision for the federal, state, local and
foreign tax withholding obligations, if any, which may arise upon my
purchase of shares under the Plan and/or my disposition of such shares. The
Company may, but will not be obligated to, withhold from my compensation
the amount necessary to meet such withholding obligations.
I agree that while I hold shares acquired under the Plan, unless
otherwise permitted by the Company, I will hold such shares in the name(s)
entered above (and not in the name of any nominee) for at least two years
from the first day of the Offering Period in which, and at least one year
from the Purchase Date on which, I acquired such shares (this restriction
only applies to the name(s) in which shares are held and does not affect
the ability to dispose of Plan shares).
I AGREE THAT I WILL NOTIFY THE CHIEF FINANCIAL OFFICER OF THE COMPANY
IN WRITING WITHIN 30 DAYS AFTER ANY SALE, GIFT, TRANSFER OR OTHER
DISPOSITION OF ANY KIND PRIOR TO THE END OF THE PERIODS REFERRED TO IN THE
PRECEDING PARAGRAPH (A "DISQUALIFYING DISPOSITION") OF ANY SHARES I
PURCHASED UNDER THE PLAN. I FURTHER AGREE THAT IF I DO NOT RESPOND WITHIN
30 DAYS OF THE DATE OF A DISQUALIFYING DISPOSITION SURVEY DELIVERED TO ME,
THE COMPANY MAY TREAT MY NONRESPONSE AS MY NOTICE TO THE COMPANY OF A
DISQUALIFYING DISPOSITION AND MAY COMPUTE AND REPORT TO THE INTERNAL
REVENUE SERVICE THE ORDINARY INCOME I MUST RECOGNIZE UPON SUCH
DISQUALIFYING DISPOSITION.
I am familiar with the provisions of the Plan and agree to participate
in the Plan subject to all of its provisions. I understand that the Board
of Directors of the Company reserves the right to terminate the Plan or to
amend the Plan and my right to purchase stock under the Plan to the extent
provided by the Plan. I understand that the effectiveness of this
Subscription Agreement is dependent upon my eligibility to participate in
the Plan.
Date: _________________ Signature:_____________________________
INVITROGEN CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
NAME (Please print): ___________________________________________________
(Last) (First) (Middle)
I hereby elect to withdraw from the Offering under Invitrogen
Corporation 1998 Employee Stock Purchase Plan (the "PLAN") which began on
______________, 19____ and in which I am currently participating (the
"CURRENT OFFERING").
ELECT EITHER A OR B BELOW:
/ / A. I elect to terminate immediately my participation in the Current
Offering and in the Plan.
I request that the Company cease all further payroll deductions
from my Compensation under the Plan (provided that I have given
sufficient notice prior to the next payday). I request that all
payroll deductions credited to my account under the Plan (if any)
not previously used to purchase shares under the Plan shall not
be used to purchase shares on the next Purchase Date of the
Current Offering. Instead, I request that all such amounts be
paid to me as soon as practicable. I understand that this
election immediately terminates my interest in the Current
Offering and in the Plan.
/ / B. I elect to terminate my participation in the Current Offering and in
the Plan following my purchase of shares on the next Purchase Date of
the Current Offering.
I request that the Company cease all further payroll deductions
from my Compensation under the Plan (provided that I have given
sufficient notice prior to the next payday). I request that all
payroll deductions credited to my account under the Plan (if any)
not previously used to purchase shares under the Plan shall be
used to purchase shares on the next Purchase Date of the Current
Offering to the extent permitted by the Plan. I understand that
this election will terminate my interest in the Current Offering
and in the Plan immediately following such purchase. I request
that any cash balance remaining in my account under the Plan
after my purchase of shares be paid to me as soon as practicable.
I understand that by making this election I am terminating my interest
in the Plan and that no further payroll deductions will be made (provided
that I have given sufficient notice prior to the next payday) unless I
elect in accordance with the Plan to become a participant in another
Offering under the Plan by filing a new Subscription Agreement with the
Company.
Date:______________________ Signature:________________________________
DETACH HERE
PROXY
INVITROGEN CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON ______________, 2000
The undersigned hereby appoints LYLE C. TURNER, JAMES R. GLYNN and WARNER
R. BROADUS, and each of them, as attorneys and proxies of the undersigned,
with full power of substitution, to vote all shares of common stock of
Invitrogen Corporation which the undersigned may be entitled to vote at the
Special Meeting of Stockholders to be held at Invitogen's offices at 1600
Faraday Avenue, Carlsbad, California, on _______________, 2000 at _____ _.m
local time, and at any and all postponements, continuations and
adjournments thereof, with all powers that the undersigned would possess if
personally present, such proxies being directed to vote on the proposals as
specified on the reverse side.
-------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
-------------- -------------
DETACH HERE
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE
LISTED NOMINEES FOR DIRECTOR AND "FOR" THE PROPOSAL LISTED BELOW AND IN THE
DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE MEETING. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE
TIME IT IS VOTED BY ANY MEANS DESCRIBED IN THE ACCOMPA NYING PROXY
STATEMENT.
