SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
|_| 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)
Not applicable
(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:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
6. Amount Previously Paid:
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7. Form, Schedule or Registration Statement No.:
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8. Filing Party:
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9. Date Filed:
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DIONEX CORPORATION
501 MERCURY DRIVE
SUNNYVALE, CALIFORNIA 94086
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 27, 1999
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, on Wednesday, October 27,
1999 at 9:00 a.m. for the following purposes:
1. To elect five directors to serve for the ensuing year and until their
successors are elected.
2. To approve an amendment to the Company's Certificate of Incorporation
to increase the authorized number of shares of Common Stock from 40,000,000 to
80,000,000.
3. To approve an amendment to the Dionex Corporation Stock Option Plan to
increase the aggregate number of shares of Common Stock authorized for issuance
under the plan by 650,000 shares.
4. To ratify the selection of Deloitte & Touche LLP as the Company's
independent auditors for its fiscal year ending June 30, 2000.
5. 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 7, 1999 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
JAMES C. GAITHER
Secretary
Sunnyvale, California
September 13, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY. STOCKHOLDERS WITH SHARES REGISTERED DIRECTLY WITH THE
COMPANY'S TRANSFER AGENT, BANKBOSTON, N.A. ("BANKBOSTON"), MAY CHOOSE TO VOTE
THOSE SHARES VIA THE INTERNET AT BANKBOSTON'S VOTING WEB SITE
(WWW.EPROXYVOTE.COM/DNEX), OR THEY MAY VOTE TELEPHONICALLY, WITHIN THE U.S.
ONLY, BY CALLING BANKBOSTON AT 1 (877) 779-8683 (TOLL-FREE), OR FOR STOCKHOLDERS
RESIDING OUTSIDE THE U.S., BY CALLING COLLECT ON A TOUCH-TONE PHONE AT 1 (201)
536-8073. STOCKHOLDERS HOLDING SHARES WITH A BROKER OR BANK MAY ALSO BE ELIGIBLE
TO VOTE VIA THE INTERNET OR TO VOTE TELEPHONICALLY IF THEIR BROKER OR BANK
PARTICIPATES IN THE PROXY VOTING PROGRAM PROVIDED BY ADP INVESTOR COMMUNICATION
SERVICES. SEE "VOTING VIA THE INTERNET OR BY TELEPHONE" IN THE PROXY STATEMENT
FOR FURTHER DETAILS.
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DIONEX CORPORATION
501 Mercury Drive
Sunnyvale, California 94086
1999 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 Wednesday, October 27, 1999, 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.
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 13, 1999, to all stockholders entitled to vote at the
Annual Meeting.
Voting Via the Internet or by Telephone
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If you hold your shares directly registered in your name with BankBoston:
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To vote by phone (within the U.S. only, call toll-free), 1 (877) 779-8683, or
(outside of the U.S., call collect on a touch-tone phone), 1 (201) 536-8073.
To vote via the Internet: www.eproxyvote.com/dnex
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If you hold your shares in an account with a broker or bank that participates
in the ADP Investor Communication Services program:
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To vote by phone: your voting form from your broker or bank will show the
telephone number to call.
To vote via the Internet: www.proxyvote.com
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For Shares Directly Registered in the Name of the Stockholder.
Stockholders with shares registered directly with BankBoston may vote those
shares telephonically by calling BankBoston at 1 (877) 779-8683 (within the U.S.
only, toll-free), or via the Internet at BankBoston's voting Web site (www.
eproxyvote.com/dnex).
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For Shares Registered in the Name of a Broker or Bank. A number of brokers
and banks are participating in a program provided through ADP Investor
Communication Services that offers telephone and Internet voting options. This
program is different from the program provided by BankBoston for shares
registered directly in the name of the stockholder. If your shares are held in
an account with a broker or bank participating in the ADP Investor Communication
Services program, you may vote those shares telephonically by calling the
telephone number shown on the voting form received from your broker or bank, or
via the Internet at ADP Investor Communication Services' voting Web site
(www.proxyvote.com).
General Information for All Shares Voted Via the Internet or By Telephone.
Votes submitted via the Internet or by telephone must be received by 12:00
midnight, Eastern Standard Time, on October 26, 1999. Submitting your proxy via
the Internet or by telephone will not affect your right to vote in person should
you decide to attend the Annual 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.
The telephone and Internet voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to give their voting
instructions and to confirm that stockholders' instructions have been recorded
properly. Stockholders voting via the Internet should understand that there may
be costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies, that must be borne by the stockholder.
