<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
BY 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 transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
Notes:
<PAGE>
LIFE TECHNOLOGIES, INC.
9800 MEDICAL CENTER DRIVE
ROCKVILLE, MARYLAND 20850
MARCH 16, 1998
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 14, 1998, 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 16, 1998, 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 $6,000.00, 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 20, 1998,
are entitled to vote at the Annual Meeting or any and all adjournments thereof.
On February 20, 1998, there were 23,476,546 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, 1998 (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 (the "SEC") 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) 52.5%
One Elm Street
Windsor Locks, CT 06096
State of Wisconsin Investment Board 1,549,500 shares (2) 6.6%
121 East Wilson Street
Madison, Wisconsin 53707
Thomas H. Adams, Ph.D. 2,951 shares (3) *
Bruce H. Beatt 1,000 shares *
Kathleen Burdett 2,500 shares *
Betsy Z. Cohen 4,325 shares (4) *
Rita R. Colwell, Ph.D. 2,951 shares (5) *
Frank E. Samuel, Jr. 2,951 shares (6) *
J. Stark Thompson, Ph.D. 372,740 shares (7) 1.6%
K. Grahame Walker 1,500 shares *
George M. Whitesides, Ph.D. --- --
Iain C. Wylie 4,500 shares (8) *
Thomas M. Coutts 38,167 shares (9) *
Joseph C. Stokes, Jr. 66,531 shares (10) *
John V. Cooper 46,089 shares (11) *
Brian D. Graves 74,564 shares (12) *
All directors, nominees and executive 864,803 shares 3.6%
officers as a group (19 persons)
</TABLE>
[Notes on Next Page]
3
<PAGE>
NOTES:
* Less than 1.0%.
(1) Excludes 23,090, 41,773, 183,887 and 3,265 shares of common stock of The
Dexter Corporation ("Dexter"), an affiliate of the Company, beneficially
owned by Mr. Beatt, Ms. Burdett, Mr. Walker and Dr. Whitesides,
respectively, constituting an aggregate of approximately 1.09% of the
outstanding shares of Dexter, as of January 1, 1998. The shares of Dexter
beneficially owned by Mr. Beatt, Ms. Burdett, Mr. Walker and Dr. Whitesides
include 10,334, 14,334, 86,834 and 0 shares, respectively, which Mr. Beatt,
Ms. Burdett, Mr. Walker and Dr. Whitesides may acquire upon the exercise of
stock options.
(2) This figure is based on information set forth in the Schedule 13G, dated
January 26, 1998, filed by the State of Wisconsin Investment Board with the
SEC.
(3) Includes 2,250 shares of Common Stock which Dr. Adams may acquire upon the
exercise of stock options.
(4) Includes 2,250 shares of Common Stock which Ms. Cohen may acquire upon the
exercise of stock options.
(5) Includes 2,250 shares of Common Stock which Dr. Colwell may acquire upon
the exercise of stock options.
(6) Includes 2,250 shares of Common Stock which Mr. Samuel may acquire upon the
exercise of stock options.
(7) Includes 327,836 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.
(8) Includes 2,250 shares of Common Stock which Mr. Wylie may acquire upon the
exercise of stock options.
(9) Includes 38,167 shares of Common Stock which Mr. Coutts may acquire upon
the exercise of stock options.
(10) Includes 41,408 shares of Common Stock which Mr. Stokes may acquire upon
the exercise of stock options. Also includes 4,587 shares owned by Mr.
Stokes' wife, of which Mr. Stokes may be deemed to be beneficial owner.
Mr. Stokes disclaims beneficial ownership of these 4,587 shares.
[Notes Continued on Next Page]
4
<PAGE>
(11) Includes 46,089 shares of Common Stock which Mr. Cooper may acquire upon
the exercise of stock options.
(12) Includes 74,168 shares of Common Stock which Mr. Graves may acquire upon
the exercise of stock options.
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 Company's Board of Directors currently consists of nine members. 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 1999,
three in the class whose term will expire in 2000, and three in the class whose
term will expire in 2001. At the Annual Meeting, three directors are to be
elected for terms expiring in 2001.
Unless otherwise specified, the enclosed proxy will be voted for the
election of Kathleen Burdett, J. Stark Thompson, Ph.D. and George M. Whitesides,
Ph.D. to serve until the 2001 Annual Meeting of Stockholders and until their
successors shall have been duly elected and shall qualify. Ms. Burdett and Dr.
Thompson 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.
5
<PAGE>
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 2001:
<TABLE>
<CAPTION>
PRINCIPAL oCCUPATION DURING THE PAST
NAME AGE DIRECTOR SINCE FIVE YEARS AND OTHER DIRECTORSHIPS
- ---- --- -------------- ------------------------------------
<S> <C> <C> <C>
Kathleen Burdett(1)(2)(3) 42 1995 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.
