<PAGE>
SCHEDULE 14A
Information Required in Proxy Statement
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 (S) 240.14a-11(c) or (S) 240.14a-12
LIFE TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Joseph C. Stokes, Jr.
- --------------------------------------------------------------------------------
(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 transactions applies:
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
- ------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------------------
(5) Total fee paid:
- ------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------
- ------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------
- ------------------------------------------------------------------------------
(3) Filing Party:
-----------------
- ------------------------------------------------------------------------------
(4) Date Filed:
---------------
- ------------------------------------------------------------------------------
<PAGE>
LIFE TECHNOLOGIES, INC.
9800 Medical Center Drive
Rockville, Maryland 20850
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 20, 1997
The Annual Meeting of Stockholders of Life Technologies, Inc. (the
"Company") will be held at The New York Palace Hotel, 455 Madison Avenue, New
York, New York, 10022, on Tuesday, April 15, 1997, at 10:00 A.M., local time,
for the following purposes:
(1) To elect three directors;
(2) To consider and vote upon a proposal to approve the Company's 1997 Long-
Term Incentive Plan;
(3) To ratify the selection by the Company's Board of Directors of the firm
of Coopers & Lybrand L.L.P. as auditors of the Company for fiscal year
1997; and
(4) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on February 21, 1997,
are entitled to notice of and to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors,
Joseph C. Stokes, Jr.
Secretary
You are cordially invited to attend the meeting. Whether or not you
plan to attend the meeting, please indicate your votes on the enclosed proxy and
date, sign and return it in the postage-prepaid envelope provided for your use.
You may still vote in person if you attend the meeting.
[LOGO OF LIFE TECHNOLOGIES APPEARS HERE]
<PAGE>
LIFE TECHNOLOGIES, INC.
9800 Medical Center Drive
Rockville, Maryland 20850
March 20, 1997
PROXY STATEMENT
GENERAL INFORMATION
Proxy Solicitation
This proxy statement is furnished to the holders of Common Stock, par
value $.01 per share (the "Common Stock"), of Life Technologies, Inc. (the
"Company") in connection with the solicitation of proxies on behalf of the Board
of Directors of the Company for use at the Annual Meeting of Stockholders of the
Company (the "Annual Meeting") to be held on Tuesday, April 15, 1997, or at any
adjournment thereof. The purposes of the Annual Meeting and the matters to be
acted upon are set forth in the accompanying Notice of Annual Meeting of
Stockholders. The Board of Directors is not currently aware of any other matters
that will come before the Annual Meeting.
Proxies for use at the Annual Meeting are being solicited by the
Board of Directors of the Company. Proxies will be mailed to stockholders on or
about March 20, 1997, and will be solicited chiefly by mail; however, certain
employees of the Company, none of whom will receive additional compensation
therefor, may solicit proxies by telephone, telegram or other personal contact.
The Company will bear the cost of the solicitation of proxies, which may include
the reasonable expenses of brokerage firms and others for forwarding proxies and
proxy material to the beneficial owners of Common Stock of the Company. The
Company has retained Morrow & Co., Inc., 909 Third Avenue, New York, New York
10022-4799, to assist in soliciting proxies, for which they will be paid a fee
of $3,000.00, plus handling, postage and out-of-pocket expenses.
Revocability and Voting of Proxy
A form of proxy for use at the Annual Meeting and a return envelope
for the proxy are enclosed. Stockholders may revoke the authority granted by
their execution of proxies at any time before their effective exercise by filing
with the Secretary of the Company a written notice of revocation or a duly
executed proxy bearing a later date, or by voting in person at the Annual
Meeting. Shares of the Company's Common Stock represented by executed and
unrevoked proxies will be voted in accordance with the instructions specified
thereon. If no specifications are given, the proxies intend to vote the shares
represented thereby to approve the Proposals set forth in the accompanying
Notice of Annual Meeting of Stockholders and in accordance with their best
judgment on any other matters which may properly come before the Annual Meeting.
A person giving the accompanying proxy has the power to revoke it at any time
before the voting.
<PAGE>
Record Date and Voting Rights
Only stockholders of record at the close of business on February 21, 1997,
are entitled to vote at the Annual Meeting or any and all adjournments thereof.
On February 21, 1997, there were 22,984,623 shares of Common Stock outstanding;
each such share is entitled to one vote on each of the matters to be presented
at the Annual Meeting. The holders of a majority of the outstanding shares of
Common Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote, will constitute a quorum at the Annual Meeting. Abstentions
and broker non-votes will be counted for purposes of determining the presence or
absence of a quorum. "Broker non-votes" are shares held by brokers or nominees
which are present in person or represented by proxy, but which are not voted on
a particular matter because instructions have not been received from the
beneficial owner. Under applicable Delaware law, the effect of broker non-votes
on a particular matter depends on whether the matter is one as to which the
broker or nominee has discretionary voting authority under the applicable rule
of the New York Stock Exchange. The effect of broker non-votes on the specific
items to be brought before the Annual Meeting is discussed under each item.
2
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of January 1, 1997
(except as otherwise noted below) regarding the beneficial ownership of Common
Stock of the Company of (i) each person known by the Company to own beneficially
more than five percent of the Company's outstanding Common Stock; (ii) each
director and nominee for election as a director of the Company; (iii) each
executive officer named in the Summary Compensation Table (see "Executive
Compensation"); and (iv) all directors, nominees and executive officers of the
Company as a group. Such beneficial ownership is reported in accordance with the
rules of the Securities and Exchange Commission and includes shares of Common
Stock which may be acquired within 60 days upon the exercise of outstanding
stock options. Except as otherwise specified, the named beneficial owner has
sole voting and investment power over the shares listed.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Ownership Percentage of
Beneficial Owner of Common Stock Common Stock
- --------------------------------------------------------------------------------------
<S> <C> <C>
The Dexter Corporation 12,246,664 shares (1) 53.4%
One Elm Street
Windsor Locks, CT 06096
State of Wisconsin Investment Board 1,549,500 shares (2) 6.8%
121 East Wilson Street
Madison, Wisconsin 53707
Thomas H. Adams, Ph.D. 150 shares *
Bruce H. Beatt --- ---
Kathleen Burdett 1,500 shares *
Betsy Z. Cohen 1,650 shares *
Rita R. Colwell, Ph.D. 150 shares *
Jerry E. Robertson, Ph.D. 15,150 shares *
Frank E. Samuel, Jr. 150 shares *
J. Stark Thompson, Ph.D. 396,066 shares (3) 1.7%
K. Grahame Walker 1,500 shares *
Iain C. Wylie 1,950 shares *
Thomas M. Coutts 34,998 shares (4) *
Joseph C. Stokes, Jr. 91,296 shares (5) *
John V. Cooper 41,500 shares (6) *
John E. Leffler, Ph.D. 30,250 shares (7) *
All directors, nominees and executive 799,490 shares 3.5%
officers as a group (17 persons)
</TABLE>
[Notes on Next Page]
3
<PAGE>
Notes:
* Less than 1.0%.
(1) Excludes 196,025, 19,620 and 36,502 shares of common stock of The Dexter
Corporation ("Dexter"), an affiliate of the Company, beneficially owned by
Mr. Walker, Mr. Beatt and Ms. Burdett, respectively, constituting an
aggregate of approximately 1.0% of the outstanding shares of Dexter, as of
January 1, 1997. The shares of Dexter beneficially owned by Mr. Walker, Mr.
Beatt and Ms. Burdett include 113,167, 11,000 and 17,334 shares,
respectively, which Mr. Walker, Mr. Beatt and Ms. Burdett may acquire upon
the exercise of stock options.
(2) This figure is based on information set forth in the Schedule 13G,
dated January 21, 1997, filed by the State of Wisconsin Investment
Board with the Securities and Exchange Commission.
(3) Includes 357,999 shares of Common Stock which Dr. Thompson may acquire upon
the exercise of stock options. Also includes 450 shares owned by Dr.
Thompson's wife and 300 shares owned by Dr. Thompson's son, of which he may
be deemed to be the beneficial owner. Dr. Thompson disclaims beneficial
ownership of these 750 shares.
(4) Includes 34,998 shares of Common Stock which Mr. Coutts may acquire upon
the exercise of stock options.
(5) Includes 83,666 shares of Common Stock which Mr. Stokes may acquire upon
the exercise of stock options. Also includes 7,330 shares owned by Mr.
Stokes' wife, of which Mr. Stokes may be deemed to be beneficial owner. Mr.
Stokes disclaims beneficial ownership of these 7,330 shares.
(6) Includes 41,500 shares of Common Stock which Mr. Cooper may acquire upon
the exercise of stock options.
(7) Includes 30,250 shares of Common Stock which Dr. Leffler may acquire upon
the exercise of stock options.
4
<PAGE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Company's certificate of incorporation provides for three classes
of directors, each class to consist of not more than five nor fewer than three
directors, with the term of one class expiring at each annual meeting of
stockholders. The number of directors in each class is determined by the vote of
at least 75% of the directors.
The Board of Directors has determined that the total number of
directors of the Company shall be nine, with three in the class whose term will
expire in 1998, three in the class whose term will expire in 1999, and three in
the class whose term will expire in 2000. At the Annual Meeting, three directors
are to be elected for terms expiring in 2000.
Unless otherwise specified, the enclosed proxy will be voted for the
election of Bruce H. Beatt, Rita R. Colwell, Ph.D. and K. Grahame Walker to
serve until the 2000 Annual Meeting of Stockholders and until their successors
shall have been duly elected and shall qualify. Dr. Colwell and Mr. Walker are
currently directors of the Company. All nominees have consented to be named and
have indicated their intent to serve if elected. If for any reason at the time
of the Annual Meeting any nominee should be unable to serve as a director, a
contingency which the Board of Directors does not expect to occur, discretionary
authority is reserved to vote for a substitute.
The following information relates to the nominees listed above and to
the other directors of the Company whose terms of office will extend beyond the
Annual Meeting.
Nominees
Term Expiring in 2000:
Bruce H. Beatt
Mr. Beatt, age 44, has been vice president, general counsel and secretary of
Dexter since April 1, 1992. From April 1991 to April 1992, he was general
counsel and secretary of Dexter.
Rita R. Colwell Director since 1996
Dr. Colwell, age 62, has been president of the University of Maryland
Biotechnology Institute since 1991. She is also a professor of microbiology at
the University of Maryland at College Park. In 1995 Dr. Colwell served as
President of the American Association for the Advancement of Science, the
world's largest scientific organization, and as chairman of the Board in 1996.