Voting Rights and Outstanding Shares
Only holders of record of Common Stock at the close of business on
September 7, 1999 will be entitled to notice of and to vote at the Annual
Meeting. At the close of business on September 7, 1999, the Company had
outstanding and entitled to vote 22,306,404 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.
Stockholder Proposals
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2000 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission (the "Commission") is May 16, 2000. The
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deadline for submitting a stockholder proposal or a nomination for director that
is not to be included in such proxy statement and proxy is July 30, 2000.
Stockholders are also advised to review the Company's Bylaws, which contain
additional requirements with respect to advance notice of stockholder proposals
and director nominations.
PROPOSAL 1
ELECTION OF 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, 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 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, 1999.
Name Age Principal Occupation/Positions Held with the Company
- ---- --- ----------------------------------------------------
David L. Anderson ... 55 Managing Director, Sutter Hill Ventures
James F. Battey ..... 78 Independent Investor
A. Blaine Bowman .... 53 President and Chief Executive Officer
B.J. Moore .......... 63 Management Consultant
Riccardo Pigliucci .. 52 Chairman and Chief Executive Officer,
Discovery Partners International
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 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.
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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.
Mr. Pigliucci is Chairman and Chief Executive Officer of Discovery
Partners International, a supplier of equipment and services to the drug
discovery market. From 1996 to 1997, Mr. Pigliucci was Chief Executive Officer
of Life Sciences International, a supplier of scientific equipment and
consumables to research, clinical and industrial markets. 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
Biosphere Medical Corporation.
Meetings; Committees
During the fiscal year ended June 30, 1999, 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, 1999.
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, 1999, the Compensation
Committee held two meetings.
During the fiscal year ended June 30, 1999, each Board member attended
100% of the meetings of the Board and the committees upon which such member
served.
PROPOSAL 2
APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has determined that it is advisable to increase the
Company's authorized Common Stock and has adopted, subject to stockholder
approval, an amendment to the Company's Certificate of Incorporation to increase
the Company's authorized number of shares of Common Stock from 40,000,000 shares
to 80,000,000 shares.
As of August 1, 1999, 22,284,416 shares of Common Stock were issued and
outstanding and an additional 4,097,449 shares were reserved for issuance upon
the exercise of options granted under the Company's stock option and stock
purchase plans. Accordingly, a total of only 13,618,135 shares of Common Stock
are available for future issuance.
4.
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Although the Board of Directors currently has no plans to issue the
additional shares of Common Stock, it desires to have such shares available to
provide additional flexibility to use its capital stock for business and
financial purposes in the future. The additional shares may be used, without
further stockholder approval, for various purposes including, without
limitation, raising capital, effecting stock splits through payment of a stock
dividend, providing equity incentives to employees, officers, directors or
consultants, opposing a hostile takeover attempt or delaying or preventing
changes in control or management of the Company, or establishing strategic
relationships with other companies and expanding the Company's business or
product lines through the acquisition of other businesses or products.
The additional Common Stock to be authorized by adoption of the amendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the proposed amendment and issuance of the Common Stock
would not affect the rights of the holders of currently outstanding Common Stock
of the Company, except for effects incidental to increasing the number of
outstanding shares of the Company's Common Stock, such as dilution of the
earnings per share and voting rights of current holders of Common Stock. If the
amendment is adopted, it will become effective upon filing of a Certificate of
Amendment of the Company's Certificate of Incorporation with the Secretary of
State of Delaware.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock will be required to approve this amendment to the
Company's Certificate of Incorporation. As a result, abstentions and broker
non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
PROPOSAL 3
APPROVAL OF INCREASE IN NUMBER OF SHARES OF COMMON STOCK
AUTHORIZED FOR ISSUANCE UNDER DIONEX CORPORATION STOCK OPTION PLAN
In July 1999, the Board approved an amendment to the Dionex Corporation
Stock Option Plan (the "Plan"), subject to stockholder approval, increasing the
number of shares of Common Stock authorized for issuance under the Plan by
650,000 shares and extending the term of the Plan to July 27, 2009. At June 30,
1999, options to purchase a total of 2,803,031 shares had been granted and were
outstanding under the Plan and the Company's now-expired 1984 Supplemental Stock
Option Plan and 1,653,308 shares (plus any shares that might be returned to the
Plan as a result of cancellations or expiration of options) remained available
for future grant under the Plan. During the fiscal year ended June 30, 1999, the
Company granted to employees as a group options to purchase 41,200 shares at a
weighted average exercise price of $34.88 per share. There were no options
granted to executive officers in the fiscal year ended June 30, 1999.
