SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant |_|
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 Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 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| No fee 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.:
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_____________________________________________________________________
4. Date Filed:
_____________________________________________________________________
<PAGE>
DIONEX CORPORATION
501 Mercury Drive
Sunnyvale, California 94086
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 22, 1998
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 Thursday,
October 22, 1998 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 ratify the selection of Deloitte & Touche LLP as the Company's
independent auditors for its fiscal year ending June 30, 1999.
3. 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 8, 1998
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
[FACSIMILE SIGNATURE]
JAMES C. GAITHER
Secretary
Sunnyvale, California
September 11, 1998
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
1998 Proxy Statement
Information Concerning Solicitation and Voting
General
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company (the "Board") for use at the Annual Meeting of Stockholders to be held
on October 22, 1998, at 9:00 a.m. local time (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 11, 1998, 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 8, 1998 will be entitled to notice of and to vote at the Annual
Meeting. At the close of business on September 8, 1998, the Company had
outstanding and entitled to vote 22,282,956 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.
1.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
In March 1998, the Board approved an amendment to the Company's Bylaws to
increase the number of authorized Board positions to five. In March 1998,
Riccardo Pigliucci was elected to the Board by the existing four directors.
There are five nominees for the five Board positions presently authorized in the
Company's Bylaws. 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, four directors
having been elected by the stockholders and one director having been elected by
the Board.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the five 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, 1998.
Principal Occupation/ Positions
Name Age Held with the Company
- ---- --- -------------------------------
David L. Anderson............... 54 Managing Director, Sutter Hill Ventures
James F. Battey................. 77 Independent Investor
A. Blaine Bowman................ 52 President and Chief Executive Officer
B. J. Moore..................... 62 Management Consultant
Riccardo Pigliucci.............. 51 Independent Consultant
Mr. Anderson has been a managing director or general partner of Sutter Hill
Ventures, a venture capital investment partnership, since 1974. Mr. Anderson has
served as a director of the Company since it began operations in 1980 and
previously served as a director of the predecessor of the Company. Mr. Anderson
is also a director of Cytel Corporation, Neurex Corporation, BroadVision, Inc.
and Molecular Devices 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 the
Company since it began operations in 1980 and previously served as a director of
the predecessor of the Company.
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. Bowman
is also a director of Molecular Devices Corporation.
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 the Company
since it began operations in 1980 and previously served as a director of the
predecessor of the Company. Mr. Moore is also a director of Adaptec, Inc. and
American Xtal Technology, Inc.
2.
<PAGE>
Mr. Pigliucci was Chief Executive Officer of Life Sciences International, a
supplier of scientific equipment and consumables to research, clinical and
industrial markets, from 1996 to 1997. Prior to that, he held numerous
management positions during his 23-year career at Perkin-Elmer Corporation, a
life science and analytical instrument company, including President and Chief
Operating Officer from 1993 to 1995. He was elected as a director of the Company
in March 1998. Mr. Pigliucci is also a director of Topometrix Corporation and
BioSepra Corporation.
Meetings; Committees
During the fiscal year ended June 30, 1998, the Board held seven meetings.
The Board 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, Moore and Pigliucci and Dr.
Battey, held one meeting during the fiscal year ended June 30, 1998.
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, Moore and Pigliucci
and Dr. Battey. During the fiscal year ended June 30, 1998, the Compensation
Committee held two meetings.
During the fiscal year ended June 30, 1998, each Board member attended 100%
of the meetings of the Board and the committees upon which such member served.
PROPOSAL 2
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, 1999.
Although it is not required to do so, the Board 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, 1999. 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.
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.
3.
<PAGE>
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, 1998 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:
Beneficial Ownership(1)
-----------------------
Number Percent
Name of Beneficial Owner of Shares of Class
- ------------------------ --------- --------
Pioneering Management Corporation(2) ................ 2,376,000 10.6%
60 State Street
Boston, MA 02109
Janus Capital Corporation(3) ........................ 1,962,864 8.8%
100 Fillmore Street #300
Denver, CO 80206
A. Blaine Bowman(4)(5) .............................. 1,436,952 6.2%
James F. Battey ..................................... 531,980 2.4%
David L. Anderson(5)(6) ............................. 312,120 1.4%
Barton Evans, Jr.(5) ................................ 310,780 1.4%
Christopher Pohl(5) ................................. 85,407 *
Michael Pope(5) ..................................... 83,218 *
Nebojsa Avdalovic(5) ................................ 56,514 *
B. J. Moore(5) ...................................... 40,040 *
Riccardo Pigliucci(5) ............................... -- *
All executive officers and directors as a group
(11 persons)(7) ................................... 2,942,129 12.5%
- --------------------
* 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 22,345,706 shares outstanding on
August 1, 1998 adjusted as required by rules promulgated by the SEC.
