<PAGE>
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:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
DIONEX 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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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:
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Notes:
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DIONEX CORPORATION
501 MERCURY DRIVE
SUNNYVALE, CALIFORNIA 94086
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 27, 1995
TO THE STOCKHOLDERS OF DIONEX CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Dionex
Corporation, a Delaware corporation (the "Company"), will be held at Dionex
Corporation, 501 Mercury Drive, Sunnyvale, California 94086, on Friday,
October 27, 1995 at 9:00 a.m. for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve Dionex Corporation Stock Option Plan, as amended and
restated, to increase the aggregate number of shares of Common Stock
authorized for issuance under such plan by 350,000 shares, to add
provisions with respect to Section 162(m) of the Internal Revenue Code of
1986, as amended, and to extend the term of such plan to July 26, 2005.
3. To ratify the selection of Deloitte & Touche LLP as the Company's
independent auditors for its fiscal year ending June 30, 1996.
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on September 11,
1995, as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ JAMES C. GAITHER
--------------------------------
James C. Gaither
Secretary
Sunnyvale, California
September 15, 1995
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK
OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST BRING TO THE
MEETING A LETTER FROM THE BROKER, BANK OR OTHER NOMINEE CONFIRMING YOUR
BENEFICIAL OWNERSHIP OF THE SHARES. ADDITIONALLY, IN ORDER TO VOTE AT THE
MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
DIONEX CORPORATION
501 MERCURY DRIVE
SUNNYVALE, CALIFORNIA 94086
1995 PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Dionex Corporation, a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on October 27, 1995, at 9:00 a.m.
(the "Annual Meeting"), or at any adjournment or postponement thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting.
The Annual Meeting will be held at Dionex Corporation, 501 Mercury Drive,
Sunnyvale, California 94086.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid to directors, officers or
other regular employees for such services.
The Company intends to mail this proxy statement and accompanying proxy card
on or about September 15, 1995, to all stockholders entitled to vote at the
Annual Meeting.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on September
11, 1995 will be entitled to notice of and to vote at the Annual Meeting. At
the close of business on September 11, 1995, the Company had outstanding and
entitled to vote 6,709,343 shares of Common Stock. Each holder of record of
Common Stock on such date will be entitled to one vote for each share held on
all matters to be voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter
has been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 501
Mercury Drive, Sunnyvale, California 94086, a written notice of revocation or
a duly executed proxy bearing a later date, or it may be revoked by attending
the meeting and voting in person. Attendance at the meeting will not, by
itself, revoke a proxy.
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PROPOSAL 1
ELECTION OF DIRECTORS
There are four nominees for the four Board positions presently authorized in
the Company's By-laws. Each director to be elected will hold office until the
next annual meeting of stockholders and until his successor is elected and has
qualified, or until such director's earlier death, resignation or removal.
Each nominee listed below is currently a director of the Company, all four
directors having been elected by the stockholders.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the four nominees named below. In the
event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected, and management has no reason to
believe that any nominee will be unable to serve. Directors are elected by a
plurality of the votes of the holders of Common Stock present in person or
represented by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
NOMINEES
The following information pertains to the nominees, their principal
occupations for the preceding five-year period, certain directorships, and
their ages as of August 31, 1995.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION/
POSITIONS HELD
NAME AGE WITH THE COMPANY
---- --- ---------------------
<S> <C> <C>
David L. Anderson................................ 51 General Partner,
Sutter Hill
Ventures
James F. Battey.................................. 74 Independent Investor
A. Blaine Bowman................................. 49 President and Chief
Executive Officer
B. J. Moore...................................... 59 Management
Consultant
</TABLE>
Mr. Anderson has been a general partner of Sutter Hill Ventures, a venture
capital investment partnership, since 1974. Mr. Anderson has served as a
director of Dionex Corporation since it began operations in 1980 and
previously served as a director of the predecessor of Dionex Corporation. Mr.
Anderson is also a director of Cytel Corporation.
Dr. Battey was President and Chief Executive Officer of Psi Star, Inc.,
which manufactured equipment used in the production of computer circuit
boards, from 1981 until May 1987, and Chairman of the Board of Psi Star from
May 1987 until his retirement in May 1990. Dr. Battey has served as a director
of Dionex Corporation since it began operations in 1980 and previously served
as a director of the predecessor of Dionex Corporation.
Mr. Bowman has served as the Company's President and Chief Executive Officer
and as a director since the Company began operations in 1980.
Mr. Moore is an independent management consultant. From December 1985 until
July 1991, he was President of Outlook Technology, Inc., a company that
manufactured and sold high performance instrumentation and was merged with
Biomation Corporation in August 1991. He has served as a director of Dionex
Corporation since it began operations in 1980 and previously served as a
director of the predecessor of Dionex Corporation. Mr. Moore is also a
director of Adaptec, Inc.
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MEETINGS; COMMITTEES
During the fiscal year ended June 30, 1995, the Board of Directors held four
meetings. The Board of Directors has two committees, an Audit Committee and a
Compensation Committee. The Audit Committee recommends engagement of the
Company's independent auditors, approves services performed by such auditors,
and reviews and evaluates the Company's accounting system and its system of
internal accounting controls. The Audit Committee, consisting of Messrs.
Anderson, Bowman and Moore and Dr. Battey, held one meeting during the fiscal
year ended June 30, 1995.
The Compensation Committee reviews and administers the compensation of the
Company's officers and certain members of senior management of the Company.
The members of the Compensation Committee are Messrs. Anderson and Moore and
Dr. Battey. During the fiscal year ended June 30, 1995, the Compensation
Committee held one meeting.
During the fiscal year ended June 30, 1995, each Board member attended all
of the meetings of the Board of Directors and the committees upon which such
member served.
PROPOSAL 2
APPROVAL OF DIONEX CORPORATION STOCK OPTION PLAN, AS AMENDED AND RESTATED
In August 1990, the Board adopted, and the stockholders subsequently
approved, Dionex Corporation Stock Option Plan (formerly, the 1990 Stock
Option Plan) (the "Plan") under which 950,000 shares of the Company's Common
Stock were authorized for issuance. At June 30, 1995, only 145,376 shares
(plus any shares that might in the future be returned to the Plan as a result
of cancellations or expiration of options) remained available for future grant
under the Plan. During the year ended June 30, 1995, under the Plan, the
Company granted to all current executive officers as a group options to
purchase 63,000 shares at an exercise price of $41.75 per share and to all
employees (excluding executive officers) as a group options to purchase
126,600 shares at an exercise price of $41.75 per share.