George M. Whitesides, 58 Mallinckrodt Professor of Chemistry of
Ph.D. Harvard University. He has been a
professor in the Department of Chemistry
of Harvard University since 1982. He
received his Ph.D. in chemistry from the
California Institute of Technology and
taught for nineteen years (1963-1982) at
MIT. He is a member of the National
Academy of Sciences and the American
Academy of Arts and Sciences. He is a
director of Advanced Magnetics, Inc.
(medical diagnostic products), Dexter,
Hyperion Catalysis, Inc. (medical
products) and Geltex, Inc. (physical
research).
J. Stark Thompson, Ph.D.(3) 56 1988 President and chief executive officer of
the Company since 1988. Prior to joining
the Company he was with E.I. DuPont de
Nemours & Company ("DuPont") for 21 years.
</TABLE>
6
<PAGE>
OTHER DIRECTORS
TERM EXPIRING IN 2000
<TABLE>
<CAPTION>
PRINCIPAL oCCUPATION DURING THE PAST
NAME AGE DIRECTOR SINCE FIVE YEARS AND OTHER DIRECTORSHIPS
- ---- --- -------------- ------------------------------------
<S> <C> <C> <C>
Bruce H. Beatt 45 1997 Vice president, general counsel and
secretary of Dexter since 1992.
Rita R. Colwell, Ph.D.(1) 63 1996 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 (technology consulting
company), Dynamac, Inc. (environmental
support services) and Texas BioTechnology
Corp. (biopharmaceutical company).
K. Grahame Walker(2)(3) 60 1989 Chairman of the Company since 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. From April
1988 to December 1989, he was president
and chief operating officer of Dexter.
Mr. Walker is a director of Dexter.
</TABLE>
7
<PAGE>
TARM EXPIRING IN 1999:
<TABLE>
<CAPTION>
PRINCIPAL oCCUPATION DURING THE PAST
NAME AGE DIRECTOR SINCE FIVE YEARS AND OTHER DIRECTORSHIPS
- ---- --- -------------- ------------------------------------
<S> <C> <C> <C>
Thomas H. Adams, Ph.D.(2) 55 1992 Chairman emeritus of Genta Incorporated
(biotechnology company) and previously
chairman of the board and chief executive
officer of Genta from 1989 to 1997. 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), and La Jolla
Pharmaceuticals, Inc.
Frank E. Samuel, Jr.(2) 58 1996 President of Edison BioTechnology Center,
Cleveland, Ohio. He was an independent
consultant on medical technology, health
care and public policy from 1990 to 1995.
Mr. Samuel is a director of Protocol
Systems, Inc. (health industry supplier)
and STERIS Corporation (health care
company).
Iain C. Wylie(1) 64 1995 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
DuPont.
</TABLE>
- --------------------------------------------------------------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation and Organization Committee.
(3) Member of the Executive Committee.
8
<PAGE>
The Board of Directors of the Company held five meetings in 1997. The Board
has an Executive Committee, a Compensation and Organization Committee, and an
Audit Committee. It has no nominating committee.
The Executive Committee currently is composed of three members, Dr.
Thompson, chairman, Ms. Burdett, and Mr. Walker. 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 1997.
The Compensation and Organization Committee currently is composed of four
members, Mr. Walker, chairman, Dr. Adams, Ms. Burdett, and Mr. Samuel. This
committee monitors the Company's compensation policy, with particular emphasis
on retirement and officer remuneration matters. It recommends to the Board of
Directors the compensation for the Company's key employees. The committee held
three meetings in 1997.
The Audit Committee currently is composed of four members, Ms. Cohen,
chairman, Ms. Burdett, Dr. Colwell 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 1997.
In 1997, 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
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and directors, as well as persons who
beneficially own more than ten percent of the Company's Common Stock, to file
initial reports of ownership and reports of changes in ownership with the SEC.
Executive officers, directors and greater than ten percent beneficial owners
are required by the SEC to furnish the Company with copies of all Section 16(a)
forms they file. 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, directors and greater than ten percent beneficial owners,
the Company believes that during fiscal year 1997 all its directors, executive
officers and holders of more than ten percent of the Company's Common Stock
complied with all filing requirements of Section 16(a) of the Exchange Act.
9
<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, 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.
10
<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(1) COMPENSATION(2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D. 1997 $433,750 $276,154 100,000 $4,338
President, Chief Executive 1996 400,500 330,413 85,000 4,297
Officer & Director 1995 368,750 318,600 112,500 3,687
Thomas M. Coutts 1997 253,750 119,821 45,000 ---
Senior Vice President & 1996 239,000 144,595 35,000 ---
General Manager 1995 220,500 174,636 54,000 ---
Joseph C. Stokes, Jr. 1997 222,750 129,952 45,000 4,750
Senior Vice President & 1996 200,167 138,806 35,000 4,738
Chief Financial Officer, 1995 181,250 117,450 41,250 4,620
Secretary & Treasurer
John V. Cooper 1997 188,500 90,384 25,000 4,750
Vice President & 1996 174,000 99,050 22,000 4,750
General Manager 1995 160,000 108,000 33,750 2,420
Brian D. Graves 1997 186,000 93,193 20,000 4,750
Vice President & 1996 175,000 95,288 20,000 4,750
General Manager 1995 166,500 85,415 33,750 4,620
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) Options granted in 1995 have been adjusted for a 3 for 2 stock split
effected in 1996.
