<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
QUIDEL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] Fee not required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
QUIDEL CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 29, 1997
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Quidel
Corporation, a Delaware corporation (the "Company"), will be held on Tuesday,
July 29, 1997 at 10:00 a.m., at the offices of the Company located at 10165
McKellar Court, San Diego, California 92121, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of Ernst & Young LLP as independent
auditors for the Company for the fiscal year ending March 31, 1998.
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on June 6, 1997 are
entitled to receive notice of and to vote at the meeting and any adjournment
thereof.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. YOU ARE URGED
TO SIGN, DATE AND OTHERWISE COMPLETE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING AND WISH TO DO SO, YOU MAY VOTE YOUR SHARES IN PERSON
EVEN IF YOU HAVE SIGNED AND RETURNED YOUR PROXY CARD.
By Order of the Board of Directors,
SIGNATURE
Steven C. Burke, Secretary
San Diego, California
July 1, 1997
<PAGE> 3
QUIDEL CORPORATION
10165 MCKELLAR COURT
SAN DIEGO, CALIFORNIA 92121
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
JULY 29, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Quidel Corporation, a Delaware corporation
(the "COMPANY"), for use at the Company's 1997 Annual Meeting of Stockholders to
be held on July 29, 1997 (the "MEETING") and at any and all adjournments and
postponements of the Meeting. This Proxy Statement and the accompanying form of
proxy will be first mailed to stockholders on or about July 1, 1997.
The cost of preparing, assembling and mailing the Notice of Annual Meeting
of Stockholders, Proxy Statement and form of proxy and the solicitation of
proxies will be paid by the Company. Proxies may be solicited in person or by
telephone or facsimile by personnel of the Company who will not receive any
additional compensation for such solicitations. The Company will pay brokers or
other persons holding stock in their name or the names of their nominees for the
expenses of forwarding soliciting material to their principals.
VOTING
The close of business on June 6, 1997 has been fixed as the record date
(the "RECORD DATE") for the determination of stockholders entitled to notice of
and to vote at the Meeting. On the Record Date, there were outstanding
23,554,333 shares of the Company's voting common stock (the "COMMON STOCK").
Each share of Common Stock is entitled to one vote on any matter that may be
presented for consideration and action by the stockholders at the Meeting. The
holders of a majority of the outstanding shares of Common Stock on the Record
Date and entitled to be voted at the Meeting, present in person or by proxy,
will constitute a quorum for the transaction of business at the Meeting and any
adjournments and postponements thereof. Abstentions and broker non-votes are
counted for the purpose of determining the presence or absence of a quorum for
the transaction of business. Abstentions are counted in tabulations of the votes
cast on proposals presented to stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
Each proxy will be voted FOR (i) the nominees for election as directors
named herein and (ii) ratification of the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending March 31, 1998, unless
the stockholder otherwise directs in his or her proxy. The ten nominees for
director receiving the highest number of votes at the Meeting will be elected.
Where the stockholder has appropriately directed how the proxy is to be voted,
it will be voted according to the stockholder's directions. Any stockholder has
the power to revoke his or her proxy at any time before it is voted at the
Meeting by submitting a written notice of revocation to the Secretary of the
Company or by filing a duly executed proxy bearing a later date. The proxy will
not be voted if the stockholder who executed it is present at the Meeting and
elects to vote the shares represented thereby in person.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of the Record Date
with respect to those known by the Company to be the beneficial owners of more
than five percent (5%) of the Company's Common Stock, and certain additional
information. On the Record Date, there were 23,554,333 shares of Common Stock
outstanding.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT(2)
------------------------------------------------------ ---------- ----------
<S> <C> <C>
J.P. Morgan Investment Corporation 2,015,254 8.56%
902 Market Street
Wilmington, DE 19801
Larry N. Feinberg(3) 1,672,300 7.10%
712 Fifth Avenue, 45th Floor
New York, NY 10019
</TABLE>
- ---------------
(1) Represents sole voting and investment power unless otherwise indicated.
(2) The percentage ownership for each stockholder is calculated by assuming the
exercise or conversion of all warrants, rights and convertible securities
held by such holder and the nonexercise and nonconversion of all other
outstanding warrants, rights and convertible securities.