In July 1995, the Board approved an amendment to and restatement of the
Plan, subject to stockholder approval, to enhance the flexibility of the Board
and the Compensation Committee in granting stock options to the Company's
employees. The amendment increased the number of shares authorized for
issuance under the Plan by 350,000 shares and extended the term of the Plan
from August 1, 2000 to July 26, 2005. The Board adopted this amendment to
ensure that the Company can continue to grant stock options to employees at
levels determined appropriate by the Board and the Compensation Committee.
In July 1995, the Board also amended the Plan, subject to stockholder
approval, generally to permit the Company under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), to continue to be able to
deduct as a business expense certain compensation attributable to the exercise
of stock options granted under the Plan. Section 162(m) denies a deduction to
any publicly held corporation for certain compensation paid to specified
employees in a taxable year to the extent that the compensation exceeds
$1,000,000 for any covered employee. See "Federal Income Tax Information"
below for a discussion of the application of Section 162(m). In light of the
Section 162(m) requirements, the Board amended the Plan, subject to
stockholder approval, to include a limitation providing that no employee may
be granted options to purchase in excess of 200,000 shares of Common Stock
during any twelve-month period. Previously, no such formal limitation was
placed on the number of shares available for option grants to an employee. In
addition, the Plan was amended, subject to stockholder approval, to provide
that, in the Board's discretion, directors who grant options to covered
employees generally will be "outside directors" as defined in Section 162(m).
For a description of this requirement, see "Administration."
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Stockholders are requested in Proposal 2 to approve the Plan, as amended and
restated. If the stockholders fail to approve Proposal 2, the number of shares
available for future grant under the Plan will remain at 145,376 and options
granted under the Plan after the Annual Meeting will not qualify as
performance-based compensation and, in some circumstances, the Company may be
denied a business expense deduction for compensation recognized in connection
with the exercise of these stock options. The affirmative vote of the holders
of a majority of the shares present in person or represented by proxy and
entitled to vote at the meeting will be required to approve the Plan, as
amended and restated. Abstentions will be counted toward the tabulation of
votes cast on proposals presented to the stockholders and will have the same
effect as negative votes. Broker non-votes are counted towards a quorum, but
are not counted for any purpose in determining whether this matter has been
approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
The essential features of the Plan are outlined below:
GENERAL
The Plan provides for the grant of both incentive and nonstatutory stock
options. Incentive stock options granted under the Plan are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Code. Nonstatutory stock options granted under the Plan are intended not to
qualify as incentive stock options under the Code. See "Federal Income Tax
Information" for a discussion of the tax treatment of incentive and
nonstatutory stock options.
PURPOSE
The Plan was adopted to provide a means by which selected officers and
employees of and consultants to the Company and its affiliates could be given
an opportunity to purchase stock in the Company, to assist in retaining the
services of employees holding key positions, to secure and retain the services
of persons capable of filling such positions and to provide incentives for
such persons to exert maximum efforts for the success of the Company.
Approximately 20% of the Company's approximately 650 employees and consultants
have received options under the Plan.
ADMINISTRATION
The Plan is administered by the Board of Directors of the Company. The Board
has the power to construe and interpret the Plan and, subject to the
provisions of the Plan, to determine the persons to whom and the dates on
which options will be granted, the number of shares to be subject to each
option, the time or times during the term of each option within which all or a
portion of such option may be exercised, the exercise price, the type of
consideration and other terms of the option. The Board is authorized to
delegate administration of the Plan to a committee composed of not fewer than
two members of the Board. The Board has delegated administration of the Plan
to the Compensation Committee of the Board. As used herein with respect to the
Plan, the "Board" refers to the Compensation Committee as well as to the Board
of Directors itself.
The proposed regulations under Section 162(m) require that the directors who
serve as members of the Compensation Committee must be "outside directors."
The Plan has been amended, subject to stockholder approval, to provide that,
in the Board's discretion, directors serving on the Committee will also be
"outside directors" within the meaning of Section 162(m). This limitation
would exclude from the Compensation Committee (i) current employees of the
Company, (ii) former employees of the Company receiving compensation for past
services (other than benefits under a tax-qualified pension plan), (iii)
current and former officers of the Company, and (iv) directors currently
receiving direct or indirect remuneration from the Company in any capacity
(other than as a director), unless any such person is otherwise considered an
"outside director" for purposes of Section 162(m). The Company currently
intends to monitor the proposed regulations and will
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determine at the appropriate time whether to make any change to the
composition of its Compensation Committee if any would be required by the
final regulations.
ELIGIBILITY
Incentive stock options may be granted under the Plan only to selected key
employees (including officers) of the Company and its affiliates. Selected key
employees (including officers) and consultants are eligible to receive
nonstatutory stock options under the Plan. Directors who are not salaried
employees of or consultants to the Company or to any affiliate of the Company
are not eligible to participate in the Plan.
No incentive option may be granted under the Plan to any person who, at the
time of the grant, owns (or is deemed to own) stock possessing more than 10%
of the total combined voting power of the Company or any affiliate of the
Company, unless the option exercise price is at least 110% of the fair market
value of the stock subject to the option on the date of grant, and the term of
the option does not exceed five years from the date of grant. For incentive
stock options granted under the Plan after 1986, the aggregate fair market
value, determined at the time of grant, of the shares of Common Stock with
respect to which such options are exercisable for the first time by an
optionee during any calendar year (under all such plans of the Company and its
affiliates) may not exceed $100,000.
Subject to stockholder approval of Proposal 2, the Company has added to the
Plan a per-employee, per-twelve-month period limitation equal to 200,000
shares of Common Stock. The purpose of adding this limitation is generally to
permit the Company to continue to be able to deduct for tax purposes the
compensation attributable to the exercise of options granted under the Plan.
Previously, the Board or the Compensation Committee determined in its
discretion the number of shares subject to an option for any employee and no
such formal limitation was placed on the number of shares available for an
option to an employee. To date, the Company has not granted to any employee in
any twelve-month period options to purchase a number of shares equal to or in
excess of the limitation.