Dr. Colwell has served on advisory councils of the National Science Foundation,
the National Institutes of Health, the Environmental Protection Agency, the Food
and Drug Administration and the Department of Agriculture. Dr. Colwell is a
director of Biospherics (information technology company) and Dynamac
(environmental support services).
5
<PAGE>
K. Grahame Walker Director since 1989
Mr. Walker, age 59, has been chairman of the Company since April 1993. He has
been chairman and chief executive officer of Dexter since April 1993. He was
president and chief executive officer of Dexter since December 1989. He was
elected a director of Dexter in April 1989. From April 1988 to December 1989, he
was president and chief operating officer of Dexter. He is a director of The
Barnes Group Inc. (manufacturer and distributor of industrial parts and
supplies).
Mr. Walker is a member of the Executive Committee and the Compensation and
Organization Committee.
Other Directors
Term Expiring in 1999
Thomas H. Adams Director since 1992
Dr. Adams, age 54, has been the chairman of the board and chief executive
officer of Genta Incorporated (biotechnology company) since February 1989. He
previously served as chairman of the board and chief executive officer of
Gen-Probe Incorporated (biotechnology company), which he co-founded in 1984.
Prior to joining Gen-Probe, he held the positions of senior vice president of
research and development and chief technical officer at Hybritech Incorporated
(biotechnology company). Dr. Adams is a director of Biosite Diagnostics
(biotechnology company), Ixsys, Inc. (biotechnology company), La Jolla
Pharmaceuticals, Inc. and Nanogen, Inc. (biotechnology company).
Dr. Adams is a member of the Compensation and Organization Committee.
Frank E. Samuel, Jr. Director since 1996
Mr. Samuel, 57, is president of Edison BioTechnology Center, Cleveland, Ohio. He
was an independent consultant on medical technology, health care and public
policy from 1990 to 1995. From 1984 to 1989, he was president of the Health
Industry Manufacturers Association, Washington, D.C. Mr. Samuel is a director of
Protocol Systems, Inc. (health industry supplier) and STERIS Corporation (health
care company).
Mr. Samuel is a member of the Audit Committee and the Compensation and
Organization Committee.
Iain C. Wylie Director since 1995
Mr. Wylie, 63, is an international business consultant and lecturer. From 1988
to 1991, he was president of Croda Japan (specialty chemicals company). Prior to
that time, Mr. Wylie served in various senior international management positions
at E.I. DuPont de Nemours & Company ("DuPont") during his career.
Mr. Wylie is a member of the Audit Committee and the Stock Option Committee.
6
<PAGE>
Term Expiring in 1998:
Kathleen Burdett Director since 1995
Ms. Burdett, age 41, has been vice president and chief financial officer of
Dexter (specialty materials company) since January 1995. She previously served
as vice president and controller of Dexter since 1989.
Ms. Burdett is a member of the Executive Committee, the Audit Committee and the
Compensation and Organization Committee.
Betsy Z. Cohen Director since 1992
Ms. Cohen, age 55, has been chairman of the board of Jeff Banks, Inc. (formerly
State Bancshares, Inc., a bank holding company) since 1981. She has been
chairman of the board of Jefferson Bank, Philadelphia, Pennsylvania, since 1974.
She has been chairman of the board of Jefferson Bank of New Jersey, Mt. Laurel,
New Jersey, since 1987. She is also a director of Aetna, Inc. (health benefits
company).
Ms. Cohen is a member of the Audit Committee, the Compensation and Organization
Committee and the Stock Option Committee.
J. Stark Thompson Director since 1988
Dr. Thompson, age 55, has been president and chief executive officer of the
Company since 1988. Prior to joining the Company, he was with DuPont for 21
years.
Dr. Thompson is a member of the Executive Committee.
The Board of Directors of the Company held six meetings in 1996. The
Board has an Executive Committee, a Compensation and Organization Committee, an
Audit Committee and a Stock Option Committee. It has no nominating committee.
The Executive Committee currently is composed of four members, Mr.
Walker, chairman, Ms. Burdett, Jerry E. Robertson, Ph.D. and Dr. Thompson.
Subject to certain limitations prescribed by law, by the Company's certificate
of incorporation and by-laws and by resolutions of the Board, the Executive
Committee has and may execute when the Board is not in session all the powers of
the Board. The Executive Committee did not meet in 1996.
The Compensation and Organization Committee currently is composed of
six members, Dr. Robertson, chairman, Dr. Adams, Ms. Burdett, Ms. Cohen, Mr.
Samuel and Mr. Walker. This
7
<PAGE>
committee monitors the Company's compensation policy, with particular emphasis
on retirement and officer remuneration matters. It recommends to the Board of
Directors and the Stock Option Committee the compensation for the Company's key
employees. The committee held three meetings in 1996.
The Audit Committee currently is composed of four members, Ms. Cohen,
chairman, Ms. Burdett, Mr. Samuel and Mr. Wylie. Its meetings include, as a
matter of course, private sessions with the Company's independent certified
public accountants. The Audit Committee recommends to the Board the selection of
independent auditors and is charged with reviewing the scope and quality of
audit and quarterly reviews performed by the independent auditors as well as
other services provided by the independent auditors to the Company. The Audit
Committee monitors the Company's policy on ethics and business conduct, the
integrity of officers, accounting policies and internal controls and the quality
of published financial statements. The committee held two meetings in 1996.
The Stock Option Committee currently is composed of three members,
Dr. Robertson, chairman, Ms. Cohen and Mr. Wylie. This committee administers and
grants stock options under the Company's long-term incentive compensation plans.
The committee held one meeting in 1996.
In 1996, each incumbent director attended at least 75 % of the
aggregate meetings of the Board held during his or her term as a director and of
the committees on which he or she served.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Based upon a review of the copies of all Section 16(a) forms
furnished to the Company and written representations from the Company's
executive officers and directors, the Company believes that during fiscal year
1996 all its directors, executive officers and holders of more than 10% of the
Company's Common Stock complied with all filing requirements of Section 16(a) of
the Securities Exchange Act of 1934.
8
<PAGE>
Vote Required
The three nominees receiving the highest number of affirmative votes
of the shares of Common Stock present in person or represented by proxy and
entitled to vote for them, a quorum being present, shall be elected as
directors. Only votes cast for a nominee will be counted, except that the
accompanying proxy will be voted for all nominees in the absence of instruction
to the contrary. Abstentions, broker non-votes and instructions on the
accompanying proxy card to withhold authority to vote for one or more nominees
will result in the respective nominees receiving fewer votes. However, the
number of votes otherwise received by the nominee will not be reduced by such
action.
THE BOARD OF DIRECTORS DEEMS ELECTION OF THE DIRECTOR NOMINEES NAMED
IN "PROPOSAL NO. 1 - ELECTION OF DIRECTORS" TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" SUCH NOMINEES.
9
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the cash
compensation paid or to be paid by the Company, as well as certain other
compensation paid or accrued, during the fiscal years indicated, to the Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company for services rendered in all capacities to the Company
and its subsidiaries during such period.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------------ ---------------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options Compensation/(1)/
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D 1996 $400,500 $330,413 85,000 $4,297
President, Chief Executive 1995 368,750 318,600 75,000 3,687
Officer & Director 1994 346,250 199,495 40,000 831
Thomas M. Coutts 1996 239,000 144,595 35,000 --
Senior Vice President & 1995 220,500 174,636 36,000 --
General Manager 1994 207,750 105,205 17,000 --
Joseph C. Stokes, Jr 1996 200,167 138,806 35,000 4,738
Senior Vice President & 1995 181,250 117,450 27,500 4,620
Chief Financial Officer, 1994 171,250 68,079 13,000 831
Secretary & Treasurer
John V. Cooper 1996 174,000 99,050 22,000 4,750
Vice President & 1995 160,000 108,000 22,500 2,420
General Manager 1994 151,750 55,081 10,000 831
John E. Leffler, Ph.D 1996 177,500 105,435 22,000 4,750
Vice President - Human 1995 164,500 102,155 22,500 4,620
Resources & Manufacturing 1994 155,247 67,810 10,000 831
</TABLE>
- -----------------------------------------
/1/ All Other Compensation represents the Company's contributions under an
Extra Savings Plan ("ESP") for the account of each executive officer. The
Company matches one-half of the first 6% of eligible contributions made by
each participant in the ESP up to the maximum elective deferral. Mr. Coutts
does not participate in the ESP.
10
<PAGE>
The following table sets forth, as to each executive officer named in
the Summary Compensation Table, information with respect to stock option grants
during the period January 1, 1996 through December 31, 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
- ----------------------------------------------------------------------------------------------
Number Potential
of Percentage of Realizable Value
Securities Total at Assumed
Under- Options Annual Rates
lying Granted to of Stock
Options Employees in Exercise or Price Appreciation
Granted Fiscal Base Price Expiration for Option Term(3)
Name (1) Year ($/Share) (2) Date 5% 10%
- --------------------------- ----------- ----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D 85,000 16.7% $ 25.00 Oct. 15, 2006 $1,336,401 $3,386,703
Thomas M. Coutts 35,000 6.9% $ 25.00 Oct. 15, 2006 550,283 1,394,525
Joseph C. Stokes, Jr 35,000 6.9% $ 25.00 Oct. 15, 2006 550,283 1,394,525
John V. Cooper 22,000 4.3% $ 25.00 Oct. 15, 2006 345,892 876,558
John E. Leffler, Ph.D 22,000 4.3% $ 25.00 Oct. 15, 2006 345,892 876,558
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) One-third of these options vest on each of the first three
anniversary dates following the date of grant. Options are
exercisable within the ten-year period from the date of grant
subject to the vesting schedule.
(2) The exercise price of all options granted during 1996 was equal to
the market value of the underlying Common Stock on the date of
grant.
(3) These amounts represent assumed rates of appreciation in the price
of the Company's Common Stock during the terms of the options.
Actual gains, if any, on stock option exercises will depend on the
future price of the Common Stock and overall stock market
conditions. There is no representation that the rates of
appreciation reflected in this table will be achieved.