(2) Pioneering Management Corporation is a registered investment adviser. As of
August 1, 1998, Pioneering Management Corporation had sole dispositive and
voting power with respect to all of the shares set forth above.
(3) Janus Capital Corporation is a registered investment advisor. As of August
1, 1998, Janus Capital Corporation had shared dispositive and voting power
with respect to all of the shares set forth above.
(4) Includes 52,264 shares held of record by a trust for the benefit of Mr.
Bowman's daughter, as to which shares Mr. Bowman disclaims beneficial
ownership.
(5) Includes shares subject to outstanding stock options that were exercisable
on August 1, 1998 or that could become exercisable within 60 days
thereafter, as follows: Mr. Bowman, 719,000 shares; Mr. Evans, 187,000
shares; Mr. Anderson, 10,000 shares; Mr. Avdalovic, 53,300 shares; Mr.
Pohl, 83,000; Mr. Pope, 75,850 shares; and Mr. Moore, 6,000 shares.
4.
<PAGE>
(6) Includes 21,120 shares held by Mr. Anderson as custodian for his son, as to
which shares Mr. Anderson disclaims beneficial ownership.
(7) Includes shares described in the notes above, as applicable, and 81,704
shares subject to outstanding stock options held by other executive
officers of the Company that were exercisable on August 1, 1998 or could
become exercisable within 60 days thereafter.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 (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, 1998, the Company's
executive officers and directors complied with applicable Section 16(a) filing
requirements.
5.
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Directors
Each Non-Employee Director received an annual fee of $15,000 in fiscal 1998
and $1,000 for each regularly scheduled meeting attended, including the Audit
Committee meeting, and $750 for every other meeting attended. A Non-Employee
Director is defined as a director who is not an employee of the Company or any
parent corporation or subsidiary corporation of the Company as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code
of 1986 (hereinafter an "Affiliate"), and has not been an employee or the
Company or any Affiliate for all or part of the preceding fiscal year. The
annual fee payable to Non-Employee Directors during fiscal 1999 will increase to
$16,500 and the fee for special meetings will increase to $800 per meeting.
In addition, each Non-Employee Director is eligible for option grants under
the Company's 1988 Directors' Stock Option Plan (the "Directors' Plan"). The
Directors' Plan is administered by the Board. On the date of the annual meeting
of stockholders, each member of the Board who is a Non-Employee Director, as
defined above, is automatically granted under the Directors' Plan, without
further action by the Company, the Board or the stockholders of the Company, an
option to purchase 4,000 shares of Common Stock of the Company. Each person who
is elected for the first time to be a Non-Employee Director is automatically
granted an option to purchase 20,000 shares of the Common Stock of the Company.
The exercise price of options granted under the Directors' Plan is 100% of the
fair market value of the Common Stock subject to the option on the date of the
option grant. Options granted under the Directors' Plan vest in 25% increments
each year beginning one year from the date of grant. The term of options granted
under the Directors' Plan is five years from the date granted.
During the last fiscal year, the Company granted options covering 32,000
shares to the Non-Employee Directors of the Company at a weighted average
exercise price per share of $27.00. Options to purchase 8,000 shares of Common
Stock granted under the Directors' Plan were exercised during fiscal 1998, and
the value realized upon exercise of such options was $142,625.
Compensation of Executive Officers
The following table sets forth, for the fiscal years ended June 30, 1998,
1997, and 1996, certain compensation awarded or paid to, or earned by, the
Company's Chief Executive Officer and the Company's four other most highly
compensated executive officers at June 30, 1998 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Number of Shares
of Common Stock All Other
Underlying Compensation
Name and Principal Position Year Salary(1) Bonus(2) Options (3)
--------------------------- ---- --------- ---------------- ------------ ---
<S> <C> <C> <C> <C> <C>
A. Blaine Bowman ............................... 1998 $334,904 $361,489(4) 160,000 $ 8,000
President and 1997 319,904 345,413(4) 200,000 8,000
Chief Executive Officer 1996 303,465 320,859(4) -- 7,408
Barton Evans, Jr ............................... 1998 $209,238 $127,699 40,000 $ 7,995
Senior Vice President 1997 192,946 120,077 56,000 $ 8,011
1996 183,273 97,299 -- 7,474
Nebojsa Avdalovic .............................. 1998 $168,185 $ 58,399 18,000 $ 8,294
Vice President 1997 163,008 55,004 18,000 7,113
1996 155,515 69,026 -- 7,856
6.
<PAGE>
Christopher Pohl(5) ............................ 1998 $155,677 $ 73,633 30,000 $ 9,053
Vice President 1997 142,832 54,867 36,000 8,828
Michael Pope ................................... 1998 $155,677 $ 73,633 30,000 $ 8,592
Vice President and 1997 146,031 66,433 36,000 8,134
Chief Financial Officer 1996 137,254 56,537 -- 8,333
</TABLE>
- ----------
(1) Includes amounts earned but deferred at the election of the Named Executive
Officers pursuant to the Company's 401(k) Plan.
(2) 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 1998, 1997, and 1996,
respectively, were as follows: Mr. Bowman $71,489, $70,413, and $70,859;
Mr. Evans $34,669, $33,077, and $31,299; Dr. Avdalovic $23,399, $23,004,
and $25,026; and Mr. Pope $23,633, $22,433, and $21,537. Under the
Management Bonus Plan, amounts earned in fiscal years 1998, 1997 and 1996,
respectively, were as follows: Mr. Bowman $290,000, $275,000, and $250,000;
Mr. Evans $93,000, $87,000, and $66,000; Dr. Avdalovic $35,000, $32,000,
and $44,000; and Mr. Pope $50,000, $44,000, and $35,000. In fiscal 1998 and
1997, respectively, Mr. Pohl earned $23,633 and $20,867 under the Employee
Profit Sharing Plan and $50,000, and $34,000 under the Management Bonus
Plan.
(3) Amounts shown include Company contributions to the Company's 401(k) Plan.
(4) Includes $190,000, $175,000 and $150,000 deferred at the election of Mr.
Bowman for fiscal 1998, 1997 and 1996, respectively, pursuant to the
Company's compensation deferral plan established by the Company for Mr.
Bowman.
(5) Mr. Pohl became an executive officer of the Company in July 1996.
Therefore, no amounts are shown for fiscal 1996.
Stock Option Grants and Exercises
The Company grants options to its executive officers under the Dionex
Corporation Stock Option Plan (the "Plan"). The Plan will terminate in July 2005
unless sooner terminated by the Board. As of June 30, 1998, options to purchase
a total of 3,136,700 shares had been granted and were outstanding under the Plan
and the Company's now-expired 1984 Supplemental Stock Option Plan. Options to
purchase 1,684,758 shares remained available for grant under the Plan.
The following tables show, for the fiscal year ended June 30, 1998, certain
information regarding options granted to, exercised by and held at year-end by
the Named Executive Officers.
7.
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------
Number of % of Total Potential Realizable Value
Shares of Options at Assumed Annual Rates of
Common Stock Granted to Exercise or Stock Price Appreciation
Underlying Employees in Base Price for Option Term(3)
Options Fiscal Per Expiration ----------------------------
Name Granted(1) Year(2) Share Date 5% 10%
---- ---------- ------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Mr. Bowman ................. 160,000 27.9 $24.125 6/7/2008 $2,427,533 $6,151,846
Mr. Evans .................. 40,000 7.0 $24.125 6/7/2008 $ 608,883 $1,537,961
Dr. Avdalovic .............. 18,000 3.1 $24.125 6/7/2008 $ 273,097 $ 692,083
Mr. Pope ................... 30,000 5.2 $24.125 6/7/2008 $ 455,162 $1,153,471
Mr. Pohl ................... 30,000 5.2 $24.125 6/7/2008 $ 455,162 $1,153,471
- ------------------------------------------------------------------------------------------------------------------------------------
All stockholders as a group(4) $342.4 $867.6
million million
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of incentive stock options to purchase 82,500 shares of Common
Stock and nonstatutory stock options to purchase 197,500 shares of Common
Stock granted under the 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 June 8,
1998 based on the closing sales price of the Common Stock as reported on
the Nasdaq National Market for the business day prior to the date of grant.
The Plan contains provisions permitting the Board 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.
(2) Based on 573,100 options granted to employees in fiscal 1998.
(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 June 8, 1998 at $24.125,
held the stock for ten years (while the stock appreciated at 5% or 10%
annual rate, respectively) and sold it on June 7, 2008, would have profits
of $15.17 and $38.45, respectively, on his or her $24.125 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 June 8, 1998 (22,565,310 shares) assuming
the annual rates of stock price appreciation set forth above over the
ten-year period used for the Named Executive Officers.
8.
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares of Common Stock
Number of Underlying Value of Unexercised
Shares Unexercised Options at Fiscal In-the-Money
Acquired On Value Year End Options at Fiscal Year End
Name Exercise Realized(1) Exercisable/Unexercisable(2) Exercisable/Unexercisable(3)
- ---- -------- ----------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Bowman .............. 130,400 $3,228,425 719,000 / 345,000 $13,641,063 / $2,427,188
Mr. Evans ............... 112,000 $2,506,000 187,000 / 97,000 $3,287,313 / $751,608
Dr. Avdalovic ........... 40,200 $ 746,814 53,300 / 38,500 $885,581 / $287,906
Mr. Pope ................ 1,150 $ 23,791 70,850 / 68,000 $1,166,724 / $524,968
Mr. Pohl ................ -- -- 83,000 / 63,000 $1,445,688 / $434,812
</TABLE>
- ----------
(1) Represents the fair market value of the underlying shares on the date of
exercise (based upon 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 ($26.375 based on the closing sales price of the Common
Stock as reported on the Nasdaq National Market) less the exercise price.
9.
<PAGE>
COMPENSATION COMMITTEE REPORT(1)
The Compensation Committee of the Board (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 1998 consisted
of base salary, including amounts received pursuant to the Company's Employee
Profit Sharing Plan, and an annual incentive award under the Company's
Management Bonus Plan. For fiscal 1998, 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.
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(1) The material in this report 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.
10.
<PAGE>
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 1998, each eligible employee, including each of the
executive officers, received pursuant to the EPSP an amount equal to 11.6% of
such employee's eligible compensation.
Annual Incentive Award
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 1998
The amount of the aggregate of Mr. Bowman's base salary and EPSP award for
fiscal 1997, in addition to his annual bonus under the MBP, was in the fourth
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 1998 at $335,000,
representing an increase of 5% over his base salary for fiscal 1997.
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 1998. In particular, the Committee took into consideration the
Company's financial performance, including sales growth and profitability, as
well as contributions by Mr. 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. As the result of this assessment, Mr. Bowman was awarded an
annual bonus of $290,000.
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 1998. The percentage increase in base salaries of executive officers
ranged from 3% to 10%. The executive officers received awards under the MBP
ranging from 21% to 45% of their base salaries.
Long-Term Incentives
The Company utilizes a long-term incentive program, currently consisting of
the Dionex Corporation 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.
11.
<PAGE>
In fiscal 1998, Mr. Bowman was granted an option to purchase 160,000 shares
and the other executive officers were granted options to purchase shares in
amounts ranging from 18,000 to 40,000 shares. In fiscal 1997, Mr. Bowman was
granted an option to purchase 200,000 shares and the other executive officers
were granted options to purchase shares in amounts ranging from 18,000 to 56,000
shares.
Section 162(m) of the 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." In fiscal
1996, the Company's stockholders approved an amendment to the Plan that enables
any compensation recognized by a Named Executive Officer as a result of the
grant of such a stock option that qualifies as "performance-based compensation"
and thus be deductible by the Company without regard to the $1 million limit
otherwise imposed by Code Section 162(m). The Committee believes that 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
RICCARDO PIGLIUCCI
12.
<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 FIVE-YEAR TOTAL CUMULATIVE RETURN
AMONG DIONEX CORPORATION
S&P 500 INDEX AND PEER GROUP INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
1993 1994 1995 1996 1997 1998
Dionex Corp 100.00 93.66 128.87 181.69 288.73 297.18
Industry Index 100.00 104.95 130.72 178.84 218.71 217.57
S&P 500 Index 100.00 101.41 127.85 161.09 216.99 282.44
ASSUMES $100 INVESTED JULY 1, 1993
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JUNE 30, 1998
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(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 Standard & Poor's 500 Stock
Index and the Peer Group, based on June 30, 1993 = 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.
<PAGE>
OTHER MATTERS
The Board 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 1999 Annual Meeting of Stockholders must be received by the Company no
later than 60 days prior to the date of such meeting in the form and manner
prescribed by the Company's Bylaws, a copy of which is available upon written
request to the Secretary of the Company. In order to be included in the proxy
statement and proxy relating to such meeting, any such proposal must be received
by the Company by May 14, 1999.
By Order of the Board of Directors
[FACSIMILE SIGNATURE]
JAMES C. GAITHER
Secretary
September 11, 1998
14.
<PAGE>
DIONEX CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 22, 1998
The undersigned hereby appoints A. Blaine Bowman and Michael 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 which 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 October 22, 1998 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 PROPOSAL 2, AS MORE SPECIFICALLY DESCRIBED
IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL
BE VOTED IN ACCORDANCE THEREWITH.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED
BELOW.
PROPOSAL 1: To elect five directors to hold office until the next Annual Meeting
of Stockholders and until their successors are elected.
|_| For all nominees listed below |_| WITHHOLD Authority
(except as marked to the to vote for all nominee
contrary s below). listed below.
Nominees: David L. Anderson, James F. Battey, A. Blaine Bowman, B.J. Moore and
Riccardo Pigliucci.
To withhold authority to vote for any nominee(s), write such nominee(s)' name(s)
below:
================================================================================
(Continued on other side)
<PAGE>
(Continued from other side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
PROPOSAL 2: To ratify the selection of Deloitte & Touche LLP as the
Company's independe nt auditors for its fiscal year ending
June 30, 1999.
|_| For |_| Against |_| Abstain
DATED _________________ ____________________________________
____________________________________
SIGNATURE(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.