STOCK SUBJECT TO THE PLAN
If options granted under the Plan expire or otherwise terminate without
being exercised, the Common Stock not purchased pursuant to such options again
becomes available for issuance under the Plan.
TERMS OF OPTIONS
The following is a description of the permissible terms of options under the
Plan. Individual option grants may be more restrictive as to any or all of the
permissible terms described below.
Exercise Price; Payment. The exercise price of incentive stock options under
the Plan may not be less than the fair market value of the Common Stock
subject to the option on the date of the option grant, and, in some cases (see
"Eligibility" above), may not be less than 110% of such fair market value. The
exercise price of nonstatutory options under the Plan may not be less than 85%
of the fair market value of the Common Stock subject to the option on the date
of the option grant. However, if options were granted with exercise prices
below market value, deductions for compensation attributable to the exercise
of such options could be limited by Section 162(m). See "Federal Income Tax
Information." At July 31, 1995, the closing price of the Company's Common
Stock as reported on the Nasdaq National Market System was $48.125 per share.
The exercise price of options granted under the Plan must be paid either:
(a) in cash at the time the option is exercised; or (b) at the discretion of
the Board, (i) by delivery of other Common Stock of the Company, (ii) pursuant
to a deferred payment arrangement; or (c) in any other form of legal
consideration acceptable to the Board.
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Option Exercise. Options granted under the Plan may become exercisable in
cumulative increments ("vest") as determined by the Board. Shares covered by
currently outstanding options under the Plan typically vest in 25% increments
each year beginning one year from the date of the grant. Shares covered by
options granted in the future under the Plan may be subject to different
vesting terms. The Board has the power to accelerate the time during which an
option may be exercised. In addition, options granted under the Plan may
permit exercise prior to vesting, but in such event the optionee may be
required to enter into an early exercise stock purchase agreement that allows
the Company to repurchase shares not yet vested at their exercise price should
the optionee leave the employ of the Company before vesting. To the extent
provided by the terms of an option, an optionee may satisfy any federal, state
or local tax withholding obligation relating to the exercise of such option by
a cash payment upon exercise, by authorizing the Company to withhold a portion
of the stock otherwise issuable to the optionee, by delivering already-owned
stock of the Company or by a combination of these means.
Term. The maximum term of options under the Plan is ten years, except that
in certain cases (see "Eligibility") the maximum term is five years. Options
under the Plan terminate 30 days after termination of the optionee's
employment or relationship as a consultant of the Company or any affiliate of
the Company, unless (a) such termination is due to such person's permanent and
total disability (as defined in the Code), in which case the option may, but
need not, provide that it may be exercised at any time within one year of such
termination; (b) the optionee dies while employed by or serving as a
consultant or director of the Company or any affiliate of the Company, or
within 30 days after termination of such relationship, in which case the
option may, but need not, provide that it may be exercised (to the extent the
option was exercisable at the time of the optionee's death) within 18 months
of the optionee's death by the person or persons to whom the rights to such
option pass by will or by the laws of descent and distribution; or (c) the
option by its terms specifically provides otherwise. Individual options by
their terms may provide for exercise within a longer period of time following
termination of employment or the consulting relationship. The option term may
also be extended in the event that exercise of the option within these periods
is prohibited for specified reasons.
ADJUSTMENT PROVISIONS
If there is any change in the stock subject to the Plan or subject to any
option granted under the Plan (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or otherwise), the Plan and options outstanding
thereunder will be appropriately adjusted as to the class and the maximum
number of shares subject to such plan, the maximum number of shares which may
be granted to an employee during any twelve-month period, and the class,
number of shares and price per share of stock subject to such outstanding
options.
EFFECT OF CERTAIN CORPORATE EVENTS
The Plan provides that, in the event of a dissolution or liquidation of the
Company, specified type of merger or other corporate reorganization, to the
extent permitted by law, any surviving corporation will be required to either
assume options outstanding under the Plan or substitute similar options for
those outstanding under such plan, or such outstanding options will continue
in full force and effect. In the event that any surviving corporation declines
to assume or continue options outstanding under the Plan, or to substitute
similar options, then the time during which such options may be exercised will
be accelerated and the options terminated if not exercised during such time.
The acceleration of an option in the event of an acquisition or similar
corporate event may be viewed as an antitakeover provision, which may have the
effect of discouraging a proposal to acquire or otherwise obtain control of
the Company.
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the Plan without stockholder approval or
ratification at any time or from time to time. In July 1995, the Board
approved an amendment to the Plan to extend the term of the Plan to July 26,
2005. If the stockholders fail to approve this Proposal 2, the Plan will
terminate on August 1, 2000.
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The Board may also amend the Plan at any time or from time to time. However,
no amendment will be effective unless approved by the stockholders of the
Company within twelve months before or after its adoption by the Board if the
amendment would: (a) modify the requirements as to eligibility for
participation (to the extent such modification requires stockholder approval
in order for the Plan to satisfy Section 422 of the Code, if applicable, or
Rule 16b-3 ("Rule 16b-3") of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")); (b) increase the number of shares reserved for issuance
upon exercise of options; or (c) change any other provision of the Plan in any
other way if such modification requires stockholder approval in order to
comply with Rule 16b-3 or satisfy the requirements of Section 422 of the Code.
The Board may submit any other amendment to the Plan for stockholder approval,
including, but not limited to, amendments intended to satisfy the requirements
of Section 162(m) of the Code regarding the exclusion of performance-based
compensation from the limitation on the deductibility of compensation paid to
certain employees.
RESTRICTIONS ON TRANSFER
Under the Plan, an incentive stock option may not be transferred by the
optionee other than by will or by the laws of descent and distribution, and
during the lifetime of the optionee, may be exercised only by the optionee. A
nonstatutory stock option may not be transferred except by will or by the laws
of descent and distribution or pursuant to a "Qualified Domestic Relations
Order." In any case, the optionee may designate in writing a third party who
may exercise the option in the event of the optionee's death. In addition,
shares subject to repurchase by the Company under an early exercise stock
purchase agreement may be subject to restrictions on transfer as the Board
deems appropriate.