11
<PAGE>
The following table provides information on option exercises in
fiscal year 1996 by the named executive officers and the value of such officers'
unexercised options at December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number Number of Securities
of Underlying Unexercised Value of Unexercised
Shares Options In-the-Money Options
Acquired at Fiscal Year End at Fiscal Year End /(1)/
on Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------- ---------- ---------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D 14,501 $155,420 357,999 180,000 $5,110,399 $930,000
Thomas M. Coutts 25,500 126,124 34,998 79,500 377,308 432,375
Joseph C. Stokes, Jr 3,401 39,153 83,666 69,000 1,018,667 330,375
John V. Cooper -- -- 41,500 49,500 471,937 266,250
John E. Leffler, Ph.D -- -- 30,250 49,500 342,000 266,250
</TABLE>
/1/ Calculated on the difference between the stock option exercise
price and the closing price of a share of the Company's Common
Stock on the Nasdaq National Market System on December 31, 1996
($25.00).
Pension and Retirement Benefits
The Company has a pension plan for certain groups of employees. The
Company makes an annual contribution to the plan which is actuarially
determined. Such contribution cannot be appropriately allocated to individual
participants and, accordingly, is not included in the Summary Compensation
Table. The Company's contribution to the pension plan for 1996 will be
$1,092,188, which represents 2.7% of eligible compensation. Employees within the
eligible group may participate in the plan after completing one year of service
and attaining age 21. Participating employees become fully vested in the plan
after five years of service. Normal retirement age is 65, and actuarially
reduced benefits are available to participants who are age 55 and have ten years
of service.
In general, the participant accrues an annual retirement benefit
equal to 1% of the participant's final five-year average compensation (plus an
additional .5% above Social Security covered compensation) times the number of
years of service credited after October 31, 1975. Eligible compensation is
defined as salary, hourly wages, bonus and commissions. Eligible compensation
for the executive officers named in the Summary Compensation Table does not
differ by more than 10 percent from the summary compensation set forth in such
table.
12
<PAGE>
The following table illustrates the estimated annual benefit (prior
to an offset for the primary Social Security benefit) which participants are
eligible to receive from the pension plan under a straight life annuity basis
with a retirement age of 65 assuming the individual's compensation remains
constant at the indicated amount for the final five years of service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Final Five-Year YEARS OF SERVICE
Average ---------------------------------------------------------------------------------------------------------
Remuneration 15 Years 20 Years 25 Years 30 Years 35 Years
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 700,000 152,813 203,375 254,688 305,625 356,563
600,000 130,313 173,750 217,188 260,625 304,063
500,000 107,813 143,750 179,688 217,625 251,563
400,000 85,313 113,750 142,188 170,625 199,063
300,000 62,813 83,750 104,688 125,625 146,563
200,000 40,313 53,750 67,188 80,625 115,938
</TABLE>
The number of credited years of service as of December 31, 1996, for
the executive officers named in the Summary Compensation Table was eight for J.
Stark Thompson, 16 for Joseph C. Stokes, Jr., five for John V. Cooper and four
for John E. Leffler. Thomas M. Coutts does not participate in the pension plan.
As of December 31, 1996, the estimated benefits payable upon retirement at age
65, based on the maximum years of service for each individual, were as follows:
J. Stark Thompson, $191,704, Joseph C. Stokes, Jr., $152,672, John V. Cooper,
$94,550, and $51,103 for John E. Leffler.
Mr. Coutts participates in a pension plan sponsored by the Company in
the United Kingdom. In general, a participant in the plan accrues an annual
benefit of one-sixtieth of his final pensionable salary multiplied by the number
of years of credited service up to a maximum of 40 years. Final pensionable
salary is the average base salary in the three consecutive years out of the last
thirteen which would produce the highest retirement benefit. Eligible
compensation is defined as base salary. An employee is eligible to participate
in the plan upon attainment of age 20 and the completion of one year of service.
A participant becomes fully vested immediately upon entry into the plan. Normal
retirement is age 60 and early retirement is permitted after age 50 at
actuarially reduced benefits. As of December 31, 1996, the number of credited
years of service for Mr. Coutts was 23. The estimated benefit payable as of
December 31, 1996, to Mr. Coutts at normal retirement at age 60 was <M156>82,667
(equivalent to approximately $132,300) based on the maximum number of years of
service allowable.
The Company has a supplemental retirement plan ("SRP") intended to
provide retirement benefits, supplementing those provided under other plans, to
certain officers and key employees. Upon retirement at the age of 65,
participants are entitled to receive an annual benefit equal to 55% of their
average annual compensation (salary and bonus) based on the highest 60
consecutive months of a participant's last 120 months as a participant in the
SRP, less all other retirement benefits received (including Social Security
benefits, other Company retirement benefits and plans of other employers).
13
<PAGE>
The SRP currently has five participants, including Dr. Thompson. Since
participation in the SRP is not based on a participant's number of years of
service and benefits payable under the SRP would only be payable after taking
into account all other retirement benefits received, payments made under the SRP
are not included in the Pension Plan Table above.
Agreements with Executive Officers
The Company or, in the case of Thomas M. Coutts, the Company and a
subsidiary of the Company, has entered into agreements, effective as of February
13, 1997, with certain of its executive officers, including the executive
officers named in the Summary Compensation Table, which provide certain
severance benefits for them in the event of a termination of their employment
following a Change of Control (as defined in the agreements), in order to
encourage such executives, in the event of a Change of Control of the Company,
to continue to perform their duties in the best interests of the Company and its
stockholders. In most instances these agreements replace and supersede prior
agreements between the Company and the executive officers entered into between
June 23, 1989 and July 16, 1996.
Each agreement provides that, if, within two years following a Change
of Control the Company terminates the employment of the executive other than for
death, disability or Cause (as defined in the agreements, including repeated,
willful and deliberate violations by the executive of his obligations under the
agreement or the commission by the executive of an intentional act of fraud,
embezzlement, theft or misappropriation of confidential information), or the
executive voluntarily terminates his employment for Good Reason (as defined in
the agreements, including a diminution in the executive's position, authority,
duties or responsibilities or a change in the executive's job location of more
than fifty miles or any purported termination in violation of the agreement or
the failure of any successor to comply with the agreement), the executive will
receive his base salary and bonus through the date of termination plus specified
severance benefits. Generally, these severance benefits include, but are not
limited to, (i) a specified multiple (two times in the case of Dr. Thompson, Mr.
Coutts and Mr. Stokes, executive officers named in the Summary Compensation
Table, and one and one-half times for all other executive officers) of an
executive's annual base salary plus the higher of his target bonuses for the
year in which the termination occurs or the average annual bonus for the prior
three years, and (ii) retirement benefits and health insurance and other
benefits for the remainder of the term of the agreement. In addition, the
executive would be entitled to immediate acceleration of the exercisability of
his stock options and accelerated vesting under certain other benefit plans of
the Company.
For purposes of the agreements, a "Change of Control" of the Company
generally means (i) an acquisition or series of acquisitions, other than from
the Company, of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of 20% or more of the Company's then outstanding Common Stock (the
"Outstanding Company Common Stock") or voting securities (the "Outstanding
Company Voting Securities"), provided, however, that any acquisition by the
Company, Dexter or any of their subsidiaries, or by any employee benefit plan
(or related trust) sponsored or maintained by the Company, Dexter or any of
their subsidiaries, or any transaction or series of transactions that results in
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any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) having beneficial ownership of more than 20% of
the Outstanding Company Common Stock, but less than the percentage of the
Outstanding Company Common Stock then beneficially owned by Dexter, and certain
other acquisitions specified in the agreements, shall not constitute a Change of
Control, (ii) certain changes in the composition of a majority of the Company's
board of directors from such composition on December 1, 1996 (the "Incumbent
Board"), except changes approved by a majority of directors comprising the
Incumbent Board, including a majority of the members of the Incumbent Board who
are not Dexter-related Directors (as defined in the agreements), (iii) approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company, or of the sale or other disposition of all or substantially all of
the assets of the Company, or of a reorganization, merger or consolidation of
the Company, and, in each case, following such reorganization, merger or
consolidation, all or substantially all of the individuals and entities that
beneficially owned the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such reorganization, merger or
consolidation do not beneficially own more than 60% of, respectively, the then
outstanding shares of common stock and voting stock of the corporation resulting
from such reorganization, merger or consolidation; and (iv) so long as Dexter
owns 20% or more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, any of the following events shall occur (a) the acquisition,
other than from Dexter, of beneficial ownership of 20% or more of Dexter's then
outstanding common stock (the "Dexter Outstanding Common Stock") or voting
securities (the "Dexter Outstanding Voting Securities"), provided that any
acquisition by the Company, Dexter or any of their subsidiaries, or by any
employee benefit plan (or related trust) sponsored or maintained by the Company,
Dexter or any of their subsidiaries, or any acquisition of Dexter by a
corporation with respect to which, following such acquisition, more than 60% of,
respectively, the then outstanding shares of such corporation's common stock and
voting power are beneficially owned by all or substantially all of the
individuals or entities who were the beneficial owners, respectively, of the
Outstanding Dexter Common Stock and Outstanding Dexter Voting Securities
immediately prior to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of the Outstanding
Dexter Common Stock and Outstanding Dexter Voting Securities, as the case may
be, shall not constitute a Change of Control, (b) certain changes in the
composition of more than a majority of the board of directors of Dexter from the
composition on December 1, 1996, except changes approved by a majority of the
incumbent board of directors of Dexter, or (c) approval by the stockholders of
Dexter of a complete liquidation or dissolution of Dexter, or the sale or other
disposition of all or substantially all of the assets of Dexter, or of a
reorganization, merger or consolidation of Dexter, and, in each case, following
such reorganization, merger or consolidation the individuals and entities that
beneficially owned the Outstanding Dexter Common Stock and Outstanding Dexter
Voting Securities prior to such reorganization, merger or consolidation do not
beneficially own more than 60% of the then outstanding shares of common stock
and voting stock of the resulting corporation.
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REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE
AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act of 1934, as amended, that might incorporate future filings, including this
proxy statement, in whole or in part, the following report of the Compensation
and Organization Committee and the Stock Option Committee and the Performance
Graph which follows shall not be incorporated by reference into any such
filings, except to the extent that the Company specifically incorporates this
information by reference.
The Compensation and Organization Committee (the "Compensation
Committee") of the Company is responsible for, among other things, establishing
and administering the compensation policies applicable to executive officers.
The Compensation Committee is currently composed of: Jerry E. Robertson, Ph.D.,
chairman, Thomas H. Adams, Ph.D., Kathleen Burdett, Betsy Z. Cohen, Frank E.