Stockholders are requested in Proposal 3 to approve the amendments to the
Plan. If the stockholders fail to approve Proposal 3, the number of shares
available for future grant under the Plan will remain at 1,653,308 and the Plan
will terminate on July 26, 2005. The affirmative vote 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 amendments to the Plan. 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 this matter has been approved.
The essential features of the Plan, as amended, are outlined below:
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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 Internal
Revenue Code of 1986, as amended (the "Code"). Nonstatutory stock options
granted under the Plan are intended not to qualify as incentive stock option's
under the Code. See "Federal Income Tax Information" for a discussion of the
federal income 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. As of June 30,
1999, stock options had been granted to approximately 20% of the Company's
active employees.
Administration
The Plan is administered by the Board. 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 itself.
Pursuant to the Plan, directors who serve as members of the Compensation
Committee must be "outside directors." This limitation excludes 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) of the Code.
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, own (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, 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.
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The Plan limits grants to 200,000 shares of Common Stock for each employee
for each twelve-month period. The purpose of this limitation is generally to
comply with requirements for options granted with an exercise price at least
equal to fair market value of the Common Stock on the date of grant to qualify
as "performance-based compensation" under Code Section 162(m), such that the
Company may continue to be able to deduct for tax purposes the compensation
attributable to the exercise of such options granted under the Plan.
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 are granted with exercise prices below
fair market value, deductions for compensation attributable to the exercise of
such options could be limited by Code Section 162(m). See "Federal Income Tax
Information." At August 2, 1999, the closing price of the Company's Common Stock
as reported on The Nasdaq National Market was $42.75 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 (iii) in any other form of legal consideration
acceptable to the Board.
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
service 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 generally terminate 30 days after termination of the optionee's
employment or relationship as a consultant to 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
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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 optionee 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. Excluding any such action by
the Board, if the stockholders approve Proposal 3, then the Plan will terminate
on July 27, 2009, and if the stockholders fail to approve Proposal 3, then the
Plan will terminate on July 26, 2005.
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 if the amendment requires stockholder approval in order to satisfy
the requirements of Section 422 of the Code or Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). 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 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
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only by the optionee. A nonstatutory stock option may not be transferred except
by will or by the laws of descent and distribution or under certain other
limited circumstances. 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 cause an optionee to
become subject to the alternative minimum tax or result in an increase in the
optionee's alternative minimum tax liability.
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 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 how long the stock was held.
Long-term capital gains currently are generally subject to lower tax rates than
ordinary income. The current maximum long-term capital gains rate for federal
income tax purposes is generally 20% for assets held more than 12 months. The
maximum ordinary income rate and short-term capital gains 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.
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 how long the stock was
9.
<PAGE>
held. 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. Section 162(m) of the Code
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 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 3.
PROPOSAL 4
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, 2000.
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, 2000. 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
10.
<PAGE>
SECURITY OWNERSHIP
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, 1999 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 of Percent of
Name of Beneficial Owner Shares Shares
- ------------------------ --------- ----------
Pioneering Investment Management Corporation(2)..... 2,176,000 9.8%
60 State Street
Boston, MA 02109
Janus Capital Corporation(3) ....................... 2,113,645 9.5%
100 Fillmore Street #3
Denver, CO 80206
A. Blaine Bowman(4) ................................ 1,402,188 6.1%
James F. Battey .................................... 535,980 2.4%
Barton Evans, Jr.(4) ............................... 310,626 1.4%
David L. Anderson(4) ............................... 292,032 1.3%
Christopher Pohl(4) ................................ 92,863 *
Michael Pope(4) .................................... 67,824 *
Bruce Barton(4) .................................... 69,580 *
B. J. Moore(4) ..................................... 40,040 *
Riccardo Pigliucci(4) .............................. 5,000 *
All executive officers and directors
as a group(12 persons)(5) ......................... 2,957,841 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 22,284,416 shares outstanding
on August 1, 1999 adjusted as required by rules promulgated by the SEC.
(2) Pioneering Investment Management Corporation is a registered investment
advisor. As of August 1, 1999, Pioneering Investment 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, 1999, Janus Capital Corporation had shared dispositive and voting power
with respect to all of the shares set forth above.
(4) Includes shares subject to outstanding stock options that were exercisable
on August 1, 1999 or that could become exercisable within 60 days
thereafter, as follows: Mr. Bowman, 716,000 shares; Mr. Evans, 226,000
shares; Mr. Anderson, 10,000 shares; Mr. Barton, 67,000 shares;
11.
<PAGE>
Mr. Pohl, 85,500 shares; Mr. Pope, 59,500 shares; Mr. Moore, 6,000 shares;
and Mr. Pigliucci, 5,000 shares.