FEDERAL INCOME TAX INFORMATION
Incentive Stock Options. Incentive stock options under the Plan are intended
to be eligible for the favorable federal income tax treatment accorded
"incentive stock options" under the Code.
There generally are no federal income tax consequences to the optionee or
the Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the optionee's
alternative minimum tax liability, if any.
If an optionee holds stock acquired through exercise of an incentive stock
option for at least two years from the date on which the option is granted and
at least one year from the date on which the shares are transferred to the
optionee upon exercise of the option, any gain or loss on a disposition of
such stock will be long-term capital gain or loss. Generally, if the optionee
disposes of the stock before the expiration of either of these holding periods
(a "disqualifying disposition"), at the time of disposition, the optionee will
realize taxable ordinary income equal to the lesser of (a) the excess of the
stock's fair market value on the date of exercise over the exercise price, or
(b) the optionee's actual gain, if any, on the purchase and sale. The
optionee's additional gain, or any loss, upon the disqualifying disposition
will be a capital gain or loss, which will be long-term or short-term
depending on whether the stock was held for more than one year. Long-term
capital gains currently are generally subject to lower tax rates than ordinary
income. The maximum capital gains rate for federal income tax purposes is
currently 28% while the maximum ordinary income rate is effectively 39.6% at
the present time. Slightly different rules may apply to optionees who acquire
stock subject to certain repurchase options or who are subject to Section
16(b) of the Exchange Act.
To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) of the
Code and the satisfaction of a tax reporting obligation) to a corresponding
business expense deduction in the tax year in which the disqualifying
disposition occurs.
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Nonstatutory Stock Options. Nonstatutory stock options granted under the Plan
generally have the following federal income tax consequences:
There are no tax consequences to the optionee or the Company by reason of the
grant of a nonstatutory stock option. Upon exercise of a nonstatutory stock
option, the optionee normally will recognize taxable ordinary income equal to
the excess of the stock's fair market value on the date of exercise over the
option exercise price. Generally, with respect to employees, the Company is
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness, the provisions of Section 162(m) of the Code and the
satisfaction of a tax reporting obligation, the Company will generally be
entitled to a business expense deduction equal to the taxable ordinary income
realized by the optionee. Upon disposition of the stock, the optionee will
recognize a capital gain or loss equal to the difference between the selling
price and the sum of the amount paid for such stock plus any amount recognized
as ordinary income upon exercise of the option. Such gain or loss will be long
or short-term depending on whether the stock was held for more than one year.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
Potential Limitation on Company Deductions. As part of the Omnibus Budget
Reconciliation Act of 1993, the U.S. Congress amended the Code to add Section
162(m), which denies a deduction to any publicly held corporation for
compensation paid to certain employees in a taxable year to the extent that
compensation exceeds $1,000,000 for a covered employee. It is possible that
compensation attributable to stock options, when combined with all other types
of compensation received by a covered employee from the Company, may cause this
limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with proposed Treasury regulations issued under Section 162(m),
compensation attributable to stock options will qualify as performance-based
compensation, provided that the option is granted by a compensation committee
comprised solely of "outside directors" and either: (i) the option plan
contains a per-employee limitation on the number of shares for which options
may be granted during a specified period, the per-employee limitation is
approved by the stockholders and the exercise price of the option is no less
than the fair market value of the stock on the date of grant; or (ii) the
option is granted (or exercisable) only upon the achievement (as certified in
writing by the compensation committee) of an objective performance goal
established in writing by the compensation committee while the outcome is
substantially uncertain, and the option is approved by stockholders.
PROPOSAL 3
APPROVAL OF INDEPENDENT AUDITORS
Deloitte & Touche LLP ("Deloitte & Touche") has served as the Company's
independent auditors with respect to the Company's books and accounts since the
Company began operations in 1980.
The stockholders are being asked to ratify the approval of Deloitte & Touche
as independent auditors for the fiscal year ending June 30, 1996. Although it
is not required to do so, the Board of Directors is submitting the approval of
Deloitte & Touche to the stockholders for ratification as a matter of good
corporate practice. Should the stockholders fail to provide such ratification,
the Board would reconsider its approval of Deloitte & Touche as independent
auditors for the fiscal year ending June 30, 1996. Even if the selection is
ratified, the Board in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the Board determines
that such a change would be in the best interests of the Company and its
stockholders.
Representatives of Deloitte & Touche are expected to be present at the Annual
Meeting of Stockholders. They do not expect to make any statement, but will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
8
<PAGE>
The affirmative vote of the holders of a majority of the Common Stock
present in person or represented by proxy and entitled to vote on the proposal
at the Annual Meeting will be required to ratify the selection of Deloitte &
Touche.
THE BOARD OF DIRECTORS RECOMMENDS RATIFICATION OF THE SELECTION OF DELOITTE &
TOUCHE.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of August 1, 1995 by (i) each director, (ii)
each Named Executive Officer (as defined under "Executive Compensation"),
(iii) all executive officers and directors as a group and (iv) all those known
by the Company to be beneficial owners of more than five percent of its Common
Stock:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
--------------------------
NUMBER PERCENT
NAME OF BENEFICIAL OWNER OF SHARES OF CLASS
------------------------ ------------- -----------
<S> <C> <C>
Pioneering Management Corporation(2)....... 746,000 10.9%
60 State Street
Boston, MA 02109
Neuberger & Berman(3)...................... 389,052 5.4
605 Third Avenue
New York, NY 10158
A. Blaine Bowman(4)(6)..................... 359,518 5.1
James F. Battey............................ 131,845 1.9
David L. Anderson(5)(6).................... 77,030 1.1
Barton Evans, Jr.(6)....................... 67,513 1.0
Nebojsa Avdalovic(6)....................... 9,500 *
B. J. Moore(6)............................. 7,010 *
Michael Pope(6)............................ 4,473 *
All executive officers and directors as a
group (the above 7 persons)(7)............ 656,889 9.3
</TABLE>
--------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission (the "SEC"). Unless otherwise indicated in the
footnotes to this table, and subject to community property laws where
applicable, each of the stockholders named in this table has sole voting
and investment power with respect to the shares indicated as beneficially
owned. Applicable percentages are based on 6,839,703 shares outstanding on
August 1, 1995, adjusted as required by rules promulgated by the SEC.
(2) Pioneering Management Corporation is a registered investment advisor. Of
the shares set forth above, as of August 1, 1995, Pioneering Management
Corporation had shared investment power with respect to 600,000 shares,
sole investment power with respect to 146,000 shares and sole voting power
with respect to 746,000.
(3) Neuberger & Berman ("N&B") is a registered investment advisor. In its
capacity as investment advisor, N&B may have discretionary authority to
dispose of or to vote shares that are under its management. As a result,
N&B may be deemed to have beneficial ownership of such shares. N&B does
not, however, have any economic interest in the shares. The clients are
the actual owners of the shares and have the sole right to receive and the
power to direct the receipt of dividends from or proceeds from the sale of
such shares. No single N&B client has an interest at N&B that amounts to
5% or more of the shares of Dionex Corporation. As of August 1, 1995, of
the shares set forth above, N&B had shared dispositive power with respect
to 389,052 shares, sole voting power with respect to 242,300 shares and
shared voting power with respect to 42,100.
9
<PAGE>
(4) Includes (i) 13,066 shares held of record by a trust for the benefit of
Mr. Bowman's minor daughter, as to which shares Mr. Bowman disclaims
beneficial ownership, and (ii) 6,000 shares held by Mr. Bowman as
custodian for his children, as to which shares Mr. Bowman disclaims
beneficial ownership.
(5) Includes 5,280 shares held by Mr. Anderson as custodian for his minor son,
as to which shares Mr. Anderson disclaims beneficial ownership.
(6) Includes shares subject to outstanding stock options that were exercisable
on August 1, 1995 or that will become exercisable within 60 days
thereafter, as follows: Mr. Bowman, 188,098 shares; Mr. Anderson, 1,500
shares; Mr. Evans, 47,750 shares; Mr. Avdalovic, 9,500 shares; Mr. Moore,
1,500 shares; and Mr. Pope, 3,750 shares.
(7) Includes shares described in the notes above, as applicable.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Executive officers, directors and greater
than ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 1995, the
Company's executive officers and directors complied with applicable Section
16(a) filing requirements.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Fees
Each director of the Company who was not also an officer or employee of the
Company received an annual fee of $12,000 in fiscal 1995 and $1,000 for each
regularly scheduled meeting attended, including the Audit Committee meeting,
and $750 for every other meeting attended. The fees payable to non-employee
directors during fiscal 1996 will remain the same as in fiscal 1995.
Directors' Stock Option Plan
In fiscal 1989, the Company adopted, and the stockholders approved, the 1988
Directors' Stock Option Plan (the "Directors' Plan"), which provides for the
non-discretionary automatic grant of stock options to purchase Common Stock of
the Company to directors of the Company who are not otherwise employees of the
Company or any parent or subsidiary of the Company (a "Non-Employee
Director"). A total of 75,000 shares of the Company's Common Stock is
authorized for issuance under the Directors' Plan. Of the Company's four
directors, all but Mr. Bowman are eligible for grants of stock options under
the Directors' Plan.
The Directors' Plan is administered by the Company's Board of Directors. The
Directors' Plan provides for the automatic grants to Non-Employee Directors of
options to purchase 5,000 shares of Common Stock on October 21 following the
date of each Non-Employee Director's initial election to the Board and for the
automatic annual grants to each continuing Non-Employee Director of options to
purchase 1,000 shares of Common Stock on each October 21 thereafter. All such
options are granted with a per share exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. Unless sooner
terminated, the Directors' Plan will terminate on August 3, 1998.
On October 21, 1994, in accordance with the Director's Plan, Messrs.
Anderson and Moore and Dr. Battey each received an option to purchase 1,000
shares of the Company's Common Stock at a per share exercise price of $37.00.
10
<PAGE>
Each option granted under the Directors' Plan becomes exercisable in four
equal annual installments starting on the first anniversary date of the grant,
provided that the optionee has continually served as a non-employee director
or as an employee of the Company during the entire year prior to such vesting
date. With limited exceptions, the optionee will forfeit all unvested portions
of an option under the Directors' Plan upon termination of his or her service
to the Company. Options granted under the Directors' Plan expire five years
from the date of grant. As of August 1, 1995, 33,000 options to purchase
Common Stock had been granted and 21,500 options had been exercised under the
Directors' Plan. Options to purchase 3,000 shares of Common Stock were
exercised during fiscal 1995, and the value realized upon exercise of such
options was $49,313.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth, for the fiscal years ended June 30, 1995,
1994 and 1993, certain compensation awarded or paid to, or earned by, the
Company's Chief Executive Officer and the Company's three other most highly
compensated executive officers at June 30, 1995 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-
TERM
COMPEN-
SATION
ANNUAL COMPENSATION(1) AWARDS(4)
----------------------- ----------
SECURITIES
UNDER- ALL OTHER
LYING COMPEN-
SALARY(2) BONUS(3) OPTIONS SATION(5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
--------------------------- ---- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
A. Blaine Bowman........... 1995 $286,212 $278,710 35,000 $7,841
President and Chief 1994 274,789 248,750 34,000 9,483
Executive Officer 1993 260,120 220,962(6) 7,516
Barton Evans, Jr.(7)....... 1995 $173,099 $ 79,784 15,000 $7,471
Senior Vice President 1994 160,958 76,928 17,000 9,939
1993 135,416 72,802 -- 9,057
Nebojsa Avdalovic.......... 1995 $150,012 $ 59,622 7,000 $7,782
Vice President 1994 142,958 56,316 8,500 9,076
1993 136,000 55,144 -- 8,650
Michael Pope(8)............ 1995 $105,924 $ 50,762 11,000 $7,096
Vice President and Chief
Financial Officer
</TABLE>
-------
(1) As permitted by rules promulgated by the SEC, no amounts are shown for
"Other Annual Compensation," with respect to certain "perquisites," as
such amounts for each Named Executive Officer do not exceed the lesser of
10% of such executive's salary plus bonus or $50,000.
(2) Includes amounts earned but deferred at the election of the Named
Executive Officers pursuant to the Company's 401(k) Plan.