(3) Includes 1,562,300 shares of Common Stock held by Mr. Feinberg individually
and by Oracle Partners, L.P. and Oracle Institutional Partners, L.P. (the
"PARTNERSHIPS"). Mr. Feinberg is the President and sole shareholder of
Oracle Management Inc., an entity that has investment discretion over the
shares held by the Partnerships. Mr. Feinberg is also the managing general
partner of each of the Partnerships. Also, includes 110,000 shares of Common
Stock owned by Jack W. Schuler. Messrs. Feinberg and Schuler have entered
into a voting agreement pursuant to which they have agreed to vote as a
group at all Company stockholder meetings all shares of Common Stock
beneficially owned by each of them.
All information with respect to beneficial ownership of the shares referred
to above and under "Security Ownership of Management" below is based on filings
made by the respective beneficial owners with the Securities and Exchange
Commission (the "COMMISSION") or information provided to the Company by such
beneficial owners.
2
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned as of the Record Date by each of the present directors
and nominees for director of the Company, each executive officer of the Company
named in the Summary Compensation Table herein and by all directors and
executive officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT(2)
------------------------------------------------------ ---------- ----------
<S> <C> <C>
DIRECTORS
Thomas A. Glaze(3) 253,940 1.08%
John D. Diekman, Ph.D.(4) 98,427 *
Richard C.E. Morgan(5) 879,747 3.73%
Mary Lake Polan, M.D., Ph.D.(6) 32,900 *
Faye Wattleton(7) 22,000 *
Roger F. Greaves(8) 15,000 *
Rockell N. Hankin(9) 40,000 *
Margaret G. McGlynn, R.Ph.(10) 15,000 *
Andre de Bruin 1,500 *
NAMED EXECUTIVE OFFICERS
Steven T. Frankel(11)** 182,151 *
Lauren G. Otsuki(12) 97,153 *
Allan D. Pronovost(13) 32,860 *
Steven C. Burke(14) 116,850 *
John D. Tamerius(15) 75,121
All directors and executive officers as a group
(16 persons)(16) 1,956,402 8.06%
</TABLE>
- ---------------
* Less than one percent.
** Also serves as a Director.
(1) Except for voting powers held jointly with a person's spouse, represents
sole voting and investment power unless otherwise indicated.
(2) The percentage ownership for each stockholder is calculated by assuming the
exercise or conversion of all warrants, options exercisable within 60 days
of the Record Date and convertible securities held by such holder, and the
nonexercise and nonconversion of all other outstanding warrants, options
and convertible securities.
(3) Includes 26,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(4) Includes 90,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(5) Includes 824,747 outstanding shares of Common Stock held by Wolfensohn
Associates L.P. Mr. Morgan may be deemed to have voting and investment
power as to all of the shares held by Wolfensohn Associates L.P. because of
his position as general partner of the sole general partner of Wolfensohn
Associates L.P. Mr. Morgan disclaims beneficial ownership as to all such
shares. Also includes 30,000 shares of Common Stock issuable to Mr. Morgan
upon exercise of options that are exercisable on or within 60 days after
the Record Date.
(6) Includes 32,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
3
<PAGE> 6
(7) Includes 22,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(8) Includes 15,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(9) Includes 15,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(10) Includes 10,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(11) Includes 150,000 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(12) Includes 80,089 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(13) Includes 32,860 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(14) Includes 66,760 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(15) Includes 75,121 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
(16) Includes 720,659 shares of Common Stock issuable upon exercise of options
that are exercisable on or within 60 days after the Record Date.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The Company's directors are to be elected at each annual meeting of
stockholders. At the Meeting, ten directors, which will make up the entire
authorized membership of the Board of Directors, will be elected to serve until
the next annual meeting of stockholders and until their successors are elected
and qualified. The nominees receiving the greatest number of votes at the
Meeting up to the number of authorized directors will be elected.
The nominees for election as directors at the Meeting set forth in the
table below are all incumbent directors. The Board of Directors presently
intends to appoint Richard C.E. Morgan to continue as the Chairman of the Board
provided that he is reelected. In addition, the Board of Directors presently
intends to appoint Andre de Bruin to serve as Vice Chairman of the Board
provided that he is elected. Each of the nominees has consented to serve as a
director if elected. Unless authority to vote for any director nominee is
withheld in a proxy, it is intended that each proxy will be voted FOR such
nominee. In the event that any of the nominees for director should before the
Meeting become unable to serve if elected, it is intended that shares
represented by proxies that are executed and returned will be voted for such
substitute nominees as may
4
<PAGE> 7
be recommended by the Company's existing Board of Directors, unless other
directions are given in the proxies. To the best of the Company's knowledge, all
nominees will be available to serve.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------ --- ---------------------------------------------- --------
<S> <C> <C> <C>
Steven T. Frankel 54 President and Chief Executive Officer of the 1992
Company
Thomas A. Glaze 50 President and Chief Executive Officer, 1979
Metabolex, Inc.