Samuel, Jr. and K. Grahame Walker. The Stock Option Committee of the Company is
responsible for administering and granting stock options under the Company's
stock option and incentive compensation plans. The Stock Option Committee is
currently composed of three non-employee directors: Jerry E. Robertson, Ph.D.,
chairman, Betsy Z. Cohen and Iain C. Wylie.
Overall Policy
The Company's executive compensation is designed to be closely linked
to long-term corporate performance and returns to stockholders. To this end, the
Company has developed an overall compensation strategy and specific compensation
plans that tie a significant portion of executive compensation to the Company's
success in meeting specified performance goals and to appreciation in the
Company's stock price over time. The overall objectives of this strategy are to
attract and retain executive talent of the highest quality, to motivate these
executives to achieve the goals inherent in the Company's strategy, to link
executive and stockholder interests through equity-based compensation and to
provide a compensation package that recognizes individual contributions as well
as overall business results.
Each year the Compensation Committee reviews the Company's executive
compensation program. This review includes an evaluation based on the
Biotechnology Compensation and Benefits Survey conducted by Radford
Associates/Alexander & Alexander Consulting Group and endorsed by the
Biotechnology Industry Organization (the "Radford Survey"). A total of 292
biotechnology companies participated in the 11th annual edition of the Radford
Survey which was published in early 1996, of which about one-half are publicly
traded companies and one-half are private companies. Compensation data was
reported for incumbents in executive, management and benchmark positions.
Participants in the Radford Survey reported on bonus and cash profit sharing
plans and stock option plans, as well as other compensation and benefit plans.
Participating companies range in size from 100 employees to over 3,000 employees
and are widespread geographically. These companies are not identical to those
comprising the Nasdaq Pharmaceutical Stock Index, which has been used for
purposes of comparison in the stock performance graph at page 21, although there
are overlaps.
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The Compensation Committee reviews and makes recommendations to the
Board of Directors and the Stock Option Committee with respect to the
compensation of the most highly compensated executives, including the
individuals named in the Summary Compensation Table, and reviews the
compensation policies and pay practices employed with respect to all the
Company's other executive-level employees. This practice is designed to ensure
consistency throughout the executive compensation program. The key elements of
the Company's executive compensation program consist of base salary, cash
bonuses and stock options. The Compensation Committee's and Stock Option
Committee's policies with respect to each of these elements, including the bases
for the compensation awarded to Dr. Thompson, are discussed below.
Base Salary
Base salaries for executive officers are initially determined by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for executive
talent, including a comparison to base salaries for comparable positions at
other companies. The Company has principally used the Radford Survey, which is
published annually, for purposes of comparison of compensation of its executive
officers to compensation of peer companies.
It has been the Company's policy to target base salaries between the
50th and 75th percentiles for base pay of similar positions within the defined
competitive group in the Radford Survey, adjusted for sales size. Annual salary
adjustments are determined by evaluating the performance of each executive
officer taking into account new responsibilities as well as the individual's
contribution to the Company's overall performance. Individual performance
ratings take into account such factors as achievement of the strategic plan,
attainment of specific individual objectives, interpersonal managerial skills
and civic involvement.
Cash Bonus
The Company's cash bonus accounts for a significant percentage of
each executive officer's compensation. Executive officers participate in the
Company's Incentive Compensation Plan ("ICP"), which is a pay-for-performance
plan designed to compensate officers for performance that increases stockholder
value. Approximately 800 employees of the Company are eligible to participate in
the ICP. The ICP is approved by the Compensation Committee and is reviewed
semi-annually.
"Performance" is measured by assessing both the Company's performance
and individual performance. The total amount of compensation to be distributed
each year (the "Incentive Pool") is based on Company performance, as measured by
specific measurements defined each year such as sales growth, return on
investment and operating profitability, and threshold, target and maximum
performance levels are established to reflect the Company's operations. Each
participant's ICP payout is based upon his or her contribution to the Company's
performance as well as the Company's overall financial results in the year. The
individual performance ratings in the ICP may range from 0% to 125%. The Company
performance-based factors considered in determining the ICP and the weight given
to those factors in 1996 were as follows: operating income, 40%; return on
investment, 20%;
17
<PAGE>
and net sales, 40%. These factors are weighted annually to reflect the
assessment of those issues that are in need of emphasis in accordance with the
Company's strategic plan. Once the Incentive Pool is determined, the
Compensation Committee reviews each executive officer's potential share of the
Incentive Pool based on his or her contribution to the Company's business
results, which is a subjective determination. The Compensation Committee
considers a number of factors in determining an executive officer's contribution
to the Company's business results, including the level of the executive's job
responsibilities, the executive's past performance and the achievement of
individual performance objectives. Individual performance objectives are set at
the beginning of each year by the Compensation Committee and the Chief Executive
Officer for the Chief Executive Officer and by the Chief Executive Officer and
each other executive officer for that executive officer. An executive's
individual performance measures take into account such factors as the attainment
of specific individual objectives, leadership and management skills and civic
involvement. No specific weight is assigned to any particular factor. Bonuses
are paid semi-annually, although the amounts paid under the ICP are based on and
adjusted for the Company's annual results.
Stock Options
The third component of each executive officer's compensation is the
Company's stock option and long-term incentive compensation plans pursuant to
which the Company has granted to executive officers and other key employees
options to purchase shares of its Common Stock. The Board of Directors of the
Company believes that these plans are an important factor in attracting,
retaining and motivating its officers and key employees. The objective of the
Company's stock option and long-term incentive compensation plans is to advance
the long-term interests of the Company and its stockholders and complement
incentives tied to annual performance. Stock option grants provide rewards to
executives upon the creation of incremental stockholder value. The determination
of the number of stock options granted under the Company's plans is primarily
based upon a review of the value of stock options granted at 17 biotechnology
companies of comparable revenue size which the Company believes reflects the
market in which the Company competes for executive talent (a number of which
companies are included in the Radford Survey), the total compensation package at
these peer companies, and judgments concerning an individual's performance
results and the ability of the individual to impact the long-term success of the
Company, which is a subjective determination. The Stock Option Committee also
considers the number of options outstanding as previously granted, the number of
options held by such officer, and the aggregate number of current stock options
to be granted in determining the number of stock options to be granted to a
participant.
In order to provide the Board with an objective perspective of
competitive stock option programs based on public information, in 1991 the Board
of Directors engaged an independent consultant in executive compensation to
prepare an analysis of the Company's stock option program in light of
competitive stock option programs at companies deemed to be most comparable to
the Company because of the similarity of their business and size. The Stock
Option Committee considered the consultant's analysis (which has been updated
annually since 1991) in determining its stock option grants.
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<PAGE>
The stock options granted in 1996 were granted at an exercise price
equal to the market value of the Common Stock on the date of grant and will only
have value if the Company's stock price increases. Generally, grants of stock
options vest in equal amounts over three years and are exercisable within the
ten-year period from the date of grant. This approach is designed to provide
further incentive to create value for the Company's stockholders over the
long-term since the full benefit of the compensation package cannot be realized
unless stock price appreciation occurs over a number of years.
Compensation to Chief Executive Officer
In 1996, J. Stark Thompson, Ph.D., Chief Executive Officer of the
Company, received a base salary of $400,500, an increase of 8.6% over his 1995
base salary. In addition, 6.1% of the Company's Incentive Pool, or $330,413, was
paid to Dr. Thompson as a bonus in 1996, compared with 6.5% of the Incentive
Pool, or $318,600 in 1995. The Company's performance in 1996 exceeded
expectations when compared with specific performance goals. Dr. Thompson's
incentive compensation increased 3.7% in 1996 compared with the prior year. Dr.
Thompson's total compensation in 1996 increased 6.3% over 1995. It is our view
that total cash compensation paid to Dr. Thompson in 1996 is consistent with the
Compensation Committee's compensation philosophy.
In 1996, Dr. Thompson also received options to purchase 85,000 shares
of Common Stock at an exercise price of $25.00 per share. The grants were given
to reinforce the relationship between the Company's performance and the Chief
Executive Officer's future earnings. The Stock Option Committee took into
consideration the report prepared by the Company's independent executive
compensation consultant in determining the stock option grants.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code of 1986 limits the amount
of compensation a corporation may deduct as a business expense paid to its Chief
Executive Officer or any one of its four other most highly compensated officers
to $1,000,000 in any year except to the extent that such compensation qualifies
as "performance-based compensation" (or meets other exceptions not here
relevant). All compensation payments in 1996 to the five executive officers
named in the Summary Compensation Table will be fully deductible. The
Compensation Committee's present intention is to comply with the requirements of
Section 162(m) unless the Compensation Committee feels that required changes
would not be in the best interests of the Company or its stockholders.
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<PAGE>
Conclusion
The Compensation Committee and Stock Option Committee believe that
linking executive compensation to individual and Company performance results in
better alignment of compensation with corporate business goals and stockholder
value. As performance goals are met or exceeded, resulting in increased value to
stockholders, executives are rewarded commensurately. The Compensation Committee
and the Stock Option Committee believe that compensation paid to its executives
during 1996, including the Chief Executive Officer, reflects the Company's
compensation goals and policy.
Compensation & Organization Committee Stock Option Committee
Jerry E. Robertson, Chairman Jerry E. Robertson, Chairman
Thomas H. Adams Betsy Z. Cohen
Kathleen Burdett Iain C. Wylie
Betsy Z. Cohen
Frank E. Samuel, Jr.
K. Grahame Walker
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PERFORMANCE GRAPH
Note: The total stockholder return (i.e., changes in share price plus reinvested
dividends) shown on the performance graph below is not necessarily indicative of
the future returns on the Company's Common Stock.
Comparison of Five-Year Cumulative Total Return Among Life Technologies, Inc.,
The Nasdaq Stock Market (U.S. & Foreign), Nasdaq Pharmaceutical Stocks
and the Russell 2000
(Assuming an investment of $100 on December 31, 1991)
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Index Description 1991 1992 1993 1994 1995 1996
- ------------------------------------------------------------------------------
Life Technologies, Inc. 100.0 125.5 107.9 114.9 162.0 224.5
Nasdaq Stock Market (U.S. & Foreign) 100.0 116.0 134.3 130.3 183.0 224.1
Nasdaq Pharmaceutical Stocks 100.0 83.2 74.2 55.8 102.1 102.2
Russell 2000 100.0 118.4 140.8 138.2 177.5 206.8
</TABLE>
21
<PAGE>
Compensation Committee Interlocks and Insider Participation
During 1996, Jerry E. Robertson, chairman, Thomas H. Adams, Kathleen
Burdett, Betsy Z. Cohen, Frank E. Samuel, Jr. and K. Grahame Walker served as
members of the Company's Compensation and Organization Committee. Jerry E.
Robertson, Betsy Z. Cohen and Iain C. Wylie served as members of the Company's
Stock Option Committee in 1996.
In 1996 the Company received the benefit of certain services
performed by Dexter corporate personnel, including insurance, risk management
advice and internal audit, for which the Company paid Dexter $20,000. Dexter
also purchased principally all insurance for the Company for which the Company
was charged its pro rata share of the cost of such insurance. Mr. Walker is a
director of the Company and Dexter; he is also chairman and chief executive
officer of Dexter. Ms. Burdett is a director of the Company; she is also vice
president and chief financial officer of Dexter.
Compensation of Directors
In 1996, each non-employee director of the Company (except Mr. Walker
and Ms. Burdett) received a $10,000 retainer fee which was paid quarterly, an
additional fee of $1,000 for each Board meeting attended, and $500 for each
committee meeting attended. Mr. Walker and Ms. Burdett were paid $2,500 each as
a retainer fee and $1,500 and $2,000, respectively, in Board and committee
meeting attendance fees in 1996. Effective April 16, 1996, Mr. Walker and Ms.
Burdett elected not to accept retainer and meeting fees. Pursuant to the terms
of the Company's Non-Employee Directors' Annual Retainer Plan, each non-employee
director (except Mr. Walker and Ms. Burdett who elected not to participate in
the Plan) received a grant of 150 shares of Common Stock (adjusted from 100
shares to reflect the 3-2 stock split on August 28, 1996) on October 1, 1996.
Pursuant to the Plan each non-employee director (except Mr. Walker and Ms.
Burdett) will receive a grant of 150 shares of Common Stock of the Company on
April 1, 1997 and on October 1, 1997. Each non-employee director may elect to
receive up to 100% of his or her board retainer fee in Common Stock of the
Company rather than in cash. Pursuant to the terms of the Company's 1996
Non-Employee Directors' Stock Option Plan, each non-employee director (except
Mr. Walker and Ms. Burdett who elected not to participate in the Plan) was
granted an option to purchase 6,750 shares of Common Stock (adjusted from 4,500
shares to reflect the 3-2 stock split on August 28, 1996) on October 1, 1996 at
a per share price of $22.875 (the fair market value on that date). The grant
becomes exercisable in three equal installments on the first, second and third
anniversary of the date of the grant, subject to acceleration in the event of a
Change of Control (as defined in the plan). The options may be exercised by
payment in cash, check or shares of Common Stock.
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PROPOSAL NO. 2 - APPROVAL OF 1997 LONG-TERM INCENTIVE PLAN
The proposed 1997 Long-Term Incentive Plan (the "Plan") authorizes
the grant of various stock and stock-related awards. The Board of Directors of
the Company believes adoption of the Plan will provide an enhanced mechanism for
compensating key management and other personnel on the basis of individual and
corporate performance. The Board further believes adoption of the Plan will
encourage selected key employees to acquire a proprietary interest in the
performance of the Company, and will enhance the Company's ability to attract
and retain individuals of exceptional managerial talent upon whom, in large
measure, the sustained progress, growth and profitability of the Company depend.
The Plan is intended to provide the Company flexibility to adapt the
compensation of key employees in a changing business environment.
The full text of the Plan recommended by the Board of Directors is
attached to this proxy statement as Exhibit A. The material features of the Plan
are outlined below, but such outline is qualified in its entirety by reference
to the full text of the Plan.
Types of Awards
The Plan would permit the granting of any or all of the following
types of awards: (1) stock options, including incentive stock options ("ISOs");
(2) stock appreciation rights ("SARs"), in tandem with stock options or
freestanding; (3) restricted stock; (4) performance share awards; (5) incentive
shares; (6) dividend equivalent rights ("DERs"), in tandem with other awards or
freestanding; and (7) other awards based on, payable in, or related to Common
Stock of the Company.
Eligibility for Participation
In addition to employee directors and officers, all key employees of
the Company or of any affiliate of the Company at least 50 percent owned by the
Company will be eligible for selection for participation under the Plan. The
selection of participants from among eligible employees will be entirely within
the discretion of the Committee (as defined below). It is not possible at the
present time to indicate the number, names, or positions of employees who may be
selected for participation or the extent of their participation within the
Plan's limitations, since no determination has been made with respect to these
matters. While the concept of a "key employee" eligible to participate in the
Plan is necessarily flexible, approximately 200 employees are presently
considered to fall within this category.
Administration and Amendment of the Program
The Plan will be administered by a committee (the "Committee")
consisting of, at the option of the Board, (i) at least two directors appointed
by and serving at the pleasure of the Board of Directors or (ii) the Board. If
the Board of Directors does not act as the Committee, the
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<PAGE>
members of the Committee shall be "non-employee directors" within the meaning
and for the purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended. The Committee will have the right to interpret its provisions and to
promulgate, amend, and rescind rules and regulations for its administration. The
Committee may delegate to the Chief Executive Officer and/or other senior
officers of the Company its duties under the Plan; provided, however, that only
the Committee may grant awards or make determinations regarding grants to
executive officers.
The Board is authorized to amend or terminate the Plan, except that
further stockholder approval is required for amendments that would decrease the
minimum exercise price of an option or SAR, increase the number of shares that
may be granted, or as otherwise necessary under applicable securities, tax, or
other laws. Under applicable federal securities law as currently in effect,
stockholder approval would generally be required for any amendment that would
materially increase the benefits accruing to reporting persons under the Plan.
Term of the Plan
The Plan will become effective on the date stockholder approval is
obtained and will terminate on the tenth anniversary of that date, after which
time no additional grants may be made thereunder.
Shares Subject to the Plan
Subject to certain exceptions set forth in the Plan for stock splits,
stock dividends or other changes in capitalization that are determined to be
dilutive to outstanding awards under the Plan, the aggregate number of shares of
the Company's Common Stock that may be awarded under the Plan is 1,000,000 and
the maximum number of shares of Common Stock covered by an award to any grantee
in any calendar year may not exceed 100,000. The closing price of a share of the
Company's Common Stock on December 31, 1996 was $25.00.
Stock Options
Stock options granted under the Plan will be subject to the terms and
conditions determined by the Committee, except that (i) options may be granted
only during the ten years following the effective date of the Plan, provided
that ISOs may be granted only during the ten-year period following the date of
adoption of the Plan by the Board; (ii) the option price cannot be less than l00
percent of the fair market value of Common Stock at the time the option is
granted; (iii) no option may be exercised more than ten years after it is
granted; and (iv) no option may be exercised more than five years after the
grantee's termination of employment except in certain circumstances if the
grantee dies after termination of employment. Unless otherwise provided in the
award, an option becomes immediately exercisable in full upon the death of the
grantee prior to termination of employment. Unless otherwise provided by the
award, outstanding options may be exercised for at least three years after the
grantee's death.
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<PAGE>
ISOs may be granted provided they meet the requirements of the
Internal Revenue Code. To the extent that the fair market value of shares with
respect to which ISOs are exercisable for the first time in any one year as to
any participant exceeds $100,000, such options shall not be treated as ISOs. An
option for additional shares, if any, which the Stock Option Committee may grant
to an employee who in the same year has been granted the maximum permissible
ISOs, would be in the form of a non-qualified stock option not intended to
qualify as an ISO.
Payment of the exercise price of a stock option will be made in cash,
shares, or other consideration in accordance with the terms of the Plan and any
applicable rules of the Stock Option Committee. Shares surrendered in payment of
the exercise price shall be valued at fair market value on the date of
surrender.
Options are subject to forfeiture if the grantee terminates
employment prior to normal retirement time (subject to exceptions for
termination due to death, incapacity or for certain approved terminations) or is
determined to have engaged in activity detrimental to the interests of the
Company or its affiliates.
An employee receiving a stock option will not realize any
compensation income under the Internal Revenue Code upon the grant of the
option. However, an employee will generally realize compensation income at the
time of exercise (except for options which are ISOs) in the amount of the
difference between the option price and the fair market value on the date of
exercise. The Company is entitled to a deduction under the Internal Revenue Code
at the time of exercise equal to the amount of compensation income that is
realized by the employee.
In the case of ISOs, although no compensation income is realized upon
exercise, the excess of the fair market value on the date of exercise over the
option price is included in alternative minimum taxable income for alternative
minimum tax purposes. If stock acquired upon exercise of an ISO is sold within
one year of the option exercise or two years of the option grant, then, in
general, the optionee's gain on the sale will be ordinary income to the extent
of the option spread on the exercise date and the balance of the gain, if any,
will be capital gain. If the stock acquired is sold after the one year/two year
holding period, then all of the gain on the sale will be capital gain. The
Company will be entitled to a deduction on the amount, if any, of the gain which
is treated as ordinary income to the optionee.
Stock Appreciation Rights (SARs)
An SAR may be granted in tandem with a stock option or as a
freestanding award. An SAR permits the holder to receive a number of shares or
cash having an aggregate value equal to any excess of the fair market value of
the Company's shares subject to the SAR over the grant price of the SAR (which
may not be less than l00 percent of the fair market value of such shares at the
time of grant) at the time of exercise. If the SAR is granted in tandem with a
stock option,
25
<PAGE>
exercise of the SAR cancels the related option to the extent of such exercise.
SARs may authorize the optionee to elect to settle the SAR in cash in lieu of
shares.
The provisions of SARs with respect to exercisability upon
termination or death of the grantee, as well as forfeiture, are substantially
the same as described above for stock options.
In the case of SARs granted either freestanding or in tandem with an
option, the employee will not realize any compensation income at the time of
grant. However, the fair market value of stock or cash delivered pursuant to the
exercise of such SARs will be treated as compensation income taxable to the
employee at the time of exercise, and the Company will be entitled to a
corresponding deduction.
Restricted Stock
An award of restricted stock may be granted under the Plan for such
minimum cost as may be required by law or otherwise determined by the Committee.
Restricted stock may not be disposed of by the recipient until the restrictions
specified in the award expire. These restrictions could be based solely on a
specified period of continuous employment or could also be contingent on
attaining specific business objectives or other quantitative or qualitative
criteria. The participant will have with respect to restricted stock, all of the
rights of a stockholder of the Company, including the right to vote the shares
and the right to receive any cash dividends, unless otherwise specified in the
award.
Except as otherwise specified in the award, if a holder of record of
restricted stock terminates employment prior to normal retirement time (subject
to exceptions for termination due to incapacity or for certain approved
terminations) or is determined to have engaged in activity detrimental to the
interests of the Company or its affiliates, all shares of restricted stock then
held and still subject to restriction will be forfeited by such holder and
reacquired by the Company at cost. Except as otherwise specified in the award,
if employment of a holder of record of restricted stock terminates at normal
retirement time for that holder, or as a result of that holder becoming
incapacitated, or with written approval of the Committee, or if the holder dies,
any and all remaining restrictions with respect to such restricted stock will
expire.
In the case of restricted stock, the employee will realize
compensation income in an amount equal to the fair market value of such stock
less any amount paid for such stock, at the time when the employee's rights with
respect to such stock are no longer subject to a substantial risk of forfeiture
unless the employee elects otherwise pursuant to a special election provided in
the Internal Revenue Code. Dividends paid to the employee during a period of
restriction will be taxable as compensation income unless the election referred
to in the preceding sentence has been made. The Company will be entitled to a
deduction under the Internal Revenue Code at the time and equal to the amount of
compensation income that is realized by the employee.
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Performance Awards
A performance award may be granted under the Plan, either at no cost
to the recipient or for such cost as may be required by law or otherwise
determined by the Stock Option Committee. Performance awards may take the form
of performance shares, or of performance units or rights valued by reference to
the value of Common Stock of the Company or by reference to some other formula
or method. Any performance award may require attainment of performance criteria
within a specified period in order for the award to be earned. Performance
awards, when and if payable, may be paid in cash, stock, other consideration, or
a combination thereof.
Performance awards are subject to forfeiture if the grantee
terminates employment prior to normal retirement time (subject to exceptions for
termination due to death, incapacity or for certain approved terminations) or is
determined to have engaged in activity detrimental to the interests of the
Company or its affiliates.
In the case of performance awards, the employee will generally
realize compensation income in an amount equal to the fair market value of such
awards less any amount paid for such awards at a time when the employee's rights
with respect to such awards are no longer subject to a substantial risk of
forfeiture unless (if applicable) the employee otherwise elects pursuant to a
special election provided in the Internal Revenue Code. The Company will be
entitled to a deduction under the Internal Revenue Code at the time and equal to
the amount of compensation income that is realized by the employee.
Incentive Shares
The Plan also allows grants of incentive shares as a form of bonus.
Incentive shares may be granted under the Plan for such minimum cost as may be
required by law or otherwise determined by the Committee. Each grant shall
specify the time and method for delivery of the incentive shares, provided that
the delivery of any incentive shares shall be completed no later than the tenth
anniversary of the grantee's date of termination.
Any undelivered incentive shares may be subject to forfeiture if the
grantee terminates employment prior to normal retirement time (subject to
exceptions for termination due to death, incapacity or for certain approved
terminations) or is determined to have engaged in activity detrimental to the
interests of the Company or its affiliates.
In the case of incentive shares, the employee will generally realize
compensation income in an amount equal to the fair market value of such stock,
less any amount paid for such stock, at the time when the shares are delivered
to the employee. The Company will be entitled to a deduction under the Internal
Revenue Code at the time and equal to the amount of compensation income that is
realized by the employee.
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Dividend Equivalent Rights (DERs) and Interest Equivalents
A DER, which gives the recipient the right to receive credits for
dividends that would be paid if the grantee held specified shares of Common
Stock, may be granted as a component of another award or as a freestanding
award. Dividend equivalents credited to the holder of a DER may be paid
currently or be deemed to be reinvested in additional shares (which may
thereafter accrue additional dividend equivalents) at fair market value at the
time of deemed reinvestment. DERs may be settled in cash, shares, or a
combination thereof, in a single installment or installments, as specified in
the award.
Awards payable in cash on a deferred basis may provide for crediting
and payment of interest equivalents.
In the case of dividend or interest equivalents, the employee will
generally realize compensation income in an amount equal to the cash or fair
market value of the dividend equivalents received in shares at the time paid to
the employee. The Company will be entitled to a deduction under the Internal
Revenue Code at the time and equal to the amount of compensation income that is
realized by the employee.
Other Awards
Other forms of awards based on, payable in, or otherwise related in
whole or in part to Common Stock of the Company may be granted under the Plan if
the Committee determines that such awards are consistent with the purposes and
restrictions of the Plan. The terms and conditions of such awards shall be
specified by the grant. Such awards shall be granted for such minimum
consideration as may be required by applicable law, or for such other
consideration as may be specified by the Committee.
The Federal income tax consequences of such other awards will depend
upon the form such awards take.
Adjustments
In the event of any stock split, stock dividend, or other relevant
change in capitalization that is determined to be dilutive to outstanding awards
under the Plan, appropriate adjustment will be made in the number of shares and
the purchase price per share, if any, under such awards, and in determining
whether a particular award may thereafter be granted.
Withholding Taxes
The Plan provides that any award thereunder may allow the grantee of
such award to elect to pay withholding taxes due with respect to such award by
delivering shares of Company Common Stock to the Company or authorizing the
Company to withhold such shares otherwise
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due under such award. Such shares delivered or withheld will be valued at fair
market value. All payments or distributions under the Plan will be subject to
satisfaction of applicable withholding requirements.
The Board of Directors has approved the adoption of the Plan, subject
to stockholder approval. The affirmative vote of the holders of a majority of
the shares of Common Stock present in person or represented by proxy and
entitled to notice of and to vote at the Annual Meeting is required to approve
the Plan. If the stockholders approve the Plan, then no additional grants will
be granted under the Company's 1995 Long-Term Incentive Plan.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
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PROPOSAL NO. 3 - RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors, upon recommendation of its Audit Committee,
has selected the firm of Coopers & Lybrand L.L.P., independent certified public
accountants, to audit the accounts of the Company for fiscal year 1997, and it
is proposed that the selection of such firm be ratified by the stockholders at
the Annual Meeting. In the event that such selection is not so ratified, it will
be reconsidered by the Audit Committee and the Board.
A representative of Coopers & Lybrand L.L.P. will be present at the
Annual Meeting, will have an opportunity to make a statement if he desires to do
so and will be available to respond to appropriate questions from stockholders.
Coopers & Lybrand L.L.P. audited the accounts of the Company and
certain employee benefit plans for fiscal year 1996. In connection with its
audit function, Coopers & Lybrand L.L.P. reviewed the Company's 1996 quarterly
and annual reports to its stockholders and certain filings with the Securities
and Exchange Commission. In addition, during fiscal year 1996, Coopers & Lybrand
L.L.P. provided other professional services to the Company.
The Audit Committee approves in advance the nature of professional
services for which the Company may retain the firm of Coopers & Lybrand L.L.P.,
considers the possible effect of such retention on the independence of such
firm, and determines whether the services provided were within the scope of such
approval.
Vote Required
The affirmative vote of the holders of a majority of the shares of
Common Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote is required for adoption of this proposal. Abstentions and
broker non-votes have the same legal effect as a vote cast against the proposal.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 3 TO BE IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR"
APPROVAL THEREOF.
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STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at the
1998 Annual Meeting of Stockholders of the Company must be received by the
Company no later than November 20, 1997, for inclusion in the Board of
Directors' proxy statement and form of proxy relating to the meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at
the Annual Meeting. If, however, any other business properly comes before the
Annual Meeting, it is the intention of the persons named in the enclosed proxy
to vote on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Annual Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors,
Joseph C. Stokes, Jr.
Secretary
Dated: March 20, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE SENT WITHOUT CHARGE
AFTER MARCH 31, 1997, TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM:
LIFE TECHNOLOGIES, INC.
ATTN: JOSEPH C. STOKES, JR., SECRETARY
9800 MEDICAL CENTER DRIVE
ROCKVILLE, MARYLAND 20850
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EXHIBIT A
LIFE TECHNOLOGIES, INC.
1997 LONG-TERM INCENTIVE PLAN
I. Purpose
The purpose of the Life Technologies, Inc. 1997 Long-Term Incentive Plan
(the "Plan") is to help maintain and develop strong management through ownership
of shares of Life Technologies, Inc. (the "Company") by key employees of the
Company and its affiliates and through incentive awards for recognition of
efforts and accomplishments which contribute materially to the success of the
Company's business interests.
II. Definitions
As used in this Plan, except where the context otherwise indicates, the
following definitions apply:
(l) "affiliate" means any corporation, partnership, or entity in which
the Company, directly or indirectly, owns a 50 percent or greater
equity interest.
(2) "award" means a stock option, stock appreciation right ("SAR"),
restricted stock, performance award, incentive share, dividend
equivalent right ("DER"), or other award under the Plan.
(3) "Board" means the Board of Directors of the Company.
(4) "Code" means the Internal Revenue Code, as in effect from time to
time.
(5) "Committee" means a committee consisting of, at the option
of the Board, (i) at least two directors appointed by and
serving at the pleasure of the Board or (ii) the Board. If
the Board does not act as the Committee, the members of the
Committee shall be "non-employee directors" within the
meaning and for the purposes of Rule 16b-3.
(6) "designated beneficiary" means the person designated by the
grantee of an award hereunder to be entitled, on the death of the
grantee, to any remaining rights arising out of such award. Such
designation must be made in writing and in accordance with such
regulations as the Committee may establish.
(7) "detrimental activity" means activity that is determined in
individual cases, by the Committee, to be detrimental to the
interests of the Company or any affiliate.
(8) "dividend equivalent right," herein sometimes called a "DER," means
the right of the holder thereof to receive, pursuant to the terms
of the DER, credits based on
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the cash dividends that would be paid on the shares specified in
the DER if such shares were held by the grantee, as more
particularly set forth in Section XII(1).
(9) "effectively granted" means, for purposes of determining the
number of shares subject to an outstanding award under the Plan,
the number of shares subject to such award or the number of shares
with respect to which the value of such award is measured, as
applicable, determined in each case according to the standards of
Rule 16b-3. An option that includes an SAR shall be considered a
single award for this purpose.
(l0) "effectively issued" means the gross number of shares purchased,
issued, delivered or paid free of restrictions upon the exercise,
settlement, or payment of an award, or lapse of restrictions
thereon, as the case may be, determined in each case according to
the standards of Rule 16b-3.
(ll) "eligible employee" means an employee who is a director or officer,
or in a managerial, professional, or other key position as
determined by the Committee.
(12) "employee" means a regular employee of the Company or one of its
affiliates.
(13) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(14) "fair market value" shall mean, for each grant date, the average
of the high and low sales prices of the Common Stock on such date
on the Nasdaq National Market System or, if no shares of Common
Stock are then quoted on the Nasdaq National Market System, the
average of the closing bid and the highest asked prices of the
Common Stock on such date on Nasdaq or, if no shares of Common
Stock are then quoted on Nasdaq, the average of the highest bid and
lowest asked prices of the Common Stock on such date as reported in
the over-the-counter system. If no closing bid and highest asked
prices thereof are then so quoted or published in the over-the-
counter market, "fair market value" shall mean the fair value per
share of the Common Stock on such date as determined in good faith
by the Board.
(15) "grantee" means a recipient of an award under the Plan.
(16) "incentive shares" means an award of shares granted pursuant to
Section XI.
(17) "incentive stock option," herein sometimes called an "ISO,"
means a stock option meeting the requirements of Section
422 of the Code or any successor provision.
(18) "performance award" means an award of shares, or of units or rights
based on, payable in, or otherwise related to shares, granted
pursuant to Section X.
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(19) "performance period" means any period specified by the grant of a
performance award during which specified performance criteria are
to be measured.
(20) "reporting person" means a person subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to
equity securities of the Company.
(21) "restricted stock" means any share issued with the restriction that
the holder may not sell, transfer, pledge, or assign such share
and such other restrictions (which may include, but are not limited
to, restrictions on the right to vote or receive dividends) which
may expire separately or in combination, at one time or in
installments, all as specified by the grant.
(22) "Rule 16b-3" means Rule 16b-3 (or any successor thereto) under the
Exchange Act that exempts transactions under employee benefit
plans, as in effect from time to time.
(23) "share" means a share of Common Stock of the Company issued and
reacquired by the Company or previously authorized but unissued.
(24) "stock appreciation right," herein sometimes called an "SAR," means
the right of the holder thereon to receive, pursuant to the terms
of the SAR, a number of shares or cash or a combination of shares
and cash, based on the increase in the value of the number of
shares specified in the SAR, as more particularly set forth in
Section VIII.
(25) "terminate" means cease to be an employee, except by death, but a
change of employment from the Company or one affiliate to another
affiliate or to the Company shall not be considered a termination.
(26) "terminate normally" for an employee participating in the Plan
means terminate
(a) at or after normal retirement time for that employee,
(b) as a result of that employee's becoming incapacitated, or
(c) with written approval of the Committee given in the context of
recognition that all or a specified portion of the outstanding
awards to that employee will not expire or be forfeited or annulled
because of such termination and, in each such case, without being
terminated for detrimental activity or for cause.
(27) "year" means calendar year.
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III. Administration
(l) The Plan shall be administered by the Committee, which shall have
authority:
(a) to determine the employees of the Company to whom, and the times
at which, awards shall be granted, and the number of shares to
be subject to each such award, taking into account the nature of
services rendered by the particular employee, the employee's
potential contribution to the long-term success of the Company
and such other factors as the Committee in its discretion shall
deem relevant;
(b) to interpret the Plan and to establish rules and regulations
relating to it;
(c) to prescribe the terms and provisions of the awards; and
(d) to make all other determinations necessary or advisable in order
to administer the Plan.
(2) The Committee may delegate to the Chief Executive Officer and/or
to other senior officers of the Company its duties under the Plan pursuant to
such conditions and limitations as the Committee may establish, except that only
the Committee may make any awards or determinations regarding grants to
reporting persons.
(3) All decisions of the Committee upon questions concerning the Plan,
or any award, shall be binding and conclusive upon the individual employees
involved and all persons claiming under them.
(4) With respect to reporting persons, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3. To the extent
any provision of the Plan or any action by an authority under the Plan fails to
so comply, such provision or action shall, without further action by any person,
be deemed to be automatically amended to the extent necessary to effect
compliance with Rule 16b-3, provided that if such provision or action cannot be
amended to effect such compliance, such provision or action shall be deemed null
and void, to the extent permitted by law and deemed advisable by the appropriate
authority. Each award to a reporting person under the Plan shall be deemed
issued subject to the foregoing qualification.
(5) An award under the Plan is not transferable except, as provided in
the award, by will or the laws of descent and distribution, and is not subject,
in whole or in part, to attachment, execution, or levy of any kind. The
designation by a grantee of a designated beneficiary shall not constitute a
transfer. Notwithstanding the foregoing, except as to ISO's, the terms of an
award hereunder may permit the grantee to make an inter vivos gift of the option
or other right covered
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by the award to members of the grantee's immediate family or to a trust or
trusts created for the benefit of such persons.
(6) Any rights with respect to an award granted under the Plan
existing after the grantee dies are exercisable by the grantee's designated
beneficiary or, if there is no designated beneficiary, by the grantee's personal
representative.
(7) Except as otherwise provided herein, a particular form of award
may be granted to an eligible employee either alone or in addition to other
awards hereunder. The provisions of particular forms of award need not be the
same with respect to each recipient.
(8) The Plan and all action taken under it shall be governed by the
laws of the State of Delaware.
IV. Term
The term of the Plan begins on the date stockholder approval of the Plan
is obtained and ends on the tenth anniversary of that date.
V. Shares Subject to the Plan
Subject to the provisions of Section VI, the aggregate number of shares
of the Common Stock of the Company which may be effectively issued under the
Plan shall not exceed 1,000,000 shares. The maximum number of shares covered by
an award to any grantee in any year may not exceed 100,000. Any shares of Common
Stock to be delivered by the Company under the Plan shall be issued from
authorized but unissued shares of Common Stock or from treasury stock acquired
by the Company at the discretion of the Committee. In the event that any award
expires, lapses or terminates without issuance of shares or other consideration,
the shares of Common Stock allocable to such award shall again be available for
issuance under the Plan.
VI. Adjustments
Whenever a stock split, stock dividend, or other relevant change in
capitalization which the Committee determines to be dilutive to outstanding
awards occurs:
(l) the number of shares that can thereafter be effectively issued
under outstanding awards and the purchase price per share, if any, under such
awards, and
(2) the aggregate number of shares which may be issued under the Plan
and the number of shares which may be issued to any individual in any year shall
be adjusted as the Committee determines is appropriate.
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VII. Stock Options
One or more stock options may be granted to any eligible employee. Each
stock option so granted shall be subject to such terms and conditions as the
Committee shall impose, which shall include the following:
(l) The exercise price per share shall be specified by the grant, but
shall in no instance be less than l00 percent of fair market value at the time
of grant. Payment of the exercise price shall be made in cash, shares, or other
consideration in accordance with the terms of the Plan, the option agreement and
any applicable regulations of the Committee in effect at the time and valued at
fair market value on the date of exercise of the stock option.
(2) If the grantee has not terminated, the stock option shall become
exercisable at the time or times specified by the grant. If the grantee has
terminated before a stock option or portion thereof becomes exercisable, that
stock option or portion thereof shall be forfeited and shall never become
exercisable. Except as otherwise specified by the grant, a stock option shall
become immediately exercisable in full upon the death of the grantee prior to
termination.
(3) Any stock option or portion thereof that is exercisable is
exercisable for the full amount or for any part thereof, except as otherwise
provided by the grant.
(4) Each stock option ceases to be exercisable, as to any share, when
the stock option is exercised to purchase that share, or when a related SAR is
exercised either by the holder or automatically in accordance with its terms, or
when the stock option expires. To the extent an SAR included in a stock option
is exercised, such stock option shall be deemed to have been exercised and shall
not be deemed to have expired.
(5) A stock option or portion thereof that is exercisable shall expire
in the following situations:
(a) if the grantee is then living, it shall expire at the earliest of:
(i) ten years after it is granted,
(ii) five years after the grantee terminates normally, or
(iii) any earlier time specified by the grant;
(b) if the grantee terminates, but does not terminate normally, it
shall expire at the time of termination;
(c) if the grantee is determined to have engaged in detrimental
activity, it shall expire as of the date of such determination;
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(d) if the grantee dies prior to termination, it shall expire at the
earlier of three years after the grantee's death or any earlier
time specified by the grant; or
(e) if the grantee dies after termination (other than a described in
subparagraph 5(b) or 5(c) above) it shall expire at the later of
three years after the grantee's death or, if applicable, the end of
the period described in subparagraph 5(a) above;
but, in any case, no later than ten years after it is granted.
(6) Except to the extent otherwise specified in this Section VII(6),
stock options granted hereunder may be designated as ISOs. To the extent that
the aggregate fair market value of shares with respect to which stock options
designated as ISOs are exercisable for the first time by any grantee during any
year (under all plans of the Company and any affiliate thereof) exceeds
$100,000, such stock options shall be treated as not being ISOs. The foregoing
shall be applied by taking stock options into account in the order in which they
were granted. For the purposes of the foregoing, the fair market value of any
share shall be determined as of the time the stock option with respect to such
share is granted. In the event the foregoing results in a portion of a stock
option designated as an ISO exceeding the above $100,000 limitation, only such
excess shall be treated as not being an ISO.
VIII. Stock Appreciation Rights
(l) An SAR may be granted to an eligible employee as a separate award
or as a component of another award. Any such SAR shall be subject to such terms
and conditions as the Committee shall impose, which shall include provisions
that (a) such SAR shall entitle the holder thereof, upon exercise thereof in
accordance with such SAR and the regulations of the Committee, to receive from
the Company that number of shares having an aggregate value equal to the excess
of the fair market value, at the time of exercise of such SAR, of one share over
the exercise price per share specified by the grant of such SAR (which shall in
no instance be less than l00 percent of the fair market value at the time of
grant) times the number of shares specified in such SAR, or portion thereof,
which is so exercised; and (b) such SAR shall be exercisable, or be forfeited or
expire, upon the same conditions set forth for freestanding options in Section
VII, paragraphs(2),(3),(4) and (5).
(2) Any stock option granted under the Plan may include an SAR, either
at the time of grant or by amendment. An SAR included in a stock option shall be
subject to such terms and conditions as the Committee shall impose, which shall
include provisions that (a) such SAR shall be exercisable to the extent, and
only to the extent, the stock option is exercisable; and (b) the optionee will
surrender to the Company unexercised the stock option or portion thereof in
respect of which the SAR is exercised, and will receive from the Company in
exchange therefor that number of shares having an aggregate value equal to the
excess of the fair market value, at the time of exercise of such SAR, of one
share over the exercise price specified in such stock option
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times the number of shares specified in such stock option, or portion thereof,
which is so surrendered.
(3) In lieu of the right to receive all or any specified portion of
such shares, at the discretion of the eligible employee an SAR may entitle the
holder thereof to receive the cash equivalent thereof as specified by the grant.
(4) An SAR may provide that such SAR shall be deemed to have been
exercised at the close of business on the business day preceding the expiration
of such SAR or the related stock option, if any, if at such time such SAR has
positive value and would have expired in accordance with the conditions set
forth in Section VII(5)(a).
IX. Restricted Stock
(l) An award of restricted stock may be granted hereunder to an
eligible employee, for such minimum consideration as may be required by
applicable law, or for such other consideration as may be specified by the
grant. The terms and conditions of restricted stock shall be specified by the
grant.
(2) Any restricted stock issued hereunder may be evidenced in such
manner as the Committee in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of restricted stock awarded hereunder, such certificate shall
bear an appropriate legend with respect to the restrictions applicable to such
award.
(3) Except as otherwise specified by the grant, if a holder of record
of restricted stock terminates, but does not terminate normally, all shares of
restricted stock (whether or not stock certificates have been issued) then held
by such holder and then subject to restriction shall be forfeited by such holder
and reacquired by the Company at cost. Except as otherwise specified by the
grant, if a holder of record of restricted stock terminates normally or dies,
any and all remaining restrictions with respect to such restricted stock shall
expire. Notwithstanding the foregoing, if a holder of record of restricted stock
is determined to have engaged in detrimental activity, all shares of restricted
stock (whether or not stock certificates have been issued) then held by such
holder and then subject to restriction shall be forfeited by such holder as of
the date of such determination and shall be reacquired by the Company at cost.
X. Performance Awards
(1) Performance awards may be granted hereunder to an eligible
employee, for such minimum consideration as may be required by applicable law,
or for such other consideration as may be specified by the grant. The terms and
conditions of performance awards, which may include provisions establishing
performance periods, performance criteria to be achieved during a performance
period, and maximum or minimum settlement values, shall be specified by the
grant.
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(2) Performance awards may be valued by reference to the value of
Common Stock of the Company or according to any other formula or method.
Performance awards may be paid in cash, shares, or other consideration, or any
combination thereof. The extent to which any applicable performance criteria
have been achieved shall be conclusively determined by the Committee.
Performance awards may be payable in a single payment or in installments and may
be payable at a specified date or dates or upon attaining performance criteria.
(3) Except as otherwise specified by the grant, if the grantee
terminates, but does not terminate normally, any performance award or
installment thereof not payable prior to the grantee's termination shall be
annulled as of the date of termination. If the grantee is determined to have
engaged in detrimental activity, any performance award or installment thereof
not payable prior to the date of such determination shall be annulled as of such
date. Except as otherwise provided in the award, if the grantee terminates
normally or dies, the grantee shall be paid a pro rata portion of the
performance award the grantee would have received, if any, had the grantee
continued to be employed through the end of the performance period.
XI. Incentive Shares
(l) An incentive award may be granted hereunder in the form of shares.
Incentive shares may be granted to an eligible employee, for such minimum
consideration as may be required by applicable law, or for such other
consideration as may be specified by the grant. The terms and conditions of
incentive shares shall be specified by the grant.
(2) Incentive shares may be paid to the grantee in a single installment
or in installments and may be paid at the time of the grant or deferred to a
later date or dates. Each grant shall specify the time and method of payment as
determined by the Committee, provided that no such determination shall authorize
delivery of shares to be made later than the tenth anniversary of the grantee's
date of termination. The Committee, by amendment of the grant prior to delivery
of incentive shares, can modify the method of payment for any incentive shares,
provided that the delivery of any incentive shares shall be completed not later
than the tenth anniversary of the grantee's date of termination.
(3) If any incentive shares are payable after the grantee dies, such
shares shall be payable (a) to the grantee's designated beneficiary or, if there
is no designated beneficiary, to the grantee's personal representative, and (b)
either in the form specified by the grant or otherwise, as may be determined in
the individual case by the Committee under the Plan.
(4) Any grant of incentive shares is provisional, as to any share, until
delivery of the certificate representing such share. If, while the grant is
provisional the grantee terminates for any reason other than death the grant
shall be annulled as of the date of termination except as otherwise provided in
the incentive share award with respect to the award for a grantee who terminates
normally.
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XII. Dividend Equivalent Rights; Interest Equivalents
(l) A DER may be granted hereunder to an eligible employee, as a
component of another award or as a separate award. The terms and conditions of
DERs shall be specified by the grant. Dividend equivalents credited to the
holder of a DER may be paid currently or may be deemed to be reinvested in
additional shares (which may thereafter accrue additional dividend equivalents).
Any such reinvestment shall be at fair market value at the time thereof. DERs
may be settled in cash or shares or a combination thereof, in a single
installment or installments. A DER granted as a component of another award may
provide that such DER shall be settled upon exercise, settlement, or payment of,
or lapse of restrictions on, such other award, and that such DER shall expire or
be forfeited or annulled under the same conditions as such other award. A DER
granted as a component of another award may also contain terms and conditions
different from such other award.
(2) Any award under the Plan that is settled in whole or in part in
cash on a deferred basis may provide by the grant for interest equivalents to be
credited with respect to such cash payment. Interest equivalents may be
compounded and shall be paid upon such terms and conditions as may be specified
by the grant.
XIII. Other Awards
Other forms of award based on, payable in, or otherwise related in whole
or in part to shares may be granted to an eligible employee under the Plan if
the Committee determines that such awards are consistent with the purposes and
restrictions of the Plan. The terms and conditions of such awards shall be
specified by the grant. Such awards shall be granted for such minimum
consideration as may be required by applicable law or for such other
consideration as may be specified by the grant.
XIV. Amendments to the Plan
The Board can from time to time amend or terminate the Plan, or any
provision thereof, except that approval of the stockholders of the Company shall
be required for any amendment (i) to increase the maximum number of shares that
may be effectively granted as awards hereunder; (ii) to decrease the minimum
exercise price per share of a stock option or SAR; or (iii) for which such
approval is otherwise necessary to comply with Rule 16b-3 or any other
applicable law, regulation, or listing requirement, or to qualify for an
exemption or characterization that is deemed desirable by the Board.
41
<PAGE>
XV. Withholding Taxes
The Company shall have the right to deduct from any cash payment made
under the Plan any federal, state or local income or other taxes required by law
to be withheld with respect to such payment. It shall be a condition to the
obligation of the Company to deliver shares or securities of the Company upon
exercise of a stock option or SAR, upon settlement of a performance award or
DER, upon delivery of restricted stock or incentive shares, or upon exercise,
settlement, or payment of any other award under the Plan, that the grantee of
such award pay to the Company such amount as may be requested by the Company for
the purpose of satisfying any liability for such withholding taxes. Any award
under the Plan may provide by the grant that the grantee of such award may
elect, in accordance with any applicable regulations of the Committee, to pay a
portion or all of the amount of such minimum required or additional permitted
withholding taxes in shares. The grantee shall authorize the Company to
withhold, or shall agree to surrender back to the Company, on or about the date
such withholding tax liability is determinable, shares previously owned by such
grantee or a portion of the shares that were or otherwise would be distributed
to such grantee pursuant to such award having a fair market value equal to the
amount of such required or permitted withholding taxes to be paid in shares.
XVI. No Rights Conferred
Nothing contained therein will be deemed to give any eligible employee
any right to receive an award under the Plan or to be retained in the employ or
service of the Company or any affiliate.
42
<PAGE>
- --------------------------------------------------------------------------------
PROXY PROXY
LIFE TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF THE STOCKHOLDERS TO BE HELD ON APRIL 15, 1997
Joseph C. Stokes, Jr. and J. Stark Thompson, and each of them acting without the
other, as the true and lawful attorneys, agents and proxies of the undersigned,
with full power of substitution, are hereby authorized to represent and to vote
as designated below, all shares of Common Stock of Life Technologies, Inc.
(the "Company") held of record by the undersigned on February 21, 1997, at the
Annual Meeting of Stockholders to be held at 10:00 a.m., local time, on Tuesday,
April 15, 1997, at The New York Palace Hotel, 455 Madison Avenue, New York, New
York or at any adjournment thereof. Any and all proxies heretofore given are
hereby revoked.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS SET
FORTH IN THE PROXY STATEMENT.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS
Nominees: Bruce H. Beatt, Rita R. Colwell and K. Grahame Walker for three-year
terms.
[_] For all listed nominees (except [_] Withhold Authority to vote for
for nominee(s) whose name(s) the listed nominees.
appear(s) below):
---------------------------------------
---------------------------------------
2. APPROVAL OF THE COMPANY'S 1997 LONG-TERM INCENTIVE PLAN.
[_] For [_] Against [_] Abstain
3. RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR FISCAL YEAR 1997.
[_] For [_] Against [_] Abstain
Discretionary authority is hereby granted with respect to such other matters as
may properly come before the Annual Meeting.
Date: ,1997
------------------------------- -------------------------------
Signature
Important: Each joint owner shall sign.
Executors, administrators, trustees, etc.,
should give full title. The above-signed -------------------------------
acknowledges receipt of the Notice of Annual Signature (if held jointly)
Meeting of Stockholders and the Proxy
Statement furnished therewith.
- --------------------------------------------------------------------------------
<PAGE>
1. ELECTION OF DIRECTORS
Nominees: Bruce H. Beatt, Rita R. Colwell and K. Grahame Walker for three-
year terms.
[ ] For all listed nominees [ ] Withhold Authority to
(except for nominee(s) whose name(s) appear(s) below):
vote for the listed nominees.
-----------------------------------
-----------------------------------
2. APPROVAL OF THE COMPANY'S 1997 LONG-TERM INCENTIVE PLAN.
[ ] For [ ] Against [ ] Abstain
3. RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR FISCAL YEAR 1997.
[ ] For [ ] Against [ ] Abstain
Discretionary authority is hereby granted with respect to such other matters as
may properly come before the Annual Meeting.
Date: ____________________________, 1997 ------------------------------
Important: Each joint owner shall sign. Signature
Executors, administrators, trustees, etc.,
should give full title.
The above-signed acknowledges receipt of the ______________________________
Notice of Annual Meeting of Stockholders Signature (if held jointly)
and the Proxy Statement furnished therewith.