(3) Amounts shown include amounts earned under the Company's Employee Profit
Sharing Plan and the Management Bonus Plan. Under the Employee Profit
Sharing Plan, amounts earned in fiscal years 1995, 1994 and 1993,
respectively, were as follows: Mr. Bowman $54,710, $48,750 and $45,962;
Mr. Evans $23,784, $21,928 and $19,802; Dr. Avdalovic $19,622, $18,316 and
$18,144. Under the Management Bonus Plan, amounts earned in fiscal years
1995, 1994 and 1993, respectively, were as follows: Mr. Bowman $224,000,
$200,000 and $175,000; Mr. Evans $56,000, $55,000 and $53,000; Dr.
Avdalovic $40,000, $38,000 and $37,000. In fiscal 1995, Mr. Pope earned
$14,762 under the Employee Profit Sharing Plan and $36,000 under the
Management Bonus Plan.
(4) The Company has not granted any stock appreciation rights or restricted
stock awards.
(5) Amounts shown include Company contributions to the Company's 401(k) Plan.
(6) Includes $175,000 deferred at the election of Mr. Bowman pursuant to the
Company's compensation deferral plan established by the Company for Mr.
Bowman.
11
<PAGE>
(7) Mr. Evans served as Vice President of the Company during fiscal year 1993
and was appointed Senior Vice President in August 1993.
(8) Mr. Pope became an executive officer of the Company in April 1995.
Therefore, no amounts are shown for fiscal 1993 and 1994.
STOCK OPTION GRANTS AND EXERCISES
The following tables set forth, for the fiscal year ended June 30, 1995,
certain information regarding options granted to, exercised by, and held at
year end by the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
PERCENT OF RATES
NUMBER OF TOTAL OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES IN EXERCISE OPTION TERM(3)
OPTIONS FISCAL PRICE EXPIRATION -------------------
NAME GRANTED(1) YEAR(2) ($/SH) DATE 5% 10%
---- ---------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Mr. Bowman.... 35,000 17.5% $41.75 04/25/05 $919,100 $2,328,900
Mr. Evans..... 15,000 7.5 41.75 04/25/05 393,900 998,100
Dr. Avdalovic. 7,000 3.5 41.75 04/25/05 183,820 465,780
Mr. Pope...... 6,000 3.0 41.75 04/25/05 157,560 399,240
5,000 2.5 33.375 07/28/04 104,950 265,950
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
All stockholders as a
group(4)................................................. $185.0 $466.2
million million
</TABLE>
--------------------------------------------------------------------------------
-------
(1) Consists of nonstatutory stock options to purchase 63,000 shares of Common
Stock granted under the Plan and an option to purchase 5,000 shares
granted to Mr. Pope in July 1994 under the Company's 1984 Supplemental
Stock Option Plan (the "1984 Plan"). Each of such options has a ten-year
term, subject to earlier termination upon death, disability or termination
of employment, and vest in four equal annual installments beginning one
year from the date of the grant. The exercise prices of such options are
equal to 100% of the fair market value of the Company's Common Stock at
July 29, 1994 and April 26, 1995, respectively, based on the closing sales
price of the Common Stock as reported on the Nasdaq National Market.
Options granted under the Plan and the 1984 Plan (collectively, the
"Plans") generally expire ten years from the date of the grant and become
exercisable in 25% increments each year beginning one year from the date
of the grant. The Plans contain provisions permitting the Board of
Directors to accelerate vesting of outstanding options. In addition, in
the event of a dissolution or liquidation of the Company, a specified
stockholder-approved merger or a sale of all or substantially all of the
assets of the Company, to the extent permitted by law, vesting with
respect to each outstanding option will automatically be accelerated,
unless such options are either assumed by any successor corporation (or
its parent corporation) or are otherwise replaced with comparable options
to purchase shares of the capital stock of such successor corporation or
parent thereof. See "Proposal 2: Approval of Dionex Corporation Stock
Option Plan, As Amended and Restated" for further information regarding
the terms of options granted under the Plan. The 1984 Plan expired in
August 1994.
(2) Based on 200,100 options granted to directors and employees in fiscal
1995.
(3) In accordance with the rules of the SEC, the table sets forth the
hypothetical gains or "option spreads" that would exist for such options
at the end of their respective terms. These gains are based on assumed
rates of annual compound stock price appreciation of 5% and 10% from the
date of grant to the end of the option term (ten years). The potential
realizable value is calculated by assuming that the stock price on the
date of grant appreciates at the indicated annual rate, compounded
annually for the entire term of the option, and that the option is
exercised and sold on the last day of its term at the appreciated stock
price. For example, a stockholder who purchased one share of stock on
April 26, 1995 at $41.75, held the stock for ten years (while the stock
appreciated at 5% or 10% annual rate, respectively) and sold it on April
25, 2005, would have profits of $26.26 and $66.54, respectively, on his or
her $41.75 investment. No gain to the optionee is possible unless the
price of the Company's stock increases over the option term, benefiting
all of the Company's stockholders. These amounts represent certain assumed
rates of appreciation in accordance with the rules of the SEC and do not
reflect the Company's estimate or projection of future stock price
performance. Actual gains, if any, are dependent on the actual future
performance of the Company's Common Stock.
(4) These amounts represent the increase in the aggregate market value of the
Common Stock outstanding as of April 26, 1995 (7,006,411 shares) assuming
the annual rates of stock price appreciation set forth above over the ten-
year period used for the Named Executive Officers.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($)(1) UNEXERCISABLE(2) UNEXERCISABLE(3)
---- --------------- --------------- --------------------- -------------------
<S> <C> <C> <C> <C>
Mr. Bowman.............. -- -- 179,599/73,001 $4,625,312/$718,388
Mr. Evans............... -- -- 43,500/31,500 $1,068,438/$299,812
Dr. Avdalovic........... 12,000 $250,625 7,375/16,625 $131,312/$176,938
Mr. Pope................ -- -- 1,875/16,625 $22,812/$154,313
</TABLE>
--------
(1) Represents the fair market value of the underlying shares on the date of
exercise (based on the closing sales price reported on the Nasdaq National
Market or the actual sales price if the shares were sold by the optionee)
less the exercise price.
(2) Includes both in-the-money and out-of-the-money options.