John D. Diekman, Ph.D. 54 Chairman of the Board, Affymetrix Inc. 1988
Richard C. E. Morgan 52 General Partner, Wolfensohn Associates, L.P. 1991
Mary Lake Polan, M.D., Ph.D. 53 Professor and Chairman, Department of 1993
Gynecology and Obstetrics, Stanford University
School of Medicine
Faye Wattleton 53 President, Center for Gender Equality 1994
Roger F. Greaves 59 Chairman, President and Chief Executive 1995
Officer (Retired), Health Net
Rockell N. Hankin 50 Senior Partner, Hankin & Co. 1995
Margaret G. McGlynn, R.Ph. 37 Senior Vice President, Health & Utilization 1996
Management, Merck-Medco Managed Care, L.L.C.
Andre de Bruin 50 Chairman, President and Chief Executive N/A
Officer, Somatogen, Inc.
</TABLE>
STEVEN T. FRANKEL joined the Company in June 1992 as President and Chief
Operating Officer. In May 1994, Mr. Frankel was elected Chief Executive Officer
of the Company. Mr. Frankel has over 30 years of experience in the areas of
sales and marketing to the medical, professional and consumer markets. Most
recently, as the head of the Asia Pacific Division of Becton Dickinson, he was
responsible for sales, marketing, manufacturing and country operations. Prior to
establishing the Asia Pacific Division in 1985, Mr. Frankel was President of
Becton Dickinson's U.S. Consumer Products Division and also had similar
responsibility for Becton Dickinson's European Consumer Products Division.
THOMAS A. GLAZE, a co-founder of the Company, has been a director since
April 1979 and was appointed Chairman of the Board in December 1980, a position
he held until April 1992. Mr. Glaze served as President of Monoclonal
Antibodies, Inc., the predecessor of the Company, from April 1979 to April 1988
and Chief Executive Officer from April 1988 to January 1991. Mr. Glaze is
currently President and Chief Executive Officer of Metabolex, Inc., a
pharmaceutical development company, and a director of Fluitek Corporation, a
distributor of industrial fluid filter elements.
JOHN D. DIEKMAN, Ph.D. was President and Chief Operating Officer of the
Company from April 1988 until 1991. He has been a director since 1988. From 1986
to 1988, he served as President of Salutar Inc., a biotechnology company. From
1970 to 1986, he was employed with Zoecon Corporation, a biotechnology and
agrichemical company, in a variety of positions, including President and Chief
Executive Officer. Dr. Diekman is currently a director of Affymax N.V., a
pharmaceutical company, and Chairman of Affymetrix Inc., a diagnostic and
genomics company. He also serves as a director of Metabolex, Inc., a
pharmaceutical development company, Pharmanex, an herbal drug company, Hilltop
Laboratories, a site management organization, and is a Managing Director in Bay
City Capital, a merchant bank.
RICHARD C. E. MORGAN has been a director of the Company since May 1990. Mr.
Morgan has been a General Partner of Wolfensohn Partners L.P. (the General
Partner of Wolfensohn Associates L.P.) since 1986. From 1976 to 1984, Mr. Morgan
was an executive director of J. Henry Schroder Wagg & Co. Ltd., a merchant bank,
which he joined in 1970. Mr. Morgan was a director and Chairman of MediSense,
Inc., from 1987 until its acquisition by Abbot Laboratories in 1996. He has been
a director of Lasertechnics, Inc., a printing systems company, since 1985 and
since 1994 has been its Chairman and Chief Executive Officer. He has been a
director of SEQUUS Pharmaceuticals, Inc., a biotechnology company, since 1990;
he has been a director of Celgene Corporation, a biotechnology company, since
1987; and has been a director of Indigo,
5
<PAGE> 8
N.V., a printing systems company, since 1996. Mr. Morgan also serves as a
director of Orbis International, a non-profit organization fighting blindness
worldwide.
MARY LAKE POLAN, M.D., Ph.D. has served as the Chairman of the Department
of Gynecology and Obstetrics at Stanford University School of Medicine since
1990. She received her Bachelors' Degree from Connecticut College, followed by a
Ph.D. in Molecular Biophysics and Biochemistry, and an M.D. from Yale University
School of Medicine. She remained at Yale New Haven Hospital for her residency in
Obstetrics and Gynecology, followed by a Reproductive Endocrine Fellowship. She
was on the faculty at Yale University until 1990, when she joined Stanford
University. She is a practicing clinical Reproductive Endocrinologist with a
research interest in ovarian function and granulosa cell steroidogenesis. More
recently, her interests have been in the interaction between the immune and
endocrine systems and the role of monokines in reproductive events. Dr. Polan
also serves on the Medical Advisory Board of Vivus, Inc., and on the Board of
Directors of Metra Biosystems and Gynecare, Inc., all in the Bay Area of
California, as well as American Home Products of Madison, New Jersey.
Faye Wattleton brings to the Board of Directors over 25 years of experience
as a leader and administrator in the fields of women's health and reproductive
rights. She is past president of the Planned Parenthood Foundation of America,
at the time of her departure the seventh largest national charity. She was
inducted into the National Women's Hall of Fame in 1993. Ms. Wattleton received
her Bachelors' of Science Degree from Ohio State University and her Masters of
Science Degree from Columbia University School of Nursing, and is the holder of
13 honorary doctorates. She presently serves on the Boards of Directors of Estee
Lauder Companies, Empire Blue Cross and Blue Shield, Biotechnology General, and
The Henry Kaiser Family Foundation.
ROGER F. GREAVES is retired Co-Chairman, President and Chief Executive
Officer of Health Systems International ("HSI"), one of America's largest
managed health care organizations until its recent merger into Foundation Health
Systems. Prior to the formation of HSI in 1994, Mr. Greaves was Chairman,
President and Chief Executive Officer of Health Net, which became the principle
subsidiary of HSI, growing the company from $40 million and 100,000 members in
1982 to over $2 billion and 1,000,000 members. He currently serves on the
Foundation Health Systems Board. He created and was founding Chairman of the
California Wellness Foundation, a health promotion and disease prevention
charity, and was a 10-year member of the Board of Directors of the Group Health
Association of America (now known as the American Association of Health Plans),
which is the managed care industry's national trade organization.
ROCKELL N. HANKIN is Senior Partner of Hankin & Co., an entity established
in 1986 which provides consulting services. Mr. Hankin is also a director of
Alpha Microsystems, a provider of information technology products and services,
Semtech Corporation, a manufacturer of electronic components, Sparta, Inc., a
provider of a wide range of scientific, engineering and technical assistance
services, and Chairman of the Board of House of Fabrics, a company engaged in
retail distribution.
MARGARET G. MCGLYNN, R.PH. serves as the Senior Vice President of Health &
Utilization Management at Merck-Medco Managed Care, where she is responsible for
developing health and utilization management programs for 50 million Americans
covered by Merck-Medco's prescription benefit plans. Prior to joining
Merck-Medco in 1994, Ms. McGlynn held several positions at Merck in the U.S.
pharmaceutical division, including sales, marketing, business development and
managed care marketing. Ms. McGlynn also serves on the executive board for a
joint venture between American Home Products and MerckMedco, which is focused on
developing disease and health management programs primarily in the area of
women's health. She also serves as a Board member of West Bergen Mental
Healthcare and the American Red Cross, Bergen Crossroad Chapter.
ANDRE DE BRUIN was appointed President and Chief Executive Officer of
Somatogen, Inc. in July 1994, and was elected as Chairman in January 1996.
Immediately prior to joining Somatogen, he was Chairman, President and Chief
Executive Officer of Boehringer Mannheim Corporation, Indianapolis, Indiana, a
U.S. subsidiary of Corange Ltd., a private, global health care corporation with
sales exceeding $3 billion. He held that position since 1989. Mr. de Bruin
serves on the Board of Directors of Diametrics Medical, Inc., a public company
that manufactures and markets proprietary critical care blood and tissue
analysis systems, and
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<PAGE> 9
Metabolex, Inc., a privately held company founded to develop therapeutics for
diabetes and related metabolic diseases. He has been involved in the global
health care industry for more than 25 years in pharmaceuticals, devices and
diagnostics.
MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of seven meetings, four
quarterly and three telephonic, during the fiscal year ended March 31, 1997
("FISCAL 1997").
During fiscal 1997, the Audit Committee of the Board of Directors consisted
of directors Thomas A. Glaze, Faye Wattleton and Rockell N. Hankin. The purpose
of the Audit Committee is to recommend engagement of the Company's independent
auditors and to approve the services performed by such auditors. In addition,
the Committee reviews and evaluates the Company's accounting principles and its
system of internal accounting controls. The Audit Committee met one time in
fiscal 1997.
During fiscal 1997, the Compensation Committee of the Board of Directors
consisted of directors John D. Diekman, Ph.D. (Chairman), Mary Lake Polan, M.D.,
Ph.D., and Roger F. Greaves. The Compensation Committee is authorized to review
and approve the Company's compensation policies. The Compensation Committee met
three times during fiscal 1997. The report of the Compensation Committee begins
at page 11.
All directors attended more than 75% of the aggregate of all meetings of
the Board of Directors and the committees, if any, upon which such directors
served.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive an annual retainer
of $12,000, with the exception of the Chairman of the Board who receives an
annual retainer of $18,000. In addition, non-employee directors receive a
meeting fee of $1,500 per meeting. The chairman of each committee of the Board
of Directors also receives an annual retainer of $1,000.
Under the Company's 1996 Non-Employee Directors Plan (the "1996 DIRECTOR
PLAN"), each non-employee director of the Company is automatically granted a
one-time option to purchase 40,000 shares of the Company's Common Stock (subject
to a four-year quarterly vesting schedule). All such options are granted at
exercise prices equal to 100% of the fair market value on the date of grant. As
of March 31, 1997, options to purchase 320,000 shares of the Company's Common
Stock under the 1996 Director Plan were outstanding.
Dr. Polan served as a consultant to the Company. She received a total of
$2,750 for consulting services rendered during fiscal 1997.
Ms. Wattleton is currently serving as a consultant to the Company. She
received a total of $10,000 for consulting services rendered during fiscal 1997.
Mr. de Bruin is currently serving as a part-time employee of the Company.
In consideration for his services, Mr. de Bruin receives an annual base salary
of $75,000. In addition, on June 23, 1997, Mr. de Bruin received a nonstatutory
stock option to purchase up to 300,000 shares of the Company's Common Stock, at
an exercise price equal to 100% of the fair market value on the date of grant.
The option vests cumulatively as to 100,000 shares at the rate of 6.25% for each
full calendar quarter following the date of grant. The option vests as to the
remaining 200,000 shares on the fifth anniversary of the date of grant, unless
the price per share of the Company's Common Stock equals or exceeds one or more
targets identified in Mr. de Bruin's option agreement over any rolling 90-day
period, in which case increments of the remaining 200,000 shares will vest on an
accelerated basis.
NOTICE REQUIREMENTS APPLICABLE TO STOCKHOLDER NOMINATIONS
The Bylaws of the Company provide that any stockholder entitled to vote for
the election of directors at a meeting may nominate persons for election as
directors only if timely written notice of such stockholder's intent to make
such nomination is given, either by personal delivery or United States mail,
postage prepaid, to the Secretary, Quidel Corporation, 10165 McKellar Court, San
Diego, California 92121. To be timely, a
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<PAGE> 10
stockholder's notice must be delivered to, or mailed and received at, the
address provided above, not less than 60 days nor more than 90 days prior to the
scheduled annual meeting; provided, however, that if less than 60 days' notice
or prior public disclosure of the date of the scheduled annual meeting is given
or made, notice by the stockholder, to be timely, must be so received not later
than the close of business on the 10th day following the day on which such
notice of the date of the scheduled annual meeting was mailed or the day on
which such public disclosure was made. A stockholder's notice to the Secretary
must set forth: (a) as to each person whom the stockholder proposes to nominate
for election or re-election as a director, (i) the name, age, business address
and residence address of the person, (ii) the principal occupation or employment
of the person, (iii) the class and number of shares of capital stock of the
Company beneficially owned by the person, and (iv) any other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"); and (b) as to
the stockholder giving the notice (i) the name and address, as they appear on
the Company's books, of such stockholder, and (ii) the class and number of
shares of the Company's stock that are beneficially owned by such stockholder on
the date of such stockholder notice.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid or accrued by the
Company to the Chief Executive Officer and the other four most highly
compensated executive officers of the Company for each of the fiscal years in
the three-year period ended March 31, 1997.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AWARDS
COMPENSATION ---------------------------
------------------ ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY(1) BONUS OPTIONS(#) COMPENSATION
- ----------------------------- ---- -------- ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
Steven T. Frankel 1997 $256,986 -- 75,000 --
President and 1996 234,596 -- 75,000 --
Chief Executive Officer 1995 212,779 -- 50,000 --
Lauren G. Otsuki 1997 $166,777 -- 40,000 --
Vice President -- Operations 1996 140,298 -- 25,000 --
1995 116,315 -- 15,000 --
Allan D. Pronovost 1997 $160,371 -- 25,000 --
Vice President -- Research 1996 134,818 -- 25,000 --
and Development 1995 120,858 -- 15,000 --
Steven C. Burke 1997 $149,532 -- 25,000 --
Vice President -- Finance 1996 139,552 -- 25,000 --
and Administration 1995 132,976 -- 15,000 --
Chief Financial Officer
John D. Tamerius 1997 $136,731 -- 25,000 --
Vice President -- Clinical 1996 126,555 -- 25,000 --
Laboratory Business 1995 120,167 -- 15,000 --
</TABLE>
- ---------------
(1) The amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred by executive officers
pursuant to the Company's 401(k) Plan. The Company did not make any
contributions to executive officers' accounts under the 401(k) Plan for the
periods indicated.