(5) Includes shares described in the notes above, as applicable, and 131,750
shares subject to outstanding stock options held by other executive
officers of the Company that were exercisable on August 1, 1999 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 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, 1999, the Company's
executive officers and directors complied with applicable Section 16(a) filing
requirements.
12.
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Directors
Each Non-Employee Director received an annual fee of $16,500 in fiscal
1999 and $1,000 for each regularly scheduled meeting attended, including the
Audit Committee meeting, and $800 for every other meeting attended. In July
1999, the Board approved an increase in the fee paid to each Non-Employee
Director for attending regularly scheduled meetings from $1,000 to $1,250. 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 Code
(hereinafter and "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 2000 will remain the same as in
fiscal 1999.
In addition, each Non-Employee Director is eligible for option grants
under the Company's 1998 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.
Until July 1999, each person who was elected for the first time to be a
Non-Employee Director was automatically granted an option to purchase 20,000
shares of the Common Stock of the Company. In July 1999, the Board amended the
Directors' Plan to decrease this initial grant to 10,000 shares for Non-Employee
Directors joining the Board after such date. 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 12,000
shares to the Non-Employee Directors of the Company at a weighted average
exercise price per share of $24.50. Options to purchase 12,000 shares of Common
Stock granted under the Directors' Plan were exercised during fiscal 1999, and
the value realized upon exercise of such options was $301,245.
Compensation of Executive Officers
The following table sets forth, for the fiscal years ended June 30, 1999,
1998, and 1997, 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, 1999 (the "Named Executive
Officers").
13.
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Number of
Shares of
Common
Annual Compensation Stock
Name and Principal ------------------- Underlying All Other
Position Year Salary(1) Bonus(2) Options Compensation(3)
- ------------------ ---- --------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C>
A. Blaine Bowman ......... 1999 $354,596 $400,497(4) -- $8,000
President and Chief 1998 334,904 361,489(4) 160,000 8,000
Executive Officer 1997 319,904 345,413(4) 200,000 8,000
Barton Evans, Jr ......... 1999 $224,539 $147,369 -- $7,676
Senior Vice President 1998 209,238 127,699 40,000 7,995
1997 192,946 120,077 56,000 8,011
Bruce Barton ............. 1999 $149,515 $ 92,607 -- $8,653
Vice President 1998 137,423 84,872 30,000 8,440
1997 125,954 81,974 36,000 8,080
Christopher Pohl ......... 1999 $169,364 $ 81,450 -- $8,706
Vice President 1998 155,677 73,633 30,000 9,053
1997 142,832 54,867 36,000 8,282
Michael Pope ............. 1999 $169,364 $ 92,676 -- $9,206
Vice President and 1998 155,677 73,633 30,000 8,592
Chief Financial 1997 146,031 66,433 36,000 8,134
Officer
</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 1999, 1998, and 1997,
respectively, were as follows: Mr. Bowman, $80,497, $71,489 and $70,413;
Mr. Evans, $39,369, $34,669 and $33,077; Mr. Barton, $25,607, $22,872 and
$21,974; Mr. Pohl, $26,450, $23,633 and $20,867; and Mr. Pope, $27,676,
$23,633 and $22,433. Under the Management Bonus Plan, amounts earned in
fiscal years 1999, 1998 and 1997, respectively, were as follows: Mr.
Bowman, $320,000, $290,000 and $275,000; Mr. Evans, $108,000, $93,000 and
$87,000; Mr. Barton, $67,000, $62,000 and $60,000; Mr. Pohl, $55,000,
$50,000 and $34,000; and Mr. Pope, $65,000, $50,000 and $44,000.
(3) Amounts shown include Company contributions to the Company's 401(k) Plan.
(4) Includes $220,000, $190,000 and $175,000 deferred at the election of Mr.
Bowman for fiscal 1999, 1998 and 1997, respectively, pursuant to the
Company's compensation deferral plan established by the Company for Mr.
Bowman.
14.
<PAGE>
Stock Option Grants and Exercises
The Company grants options to its executive officers under the Dionex
Corporation Stock Option Plan. As of June 30, 1999, options to purchase a total
of 2,803,031 shares had been granted and were outstanding under the Plan and the
Company's now-expired 1984 Supplemental Stock Option Plan. Options to purchase
1,653,308 shares remained available for grant under the plan.
During the fiscal year ended June 30, 1999 there were no options granted
to Named Executive Officers.