(3) Represents the fair market value of the underlying shares on the last day
of the fiscal year ($45.75 based on the closing sales price of the Common
Stock as reported on the Nasdaq National Market) less the exercise price.
COMPENSATION COMMITTEE REPORT(1)
The Compensation Committee of the Board of Directors (the "Committee")
consists of non-employee directors and establishes compensation policy and
practices for the Company's Chief Executive Officer ("CEO") and its other
executive officers. All compensation at the Company is based upon a sustained
high level of individual performance and the Company's overall performance.
The Committee provides direction and makes recommendations on all compensation
matters relating to executive officers and other senior management employees,
including stock option grants.
COMPENSATION PHILOSOPHY
The goal of the compensation program is to tie compensation to the
attainment of specific business and individual objectives, while providing
compensation sufficient to attract, retain, motivate and reward executive
officers and other key employees who contribute to the long-term success of
the Company. In furtherance of these goals, annual base salaries are generally
set at levels that take into account both competitive and performance factors.
The Company also relies to a significant degree on annual and longer-range
incentive compensation in order to attract and motivate its executives.
Incentive compensation is variable and is closely tied to corporate
performance to encourage profitability growth and the enhancement of
stockholder value. The Company's total compensation package, composed of base
salary, bonus awards and stock option grants, is designed to be competitive
with leading separations science and high technology companies with which the
Company competes for people.
CASH-BASED COMPENSATION
Cash-based compensation paid to executive officers in fiscal 1995 consisted
of base salary, including amounts received pursuant to the Company's Employee
Profit Sharing Plan, and an annual incentive award under
--------
(1) This Section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the
Company under the Securities Act of 1933 (the "Securities Act") or the
Exchange Act, whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
13
<PAGE>
the Company's Management Bonus Plan. For fiscal 1995, in making its competitive
analysis of cash-based executive compensation, the Committee reviewed surveys
provided by Towers Perrin, Hewitt and Associates and the Western Management
Group, all nationally recognized consulting organizations specializing in
executive compensation, of compensation paid to executive officers of
separations science and high technology companies. Generally, the Committee
sets annual base salary levels and bonus amounts to provide for a total cash-
based compensation that is within the second and third quartiles of
compensation paid to executive officers of separations science and high
technology companies with which the Company competes for talented executives.
Base Salary
The Committee annually reviews and adjusts each executive officer's base
salary. To ensure retention of qualified management, the Committee generally
targets base salaries paid to executive officers at competitive levels, based
on the surveys described above. In addition, when reviewing base salaries, the
Committee considers both qualitative and quantitative factors relating to
individual and corporate performance, levels of responsibility, prior
experience and breadth of knowledge. The Committee does not base its
considerations on any single one of these factors nor does it specifically
assign relative weights to factors. In many instances, the qualitative factors
necessarily involve a subjective assessment by the Committee. Generally, in
determining salary adjustments for executive officers (other than the chief
executive officer), the Committee relies primarily on the evaluation and
recommendations of Mr. Bowman.
Employee Profit Sharing Plan
The Company's Employee Profit Sharing Plan (the "EPSP") has been established
to reward all North American full-time employees of the Company, including
executive officers, for their contributions to the Company's profitability for
any given year. The structure of the EPSP provides for the development of a
compensation pool, the size of which is based on profits for a given year. In
fiscal 1995, each eligible employee, including each of the executive officers,
received pursuant to the EPSP an amount equal to approximately 10% of such
employee's eligible compensation.
Annual Incentive
The Management Bonus Plan (the "MBP"), an annual incentive award plan, is the
variable pay program for officers and other senior managers of the Company. The
actual bonus award earned depends on the extent to which Company and individual
performance objectives are achieved for any given year. Company objectives
consist of achieving operating, strategic and financial goals that are
considered to be critical to the Company's fundamental long-term goal of
building stockholder value. The Company does not set any specific target levels
of compensation nor does it base its bonus determinations on achievement of all
criteria. At the end of each fiscal year, the Committee evaluates the degree to
which the Company has met its goals in light of its historical and industry-
wide performance. The Committee then determines individual awards under the MBP
by evaluating each participant's contribution to the achievement of the
Company's objectives and overall individual performance as well as by ensuring
that the bonus awards remain at competitive levels.
Cash-based Compensation For Fiscal 1995
The amount of the aggregate of Mr. Bowman's base salary and EPSP award for
fiscal 1995, in addition to his annual bonus under the MBP, was in the third
quartile compared to the surveyed group of leading separations science and high
technology companies. Following a review of the above-described surveys, the
Committee set Mr. Bowman's base annual salary for fiscal 1995 at $286,000,
representing an increase of 4% over his base salary for fiscal 1994.
In setting Mr. Bowman's base salary and amount of award under the MBP, the
Committee took into account, in addition to competitive consideration, the
Committee's evaluation of Mr. Bowman's contribution to the performance of the
Company in fiscal 1995. In particular, the Committee took into consideration
the Company's financial performance, including sales growth and profitability,
as well as contributions by Mr.
14
<PAGE>
Bowman to achievements in strategic planning and positioning. The Committee
also considered Mr. Bowman's leadership and experience in the separations
science industry and the scope of Mr. Bowman's responsibility and rated Mr.
Bowman's individual performance as exceptional. This performance level
resulted in an annual bonus award to him of $224,000.
Similar competitive consideration and corporate and individual performance
factors accounted for increases in base salaries and were taken into
consideration in determining awards under the MBP for other executive officers
for fiscal 1995. The percentage increase in base salaries of executive
officers ranged from 5% to 6%. The executive officers received awards under
the MBP ranging from 27% to 34% of their base salaries.
LONG-TERM INCENTIVES
The Company utilizes a long-term incentive program, currently consisting of
Dionex Corporation Stock Option Plan (formerly, the 1990 Stock Option Plan)
(the "Plan") and, until August 1994, also consisting of the Supplemental Stock
Option Plan, to further align the interests of stockholders and management by
creating common incentives related to the possession by management of a
substantial economic interest in the long-term appreciation of the Company's
stock. In determining the size of an option to be granted to an executive
officer, the Committee takes into account the officer's position and level of
responsibility within the Company, the officer's existing stock and unvested
option holdings, the potential reward to the officer if the stock price
appreciates in the public market, and the competitiveness of the officer's
overall compensation arrangements, including stock options. Additional long-
term incentives are provided through the Company's Employee Stock
Participation Plan in which all eligible employees, including eligible
executive officers of the Company, may purchase stock of the Company, subject
to specified limits, at 85% of fair market value.
In 1995, after considering the criteria discussed above, the Committee
granted to Mr. Bowman an option to purchase 35,000 shares. In 1994, Mr. Bowman
was granted an option to purchase 34,000 shares. The Committee also granted
options to other executive officers to purchase shares ranging in amounts from
7,000 to 15,000 shares. In 1994, the other executive officers were granted
options to purchase shares in amounts ranging from 8,500 to 17,000 shares.
Section 162(m) of the Internal Revenue Code limits the Company to a
deduction, for federal income tax purposes, of no more than $1 million of
compensation paid to certain named executive officers in a taxable year.
Compensation above $1 million may be deducted if it is "performance-based
compensation." The Compensation Committee has determined that stock options
granted under the Plan with an exercise price at least equal to the fair
market value of the Company's common stock on the date of grant shall be
treated as "performance-based compensation." As a result, the Company's
stockholders have been asked to approve an amendment to the Plan which would
allow any compensation recognized by a Named Executive Officer as a result of
the grant of such a stock option to be deductible by the Company. The
Committee believes that, if such amendment to the Plan is approved, it is
quite unlikely that compensation, excluding the value of any stock options
granted under the Plan, paid to any Named Executive Officer in a taxable year
which is subject to the limitation will exceed $1 million.
DAVID L. ANDERSON
JAMES F. BATTEY
B. J. MOORE
15
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON(1)
The following chart shows total stockholder return for the Standard & Poor's
500 Stock Index, a peer group index comprised of all public companies using
SIC Code 3826 (Laboratory Analytical Instruments) (the "Peer Group")(2) and
for the Company:
COMPARISON OF 5-YEAR TOTAL CUMULATIVE RETURN ON INVESTMENT(3)
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG DIONEX CP, PEER GROUP AND S&P 500.
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period DIONEX PEER S&P
(Fiscal Year Covered) CORPORATION GROUP 500
------------------- ----------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-06/30/90 $100 $100 $100
FYE 06/30/91 $131.87 $120.00 $107.40
FYE 06/30/92 $120.88 $116.19 $121.81
FYE 06/30/93 $156.04 $123.37 $138.44
FYE 06/30/94 $146.15 $129.48 $140.39
FYE 06/30/95 $201.10 $161.26 $176.99
</TABLE>
--------
(1) This Section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the
Company under the Securities Act or the Exchange Act, whether made before
or after the date hereof and irrespective of any general incorporation
language in any such filing.
(2) Upon written request of a stockholder, the Company will provide a list of
companies comprising the Peer Group as well as the list of companies that
were included in the prior year's Peer Group but are not included in this
year's Peer Group because such companies are no longer listed under the
SIC Code 3826 and companies that were not included in the prior year's
Peer Group but are included in this year's Peer Group because such
companies are currently, but were not in the prior year, listed under the
SIC Code 3826.
(3) The total return on investment (change in year-end stock price plus
reinvested dividends) for the Company, the S&P 500 Stock Index and the
Peer Group, based on June 30, 1990 = 100. In accordance with the rules of
the SEC, the returns of companies comprising the Peer Group are weighted
according to their respective stock market capitalization at the beginning
of each period for which a return is indicated.
16
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OTHER MATTERS
The Board of Directors does not know of any other matters that may come
before the meeting. If any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise to act, in accordance with their best judgment on such
matters.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the Company's
1996 Annual Meeting of Stockholders must be received by the Company no later
than May 19, 1996 in order to be included in the proxy statement and proxy
relating to that meeting.
By Order of the Board of Directors
/s/ JAMES C. GAITHER
-----------------------------------
James C. Gaither
Secretary
September 15, 1995
17
<PAGE>
DIONEX CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 27, 1995
The undersigned hereby appoints A. BLAINE BOWMAN and MICHAEL W. POPE, and
each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Dionex Corporation that the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of
Dionex Corporation to be held at DIONEX CORPORATION, 501 MERCURY DRIVE,
SUNNYVALE, CALIFORNIA 94086 on FRIDAY, OCTOBER 27, 1995 at 9:00 A.M. (local
time), and at any and all postponements, continuations and adjournments thereof,
with all powers that the undersigned would possess if personally present, upon
and in respect of the following matters and in accordance with the following
instructions, with discretionary authority as to any and all other matters that
may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW.
PROPOSAL 1: To elect directors to hold office until the next Annual Meeting of
Stockholders and until their successors are elected.
[_] For all nominees listed below [_] WITHHOLD AUTHORITY to
(except as marked to the contrary vote for all nominees
below). listed below.
NOMINEES: David L. Anderson, James F. Battey, A. Blaine Bowman and B.J. Moore
To withhold authority to vote for any nominee(s), write such nominee(s)' name(s)
below:
-------------------------------------------------------------------------------
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(Continued and to be signed on reverse side)
1.
<PAGE>
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 2.
PROPOSAL 2. To approve Dionex Corporation Stock Option Plan, as amended and
restated, to increase the aggregate number of shares of Common Stock
authorized for issuance under such plan by 350,000 shares, to add
provisions with respect to Section 162(m) of the Internal Revenue
Code of 1986, as amended, and to extend the term of such plan to
July 26, 2005.
[_] FOR [_] AGAINST [_] ABSTAIN
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 3.
PROPOSAL 3. To ratify selection of Deloitte & Touche LLP as independent auditors
of the Company for its fiscal year ending June 30, 1996.
[_] FOR [_] AGAINST [_] ABSTAIN
DATED ____________, 1995 ------------------------------------
------------------------------------
SIGNATURES(S)
Please sign exactly as your name appears hereon.
If the stock is registered in the names of two
or more persons, each should sign. Executors,
administrators, trustees, guardians and
attorneys-in-fact should add their titles. If
signer is a corporation, please give full
corporate name and have a duly authorized
officer sign, stating title. If signer is a
partnership, please sign in partnership name by
authorized person.
Please vote, date and promptly return this proxy in the enclosed return envelope
which is postage prepaid if mailed in the United States.
2.