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<PAGE> 11
OPTION GRANTS IN FISCAL 1997
The following table sets forth information concerning options granted to
each of the named executive officers during fiscal 1997:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION
GRANTED TO FOR
OPTIONS EMPLOYEES EXERCISE OR OPTION TERM(2)
GRANTED IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME (#)(1) 1997 ($/SH) DATE 5% 10%
- --------------------------- ------- ---------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Steven T. Frankel.......... 75,000 14.6% $3.625 7/30/06 $170,981 $433,299
Lauren G. Otsuki........... 40,000 7.8 3.625 7/30/06 91,190 231,093
Allan D. Pronovost......... 25,000 4.9 3.625 7/30/06 56,994 144,433
Steven C. Burke............ 25,000 4.9 3.625 7/30/06 56,994 144,433
John D. Tamerius........... 25,000 4.9 3.625 7/30/06 56,994 144,433
</TABLE>
- ---------------
(1) Options disclosed above were granted pursuant to the Company's 1990 Employee
Stock Option Plan (the "1990 EMPLOYEE PLAN") on July 30, 1996. All options
disclosed above become fully exercisable on July 30, 2001. Such exercise
dates may be accelerated by meeting specific performance objectives or by
the Board of Directors in its discretion upon the occurrence of certain
events constituting a change in control (as defined in the 1990 Employee
Plan). The exercise price of the above options is equal to the fair market
value of the Common Stock on the date of the grant.
(2) The assumed annual rates of appreciation of five and ten percent would
result in the price per share of the Company's stock increasing to $5.90 and
$9.40, respectively.
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR END HOLDINGS AND
VALUES
The following table sets forth information for the named executive officers
regarding the exercise of stock options in fiscal 1997 and unexercised options
held at the end of fiscal 1997.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT 3/31/97 AT 3/31/97(1)($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven T. Frankel........... -- $ -- 100,000 250,000 $ -- $37,500
Lauren G. Otsuki............ -- -- 58,089 102,000 44,198 16,250
Allan D. Pronovost.......... -- -- 7,860 90,000 -- 12,500
Steven C. Burke............. 19,052 57,728 38,760 93,000 -- 12,500
John D. Tamerius............ -- -- 50,121 90,000 99,007 12,500
</TABLE>
- ---------------
(1) Based on the closing price of $3.875 quoted on The Nasdaq National Market on
March 31, 1997.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the securities laws of the United States, the directors and executive
officers of the Company and persons who own more than ten percent (10%) of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Commission and The Nasdaq National Market. Specific due dates for these reports
have been established, and the Company is required to disclose in this Proxy
Statement any late filings during fiscal 1997. To the Company's knowledge, based
solely on its review of the copies of such reports required to be furnished to
the Company during the fiscal year ended March 31, 1997, all of these reports
were timely filed.
9
<PAGE> 12
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "COMMITTEE")
administers the Company's executive compensation programs. After consideration
of the Committee's recommendations, the full Board of Directors reviews and
approves salaries of all elected officers, including those of the executive
officers named in the Summary Compensation Table. The Committee is responsible
for recommending to the Board and administering all other elements of executive
compensation, including annual incentive awards and stock options. The Company's
executive compensation programs are designed to:
- provide competitive levels of base compensation in order to attract,
retain and motivate high-quality employees;
- tie individual total compensation to individual performance and the
success of the Company; and
- align the interests of the Company's executive officers with those of its
stockholders.
BASE SALARY
Base salary is targeted to be moderate yet competitive in relation to
salaries commanded by those in similar positions in comparable companies. The
Committee reviews management recommendations for executives' salaries and
examines survey data for executives with similar responsibilities in comparable
companies in the biotechnology industry. Individual salary determinations are
based on experience, sustained performance and comparison to peers inside and
outside the Company.
ANNUAL INCENTIVE AWARDS
The Company maintains a management incentive compensation plan that is
designed to reward the Company's officers for their contributions to corporate
and individual objectives. Under the plan, each participating officer is
entitled to receive a cash bonus if certain performance goals are met in a
particular fiscal year. The performance goals measure the extent to which the
Company has realized or exceeded separate targets for sales and net income
during the fiscal year and the extent to which the relevant officer has realized
certain personal performance goals. If the specified performance target is
achieved, the officer will receive a defined bonus.
Each eligible employee's potential annual award under the plan is expressed
as a percentage of the total base compensation earned by the individual during
the fiscal year. During fiscal 1997, the percentages for the Chief Executive
Officer and all participating Vice Presidents were set at 40% and 30%,
respectively. These percentages could be increased in the event the maximum
target levels are exceeded for the sales and net income performance goals. For
the year ended March 31, 1997, targeted sales and net income goals were not
achieved and as such no incentive compensation was earned or paid.
STOCK OPTIONS
The Committee administers the 1990 Employee Plan and is responsible for the
recommendation to the Board of Directors of stock option grants. The plan is
designed to align the interests of management with those of the Company's
stockholders. The number of stock options granted is related to the recipient's
base compensation and level of responsibility. All options are granted with an
option exercise price equal to the fair market value of the Company's Common
Stock on the date of the grant.
The stock option program for the Company's officers is designed to provide
a reward for the achievement of the same corporate and individual objectives as
provided for under the incentive compensation plan. The program is administered
under the 1990 Employee Plan and ties the timing of vesting dates of newly
granted stock options to the success of the Company and to individual
performance. In fiscal 1997, the program resulted in an aggregate grant of
options to purchase 240,000 shares of Common Stock to a total of seven officers.
The exercise price of the options is $3.625, which is equal to the closing sales
price for the Common Stock on July 29, 1996 as reported on The Nasdaq National
Market. All options granted under the program
10
<PAGE> 13
vest in five years from the grant date, but vesting may be accelerated so that
up to 50% of such options vest in each of the first two years from the date of
grant, with the exact timing of such vesting dependent upon the achievement of
certain corporate and individual goals. Under the program, the options granted
in fiscal 1997 will be fully vested on July 30, 2001.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In determining Mr. Frankel's base salary and bonus, the Committee
considered both the Company's overall performance and Mr. Frankel's individual
performance by the same measures described above for determining executive
officer compensation. The Committee also considered base salary and bonus levels
for Chief Executive Officers in comparable companies.
Mr. Frankel's base salary was increased by 6.7% in February 1997 based on
merit. Under the management incentive compensation plan, the Committee tied Mr.
Frankel's possible award to the satisfaction of specified sales and net income
targets and to the satisfaction of certain personal goals. Although the
Company's sales and net income increased significantly in fiscal 1997, the sales
and net income targets were not achieved and no incentive compensation was
earned or paid. If all of the above targets and goals had been satisfied in
fiscal 1997, Mr. Frankel would have earned approximately $102,794 under the
plan.
Compensation Committee
John D. Diekman, Ph.D. (Chairman)
Mary Lake Polan, M.D., Ph.D.
Roger F. Greaves
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Other than Dr. Diekman, no current member of the Company's Compensation
Committee is a current or former officer or employee of the Company. There are
no Compensation Committee interlocks between the Company and other entities
involving the Company's executive officers and Board members who serve as
executive officers or board members of such other entities.
11
<PAGE> 14
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's Common Stock with the
cumulative total return of the Nasdaq U.S. Index and the Nasdaq Pharmaceutical
Index for the period beginning March 31, 1992 and ending March 28, 1997. The
graph assumes that all dividends have been reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NASDAQ QUIDEL
(FISCAL YEAR COVERED) NASDAQ U.S.* PHARMACEUTICAL CORPORATION
--------------------- ------------ -------------- -----------
<S> <C> <C> <C>
3/31/92 100.0 100.0 100.0
3/31/93 115.0 69.2 64.2
3/31/94 124.1 69.9 73.6
3/31/95 138.0 69.6 67.9
3/29/96 187.4 122.8 84.9
3/31/97 208.5 112.4 58.5
</TABLE>
- ---------------
* Nasdaq Stock Market total return indexes prepared by The Center for Research
in Securities Prices ("CRSP") at the University of Chicago.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP ("ERNST & YOUNG"),
independent auditors, to audit the consolidated financial statements of the
Company for the fiscal year ending March 31, 1998 and recommends that the
stockholders vote "FOR" ratification of such appointment. In the event of a
negative vote on such ratification, the Board of Directors will reconsider its
selection.
Ernst & Young's representatives are expected to be present at the Meeting,
to have the opportunity to make a statement if they desire to do so and to be
available to respond to appropriate questions.
12
<PAGE> 15
ANNUAL REPORTS
The Company's 1997 Annual Report to Stockholders has been mailed to
stockholders concurrently with this Proxy Statement, but such report is not
incorporated herein and is not deemed to be a part of this Proxy Statement.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE
COMMISSION, WITHOUT EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO ANY PERSON
FROM WHOM THE ACCOMPANYING PROXY IS SOLICITED UPON WRITTEN
REQUEST TO THE COMPANY'S SECRETARY, STEVEN C. BURKE, AT QUIDEL CORPORATION,
10165 MCKELLAR COURT, SAN DIEGO, CALIFORNIA 92121.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholders who wish to include proposals for action at the Company's 1998
Annual Meeting of Stockholders in next year's proxy statement and proxy must
cause their proposals to be received in writing by the Company's Secretary at
the address set forth on the first page of this Proxy Statement no later than
February 27, 1998.
Stockholders who do not present proposals for inclusion in the Proxy
Statement but who still intend to submit a proposal at the 1997 Annual Meeting
must, in accordance with the Company's Bylaws, provide timely notice of the
matter to the Secretary of the Company. To be timely, written notice must be
received by the Secretary no less than 60 days nor more than 90 days prior to
the annual meeting. If less than 60 days' notice or prior public disclosure of
the date of the scheduled annual meeting is given, then notice of the proposed
business matter must be received by the Secretary not later than the close of
business on the tenth day following the day on which such notice of the date of
the scheduled annual meeting was mailed or the day on which such public
disclosure was made. Any notice to the Secretary must include as to each matter
the stockholder proposes to bring before the meeting: (a) a brief description of
the proposal desired to be brought before the meeting and the reason for
conducting such business at the annual meeting, (b) the stockholders name and
address, as they appear on the Company's books, (c) the class and number of
shares of the Company which are beneficially owned by the stockholder, (d) any
material interest of the stockholder in such business and (e) any other
information that is required to be provided by the stockholder pursuant to
Regulation 14A under the Exchange Act in his or her capacity as a proponent of
the stockholder proposal.
OTHER BUSINESS
The Company knows of no other matters to be submitted to the Meeting. If
any other matters properly come before the Meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.
San Diego, California
July 1, 1997
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES ON, DATE, SIGN AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.
13
<PAGE> 16
QUIDEL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 29, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned Stockholder of QUIDEL CORPORATION, a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement for the Annual Meeting to be held on July 29,
1997 at 10:00 a.m., at the Company's offices located at 10165 McKellar Court,
San Diego, California, and hereby appoints Steven T. Frankel and Steven C.
Burke, and each of them, proxies and attorneys-in-fact, each with full power of
substitution and revocation, and each with all powers that the undersigned
would possess if personally present, to vote QUIDEL CORPORATION Common Stock
held by the undersigned at such meeting and any postponements or adjournments of
such meeting, as set forth on the reverse, and in their discretion upon any
other business that may properly come before the meeting.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
<PAGE> 17
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
A [X] PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE.
FOR all nominees listed WITHHOLD authority
PROPOSAL 1. ELECTION OF DIRECTORS at right (except as to vote for all
indicated) nominees listed
to right
[ ] [ ]
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE
THROUGH THAT NOMINEE'S NAME LISTED AT RIGHT.
- --------------------------------------------------------------------------
Nominees: Steven T. Frankel
Thomas A. Glaze
John D. Diekman, Ph.D.
Richard C. E. Morgan
Mary Lake Polan, M.D., Ph.D.
Faye Wattleton
Roger F. Greaves
Rockell N. Hankin
Margaret G. McGlynn, R.Ph.
Andre de Bruin
PROPOSAL 2. To ratify the selection of Ernst & Young LLP as the independent
auditors for the Company for the fiscal year ending March 31, 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS CARD
Signature(s): Date:
--------------------------------------------- --------------
NOTE: This Proxy should be dated, signed by the stockholder(s) exactly as his
or her name(s) appear hereon and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.