The following table shows, for the fiscal year ended June 30, 1999,
certain information regarding options exercised by and held at year-end by the
Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares of Common Stock
Number of Shares Underlying Unexercised Options at Value of Unexercised In-the-Money
Acquired On Value Fiscal Year End Exercisable/ Options at Fiscal Year End Exercisable/
Name Exercise Realized(1) Unexercisable(2) Unexercisable(3)
- ---- -------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
Mr. Bowman 128,000 $4,384,500 716,000/220,000 $22,089,500/$4,383,750
Mr. Evans -- -- 226,000/58,000 $6,882,000/$1,168,500
Mr. Barton 3,000 $117,138 67,000/40,500 $1,835,875/$803,812
Mr. Pohl 20,000 $523,125 85,500/40,500 $2,473,313/$803,812
Mr. Pope 38,850 $761,950 59,500/40,500 $1,602,812/$803,812
</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 ($40.50 based on the closing sales price of the Common
Stock as reported on the Nasdaq National Market) less the exercise price.
15.
<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 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
peoples.
Cash-Based Compensation
Cash-based compensation paid to executive officers in fiscal 1999
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 1999, 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.
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.
- ----------
(1) The material in this report is no "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.
16.
<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 1999, each eligible employee, including each of the
executive officers, received pursuant to the EPSP an amount equal to 11.8% 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 bonus
awards remain at competitive levels.
Cash-based Compensation for Fiscal 1999
The amount of the aggregate of Mr. Bowman's base salary and EPSP award for
fiscal 1998, 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 1999 at $355,000,
representing an increase of 6% over his base salary for fiscal 1998.
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 1999. 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 $320,000.
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 1999. The percentage increase in base salaries of executive officers
ranged from 4% to 9%. The executive officers received awards under the MBP
ranging from 22% to 48% 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 1984 Supplemental Stock Option Plan, to further align the
interests of stockholders and management by
17.
<PAGE>
creating common incentives related to the possession by management of
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.
No options were granted to executive officers in fiscal 1999. 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.
Section 162(m) of the Code limits the Company to 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
18.
<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 ON INVESTMENT(3)
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------
Dionex Corp 100.00 137.59 193.99 308.27 317.29 487.22
Industry Index 100.00 124.55 170.39 208.38 207.30 293.70
S&P 500 Index 100.00 126.07 158.85 213.97 278.51 341.89
- ----------
(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 not 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, 1994 = 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.
19.
<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.
By Order of the Board of Directors
JAMES C. GAITHER
Secretary
September 13, 1999
20.
<PAGE>
DETACH HERE
PROXY
DIONEX CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 27, 1999
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 27, 1999 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, 3 AND 4, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
<PAGE>
- -----------------
Vote by Telephone
- -----------------
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone 1-877-PRX-VOTE (1-877-779-8683).
- --------------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement/Prospectus and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE (1-877-779-8683). For
shareholders residing outside the United States call collect on a
touch-tone phone 1-201-536-8073.
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the recorded instructions.
- --------------------------------------------------------------------------------
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- ----------------
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- ----------------
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- --------------------------------------------------------------------------------
Follow these four easy steps:
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2. Go to the Website http://www.eproxyvote.com/dnex
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the instructions provided.
- --------------------------------------------------------------------------------
Your vote is important!
Go to http://www.eproxyvote.com/dnex anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
<PAGE>
DETACH HERE
|X| Please mark
votes as in
this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED
BELOW AND FOR PROPOSAL 2, 3 AND 4.
1. To elect five directors to hold office until the next Annual Meeting of
Stockholders and until their successors are elected.
Nominees: (01) David L. Anderson, (02) James F. Battey, (03) A. Blaine
Bowman, (04) B.J. Moore and (05) Riccardo Pigliucci.
FOR WITHHELD
ALL |_| |_| FROM ALL
NOMINEES NOMINEES
|_|
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To withhold authority to vote for any nominee(s), write such nominee(s)'
name(s) above.
FOR AGAINST ABSTAIN
2. To approve an amendment to the Company's |_| |_| |_|
Certificate of Incorporation to increase the
authorized number of shares of Common Stock from
40,000,000 to 80,000,000.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Dionex Corporation |_| |_| |_|
Stock Option Plan to increase the aggregate
number of shares of Common Stock for issuance
under the plan by 650,000 shares.
FOR AGAINST ABSTAIN
4. To ratify the selection of Deloitte & Touche LLP |_| |_| |_|
as the Company's independent auditors for its
fiscal year ending June 30, 2000.
Please vote, date and promptly return this proxy in the enclosed return envelope
which is postage prepaid if mailed in the United States.
Please sign exactly as your name 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.
Signature: Date: Signature: Date:
