SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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|X| Preliminary Proxy Statement |_| Confidential, for Use
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DEXTER CORPORATON
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offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
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As filed with the Commission on March 1, 2000
[DEXTER CORPORATION LOGO]
March [day], 2000
Dear Shareholder:
We are pleased to invite you to attend the 2000 annual meeting of
shareholders of Dexter Corporation, which will be held on Thursday, April
27, 2000, at 10:00 A.M., local time, at The Hartford Club, 46 Prospect
Street, Hartford, Connecticut.
The items to be considered and voted on at the meeting are
described in the notice of the 2000 annual meeting of shareholders and
proxy statement accompanying this letter.
You may have already received proxy soliciting materials from
International Specialty Products Inc. in connection with items ISP intends
to present at the meeting. The ONLY items that will be brought before the
Company's 2000 annual meeting are the ones described in the accompanying
proxy statement and not the items described in ISP's proxy materials. YOUR
BOARD OF DIRECTORS BELIEVES THAT PROPOSALS SUBMITTED BY ISP AND DESCRIBED
IN THIS PROXY STATEMENT ARE NOT IN THE BEST INTERESTS OF THE COMPANY AND
ITS SHAREHOLDERS AND URGES YOU TO VOTE AGAINST THESE PROPOSALS.
Your vote is important. We encourage you to vote your shares as
soon as possible. If you have any questions or need assistance in voting
your shares, please call our proxy solicitor, MacKenzie Partners, Inc.,
toll free at (800) 322- 2885.
Sincerely,
K. Grahame Walker
Chairman and Chief Executive Officer
[DEXTER LOGO]
Dexter Corporation -- One Elm Street -- Windsor Locks, CT 06096-2334 --
Tel: 860.292.7675
NOTICE OF ANNUAL MEETING
March [day], 2000
The annual meeting of the shareholders of Dexter Corporation (the
"Company" or "Dexter") will be held at The Hartford Club, 46 Prospect
Street, Hartford, Connecticut, on Thursday, April 27, 2000, at 10:00 A.M.,
local time, for the following purposes:
(1) To elect three directors to serve for three-year terms expiring at
the 2003 annual meeting of shareholders. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE ELECTION OF THE EXISTING DEXTER DIRECTOR
NOMINEES PROPOSED FOR REELECTION AND AGAINST THE ELECTION OF
INTERNATIONAL SPECIALTY PRODUCTS INC.'S DIRECTOR NOMINEES.
(2) To ratify the selection by the Company's Board of Directors of the
firm of PricewaterhouseCoopers LLP as auditor of the Company for
the year 2000. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS
PROPOSAL.
(3) To vote upon a proposal by International Specialty Products Inc.
and its wholly owned subsidiary ISP Investments Inc. (collectively,
"ISP"), as described in the Company's proxy statement, relating to
an amendment to the Company's Bylaws requiring the Dexter Board to
make certain amendments to the Company's Rights Agreement or to
redeem the rights issued under the Agreement if the Company's
shareholders instruct the Board to do so and requiring the Board
not to adopt a new rights agreement without shareholder approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
(4) To vote upon a proposal by ISP, as described in the Company's proxy
statement, relating to a shareholder resolution directing Dexter's
Board to amend the Rights Agreement promptly to make it
inapplicable to any offer for all outstanding shares of Dexter for
at least $45.00 per share in cash. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
(5) To vote upon a proposal by ISP, as described in the Company's proxy
statement, relating to a shareholder resolution repealing any and
all amendments made by the Dexter Board to the Company's Bylaws
after February 26, 1999. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST THIS PROPOSAL.
(6) To transact such other business as may properly come before the
meeting or at any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on February
25, 2000 as the record date for the determination of shareholders entitled
to notice of and to vote at the meeting.
THIS ANNUAL MEETING IS OF PARTICULAR IMPORTANCE TO ALL SHAREHOLDERS
OF THE COMPANY BECAUSE OF ISP'S ONGOING HOSTILE ATTEMPT TO TAKE OVER YOUR
COMPANY.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON AND
REGARDLESS OF THE NUMBER OF SHARES OF COMMON STOCK YOU OWN, YOUR BOARD
URGES YOU TO COMPLETE, SIGN, DATE AND RETURN THE WHITE PROXY CARD IN THE
ACCOMPANYING ENVELOPE, WHICH IS POSTAGE PAID IF MAILED IN THE UNITED
STATES.
YOUR BOARD ALSO URGES YOU NOT TO SIGN ANY GOLD PROXY CARDS SENT TO
YOU BY ISP. EVEN IF YOU HAVE PREVIOUSLY SIGNED A PROXY CARD SENT TO YOU BY
ISP, YOU CAN REVOKE THAT EARLIER PROXY BY SIGNING, DATING AND MAILING THE
ENCLOSED WHITE PROXY CARD IN THE ENVELOPE PROVIDED.
By order of the Board of Directors,
BRUCE H. BEATT,
Secretary
[DEXTER LOGO]
Dexter Corporation -- One Elm Street -- Windsor Locks, CT 06096-2334 --
Tel: 860.292.7675
March [day], 2000
PROXY STATEMENT
This proxy statement is furnished to the shareholders of Dexter
Corporation (the "Company") in connection with the solicitation by the
Board of Directors of proxies to be used in voting at the annual meeting of
the shareholders of the Company to be held on Thursday, April 27, 2000 and
at any adjournments or postponements thereof. The accompanying proxy is
solicited on behalf of the Board of Directors of the Company. This proxy
statement and the accompanying proxy are first being mailed to shareholders
on or about March [day], 2000.
International Specialty Products Inc. and its wholly owned
subsidiary ISP Investments Inc. (collectively, "ISP") have nominated three
individuals for election to the Board of Directors in opposition to the
Company's nominees for election (the "Director Election Proposal"). ISP has
also stated that it intends to present proposals concerning (i) a Bylaw
amendment that would increase the size of the Company's Board of Directors
(the "Board Size Bylaw Proposal"), (ii) the election of ISP's slate of
nominees to fill the vacancies created by the increased directorships (the
"Additional Directors Election Proposal"), (iii) a Bylaw amendment that
would require the Board to make certain amendments to the Company's Rights
Plan or redeem the rights issued thereunder, under certain circumstances
(the "Rights Plan Bylaw Proposal"), (iv) a shareholder resolution directing
the Board of Directors to amend the Company's Rights Plan to make it
inapplicable to any offer for all outstanding shares of the Company for at
least $45.00 per share in cash (the "Rights Plan Amendment Proposal"), (v)
a shareholder resolution repealing any and all amendments to the Company's
Bylaws made by the Company's Board of Directors after February 26, 1999 and
prohibiting the Board from adopting certain new amendments to the Company's
Bylaws without the approval of the shareholders (the "Bylaw Repeal
Proposal"), and (vi) a resolution providing the order of voting on the
proposals at the 2000 annual meeting ( the "Omnibus Proposal").
ISP'S BOARD SIZE BYLAW PROPOSAL AND ADDITIONAL DIRECTORS ELECTION
PROPOSAL ARE NOT AUTHORIZED (AND ARE THEREFORE ILLEGAL) UNDER DEXTER'S
RESTATED CERTIFICATE OF INCORPORATION AND THE CONNECTICUT BUSINESS
CORPORATION ACT. ACCORDINGLY, THEY CANNOT BE BROUGHT BEFORE THE ANNUAL
MEETING BY ISP, AND NO ACTION WILL BE TAKEN UPON THEM AT THE ANNUAL
MEETING. AS A RESULT, ISP IS NOT IN A POSITION TO TAKE CONTROL OF A
MAJORITY OF THE SEATS ON THE DEXTER BOARD. IN LIGHT OF THIS, ISP'S OMNIBUS
PROPOSAL IS NOT NECESSARY, AND WILL NOT BE BROUGHT BEFORE THE ANNUAL
MEETING. DEXTER BELIEVES THAT THE RIGHTS PLAN BYLAW PROPOSAL AND THE RIGHTS
PLAN AMENDMENT PROPOSAL ARE ALSO ILLEGAL AND UNENFORCEABLE UNDER
CONNECTICUT LAW. FOR THIS REASON, DEXTER DOES NOT PLAN TO IMPLEMENT THE
ACTIONS CONTEMPLATED BY THESE PROPOSALS, WHATEVER THE OUTCOME OF THE VOTE
IS. HOWEVER, IN ORDER TO GIVE SHAREHOLDERS THE OPPORTUNITY TO MOOT THE
ISSUE BY VOTING THESE PROPOSALS DOWN, DEXTER WILL PRESENT THEM TO THE
ANNUAL MEETING. THE BYLAW REPEAL PROPOSAL IS ILLUSORY AND UNNECESSARY
BECAUSE DEXTER HAS NEITHER AMENDED NOR ADOPTED ANY BYLAWS SINCE FEBRUARY
26, 1999 AND DOES NOT INTEND TO TAKE ANY SUCH ACTION PRIOR TO THE ANNUAL
MEETING. ACCORDINGLY, THIS PROPOSAL SERVES NO PURPOSE WHATEVER. HOWEVER, TO
AVOID THE EXPENSE AND DISTRACTION OF LITIGATING THE ISSUE WITH ISP, DEXTER
PLANS TO PRESENT THIS PROPOSAL TO THE ANNUAL MEETING.
Accordingly, the Board of Directors is soliciting votes FOR the
Company's slate of nominees for election to the Board of Directors, FOR
ratification of the appointment of the firm of PricewaterhouseCoopers LLP
as auditor of the Company for the year 2000 and AGAINST ISP's Director
Election Proposal, Rights Plan Bylaw Proposal, Rights Plan Amendment
Proposal and Bylaw Repeal Proposal (collectively, the "ISP Proposals").
Unless contrary instructions are indicated on the WHITE proxy card,
all shares represented by valid proxies received pursuant to this
solicitation (and not revoked) will be voted:
o FOR the election of all of the Company's nominees for
directors named in this proxy statement,
o FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as auditor of the Company for the
year 2000, and
o AGAINST the ISP Proposals.
If you specify a different choice on the proxy card, your shares
will be voted as specified.
VOTING AND REVOCABILITY OF PROXIES
You are urged to sign and date the enclosed WHITE proxy card and
return it in the enclosed prepaid envelope whether or not you plan to
attend the meeting. A person giving any proxy has the power to revoke it
(whether such proxy was solicited by the Board of Directors or ISP) at any
time before the voting by submitting to the Company or to ISP a written
revocation or duly executed proxy bearing a later date. In addition, any
shareholder who attends the meeting in person may vote by ballot at the
meeting, thereby canceling any proxy previously given.
VOTING SECURITIES; QUORUM
The only outstanding voting securities of the Company are the
shares of its Common stock, par value $1 per share, 23,058,969 of which
were outstanding as of February 25, 2000, and only shareholders of record
at the close of business on that date will be entitled to vote at the
meeting. Each share is entitled to one vote. Proxies may be solicited,
without additional compensation, by directors, officers or employees of the
Company by mail, telephone, facsimile, telegram, in person or otherwise.
Under Connecticut law and the Company's Bylaws, a majority of the
number of shares of stock issued and outstanding and entitled to vote at
the annual meeting must be present in person or by proxy to constitute a
quorum for the transaction of business.
VOTE REQUIRED
Under Connecticut law, directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at
which a quorum is present.
The Company's Bylaws provide that the Bylaws may be altered,
amended or repealed, or new bylaws may be adopted, at any meeting of the
shareholders, provided that such action by shareholders be by the
affirmative vote of at least two-thirds of the voting power of the shares
of the Company entitled to vote thereon. Consequently, approval of the
Rights Plan Bylaw Proposal and the Bylaw Repeal Proposal would require the
affirmative vote of at least two-thirds of the voting power of the shares
of the Company entitled to vote thereon. ISP has instituted litigation in
the United States District Court for the District of Connecticut seeking,
among other things, to have the two-thirds supermajority voting provision
contained in the Bylaws held ineffective. Dexter believes that the
supermajority provision was properly adopted and is effective. Accordingly,
Dexter will require that approval of the Rights Plan Bylaw Proposal and the
Bylaw Repeal Proposal be approved by the affirmative vote of at least two-
thirds of the voting power of the shares of the Company entitled to vote
thereon. Should the Connecticut District Court rule in favor of ISP, each
of the Rights Plan Bylaw Proposal and the Bylaw Repeal Proposal will be
approved if the votes cast in favor of the proposal exceed the votes cast
against the proposal at the annual meeting. See "Certain Litigation."
ISP's Rights Plan Amendment Proposal will be approved if the votes
cast for the proposal exceed the votes cast against proposal at the annual
meeting.
METHOD FOR COUNTING VOTES
Votes will be counted and certified by independent inspectors of
election. Under the rules of the Securities and Exchange Commission (the
"SEC"), boxes and a designated blank space are provided on the proxy card
for you to mark if you wish to vote "for" or "against" or "abstain" from
voting on one or more or the proposals, or to withhold authority for one or
more of the nominees for director. Connecticut law and the Company's Bylaws
require the presence of a quorum at the annual meeting. Abstentions are
counted in determining whether a quorum is present but are not counted in
determining the votes cast for or against any proposal. Votes withheld in
connection with the election of one or more nominees for director will not
be counted as votes cast for those individuals. Broker non-votes, which
occur when brokers do not receive voting instructions from their customers
on non-routine matters and, consequently, have no discretion to vote on
those matters, are not counted as votes cast for any proposal. However,
because, as described above, approval of the Rights Plan Bylaw Proposal and
the Bylaw Repeal Proposal would require the affirmative vote of at least
two-thirds of the voting power of the shares of the Company entitled to
vote thereon, abstentions and broker non-votes will have the effect of a
vote against such proposals. See "Certain Litigation."
BACKGROUND OF ISP'S PROXY CONTEST
In 1998 the Company's management undertook an extensive strategic
review of all of the Company's businesses and operations. As part of this
review process, the management reviewed its investment in its majority
owned subsidiary, Life Technologies Inc. Life Technologies develops,
manufactures and supplies more than 3,000 products used in life sciences,
research and commercial manufacture of genetically engineered products. The
Company's management concluded that it was important to acquire the
remaining minority equity interest in Life Technologies that it did not own
as part of its long-term strategy to focus its efforts and resources on
businesses with strong market positions, like that of Life Technologies.
Since mid-1998, Dexter has been pursuing its shareholder value growth
strategy by focusing on life sciences. In particular, it has been
attempting to acquire 100% of Life Technologies. Virtually
contemporaneously with Dexter's publicly announced efforts to maximize
value for all Dexter shareholders by pursuit of its life sciences strategy,
ISP and its Chairman of the Board, Samuel J. Heyman, have been attempting
to frustrate the Company's efforts. Specifically, as Dexter was pursuing
its public tender offer at $39.125 per share in cash for all outstanding
Life Technologies shares, ISP was engaged in an open-market purchase
program resulting in ISP's acquiring 15% of the Life Technologies shares.
On November 20, 1998, ISP filed a Schedule 13D with the SEC revealing its
ownership in Life Technologies and stating that it acquired its shares
because the Life Technologies shares were "substantially undervalued."
ISP's actions eliminated Dexter's ability to realize the cost savings and
cash flow benefits that could be achieved from owning 100% of Life
Technologies as well as the ability to secure its platform for growth in
life sciences.
Promptly thereafter, ISP embarked on an open-market purchase
program in the Dexter shares. ISP first announced its ownership position in
Dexter in a Schedule 13D filed with the SEC on April 22, 1999, once again
stating that the purpose of its purchases was that the shares were
"undervalued" and that it had acquired the shares "for investment purposes
only." ISP continued to acquire (and on a number of occasions, sell) Dexter
shares through September 1999, until its publicly reported ownership
reached 9.98% of the Company's outstanding shares.
At the request of Mr. Heyman, representatives of Dexter met with
representatives of ISP on December 3, 1999. Dexter had requested an agenda
for the meeting, but Mr. Heyman declined to provide one. At the meeting the
ISP representatives expressed their belief that Life Technologies, with its
higher growth and higher margins, could better fulfill its potential as an
independent entity or in combination with another similarly strategically
situated company, rather than in combination with Dexter. The ISP
representatives argued that there are no apparent synergies between Dexter
and Life Technologies that would justify Dexter's continued control of Life
Technologies and, as an independent company, Life Technologies would likely
have greater access to the capital markets and receive a higher level of
analyst coverage. They recommended that Dexter and Life Technologies be
separate corporate entities. Among other proposals, Mr. Heyman specifically
recommended that Dexter spin off Life Technologies to Dexter shareholders,
which he claimed could be accomplished tax-free.
Without giving Dexter an opportunity to explain what Dexter
believed were the serious fallacies in ISP's recommendations, including the
potentially enormous tax cost associated with such a separation, just 11
days later ISP proposed to acquire Dexter for $45.00 per share in cash,
subject to the execution of a mutually acceptable merger agreement. In Mr.
Heyman's letter of December 14, 1999, to Mr. K. Grahame Walker, Chairman of
the Board and Chief Executive Officer of Dexter, Mr. Heyman stated:
"In addition, if you would provide us additional information
on Dexter Corporation and Life Technologies that justifies
an increased price we would be willing to pay more. We would
be willing to enter into a confidentiality agreement in
connection therewith (but not any such agreement that would
limit our rights as shareholders)."
It was not until ISP filed its December 14, 1999 letter in an
amendment to its Schedule 13D that ISP revealed to the Dexter shareholders
that it had changed its "investment only" purpose for acquiring its Dexter
investment.
Following a careful consideration of ISP's $45.00 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 and rejected it.
In an effort to pursue aggressively its strategic plan to maximize
value for all Dexter shareholders by focusing on life sciences through the
acquisition of 100% of Life Technologies, on January 20, 2000 Dexter
announced that it had sent a letter to Life Technologies proposing to
acquire all of the remaining outstanding Life Technologies shares that it
did not own in a merger transaction at $49.00 per share in cash. Since
Dexter believed that under applicable Delaware law, their proposed merger
would require the affirmative vote of 2/3 of the outstanding Life
Technologies shares held by stockholders other than Dexter and its
affiliates and associates, Dexter's proposal was conditioned upon receipt
of such approval. In addition, Dexter's letter indicated that before a
definitive agreement could be signed and before the Life Technologies Board
of Directors responded to the proposal, Dexter needed appropriate
indications of support for the merger from ISP and the other "group"
members who filed the Schedule 13D concerning the Life Technology shares.
Rather than allow Dexter to pursue its growth strategy by
supporting Dexter's $49.00 per share merger proposal with Life
Technologies, Mr. Heyman once again embarked on a program Dexter believes
is designed to frustrate the Dexter Board's longstanding and considered
strategy to maximize value for all Dexter shareholders by becoming a
preeminent life sciences supplier by commencing his proxy contest to elect
his hand-picked directors and seek approval of the other ISP proposals. In
addition to diverting Dexter management's attention from the Company's
business and operations with his proxy contest, Mr. Heyman also commenced
litigation in support of his proxy fight in the United States District
Court in the District of Connecticut. See "Certain Litigation."
Following a special meeting of the Dexter Board of Directors on
February 8, 2000, Dexter took the following actions:
o Dexter offered both ISP and Chase Securities Inc., ISP's
financial advisor, the opportunity to review confidential
business and financial information for the purpose of
determining whether they would be willing to increase their
$45.00 per share proposal to acquire Dexter.
o Dexter amended its rights plan to address ISP's concerns
evidenced by its shareholder proposals in a manner that
Dexter believes to be fair, even-handed and in the best
interests of its shareholders.
o Dexter requested that ISP make whatever financing commitment
letters that it has received public so that shareholders
could evaluate the terms, conditions and sufficiency of
ISP's financing arrangements for its $45.00 per share cash
proposal.
o Dexter offered a meeting among its tax advisors and those of
ISP for the purpose of understanding how ISP would separate
Life Technologies on a tax-free basis.
On Wednesday, February 23, 2000, ISP entered into a confidentiality
agreement and since that date has spent several days together with its
financial and legal advisors reviewing confidential information concerning
Dexter and its businesses and operations.
Following a meeting of the Dexter Board of Directors, on Monday,
February 28, 2000, Dexter issued the following press release:
Contact:
Kathleen Burdett
John Thompson
Dexter Corporation
(860) 292-7675
or
Lawrence A. Rand
Michael Freitag
Kekst and Company
(212) 521-4800
FOR IMMEDIATE RELEASE
DEXTER BOARD AUTHORIZES EXPLORATION OF STRATEGIC ALTERNATIVES
WINDSOR LOCKS, CONNECTICUT, February 28, 2000 -- Dexter Corporation
(NYSE:DEX) said today its Board of Directors has authorized the
Company's management and its financial advisor, Lehman Brothers, to
explore all strategic alternatives that may be available to Dexter
to maximize shareholder value in the short term.
K. Grahame Walker, Chairman and Chief Executive Officer of Dexter,
said: "Based on the current circumstances that our company is
facing, our Board has decided to institute a process in which we
will survey all of the Company's available options. Several
specific factors contributed to the Board's decision, including the
acquisition by International Specialty Products, Inc. (NYSE:ISP) of
a blocking position in Life Technologies, Inc. (OTC Bulletin
Board:LTEK) that made it impossible for Dexter to complete our plan
to achieve 100 percent ownership of LTI as a platform for
implementation of Dexter's life sciences growth strategy."
"Rather than negotiate a reasonable exit from LTI," Mr. Walker
continued, "ISP instead launched a proxy contest for control of
Dexter's Board with an unfinanced and inadequate $45 negotiation
proposal. The Board strongly believes and has confidence in the
long-term prospects for Dexter's growth strategy. However, ISP's
self-serving insistence on a debate confined to a short-term focus
coupled with ISP's ability to prevent Dexter from effectively
implementing its growth strategy made it necessary to explore all
other options at this time."
Dexter emphasized its Board has made no decision to sell the
Company at this time, but said every available alternative --
including a merger or sale of the company, a financial
restructuring, or a spin-off or sale of one or more of the
Company's businesses -- would be examined and considered. In
pursuit of that objective, third parties will be invited to sign
confidentiality agreements, review comprehensive data room
materials and receive Dexter management presentations. The Company
has entered into a confidentiality agreement with ISP, and, as of
February 24, three representatives of ISP and 10 representatives of
ISP's financial advisor, Chase Securities, began to visit Dexter's
data room. There can be no assurance that these discussions will
result in a transaction or other action by Dexter.
Any statements in this press release that are not historical facts
are "forward-looking statements" as that term is defined under the
Federal Securities Laws. Forward-looking statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from those stated in such statements.
These and other risks are detailed in the Company's filings with
the Securities and Exchange Commission.
Dexter Corporation is a global specialty materials supplier with
three operating segments: life sciences, nonwovens, and specialty
polymers. The company supplies specialty materials to the
aerospace, electronics, food packaging, and medical markets. . . ."
PROPOSAL (1) ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and Bylaws
provide for three classes of directorships, with the term of one class
expiring at each annual meeting of the shareholders. Pursuant to the
authority granted to the Board in Article VII of the Restated Certificate
of Incorporation, the Board of Directors has determined that effective on
the date of the 2000 annual meeting, the number of directors is fixed at
ten, three in the class whose term expires in 2001, four in the class whose
term expires in 2002 and three in the class whose term expires in 2003. At
the 2000 annual meeting, three directors are to be elected, all of whom
shall constitute the class whose term will expire in 2003. The Board of
Directors has nominated Messrs. Charles H. Curl, Peter G. Kelly and
Jean-Francois Saglio, who are currently serving as directors, having been
elected to serve for their present terms at the annual meeting in 1997.
Each nominee has consented to serve for the specified term. It is intended
that the shares represented by the accompanying proxy will be voted for the
election of Messrs. Curl, Kelly and Saglio, whose terms will expire in
2003.
If for any reason any nominee should be unavailable to serve as a
director at the time of the meeting, a contingency which the Board of
Directors does not expect, the shares represented by the accompanying proxy
may be voted for the election in his stead of such person as may be
determined by the holders of the proxy, unless the proxy withholds
authority to vote for all such nominees. Nominees shall be elected by a
plurality of the votes cast by the shares entitled to vote in the election
at a meeting at which a quorum is present in person or by proxy. An
abstention shall be included in the determination of the number of shares
present and voting, but shall not be counted as a vote in favor of the
election of a nominee. Broker non-votes shall not be counted for any
purpose.
ISP is seeking the election of a slate of three directors. The
Dexter Board of Directors believes that the election of ISP's nominees
would not be in your best interests. Your Board opposes the election of
ISP's nominees for several reasons. First, ISP stated in its proxy
statement:
"The overall purpose of our proposals is to elect nominees
to the Dexter Board who are committed to consider and pursue
[ISP's merger proposal], in which you would receive $45 per
share in cash, or a superior proposal."
Following careful consideration of ISP's $45.00 per share proposal
with its financial and legal advisors, the Board of Directors previously
concluded that ISP's proposal was inadequate and contrary to the best
interests of stockholders and rejected it. Consequently, the Board of
Directors believes that if ISP's nominees were to be elected, they would
pursue a course which is not in your best interests. As described more
fully below, we believe that Mr. Heyman and ISP have a multitude of
conflicts of interest -- for example, Mr. Heyman as Chairman of the Board
of ISP is legally bound to protect and promote the interests of ISP
shareholders, even if your interests as Dexter shareholders are directly
damaged, undermined or otherwise in conflict with those of ISP. We believe
Mr. Heyman as the controlling shareholder of ISP is driven by the same
conflicting interests. More fundamentally, ISP claims to be a prospective
purchaser of Dexter, which places Mr. Heyman and ISP's CEO Sunil Kumar
directly and irreconcilably in conflict with Dexter and certainly bars them
from participating in deliberations addressing the sale of Dexter. In
simplest terms, their interest is to help ISP to acquire Dexter for the
LOWEST PRICE POSSIBLE, not the HIGHEST PRICE as must be the objective of
the Dexter Board. Finally, Mr. Heyman as a director and as the controlling
shareholder of ISP and Mr. Kumar as a director and the CEO of ISP have a
different and even more irreconcilable conflict by reason of ISP's
ownership of both Dexter shares and Life Technologies shares. As a result,
in every decision involving the relative values of Dexter (excluding Life
Technologies) and Life Technologies, we believe ISP has a fundamentally
different and conflicting interest from that of the Dexter shareholders.
Your Board also believes that independence and experience are key
qualifications for a director of the Company, particularly in light of the
Company's previously announced decision to explore all strategic
alternatives that may be available to maximize shareholder value. The Board
believes that the ISP nominees lack these qualities. Two of ISP's nominees
- -- Samuel Heyman and Sunil Kumar -- are officers and directors of ISP. The
Board believes they would be committed first and foremost to furthering
ISP's interests by virtue of their affiliation with ISP rather than your
interests. According to ISP's proxy statement, ISP's other hand-picked
nominee, Phillip Peller, is a retired accountant who does not serve on the
board of directors of any public company and does not appear to have had
any business experience in the industries in which the Company operates
Additional information concerning the backgrounds and experience of ISP's
nominees is set forth in the proxy statement being furnished by ISP in
connection with its solicitation of proxies from the Company's shareholders
and, in accordance with Rule 14a-5(c) under the Exchange Act, such
information is incorporated herein by reference.
The nominees of the Board of Directors, on the other hand, are
independent, familiar with the Company and its businesses and operations
and are committed to exploring all strategic alternatives that may be
available to maximize shareholder value.
FOR THESE REASONS, YOUR BOARD OF DIRECTORS BELIEVES YOU WOULD BE
FAR BETTER SERVED BY ELECTING THE COMPANY'S NOMINEES -- CHARLES H. CURL,
PETER G. KELLY AND JEAN-FRANCOIS SAGLIO -- TO THE BOARD, AND YOU ARE URGED
TO VOTE FOR THESE INDIVIDUALS ON THE ENCLOSED WHITE PROXY CARD. THE BOARD
OF DIRECTORS URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY ISP.
The following information relates to the Company's nominees for
reelection at the 2000 annual meeting and to the other directors of the
Company. There are no family relationships among the directors and
executive officers of the Company. The Board of Directors held ten meetings
in 1999.
DEXTER NOMINEES FOR DIRECTORS
Terms Expiring in 2003:
CHARLES H. CURL Director since 1992
[PHOTO] Mr. Curl, age 51, has been president of Curl
&Associates (independent management consulting
firm) since prior to 1995.
Mr. Curl is on the Environmental & Safety
Committee.
PETER G. KELLY Director since 1994
[PHOTO] Mr. Kelly, age 62, has been senior principal of
Updike, Kelly & Spellacy, P.C., a Hartford,
Connecticut-based law firm, since 1999 and
chairman of the firm from prior to 1995 to 1999.
Mr. Kelly has been chairman of Meridian
Worldwide LLC (public affairs firm) and Meridian
Americas LLC (public affairs firm) since 1998.
From 1997 to 1998, Mr. Kelly was chairman of the
professional advisory council of C.I.S. Strategies,
Ltd. (division of The PBN Company), and since
1999 has been chairman of The PBN Company
(public relations firm). From prior to 1995 to 1996,
Mr. Kelly was chairman of Black, Manafort, Stone
& Kelly, a subsidiary of Burson-Marsteller
(worldwide public relations firm). Mr. Kelly was
also the managing director of Black, Kelly, Scruggs
& Healy, a subsidiary of Burson-Marsteller, from
1996 to 1997. Mr. Kelly is a director of Phillips
Screw Corp. (manufacturer and licensor) and a
director of Life Technologies, Inc. (life science/
biotechnology products), an affiliate of the
Company.
Mr. Kelly is on the Audit Committee and the
Environmental & Safety Committee.
JEAN-FRANCOIS SAGLIO Director since 1991
[PHOTO] Mr. Saglio, age 63, has been president of ERSO (a
consulting company in France) since 1994. From
prior to 1994 to 1995, he was senior vice president
of CEA Industrie (industrial and financial holding
company of the French Atomic Energy
Commission). Mr. Saglio is a former member of
the cabinet of M. Pompidou, President of France,
and also served as director of the French
Administration of Environment Protection. Mr.
Saglio is a director of EEM (a French investment
fund). Mr. Saglio is on the Environmental &
Safety Committee.
DIRECTORS CONTINUING IN
OFFICE
Term expiring in 2002:
HENRIETTA HOLSMAN FORE Director since 1996
Mrs. Fore, age 51, has been chairman and chief
executive officer of Holsman International
(investment and management company) and
chairman and president of Stockton Products,
[PHOTO] formerly Stockton Wire Products (manufacturer of
wire and steel building materials and additives)
since prior to 1995. She is a director of HSB
Group, Inc. (equipment insurance and engineering
services).
Mrs. Fore is on the Compensation & Organization
Committee.
BERNARD M. FOX Director since 1990
Mr. Fox, age 57, has been a senior advisor to
Dignitas Partners, a private equity capital general
partnership, since 1999 and has been an
independent consultant to corporations and clients
on strategic, energy and marketing issues since
September 1997. Mr. Fox had been President and
[PHOTO] chief executive officer of Northeast Utilities (public
utility holding company) since prior to 1995 and
had been chairman since August 1995, until his
retirement in September 1997. Mr. Fox is on the
Advisory Board of Cheng Power Systems, Inc.
(advanced Electrical generation technology).
Mr. Fox is Chairman of the Audit Committee and is
on the Compensation & Organization Committee.
K. GRAHAME WALKER Director since 1989
Mr. Walker, age 62, has been chairman and chief
executive officer of the Company since prior to
1995. Mr. Walker was President of the Company
[PHOTO] since prior to 1995 until September 1999. He is
chairman of the board of directors of Life
Technologies, Inc.
GEORGE M. WHITESIDES Director since 1985
Dr. Whitesides, age 60, has been a professor of
chemistry at Harvard University since prior to
1995. Dr. Whitesides is a director of Advanced
Magnetics, Inc. (medical diagnostic products),
Hyperion Catalysis, Inc.(medical products) and is a
[PHOTO] director of Life Technologies, Inc.
Dr. Whitesides is Chairman of the Environmental
& Safety Committee and is on the Audit
Committee.
Term Expiring in 2001:
ROBERT M. FUREK Director since 1990
Mr. Furek, age 57, has been chairman of the State
Board of Trustees for the Hartford, Connecticut
public school system since June 1997. Mr. Furek is
also a partner in Resolute Partners, a private equity
investment firm. Mr. Furek served as president and
chief executive officer of Heublein, Inc. (wine and
[PHOTO] spirits producer) from prior to 1995 until his
retirement in December 1996. Mr. Furek is a
director of Massachusetts Mutual Life Insurance
Company (insurance) and Ikon Office Solutions,
Inc. (business communication products and
services).
Mr. Furek is Chairman of the Compensation &
Organization Committee and is on the Audit
Committee.
MARTHA CLARK GOSS Director since 1992
[PHOTO] Mrs. Goss, age 50, has been the chief financial
officer of The Capital Markets Company (private
investment consulting and software solutions firm)
since October 1999. Mrs. Goss was vice president
and chief financial officer of Booz, Allen &
Hamilton Inc. from July 1995 to October 1999.
From prior to 1995 to July 1995, Mrs. Goss was a
senior vice president of The Prudential Insurance
Company of America. From prior to 1995 to July
1995, Mrs. Goss was the enterprise control officer
of The Prudential Insurance Company of America.
Mrs. Goss is a director of Foster Wheeler
Corporation (engineering, construction and
manufacturing).
Mrs. Goss is on the Compensation & Organization
Committee and the Audit Committee.
EDGAR G. HOTARD Director since 1996
Mr. Hotard, age 56, has been an independent
consultant to corporations since January 1999. Mr.
Hotard served as chief operating officer of Praxair,
Inc. (industrial gases supplier) from December
1997 to December 1998 and as President of Praxair
[PHOTO] since prior to 1995 to December 1998. Mr. Hotard
is a director of Global Industries, Ltd. (offshore oil
and gas engineering and construction) and Iwatani
Industrial Gases Corp. (industrial gases supplier in
Japan).
Mr. Hotard is on the Compensation & Organization
Committee and the Environmental & Safety
Committee.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has appointed a Compensation & Organization
Committee, an Audit Committee, and an Environmental & Safety Committee.
The Compensation & Organization Committee is composed of the
following five members, none of whom is an officer or employee of the
Company or its subsidiaries: Robert M. Furek, Chairman, Henrietta Holsman
Fore, Bernard M. Fox, Martha Clark Goss, and Edgar G. Hotard. This
Committee monitors the Company's compensation policy, with particular
emphasis on officer remuneration matters. It also serves as a nominating
committee for the Board of Directors, oversees organizational matters for
the Company and the Board of Directors, and administers the granting of
restricted stock and stock options under the 1999 Plan. Six meetings of the
Compensation & Organization Committee were held in 1999, and five meetings
have been scheduled for 2000.
The Audit Committee is composed of the following five members, none
of whom is an officer or employee of the Company or its subsidiaries:
Bernard M. Fox, Chairman, Robert M. Furek, Martha Clark Goss, Peter G.
Kelly, and George M. Whitesides. The Audit Committee's meetings include, as
a matter of course, private sessions with the Company's independent
certified public accountants and internal auditors. The Audit Committee
recommends the selection of independent accountants to the Board of
Directors and is concerned with the scope and quality of audit and
quarterly reviews performed by the independent accountants as well as other
services provided by them to the Company. The Audit Committee monitors the
Company's Code of Conduct, the integrity of officers, accounting policies,
internal controls and the quality of accounting and published financial
statements. Three meetings of the Audit Committee were held in 1999, and
three meetings have been scheduled for 2000.
The Environmental & Safety Committee is composed of the following
five members: George M. Whitesides, Chairman, Charles H. Curl, Edgar G.
Hotard, Peter G. Kelly, and Jean-Francois Saglio. The Environmental &
Safety Committee monitors and evaluates the Company's environmental and
safety policies and practices and makes recommendations in respect thereof
to the Board of Directors. Three meetings of the Environmental & Safety
Committee were held in 1999, and three meetings have been scheduled for
2000.
During 1999, each of the directors attended at least 75% of the
aggregate number of meetings of the Board of Directors and committees of
the Board of Directors.
COMPENSATION OF DIRECTORS
In 1999, each director of the Company who was not an officer of the
Company or a subsidiary received (a) a fee of $1,000 for each meeting of
the Board (with the exception of meetings not held at the Company's
headquarters, for which a fee of $2,000 was paid), and (b) a fee of $1,000
for each meeting of a permanent committee of the Board. For 1999, the
annual retainers for serving on the Board of Directors of the Company and
for serving as Chairman of a permanent committee were $20,000 and $4,000,
respectively. Under the 1996 Non- Employee Directors' Stock Plan, as
amended, each director receives 50% of his or her annual retainer in the
form of common stock and may also elect to receive all or a portion of the
remainder of his or her retainer in the form of common stock.
Pursuant to the 1994 Stock Plan for Outside Directors, as amended,
on December 31, 1999, each outside director was granted 300 shares of the
Company's common stock. As of December 31, 1999, the value of 300 shares of
the Company's common stock was $11,925.
CERTAIN TRANSACTIONS AND LEGAL MATTERS
Section 16(a) of the Exchange Act, requires the Company's
directors, executive officers and holders of more than 10% of the Company's
common stock to file with the SEC and the New York Stock Exchange reports
of beneficial ownership and changes in beneficial ownership of the common
stock and other equity securities of the Company. These persons are
required by SEC rules to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of the copies of those
reports furnished to the Company, the Company believes that, during 1999,
its directors, executive officers and holders of more than 10% of the
Company's Common stock complied with all applicable Section 16(a) filing
requirements.
PROPOSAL (2) RATIFICATION OF SELECTION OF AUDITOR
The Board of Directors, upon recommendation of its Audit Committee,
has selected the firm of PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), independent certified public accountants, to
audit the accounts of the Company for the year 2000, and it is proposed
that the selection of such firm be ratified by the shareholders at the
annual meeting.
PricewaterhouseCoopers audited the accounts of the Company and
certain employee benefit plans for the year 1999. In connection with its
audit function, PricewaterhouseCoopers reviewed the Company's 1999
quarterly and annual reports to its shareholders and certain filings with
the SEC. In addition, during 1999, PricewaterhouseCoopers provided other
professional services to the Company.
The Audit Committee approved in advance the nature of the
professional services for which the Company retained the firm of
PricewaterhouseCoopers, considering the possible effect of such retention
on the independence of such firm, and has determined that the services
provided were within the scope of such approval. PricewaterhouseCoopers has
no interest, financial or otherwise, direct or indirect, in the Company
other than as independent accountants.
Representatives of PricewaterhouseCoopers are expected to be
present at the meeting and will have an opportunity to make a statement if
they desire to do so and will be available to respond to questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
THE PROPOSAL TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS AS AUDITOR
OF THE ACCOUNTS OF THE COMPANY FOR THE YEAR 2000.
PROPOSAL (3) RIGHTS PLAN BYLAW PROPOSAL
Summary of ISP Proposal
ISP is proposing that shareholders approve a resolution to amend
the Company's Bylaws to require the Board of Directors to make certain
amendments to the Rights Agreement, dated as of August 23, 1996, between
the Company and ChaseMellon Shareholder Services, L.L.C., as rights agent,
as amended (the "Rights Agreement"), or redeem the rights issued under the
agreement if shareholders adopt by majority vote a special resolution
requiring the Board to do so. In addition, the proposed Bylaw amendment
would require the Board of Directors to obtain shareholder approval prior
to adopting any new shareholder rights plan, rights agreement or any other
form of "poison pill" which is designed to make or has the effect of making
acquisitions of large holdings of the Company's shares of stock more
difficult or expensive. The complete text of ISP's resolution implementing
the Rights Plan Bylaw Proposal is attached to this Proxy Statement as Annex
I.
Your Company's Response
The Board of Directors believes that adoption of the Bylaw
amendment relating to the Rights Agreement proposed by ISP would not be in
the best interests of the Company or its shareholders, and would, in fact,
expose shareholders to coercive tender offers and undervalued takeover bids
without adequate protection.
As ISP correctly stated in its proxy statement:
"Poison pills are considered extremely potent corporate
takeover defense mechanisms, and Dexter's existing Rights Agreement
may, in some respects, be aligned with shareholder interests.
Proponents of poison pills assert that rights plans, such as the
Rights Agreement, enable the board to respond in an orderly manner
to unsolicited bids by providing sufficient time to carefully
evaluate the fairness of an unsolicited offer and the credibility
of the bidder, and thereby giving the board the flexibility to
explore alternative strategies for maximizing shareholder value. It
has been argued that poison pills deter abusive takeover tactics.
PROPONENTS OF POISON PILLS ALSO ASSERT THAT RIGHTS PLANS PROVIDED
INCENTIVES FOR A POTENTIAL BIDDER TO NEGOTIATE IN GOOD FAITH WITH
THE BOARD, AND THAT SUCH NEGOTIATIONS ARE LIKELY TO MAXIMIZE VALUE
FOR SHAREHOLDERS BY SOLICITING THE HIGHEST POSSIBLE PRICE FROM THE
BIDDER." (Emphasis added.)
It is precisely for these reasons that Dexter adopted a rights
agreement and has caused it to remain in place. The Company believes that
the current Board is in the best position to evaluate and negotiate on
behalf of all shareholders any potential offer and to develop alternatives
to maximize shareholder value. The Rights Agreement is designed to
encourage prospective acquirors to negotiate directly with the Board of
Directors, and in the Board's view, the Rights Agreement provides the Board
necessary flexibility in such negotiations. The Rights Agreement protects
shareholders against abusive takeover tactics that do not treat all
shareholders fairly and equally, such as partial and two-tiered tender
offers and creeping stock accumulation programs.
Notwithstanding all the positive attributes that the Company's
rights plan afforded the Dexter shareholders prior to its amendment on
February 8, 2000, the Board of Directors decided to address in what it
believes to be a fair and constructive manner the concerns raised by Mr.
Heyman about the applicability of the Company's Rights Agreement to certain
offers or transactions. ISP's proxy statement states:
"Our proposed Bylaw amendment does not nullify the Rights
Agreement. If our [Rights Plan] Bylaw Proposal is adopted,
the Rights Agreement will remain in effect to deter
unsolicited, undervalued proposals. In order to make the
Rights inapplicable to a proposed offer or transaction,
either the Dexter Board must act by majority vote, or the
shareholders must act."
The shareholder action that Mr. Heyman is suggesting is the Bylaw amendment
set forth in Proposal (4) which requires the Board to amend the Rights
Agreement to make it inapplicable to any offer for all outstanding Dexter
shares at a price of at least $45 per share in cash. UNFORTUNATELY, WE
BELIEVE THAT THE ISP PROPOSALS ARE DESIGNED TO ENSURE THAT MR. HEYMAN
SUCCEEDS IN ACQUIRING YOUR COMPANY AT A PRICE THAT YOUR BOARD HAS
PREVIOUSLY DETERMINED TO BE INADEQUATE. We do not believe that the ISP
Proposals are in your best interests.
In order to ensure that you receive the maximum value for your
Dexter shares, the Board authorized, among other things, an amendment to
the Company's Rights Agreement causing the rights to be inapplicable to any
tender or exchange offer that:
o is for all outstanding Dexter shares,
o is fully financed,
o is, in the Board's reasonable judgment, substantially
unconditional,
o remains available to Dexter shareholders for 60 days, and
o assuming all of the foregoing conditions are met,
Dexter's investment banker opines is at
a price that is fair to the Dexter shareholders.
DEXTER BELIEVES THAT THIS ACTION IS IN YOUR BEST INTERESTS AND
APPROPRIATELY ADDRESSES ANY CONCERNS THAT ISP MAY HAVE REGARDING YOUR BOARD
NOT ACTING IN YOUR BEST INTERESTS WITH RESPECT TO AN ACQUISITION PROPOSAL
THAT MAXIMIZES SHAREHOLDER VALUE. We believe that any objections that Mr.
Heyman has to this action are nothing more than self-serving complaints
because ISP may not be able to acquire your company on terms and conditions
that Mr. Heyman sets and that he believes are best for him and the
shareholders of ISP. We believe Mr. Heyman has an inherent conflict of
interest, being a shareholder in both Dexter and Life Technologies and
being the Chairman of the Board of ISP. By virtue of ISP's larger
percentage ownership interest in Life Technologies than in Dexter, we
believe Mr. Heyman's primary interest is in maximizing the value of his
Life Technologies investment rather than maximizing the value of the Dexter
shares -- particularly when you consider the conflict Mr. Heyman has as
Chairman of ISP and his fiduciary obligation to act in the best of
interests of the ISP shareholders. We cannot understand how Mr. Heyman and
ISP can act in your best interests with all the other constituencies they
have to serve.
You should also be aware that Dexter believes that the Rights Plan
Bylaw Proposal is invalid under Connecticut law. It is Dexter's position
that ISP's Rights Plan Bylaw Proposal is an impermissible attempt to
circumscribe the authority of Dexter's Board to determine the terms and
conditions of the Company's Rights Agreement. Under the relevant provision
of the Connecticut Business Corporation Act, Section 33-735, the
fundamental power to run a corporation rests with its board of directors,
and the only permissible limitations on this authority are provisions that
are set forth in the Company's certificate of incorporation. Despite this
clear mandate, ISP is attempting to impose such a restriction on the Dexter
Board through an impermissible bylaw amendment. Moreover, the Connecticut
Business Corporation Act, Section 33-675, grants the Board exclusive
statutory authority to issue, and determine the details regarding, the
Company's Rights Agreement. For these reasons, Dexter does not plan to
implement the actions contemplated by the Rights Plan Bylaw Proposal,
whatever the outcome of the vote is. However, in order to give shareholders
the opportunity to moot the issue by voting this proposal down, Dexter will
present it to the annual meeting.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST
RIGHTS PLAN BYLAW PROPOSAL PROPOSAL (3).
PROPOSAL (4) RIGHTS PLAN AMENDMENT PROPOSAL
Summary of ISP Proposal
In connection with the Rights Plan Bylaw Proposal, ISP is proposing
the adoption of a special shareholder resolution. The resolution will
require the Board to amend the Rights Agreement to make it inapplicable to
any offer for all outstanding shares of Common Stock at a price of at least
$45.00 per share in cash. The complete text of ISP's resolution
implementing the Rights Plan Amendment Proposal is attached to this Proxy
Statement as Annex II.
Your Company's Response
As discussed above under "Proposal (3) Rights Plan Bylaw
Proposal--Your Company's Response," we believe that the ISP Proposals,
including the Rights Plan Amendment Proposal, are designed to ensure that
ISP succeeds in acquiring your Company at a price that your Board
previously determined to be inadequate. The Rights Plan Amendment Proposal
is designed to cause the Company to amend the Rights Agreement to make the
rights inapplicable to any offer for all of the Company's outstanding
shares for consideration of at least $45.00 in cash--a price that your
Board has previously determined to be inadequate. Moreover, as discussed
above, the Company amended the Rights Agreement to address the concerns
raised by ISP about the applicability of the Rights Agreement to certain
offers or transactions in what the Board believes is a fair and
constructive manner.
You should also be aware that Dexter believes that the Rights Plan
Amendment Proposal is invalid under Connecticut law. It is Dexter's
position that ISP's Rights Plan Amendment Proposal is an impermissible
attempt to circumscribe the authority of Dexter's Board to determine the
terms and conditions of the Company's Rights Agreement. Under the relevant
provision of the Connecticut Business Corporation Act, Section 33-735, the
fundamental power to run a corporation rests with its board of directors,
and the only permissible limitations on this authority are provisions that
are set forth in the Company's certificate of incorporation. Despite this
clear mandate, ISP is attempting to impose such a restriction on the Dexter
Board through an impermissible bylaw amendment and resolution. Moreover,
the Connecticut Business Corporation Act, Section 33-675, grants the Board
exclusive statutory authority to issue, and determine the details
regarding, the Company's Rights Agreement. For these reasons, Dexter does
not plan to implement the actions contemplated by the Rights Plan Amendment
Proposal, whatever the outcome of the vote is. However, in order to give
shareholders the opportunity to moot the issue by voting this proposal
down, Dexter will present it to the annual meeting.
FOR THESE REASONS THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE AGAINST THE RIGHTS PLAN AMENDMENT PROPOSAL (PROPOSAL 4).
PROPOSAL (5) BYLAW REPEAL PROPOSAL
Summary of ISP Proposal
ISP is proposing to repeal any Bylaw amendments adopted by the
Board between February 26, 1999 and the date of the 2000 annual meeting.
The complete text of ISP's resolution implementing the Bylaw Repeal
Proposal is attached to this Proxy Statement as Annex III.
Your Company's Response
The Company has neither adopted nor amended or repealed any
provisions of its Bylaws since February 26, 1999. In addition, the Company
has not taken any other action during this time period with respect to the
Bylaws. Moreover, the Company does not intend to take any action in
connection with its Bylaws that would frustrate any third party proposal
that the Board believes will maximize the value of your shares.
Accordingly, this proposal is illusory and any vote cast for this proposal
will be of no effect.
FOR THESE REASONS THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE AGAINST THE BYLAW REPEAL PROPOSAL (PROPOSAL 5).
COMPENSATION OF EXECUTIVE OFFICERS
The following table contains information concerning compensation
paid or to be paid to the chief executive officer ("CEO") and the other
four most highly compensated executive officers of the Company for services
rendered to the Company and its subsidiaries during the past three
completed fiscal years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
------------------------
Annual Compensation Awards
------------------- ------
Name and Other Annual(1) Restricted Stock Options All Other
Principal Position Year Salary($) Bonus($) Compensation($) Awards($)(2) (#) Compensation($)(3)
- ------------------ ---- --------- -------- --------------- ---------------- ------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
K. Grahame Walker 1999 692,500 539,630 10,010 363,600 55,000 192,171
Chairman, President and 1998 660,000 164,835 9,239 384,100 64,000 130,894
Chief Executive Officer 1997 615,563 461,670 9,025 373,438 55,000 168,321
Kathleen Burdett 1999 275,500 183,330 762 170,438 17,500 54,411
Vice President and 1998 261,250 57,420 692 183,700 16,000 46,535
Chief Financial Officer 1997 247,000 156,730 789 164,313 10,000 63,057
David G. Gordon 1999 256,333 124,537 1,051 132,563 15,000 46,645
President and Chief 1998 223,750 39,774 580 125,250 15,000 30,739
Operating Officer 1997 211,000 83,084 44,271 119,500 10,000 45,760
John D. Thompson 1999 219,750 143,840 927 124,988 15,000 43,191
Senior Vice President, 1998 211,000 44,270 0 125,250 15,000 36,588
Strategic and Business 1997 203,125 122,050 1,020 119,500 6,000 47,531
Development
Bruce H. Beatt 1999 220,250 114,420 929 124,988 9,000 40,195
Vice President, General 1998 209,875 36,690 857 125,250 8,000 32,424
Counsel and Secretary 1997 201,625 106,730 608 119,500 6,000 42,399
</TABLE>
- ----------
(1) The other annual compensation reported above includes the amounts
paid by the Company to the executive officers for reimbursement
of income taxes incurred by the executive officers in connection
with the term life insurance premiums paid by the Company on the
executive officers' behalf. For David G. Gordon, the other annual
compensation reported above also includes relocation expenses of
$43,356 in 1997.
(2) The restricted stock awards reported above, which were made
pursuant to the 1999 Plan in 1999, show the dollar value of such
awards on the date of grant. As of December 31, 1999, the
aggregate number and value of restricted shares held by the named
executive officers are as follows: K. Grahame Walker -- 51,434
shares, $2,044,502; Kathleen Burdett -- 21,142 shares, $840,395;
David G. Gordon -- 11,460 shares, $455,535; John D. Thompson -
14,796 shares, $588,141 and Bruce H. Beatt -- 13,972 Shares,
$555,387. Unless and until the restricted shares are forfeited,
dividends will be paid on such shares. Additional information
regarding the restricted shares issued to the named executive
officers is set forth below under the heading "Long Term
Incentive Plan -- Awards in Last Fiscal Year."
(3) The other compensation reported above for all executive officers
is composed of five principal components: (a) the contribution
payable under the Dexter ESPRIT Plan, (b) the benefit payable
under the Amended and Restated Retirement Equalization Plan, and
(c) term life insurance premiums. The respective amounts for each
of the named executive officers are as follows: K. Grahame Walker
-- $19,378, $160,820 and $11,966; Kathleen Burdett -- $19,232,
$34,319 and $860; David G. Gordon -- $19,286, $26,103 and $1,256;
John D. Thompson -- $19,259, $22,824 and $1,108; and Bruce H.
Beatt -- $19,151, $19,934 and $1,110.
OPTION GRANTS IN LAST FISCAL YEAR
The following table discloses information concerning
individual grants of stock options made during the last completed fiscal
year to the executive officers named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Potential Realizable value
at Assumed
Annual Rates of Stock
Price Appreciation
For Option Term
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration 5% 10%
Name Granted (#) Fiscal Year ($/Share) Date ($)(a) ($)(a)
---- ----------- ------------ --------- ---------- ------ ------
<S> <C> <C> <C> <C> <C>
K. Grahame Walker 18,333 7.7% $37.7188 April 22, 2005 $235,176 $533,533
18,333 7.7% $37.7188 April 22, 2006 $281,509 $656,037
18,334 7.7% $37.7188 April 22, 2007 $330,178 $790,833
Kathleen Burdett 5,833 2.4% $37.7188 April 22, 2005 $ 74,826 $169,754
5,833 2.4% $37.7188 April 22, 2006 $ 89,586 $208,731
5,834 2.4% $37.7188 April 22, 2007 $105,065 $251,648
David G. Gordon 5,000 2.1% $37.7188 April 22, 2005 $ 64,140 $145,512
5,000 2.1% $37.7188 April 22. 2006 $ 76,777 $178,922
5,000 2.1% $37.7188 April 22, 2007 $ 90,045 $215,674
John D. Thompson 3,000 1.3% $37.7188 April 22, 2005 $ 38,484 $ 87,307
3,000 1.3% $37.7188 April 22. 2006 $ 46,066 $107,353
3,000 1.3% $37.7188 April 22, 2007 $ 54,027 $129,404
Bruce H. Beatt 3,000 1.3% $37.7188 April 22, 2005 $ 38,484 $ 87,307
3,000 1.3% $37.7188 April 22. 2006 $ 46,066 $107,353
3,000 1.3% $37.7188 April 22, 2007 $ 54,027 $129,404
</TABLE>
- ----------
(a) The five percent and ten percent rates of appreciation were set
by the Securities and Exchange Commission and are not intended to
forecast future appreciation of the Company's common stock.
The option grants described in the foregoing table were made pursuant to
the 1999 Plan. On April 22, 1999, three grants of stock options were made
to each of the above-named executive officers. The first grant will vest on
April 22, 2000, the second grant will vest on April 22, 2001, and the third
grant will vest on April 22, 2002. All grants become exercisable without
regard to any performance-based conditions upon vesting. All options expire
five years after vesting. The exercise price for all options granted in
1999 under the 1999 Plan is the fair market value per share of the
Company's common stock on the date of grant and is not subject to change.
The 1999 Plan permits the grant of stock appreciation rights in tandem with
options or as freestanding awards.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The table set forth below discloses certain information
concerning the exercise of stock options during the last completed fiscal
year by the executive officers named in the Summary Compensation Table as
well as certain information concerning the number and value of unexercised
options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options and SARs Options and SARs
Shares at FY-End(#) at FY-End($)(a)
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized Unexercisable Unexercisable
---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
K. Grahame Walker.... 21,666 $ 196,869 101,500 / 116,001 $1,003,634 / $291,618
Kathleen Burdett..... 4,000 $ 16,167 19,333 / 31,501 $174,212 / 68,261
David G. Gordon...... 414 $ 4,428 29,586 / 28,334 $300,610/ $63,183
John D. Thompson..... 2,000 $ 10,062 13,000 / 16,334 $132,427/ $37,906
Bruce H. Beatt....... 2,666 $ 21,434 12,834 / 16,334 $130,041/ $37,906
</TABLE>
- ----------
(a) The value of unexercised options was determined using the closing
price of the Company's common stock as of December 31, 1999.
LONG TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
The table set forth below discloses certain information concerning
the grant of restricted shares of the Company's common stock during the
last completed fiscal year to the executive officers named in the Summary
Compensation Table. The grants were made pursuant to the 1999 Plan.
<TABLE>
<CAPTION>
LONG TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
NUMBER OF PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
SHARES, OR OTHER NON-STOCK PRICE-BASED PLANS
UNITS PERIOD UNTIL ------------------------------------------------------
OR OTHER MATURATION OR THRESHOLD(B) TARGET(C) MAXIMUM(C)
NAME RIGHTS PAYOUT(A) (# OF SHARES) (# OF SHARES) (# OF SHARES)
---- --------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
K. Grahame Walker 9,600 April 22, 2002 2,400 9,600 9,600
Kathleen Burdett 4,500 April 22, 2002 1,125 4,500 4,500
David G. Gordon 3,500 April 22, 2002 875 3,500 3,500
John D. Thompson 3,300 April 22, 2002 825 3,300 3,300
Bruce H. Beatt 3,300 April 22, 2002 825 3,300 3,300
- ----------
</TABLE>
(a) The restricted shares reported in this table were granted to the
named executive officers on April 22, 1999, and are subject to two
types of restrictions: (a) restrictions based on the achievement by
the Company of certain financial targets during the three year
period commencing on January 1, 1999 and ending on December 31,
2001 ("performance target restrictions"), and (b) restrictions
based on continuous employment by the Company over specified
periods of time ("time-lapse restrictions"). Seventy-five percent
of the restricted shares granted to each executive officer are
subject to both performance target restrictions and time-lapse
restrictions. The remaining twenty-five percent are subject solely
to time-lapse restrictions, which will lapse if the executive
officer remains in the Company's employment through the date set
forth in this column.
(b) If the Company fails to achieve at least 85% of the financial
targets established for the performance target restrictions, then
all the shares subject to performance target restrictions will be
forfeited. Thus, the "Threshold" amount shown in this column is the
number of restricted shares which are subject solely to time-lapse
restrictions.
(c) The "Target" amount reflects the number of shares for which the
performance restrictions will lapse if the Company achieves 100% of
the financial targets. No additional shares will be awarded if the
Company achieves more than 100% of the financial targets.
Accordingly, the "Maximum" amount is the same as the "Target"
amount.
PENSION PLANS
The Company maintains the Dexter Pension Plan for the employees of
certain business units. Employees are eligible to participate in the
pension plan after one year of service and after attaining age 21 and
become fully vested after five years of service. The annual benefit payable
upon normal retirement is equal to the sum of: (i) 1.5% of a participant's
average compensation times the participant's years of service prior to
January 1, 1976; (ii) 1% of the participant's average annual compensation
times the participant's years of service after December 31, 1975; and (iii)
.5% of the participant's average annual compensation in excess of Social
Security covered compensation times the participant's years of service
after December 31, 1975. For purposes of calculating the annual benefit, a
participant shall be credited with no more than 35 years of service. The
annual benefit payable upon normal retirement (age 65) is reduced or
increased, respectively, if the participant elects an early or postponed
retirement. Mr. Walker, while employed by a business unit of the Company,
participated in the pension plan. The estimated annual benefit payable
under the pension plan to Mr. Walker upon normal retirement is $47,018. Ms.
Burdett, Mr. Gordon, Mr. Thompson and Mr. Beatt are not participants in the
Company's pension plan.
John D. Thompson, while an employee of Life Technologies, Inc.
("LTI"), participated in the LTI Pension Plan. Mr. Thompson is fully vested
in the LTI Pension Plan. Under the LTI Pension Plan, normal retirement age
is 65, and actuarially reduced benefits are available to participants who
are age 55 and have ten years of service. In general, under the LTI Pension
Plan, the participant accrues an annual retirement benefit equal to 1% of
the participant's final five-year average LTI compensation times the number
of years of service credited after October 31, 1975. Eligible compensation
is defined as salary, hourly wages, bonus and commissions. The estimated
annual benefit payable to Mr. Thompson under the LTI Pension Plan upon
normal retirement is $23,201.
The Company has a supplemental retirement plan intended to provide
retirement benefits, supplementing those provided under other plans, to
certain executive officers and key employees. The executive officers named
in the Summary Compensation Table are participants in the supplemental
retirement plan. Upon retirement, participants are entitled to receive an
annual benefit equal to 55% of their average final compensation (the annual
average of (a) salaries, and (b) cash incentive payments, during the
highest 60 consecutive calendar months of a participant's last ten years as
a participant in the plan) less all other retirement benefits received
(including the full primary Social Security benefit and all retirement
benefits from other Company-related plans and plans of other employers).
Unless otherwise stipulated by the Board of Directors, such annual benefit
will be reduced ratably for employment of less than, and will not be
increased for employment of more than, 20 years of service with the
Company.
The following table shows the estimated annual benefit (prior to an
offset for other retirement benefits received) which participants are
entitled to receive under the supplemental retirement plan, on a straight
life annuity basis assuming retirement at age 65 in the indicated
compensation classification with certain years of service. If the annual
retirement benefits payable to a participant under other Company-related
plans and plans of other employers (plus his or her primary Social Security
benefit) exceed the annual retirement benefit shown in the table, the
participant will instead receive the benefits payable under those other
plans.
AVERAGE
FINAL YEARS OF SERVICE
--------------------------------------------------
COMPENSATION 15 20 25 30 35
------------ ------- ------- ------- -------- -------
$125,000 $51,563 $68,750 $68,750 $68,750 $68,750
150,000 61,875 82,500 82,500 82,500 82,500
175,000 72,188 96,250 96,250 96,250 96,250
200,000 82,500 110,000 110,000 110,000 110,000
225,000 92,813 123,750 123,750 123,750 123,750
250,000 103,125 137,500 137,500 137,500 137,500
300,000 123,750 165,000 165,000 165,000 165,000
350,000 144,375 192,500 192,500 192,500 192,500
400,000 165,000 220,000 220,000 220,000 220,000
450,000 185,625 247,500 247,500 247,500 247,500
500,000 206,250 275,000 275,000 275,000 275,000
The number of credited years of service as of December 31, 1999 is
34 for K. Grahame Walker, 18 for Kathleen Burdett, 24 for David G. Gordon,
21 for John D. Thompson and 9 for Bruce H. Beatt.
SEVERANCE AGREEMENTS
The Company has entered into agreements with the executive officers
named in the Summary Compensation Table and with certain other executive
officers and key employees of the Company which, in the event of a change
of control (as defined in the agreements), provide for certain benefits.
Agreements entered into by the Company and the executive officers named in
the Summary Compensation Table provide for benefits in the following
circumstances: (i) involuntary termination of the individual's employment
within 395 days of the occurrence of the change in control for reasons
other than death, permanent disability, attainment of age 65 or cause; (ii)
resignation within 395 days of the occurrence of the change of control for
good reason; and (iii) resignation for any reason during the thirty-day
period immediately preceding the expiration of the severance period. In
such circumstances, the employee shall be entitled to a severance payment
equal to a certain percentage (200% in the case of the executive officers
named in the Summary Compensation Table) of (i) the employee's base salary
at the time of termination or resignation, and (ii) the highest annual
incentive compensation paid in any of the three full years immediately
prior to the change of control. In addition, the employee will be entitled
to a continuation of certain employee welfare benefits for a certain period
(two years in the case of the executive officers named in the Summary
Compensation Table) provided by the Company on the date of the change in
control, and the employee will be credited with a certain number of
additional years of service (two in the case of the executive officers
named in the Summary Compensation Table) for retirement income plan
purposes. The employees are also entitled to receive additional payments,
if necessary, to reimburse the employee for (i) any legal expenses, plus
interest thereon, incurred in enforcing or defending a severance agreement,
and (ii) any excise tax liability that may be imposed by reason of Section
4999 of the Internal Revenue Code. For purposes of the severance
agreements, the term "change of control" generally means: (i) a person
acquires beneficial ownership of 19% or more of the Company's common stock;
(ii) certain changes in the composition of a majority of the Company's
board of directors from such composition on September 20, 1999, except such
changes approved by two-thirds of such directors; (iii) except as otherwise
specifically provided for in the agreements the Company is reorganized,
merged, consolidated or sells, or otherwise disposes of substantially all
of its assets; or (iv) approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.
REPORT OF COMPENSATION & ORGANIZATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation & Organization Committee ("Compensation
Committee") is responsible for, among other things, establishing the
compensation policies applicable to executive officers of the Company. The
Compensation Committee is composed exclusively of outside directors. There
are presently five members: Robert M. Furek, Chairman, Henrietta Holsman
Fore, Bernard M. Fox, Martha Clark Goss and Edgar G. Hotard.
OVERALL POLICY
The Company's executive compensation program is designed to be
linked to corporate performance and return to shareholders. Of particular
importance to the Company is its ability to grow and enhance its long-term
competitiveness. Shorter term performance, although scrutinized by the
Compensation Committee, stands behind the issue of furthering the Company's
strategic goals. To this end, the Company has developed an overall
compensation strategy and specific compensation plans that tie a
significant portion of executive compensation to the Company's success in
meeting specified performance goals and to growth of the Company's stock
price. The overall objectives of this strategy are to attract and retain
the best possible executive talent, to motivate these executives to achieve
the goals inherent in the Company's business strategy, to link executive
and shareholder interests through equity-based plans and to provide a
compensation package that recognizes individual contributions as well as
overall business results.
Each year the Compensation Committee conducts a full review of the
Company's executive compensation program. This review includes a
comprehensive evaluation, based on compensation surveys prepared by
independent compensation consultants, of the competitiveness of the
Company's compensation program and a comparison of the Company's executive
compensation to a peer group of public corporations (the "Compensation Peer
Group") which, in the view of the Compensation Committee, represent the
Company's most direct competitors for executive talent. There are currently
17 companies in the Compensation Peer Group, which is subject to occasional
change as the Company or its competitors change their focus, merge or are
acquired, or as new competitors emerge. It is the Compensation Committee's
policy to target overall compensation for executive officers of the Company
at a level which is at the median paid for such positions by the
Compensation Peer Group. A variety of other factors, however, including
position and time in position, experience, and both company performance and
individual performance, will have an impact on individual compensation
amounts.
The Compensation Committee believes that the Compensation Peer
Group represents the group of companies for which remuneration data is
available that compete most directly with the Company for executive talent.
It should be noted that, while there are overlaps, the Compensation Peer
Group is composed of a different group of companies than is contained in
either of the indices used in the performance graph contained in this proxy
statement.
The Compensation Committee approves the compensation of the
executive officers of the Company, including the individuals whose
compensation is detailed in this proxy statement, and reviews the
compensation policies and pay practices employed with respect to all the
Company's other executive-level employees. This is designed to ensure
consistency throughout the executive compensation program.
The key elements of the Company's executive compensation program in
1999 consisted of base salary, annual incentive compensation and long term
incentive compensation in the form of stock options and restricted stock
awards. The Compensation Committee's policies with respect to each of these
elements, including the basis for the compensation awarded to the CEO, are
discussed below. In addition, while the elements of compensation described
below are considered separately, the Compensation Committee takes into
account the full compensation package afforded by the Company to the
individual, including pension benefits, supplemental retirement benefits,
severance plans, insurance and other benefits, as well as the programs
described below.
BASE SALARIES
Base salaries for executive officers are established by evaluating,
on an annual basis, the performance of such individuals (which evaluation
involves management's consideration of such factors as responsibilities of
the position held, contribution toward achievement of the strategic plan,
attainment of specific individual objectives, interpersonal managerial
skills and civic involvement), and by reference to the marketplace for
executive talent, including a comparison to base salaries for comparable
positions at companies within the Compensation Peer Group.
In establishing the CEO's base salary, the Compensation Committee
took into account the salaries of chief executive officers at companies
within the Compensation Peer Group and the CEO's leadership in shaping and
implementing the strategy of the Company to become focused on the
technologies and markets that will generate future earnings growth. Based
upon this evaluation, the Compensation Committee established a base salary
of $700,000 for the period commencing April 1, 1999 and ending March 31,
2000, an increase of 4.5% over the $670,000 base salary paid to him during
the immediately preceding 12 month period.
ANNUAL INCENTIVE COMPENSATION
Annual incentive compensation accounts for a significant percentage
of each executive officer's compensation. Executive officers of the Company
(other than the CEO) participate in the Company's Executive Incentive
Compensation Plan, and the CEO participates in the Company's Senior
Management Executive Incentive Plan, which was designed to conform with the
requirements of Internal Revenue Code Section 162(m). (These plans are
collectively referred to herein as the EIC Plans.) The EIC Plans are
designed to compensate executives for performance that increases
shareholder value over time, and are reviewed annually by the Compensation
Committee.
Each of the EIC Plans has two performance components: (1) corporate
and/or business unit financial performance and (2) an assessment of the
executive's individual performance. Each year the Compensation Committee
reviews the specific financial measures to be used and approves the target
payout amounts for all executive officers of the Company. The target
payouts are determined by reference to each executive's job classification
as determined pursuant to a Hay point system. The Hay point system
evaluates jobs according to the knowledge required to do the job, the
intensity of thinking needed to solve the problems commonly faced, and the
accountability of the position. In 1999, the sole financial measure for
corporate financial performance, which was approved by the Compensation
Committee, was earnings per share. The financial measures used in 1999 for
individual businesses, on the other hand, included several from a variety
of factors, such as sales growth, growth in operating earnings, and return
on investment. These factors were weighted differently for each business to
reflect the corporate management's assessment of those issues that were in
need of emphasis, all in accordance with the Company's strategic plan.
The four most highly compensated executive officers other than the
CEO were eligible to receive incentive compensation payouts in 1999 of
specified amounts of their base salaries in the event that financial
performance targets were fully achieved. Such payouts were subject to
further adjustment, up or down, based upon management's assessment of
individual performance. Based upon these factors, the actual payout amounts
for these individuals ranged from approximately 49% to approximately 65% of
their base salaries. The assessment of management as to the performance of
these individuals did not result in a significant (over 10%) reduction or
increase in the amount of the payout.
The CEO was eligible to receive an incentive compensation payout in
1999 equal to 75% of his base salary in the event that financial
performance targets were fully achieved (or more if they were exceeded).
There was no reduction or increase in the CEO's incentive compensation
payout based on an assessment of the CEO's individual performance. Because
earnings per share slightly exceeded the targeted amount established by the
Compensation Committee for 1999, a target that, in the opinion of the
Compensation Committee, was aggressive and required significant efforts on
the part of the CEO, the CEO's actual payout was approximately 78% of his
base salary, or $539,630. This represents an increase from the $164,835 of
incentive compensation paid to the CEO in 1998, when the targeted goals
were not met.
It should be emphasized that the Company's EIC Plans are
pay-for-performance plans and, as a result, payments under such plans vary
from year to year depending upon the Company's financial performance. In
years in which performance targets have been met, such as 1999, there has
been a full payout of incentive compensation to the CEO. In years in which
the targets have not been met, on the other hand, such as 1998, such
payouts have been reduced.
Because the purpose of the EIC Plans is to reward performance that
increases shareholder value over time, the Compensation Committee requires
that the overall corporate return to shareholders, apart from unusual
items, exceeds the cost of capital for the Company as a whole before any
executive incentive compensation is paid. There are also minimum thresholds
established for payouts to corporate and business unit employees.
STOCK OPTIONS
The third component of executive compensation is the Company's
stock option program, pursuant to which the Company has granted to
executive officers and other senior management options to purchase shares
of its common stock. Stock options are granted with an exercise price equal
to the market price of the common stock on the date of grant, vest over
three years and expire five years from the date of vesting.
A total of 240,000 options were granted to executive officers and
other senior management in 1999 under the 1999 Long Term Incentive Plan
("1999 Plan"), 55,000 of which were granted to the CEO and 50,500 of which
were granted (in the aggregate) to the four other executive officers named
in the Summary Compensation Table. The number of stock options granted in
1999 were determined by reference to the long term compensation for
comparable positions at companies within the Compensation Peer Group and
based upon an assessment of individual performance.
RESTRICTED STOCK AWARDS
The final component of executive compensation is restricted stock,
which the Company granted in 1999 to executive officers and other senior
management under the 1999 Plan.
A total of 60,000 shares of restricted stock were granted to
executive officers and other senior management in 1999, 9,600 of which were
granted to the CEO and 14,600 of which were granted (in the aggregate) to
the four other executive officers named in the Summary Compensation Table.
The number of restricted stock awards granted in 1999 were determined by
reference to the long term compensation for comparable positions at
companies within the Compensation Peer Group and based upon an assessment
of individual performance.
Restricted stock awards are intended to align the interests of
executives with those of the shareholders. The shares of restricted stock
issued to executive officers and other senior management in 1999 are
subject to two types of restrictions: (a) restrictions based on the
achievement by the Company of certain financial performance targets during
the three year period commencing on January 1, 1999 and ending on December
31, 2001 ("performance target restrictions") and (b) restrictions based on
continuous employment of the recipient over a specified period of time
("time-lapse restrictions"). Seventy-five percent of the restricted shares
issued in 1999 are subject to both performance target restrictions and
time-lapse restrictions. The remaining 25 percent of the restricted shares
are subject solely to time-lapse restrictions. This approach is intended to
incentivize the creation of shareholder value over the long term.
In 1995, the Compensation Committee established guidelines for
ownership of Dexter common stock by executive officers. Under these
guidelines, each executive officer is expected to own, within three years
of becoming an executive officer, Dexter common stock with a value of
between two to four times his or her base salary, depending upon the
individual's position with the Company. As of December 31, 1999, these
ownership guidelines have been met.
DEDUCTIBILITY OF COMPENSATION
Internal Revenue Code Section 162(m), which was added to the
Internal Revenue Code by the Omnibus Budget Reconciliation Act of 1993,
limits the amount of compensation a corporation may deduct as a business
expense. That limit, which applies to up to five executives individually,
is $1 million per individual, per year, subject to certain specified
exceptions. All compensation payments in 1999 to the five executive
officers named in the Summary Compensation Table will be fully deductible.
The Company has procedures in place to assure that compensation paid to
executive officers continues to be fully deductible in the future.
CONCLUSION
Through the programs described above, a very significant portion of
the Company's executive compensation is linked directly to individual and
corporate performance and stock price appreciation over the long term. The
Compensation Committee intends to continue and strengthen the policy of
linking executive compensation to corporate performance and returns to
shareholders, recognizing that the fluctuations of the business cycle from
time to time may result in an imbalance for a particular period.
Compensation & Organization Committee
Robert M. Furek, Chairman
Henrietta Holsman Fore
Bernard M. Fox
Martha Clark Goss
Edgar G. Hotard
PERFORMANCE GRAPH
The following graph shows how an initial investment of $100 in the
Company's common stock would have compared to an equal investment in the
S&P 500 Index or in the S&P Specialty Chemicals Index over the five-year
period beginning December 31, 1994 and ending December 31, 1999. The graph
reflects reinvestment of all dividends.
NOTE: The total shareholder return shown on the graph below is not
necessarily indicative of future returns on the Company's common stock.
COMPARISON OF FIVE YEAR
CUMULATIVE TOTAL SHAREHOLDER RETURN
(ASSUMING AN INVESTMENT OF $100 ON DECEMBER 31, 1993)
DEXTER CORPORATION PERFORMANCE GRAPH
S&P Specialty
Dexter Corporation S&P 500 Index Chemicals Index
------------------ ------------- ---------------
1994 $100.00 $100.00 $100.00
1995 $112.73 $137.58 $131.44
1996 $156.70 $169.17 $134.81
1997 $218.11 $225.60 $166.94
1998 $164.05 $290.08 $142.17
1999 $213.33 $351.12 $157.37
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of five members: Robert M.
Furek, Chairman, Henrietta Holsman Fore, Bernard M. Fox, Martha Clark Goss,
and Edgar G. Hotard. None of the members of the Compensation Committee is
an officer, employee or former officer or employee of the Company or its
subsidiaries. In 1999, none of the members of the Compensation Committee
had any relationship requiring disclosure in accordance with Item 402(j)(3)
of Regulation S-K of the SEC.
CERTAIN LITIGATION
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). The complaint alleges, among other
things, that Article X of Dexter's bylaws (insofar as it may provide for a
two-thirds supermajority vote of the shareholders to amend the bylaws)
violates Section 33-807 of the Connecticut Business Corporation Act and is
therefore invalid; that Dexter's poison pill violates Section 33-665 of the
Connecticut Business Corporation Act and is therefore invalid; that
shareholders have the right to vote on the Nominee Election Proposals,
Shareholder Rights Proposals and Voting Rights Proposals at the 2000 Annual
Meeting; and that the directors have breached their fiduciary obligations
to Dexter and its shareholders. The complaint seeks declaratory and
injunctive relief as well as money damages. The complaint also asks the
Court to order that the 2000 Annual Meeting be held no later than April 30,
2000. Dexter believes that IPS's lawsuit is without merit and intends to
defend vigorously against it.
BENEFICIAL OWNERSHIP OF THE COMPANY'S STOCK
The following table sets forth information, as of December 31,
1999, with respect to the beneficial ownership of shares of the common
stock of the Company by (1) certain major shareholders of the Company, (2)
each director and nominee for director of the Company, (3) each of the
executive officers named in the Summary Compensation Table set forth below,
and (4) all directors, nominees and executive officers of the Company as a
group. Such beneficial ownership is reported in accordance with the rules
of the 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 OF
COMMON STOCK PERCENTAGE OF
BENEFICIALLY COMMON STOCK
Shareholders: OWNED(1) OUTSTANDING(1)
-------- --------------
ISP OPCO Holdings Inc. and related entities,
<S> <C> <C> <C>
1361 Alps Road, Wayne, New Jersey 07470................ 2,299,200 9.98(2)
FMR Corp., 82 Devonshire Street, Boston,
Massachusetts 02109 (Fidelity Managed Funds)........... 1,703,300 7.39(3)
Mary K. Coffin, c/o Dexter Corporation, One Elm Street,
Windsor Locks, Connecticut 06096....................... 1,290,000 5.59(4)
Directors, Nominees and Executive Officers:
K. Grahame Walker.......................................... 229,681 *
Kathleen Burdett........................................... 63,668 *
David G. Gordon............................................ 42,579 *
John D. Thompson........................................... 38,241 *
Bruce H. Beatt............................................. 34,744 *
Charles H. Curl............................................ 4,165 *
Henrietta Holsman Fore..................................... 5,626 *
Bernard M. Fox............................................. 4,973 *
Robert M. Furek............................................ 4,510 *
Martha Clark Goss.......................................... 4,274 *
Edgar G. Hotard............................................ 3,148 *
Peter G. Kelly............................................. 8,301 *
Jean-Francois Saglio....................................... 3,201 *
George M. Whitesides....................................... 4,381 *
All Directors, Nominees and Executive Officers
as a Group (24 persons).................................... 638,727 2.77%
</TABLE>
- ----------
(1) The shares reported above as beneficially owned by the following
persons include vested stock options granted under the Company'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 -- 51,434; Kathleen Burdett -- 21,142; David G.
Gordon -- 11,460; John D. Thompson -- 14,976; Bruce H. Beatt -- 13,972;
and "All Directors, Nominees and Executive Officers as a Group" --
171,233. 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 December 31, 1999, as reported on Amendment No. 6 to
the Schedule 13D filed by such shareholder.
(3) Share holdings as of December 31, 1999, as reported on the Schedule 13G
most recently filed by such shareholder.
(4) 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.
PROPOSALS OF SHAREHOLDERS
In order to be considered for inclusion in the Company's proxy
statement and form of proxy relating to next year's annual meeting of
shareholders, proposals of shareholders intended to be presented for action
at that meeting must be received at the principal executive offices of
Dexter Corporation, One Elm Street, Windsor Locks, Connecticut 06096-2334,
marked for the attention of the Secretary, by November 10, 2000.
Under the Company's Bylaws, notice of any other matter intended to
be presented by a shareholder for action at next year's annual meeting must
be addressed to the principal executive offices of Dexter Corporation, One
Elm Street, Windsor Locks, Connecticut 06096-2334, marked for the attention
of the Secretary, and must contain the information required by the Bylaws.
The notice must be received at the principal executive offices during the
period from December 22, 2000 through February 9, 2001, unless next year's
annual meeting is called for a date prior to February 9, 2001, in which
case notice must be received within fifteen days of when notice of the
annual meeting is given.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K to the Securities and
Exchange Commission for 1999 will be sent without charge after March 31,
2000 to any shareholder upon written request directed to:
Dexter Corporation
Attention: Secretary
One Elm Street
Windsor Locks, CT 06096-2334
METHOD AND COST OF PROXY SOLICITATION
Proxies may be solicited, without additional compensation, by
directors, officers or employees of the Company by mail, telephone,
telegram, in person or otherwise. The Company will bear the costs of the
solicitation of proxies, which may include the cost of preparing, printing
and mailing the proxy materials. In addition, the Company will request
banks, brokers and other custodians, nominees and fiduciaries to forward
proxy materials to the beneficial owners of common stock and obtain their
voting instructions. The Company will reimburse those firms for their
expenses in accordance with the rules of the SEC and the New York Stock
Exchange. In addition, the Company has retained MacKenzie Partners, Inc.,
156 Fifth Avenue, New York, NY 10010, to assist in soliciting proxies, for
which services the Company will pay a fee of $__________ , plus handling,
postage and out-of- pocket expenses. An additional fee will be paid to
Mackenzie Partners if it is engaged to solicit proxies by telephone.
Expenses related to the solicitation of shareholders, in excess of
those normally spent for an annual meeting, are expected to aggregate
approximately $__________, of which approximately $__________ has been
spent to date. APPENDIX A SETS FORTH CERTAIN INFORMATION RELATING TO THE
COMPANY'S DIRECTORS, NOMINEES, OFFICERS AND OTHER EMPLOYEES OF THE COMPANY
WHO WILL BE SOLICITING PROXIES ON THE COMPANY'S BEHALF ("PARTICIPANTS").
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
PLEASE SIGN AND DATE THE ENCLOSED WHITE PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE PROMPTLY.
WE URGE YOU NOT TO SIGN OR RETURN ANY PROXY CARD THAT MAY BE SENT
TO YOU BY ISP, EVEN AS A PROTEST VOTE AGAINST ISP. IF YOU PREVIOUSLY VOTED
ON AN ISP GOLD PROXY CARD, YOU HAVE EVERY LEGAL RIGHT TO CHANGE YOUR VOTE.
YOU CAN DO SO SIMPLY BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE
PROXY CARD. ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.
IMPORTANT: If your shares of the Company's stock are held in the
name of a brokerage firm, bank, nominee or other institution, only it can
sign a WHITE proxy card with respect to your shares and only upon specific
instructions from you. Please contact the person responsible for your
account and give instructions for a WHITE proxy card to be signed
representing your shares of the Company's stock. We urge you to confirm in
writing your instructions to the person responsible for your account and to
provide a copy of such instructions to the Company's proxy solicitor,
MacKenzie Partners, Inc., at the address indicated below so that MacKenzie
Partners can attempt to ensure that your instructions are followed.
If you have any questions about executing your proxy or require
assistance, please contact:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
Call Toll Free: (800) 322-2885
Banks and Brokerage Firms please call collect: (212) 929-5500
APPENDIX A
INFORMATION CONCERNING THE DIRECTORS AND CERTAIN OFFICERS
OF THE COMPANY WHO MAY ALSO SOLICIT PROXIES
The following table sets forth the name, principal business address
and the present office or other principal occupation or employment, and the
name, principal business and the address of any corporation or other
organization in which their employment is carried on, of the directors and
certain officers of the Company ("Participants") who may also solicit
proxies from shareholders of the Company. Unless otherwise indicated, the
principal occupation refers to such person's position with the Company and
the business address is Dexter Corporation, One Elm Street, Windsor Locks,
Connecticut 06096.
DIRECTORS
The principal occupations of the Company's directors who are deemed
Participants in the solicitation are set forth under "Proposal (1) Election
of Directors" in this Proxy Statement. The principal business address of
Mr. Walker is that of the Company. The name, business and address of the
director-Participants' organization of employment are as follows:
NAME ADDRESS
- ---- -------
Charles H. Curl........................... Curl & Associates
4101 Parkglen Court, N.W.
Washington, D.C. 20007
Peter G. Kelly............................ Updike, Kelly & Spellacy, P.C.
One State Street
Suite 2400
Hartford, Connecticut 06103
Jean-Francois Saglio...................... ERSO
c/o Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096
Henrietta Holsman Fore ................... Holsman International
2600 Virginia Ave., N.W.
Washington, D.C. 20037
Bernard M. Fox............................ Dignitas Partners
c/o Shipman & Goodwin
One American Row
Hartford, Connecticut 06103
George M. Whitesides ..................... Harvard University
12 Oxford Street
Cambridge, Massachusetts 02138
Robert M. Furek........................... State Board of Trustees
c/o Shipman & Goodwin
One American Row
Hartford, Connecticut 06103
Martha Clark Goss ........................ The Capital Markets Company
120 Broadway, 29th Floor
New York, New York 10271
Edgar G. Hotard........................... c/o Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS AND CERTAIN CORPORATE OFFICERS
NAME PRINCIPAL OCCUPATION
- ---- --------------------
<S> <C>
K. Grahame Walker..................................... Chairman and Chief Executive Officer
David G. Gordon....................................... President and Chief Operating Officer
Kathleen Burdett...................................... Vice President and Chief Financial Officer
John D. Thompson...................................... Senior Vice President, Strategic and Business
Development
Bruce H. Beatt........................................ Vice President, General Counsel and
Secretary
Ronald C. Benham...................................... Vice President and President -
Electronic Materials
Jeffrey W. McClelland................................. Vice President and President -
Adhesive and Coating Systems
Lawrence D. McLure.................................... Vice President - Human Resources
A. Duncan Middleton................................... Vice President and President -
Nonwoven Materials
Roseanne Potter....................................... Treasurer
Dale Ribaudo.......................................... Controller
</TABLE>
INFORMATION REGARDING OWNERSHIP OF THE COMPANY'S SECURITIES BY PARTICIPANTS
None of the Participants owns any of the Company's securities of
record but not beneficially. The number of shares of Common Stock held by
directors and the named executive officers is set forth on page xx of this
proxy statement. The number of shares of Common Stock held by the other
Participants as of February 1, 2000 is set forth below. The information
includes shares that may be acquired by the exercise of stock options
within 60 days of February 1, 2000:
NAME SHARE OWNERSHIP
- ---- ---------------
Ronald C. Benham.................................... 50,444
Jeffrey W. McClelland............................... 23,402
Lawrence D. McLure.................................. 23,507
A. Duncan Middleton................................. 9,028
Roseanne Potter..................................... 4,459
Dale Ribaudo........................................ 14,318
INFORMATION REGARDING TRANSACTIONS IN THE COMPANY'S SECURITIES BY PARTICIPANTS
The following table sets forth purchases and sales of the Company's
securities by the Participants listed below during the past two years.
Unless otherwise indicated, all transactions are in the public market.
NUMBER OF SHARES
NAME OF COMMON STOCK
DIRECTORS DATE PURCHASED OR (SOLD) NOTE
- --------- ---- ------------------ ----
Charles H. Curl 12/31/99 300 (2)
12/31/99 200
4/22/99 621 (1)
12/31/98 200
4/23/98 493 (1)
Peter G. Kelly 12/31/99 300 (2)
12/31/99 200
4/22/99 310 (1)
3/8/99 1,500
12/31/98 200
4/23/98 493 (1)
3/10/98 72.2892 (1)
Jean-Francois Saglio 12/31/99 300 (2)
12/31/99 200
4/22/99 310 (1)
12/31/98 200
4/23/98 370 (1)
Henrietta Holsman Fore 12/31/99 300 (2)
12/31/99 200
4/22/99 621 (1)
3/2/99 1,000
12/31/98 200
4/23/98 493 (1)
Bernard M. Fox 12/31/99 300 (2)
12/31/99 200
4/22/99 621 (1)
12/31/98 200
4/23/98 493 (1)
George M. Whitesides 12/31/99 300 (2)
12/31/99 200
4/22/99 310 (1)
12/31/98 200
4/23/98 246 (1)
Robert M. Furek 12/31/99 300 (2)
12/31/99 200
4/22/99 621 (1)
12/31/98 200
4/23/98 493 (1)
Martha Clark Goss 12/31/99 300 (2)
12/31/99 200
4/22/99 310 (1)
12/31/98 200
4/23/98 246 (1)
Edgar G. Hotard 12/31/99 300 (2)
12/31/99 200
4/22/99 621 (1)
12/31/98 200
4/23/98 493 (1)
EXECUTIVE OFFICERS
K. Grahame Walker 5/3/99 (848) (3)
4/9/99 (18,486) (4)
5/1/98 9,200 (5)
David G. Gordon 6/3/99 (80)
5/3/99 (325)
4/22/99 5,000 (5)
4/13/99 (269) (4)
5/1/98 3,000 (5)
4/21/98 (323) (4)
Kathleen Burdett 4/22/99 4,500 (6)
2/12/99 4,000 (7)
5/1/98 4,400 (5)
3/5/98 1,666 (7)
John D. Thompson 4/22/99 3,300 (6)
1/21/99 2,000 (7)
5/1/98 3,000 (5)
Bruce H. Beatt 4/22/99 3,300 (6)
4/1/99 (1,363) (4)
5/1/98 3,000 (5)
4/17/98 1,500 (7)
Ronald C. Benham 4/21/99 3,000 (6)
4/21/99 3,667 (7)
5/1/98 2,800 (5)
4/20/98 6,000 (4)
Jeffrey W. McClelland 5/3/99 (220) (3)
4/21/99 10,000 (7)
4/21/99 2,500 (6)
4/21/99 3,000 (7)
5/1/98 1,600 (5)
4/23/98 8,366.411 (8)
Lawrence D. McLure 5/3/99 (678)
4/22/99 2,800 (6)
5/1/98 2,500 (5)
A. Duncan Middleton 12/2/99 (688)
Rosanne Potter 12/20/99 25.477
11/22/99 28.6807
10/15/99 400
Dale Ribaudo 5/3/99 (254) (3)
4/22/99 2,200 (6)
4/16/99 666 (7)
5/1/98 2,000 (5)
4/20/98 333 (7)
- ---------------
(1) Acquisition of shares pursuant to the Company's 1996 Non-Employee
Directors' Stock Plan.
(2) Shares obtained pursuant to the Company's 1994 Stock Plan for
Outside Directors, as amended.
(3) Surrender of shares to pay withholding tax on restricted shares
whose restrictions lapsed.
(4) Shares diposed of on exercise of options.
(5) Acquired under the Company's 1994 Long Term Incentive Plan.
(6) Acquired under the Company's 1999 Long Term Incentive Plan..
(7) Acquired upon exercise of options.
(8) Includes Commons Stock acquired under the Company's 1994 Long Term
Incentive Plan. Restricted Shares and share in the Company's
401(k) plan.
MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS
Except as described in this Appendix A or in the proxy statement,
none of the Participants nor any of their respective affiliates or
associates (together, the "Participant Affiliates"), (i) directly
beneficially owns any shares of Common Stock of the Company or any
securities of any subsidiary of the Company or (ii) has had any
relationship with the Company in any capacity other than as a shareholder,
employee, officer or director. Furthermore, except as described in this
Appendix A or in the proxy statement, no Participant or Participant
Affiliate is either a party to any transaction or series of transactions
since February 1, 1998, or has knowledge of any currently proposed
transaction or series of transactions, (i) to which the Company or any of
its subsidiaries was or is to be a party, (ii) in which the amount involved
exceeds $60,000, and (iii) in which any Participant or Participant
Affiliate had or will have, a direct or indirect material interest.
ANNEX I
PROPOSAL (3) RIGHTS PLAN BYLAW PROPOSAL
RESOLVED, that the Bylaws of Dexter Corporation be, and they hereby
are, amended, effective at the time this resolution is approved by the
shareholders of Dexter Corporation, by adding the following Section 7 to
the end of Article II:
'Section 7. Rights Agreements.
The Board of Directors, in exercising its rights
and duties with respect to the administration of the Rights
Agreement dated as of August 23, 1996, as amended, by and between
the corporation and Chase Mellon Shareholder Services L.L.C., as
Rights Agent (the "Rights Agreement") will carry out a resolution
authorizing (i) the partial or complete redemption of the rights
issued pursuant to the Rights Agreement (the "Rights"), or (ii) an
amendment to the Rights Agreement making the Rights inapplicable to
offers or transactions or types of offers or transactions specified
in such resolution, if such resolution is authorized and approved
by the shareholders of the corporation entitled to vote thereon in
the manner set forth in Section 33-709(c) of the Connecticut
Business Corporation Act. In addition, the Board of Directors shall
not adopt any new shareholder rights plan, rights agreement or any
other form of "poison pill" which is designed to or has the effect
of making acquisitions of large holdings of the corporation's
shares of stock more difficult or expensive, unless such plan is
first approved by the shareholders of the corporation entitled to
vote thereon in the manner set forth in Section 33-709(c) of the
Connecticut Business Corporation Act. This Section 7 may be
altered, amended or repealed only with the approval of the
shareholders of the corporation entitled to vote thereon in the
manner set forth in Section 33-709(c) of the Connecticut Business
Corporation Act.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
ANNEX II
PROPOSAL (4) RIGHTS PLAN AMENDMENT PROPOSAL
RESOLVED, that the shareholders of Dexter Corporation hereby
exercise their right under Article II, Section 7 of the Bylaws of
Dexter Corporation, as amended on the date hereof, to require the
Board of Directors to promptly amend the Rights Agreement, dated as
of August 23, 1996, as amended, by and between Dexter Corporation
and ChaseMellon Shareholder Services, L.L.C. (the "Rights
Agreement") to provide that the acquisition of beneficial ownership
of shares of common stock, par value $1.00 per share, of Dexter
Corporation ("Common Stock") pursuant to any offer for all
outstanding shares of Common Stock for consideration of at least
$45 per share net to the seller in cash shall constitute a
"Qualifying Offer" within the meaning of Sections 11(a)(ii) and
13(d) of the Rights Agreement.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
ANNEX III
PROPOSAL (5) BYLAW REPEAL PROPOSAL
RESOLVED, that any and all amendments made by the Board of
Directors of Dexter Corporation to the Bylaws of Dexter Corporation
on or after February 26, 1999, be, and the same hereby are,
repealed, and that, without the approval of the shareholders of
Dexter Corporation, the Board of Directors may not thereafter amend
any section of the Bylaws affected by such repeal or adopt any new
Bylaw provision which serves to reinstate any repealed provisions
or any similar provisions.
DEXTER CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY FOR THE ANNUAL MEETING TO BE HELD ON APRIL 27, 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 Annual Meeting of Shareholders of Dexter
Corporation, to be held on Thursday, April 27, 2000, at 10:00 A.M., local
time, at The Hartford Club, 46 Prospect Street, Hartford, Connecticut, and
at any adjournment or postponement thereof, upon the matters set forth in
the Dexter Corporation Proxy Statement and upon such other matters as may
properly come before the Annual Meeting, voting as specified on the reverse
side of this card with respect to the matters set forth in the Proxy
Statement, and voting in the discretion of the above-named persons on such
other matters as may properly come before the Annual Meeting.
PROPOSAL (1) ELECTION OF DIRECTORS.
Nominees for Terms Expiring at the Annual Meeting in 2003: Charles H. Curl,
Peter G. Kelly and Jean-Francois Saglio.
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 PROPOSALS 1
AND 2 AND AGAINST PROPOSALS 3, 4 AND 5.
DIRECTORS RECOMMEND A VOTE "FOR" PROPOSALS 1 AND 2
FOR WITHHELD
(1) ELECTION OF [ ] [ ]
DIRECTORS
(see reverse side)
FOR, except vote withheld from the following nominee(s):
- ------------------------------------------------------
FOR AGAINST ABSTAIN
(2) APPOINTMENT OF INDEPENDENT ACCOUNTANTS [ ] [ ] [ ]
DIRECTORS RECOMMEND A VOTE "AGAINST" PROPOSALS 3, 4 AND 5
(3) ISP PROPOSAL TO AMEND DEXTER'S BYLAWS
REQUIRING THE DEXTER BOARD TO MAKE FOR AGAINST ABSTAIN
CERTAIN AMENDMENTS TO THE DEXTER
RIGHTS PLAN FOLLOWING ADOPTION OF
CERTAIN SHAREHOLDER RESOLUTIONS [ ] [ ] [ ]
FOR AGAINST ABSTAIN
(4) ISP PROPOSAL TO AMEND THE RIGHTS PLAN [ ] [ ] [ ]
FOR AGAINST ABSTAIN
(5) ISP PROPOSAL TO REPEAL CERTAIN BYLAWS [ ] [ ] [ ]
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 2000
Annual Meeting of Shareholders of Dexter Corporation and any adjournment or
postponement thereof.