To approve and adopt each of the Agreement and Plan of Merger dated as
of July 7, 2000, between Invitrogen and Life Technologies, and the
Agreement and Plan of Merger, dated as of July 7, 2000, between
Invitrogen and Dexter Corporation, and to approve the Life
Technologies and Dexter mergers.
FOR / / AGAINST / / ABSTAIN / /
To amend Invitrogen Corporation's Certificate of Incorporation to
increase the authorized capital stock to 131,405,884.
FOR / / AGAINST / / ABSTAIN / /
To increase by the number of shares Invitrogen may issue under our
1997 Stock Option Plan to [x,xxx,xxx] shares.
FOR / / AGAINST / / ABSTAIN / /
To increase by the number of shares of Invitrogen common stock
that Invitrogen may issue under Invitrogen's 1998 Employee Stock
Purchase Plan to [x,xxx,xxx] shares.
FOR / / AGAINST / / ABSTAIN / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED
RETURN ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED
STATES. PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) HEREON. IF THE
STOCK IS REGISTERED IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD
SIGN. PLEASE GIVE FULL TITLE AS CAPACITY IN WHICH SIGNING IF NOT
SIGNING AS AN INDIVIDUAL.
SIGNATURE: DATE:
SIGNATURE: DATE:
LIFE TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF LIFE
TECHNOLOGIES FOR THE SPECIAL MEETING TO BE HELD ON [MONTH, DAY], 2000.
[J. Stark Thompson], [K. Grahame Walker] and George M. Whitesides, or
any of them, each with power of substitution, are hereby authorized to vote
the shares of the undersigned at the Special Meeting of Stockholders of
Life Technologies, to be held on [weekday], [month, day], 2000, at [time],
local time, at [location], and at any adjournment or postponement thereof,
upon the matters set forth in the joint Proxy Statement and Prospectus and
upon such other matters as may properly come before the Special Meeting,
voting as specified on the reverse side of this card with respect to the
matters set forth in the joint Proxy Statement and Prospectus, and voting
in the discretion of the above-named persons on such other matters as may
properly come before the Special Meeting. If you specify a different choice
on the proxy card, your shares will be voted as specified.
Signing and dating Life Technologies proxy card will have the effect
of revoking any proxy card you signed on an earlier date, and will
constitute a revocation of all previously granted authority to vote for
every proposal included on such other proxy card.
PROPOSAL (1) APPROVAL OF THE LIFE TECHNOLOGIES MERGER.
PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE.
YOU MAY SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE
SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH
THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PERSONS NAMED ABOVE AS PROXIES
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
(continued on reverse side)
(Reverse Side)
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL 1
PROPOSAL (1):
APPROVAL OF THE LIFE TECHNOLOGIES MERGER
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I plan to attend the meeting. [ ]
SIGNATURE(S): __________________________________Date: ______________, 2000
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, give full title as such. If signing on behalf of a corporation,
sign the full corporate name by authorized officer. The signer hereby
revokes all proxies heretofore given by the signer to vote at the Special
Meeting of Stockholders of Life Technologies and any adjournment or
postponement thereof.
DEXTER CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DEXTER
FOR THE SPECIAL MEETING TO BE HELD ON [MONTH, DAY], 2000.
K. Grahame Walker, George M. Whitesides and Bernard M. Fox, or any of
them, each with power of substitution, are hereby authorized to vote the
shares of the undersigned at the Special Meeting of Stockholders of Dexter
Corporation, to be held on [weekday], [month, day], 2000, at [time], local
time, at [location], and at any adjournment or postponement thereof, upon
the matters set forth in the joint Proxy Statement and Prospectus and upon
such other matters as may properly come before the Special Meeting, voting
as specified on the reverse side of this card with respect to the matters
set forth in the joint Proxy Statement and Prospectus, and voting in the
discretion of the above-named persons on such other matters as may properly
come before the Special Meeting. If you specify a different choice on the
proxy card, your shares will be voted as specified.
Signing and dating Dexter's proxy card will have the effect of
revoking any proxy card you signed on an earlier date, and will constitute
a revocation of all previously granted authority to vote for every proposal
included on such other proxy card.
PROPOSAL (1) APPROVAL OF THE DEXTER MERGER.
PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE.
YOU MAY SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE
SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH
THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PERSONS NAMED ABOVE AS PROXIES
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
(continued on reverse side)
(Reverse Side)
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL 1
PROPOSAL (1):
APPROVAL OF THE DEXTER MERGER
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I plan to attend the meeting. [ ]
SIGNATURE(S): ____________________________________Date: ______________, 2000
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, give full title as such. If signing on behalf of a corporation,
sign the full corporate name by authorized officer. The signer hereby
revokes all proxies heretofore given by the signer to vote at the Special
Meeting of Stockholders of Dexter Corporation and any adjournment or
postponement thereof.