(2) All Other Compensation represents the Company's contributions under an Extra
Savings Plan ("ESP") for the account of each executive officer. The Company
matches one-half of the first 6% of eligible contributions made by each
participant in the ESP up to the maximum elective deferral. Mr. Coutts does not
participate in the ESP.
11
<PAGE>
The following table sets forth, as to each executive officer named in the
Summary Compensation Table, information with respect to stock option grants
during the period January 1, 1997 through December 31, 1997:
OPTION GRANTS IN LAST FISCAL YEAR
- ---
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------
NUMBER PERCENTAGE POTENTIAL
OF OF REALIZABLE VALUE
SECURITIES TOTAL AT ASSUMED
UNDER- OPTIONS ANNUAL RATES
LYING GRANTED TO EXERCISE OR OF STOCK
OPTIONS EMPLOYEES IN BASE PRICE PRICE APPRECIATION
GRANTED FISCAL ($/SHARE) EXPIRATION FOR OPTION TERM(3)
NAME (1) YEAR (2) DATE 5% 10%
- ------------------- --------- ------------ ------------ ---------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D. 100,000 18.1% $34.41 Oct. 14, 2007 $2,163,416 $5,483,095
Thomas M. Coutts 45,000 8.2% $34.41 Oct. 14, 2007 973,537 2,467,393
Joseph C. Stokes, Jr. 45,000 8.2% $34.41 Oct. 14, 2007 973,537 2,467,393
John V. Cooper 25,000 4.5% $34.41 Oct. 14, 2007 540,854 1,370,774
Brian D. Graves 20,000 3.6% $34.41 Oct. 14, 2007 432,683 1,096,619
</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 1997 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.
12
<PAGE>
The following table provides information on option exercises in fiscal year
1997 by the named executive officers and the value of such officers' unexercised
options at December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR END AT FISCAL YEAR END (1)
ACQUIRED -------------------------------- ----------------------
ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D. 115,997 $2,333,735 327,836 194,166 $6,322,084 $1,114,370
Thomas M. Coutts 34,998 410,118 38,167 86,333 586,315 502,997
Joseph C. Stokes, Jr. 74,175 1,088,213 41,408 82,083 635,898 429,685
John V. Cooper 18,995 277,298 46,089 50,916 787,235 315,057
Brian D. Graves --- --- 74,168 44,584 1,360,648 304,077
</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 on December 31, 1997 ($33.25).
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 1997 will be $1,839,861, which represents
4.1% 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.
13
<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, 1997, for the
executive officers named in the Summary Compensation Table was nine for J. Stark
Thompson, 17 for Joseph C. Stokes, Jr., six for John V. Cooper and 16 for Brian
D. Graves. Thomas M. Coutts does not participate in the pension plan. As of
December 31, 1997, 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, $185,788, Joseph C. Stokes, Jr., $158,833, John V. Cooper,
$96,407 and $96,522 for Brian D. Graves.
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, 1997, the number of credited
years of service for Mr. Coutts was 24. The estimated benefit payable as of
December 31, 1997, to Mr. Coutts at normal retirement at age 61 was 87,627
(equivalent to approximately $140,203) 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). The SRP currently has six
participants, including Dr. Thompson and Mr. Coutts.
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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
any individual, entity or group (within the meaning of Section 13(d)(3) or
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<PAGE>
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
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 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: K. Grahame Walker, chairman,
Thomas H. Adams, Ph.D., Kathleen Burdett and Frank E. Samuel, Jr.
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.
The Compensation Committee reviews and makes recommendations to the Board
of Directors 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 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 used the Biotechnology Compensation and Benefits Survey conducted by
Radford Associates/Alexander & Alexander Consulting Group and endorsed by the
17
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Biotechnology Industry Association (the "Radford Survey"), which is published
annually, for purposes of comparison of compensation of its executive officers
to compensation of companies which the Company believes reflects the market in
which the Company competes for executive talent. The Committee engaged Frederick
W. Cook & Co., executive compensation consultants, to prepare an executive
compensation review using sixteen companies for comparative purposes.
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 700 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 performane 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 1997 were as follows: earnings per share, 40%; return on
average stockholders' equity, 20%; 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.
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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 16 biotechnology
companies of comparable revenue size which the Company believes reflects the
market in which the Company competes for executive talent, 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 Board
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 Frederick W. Cook & Co. 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 16 peer companies were the same companies
included in the analysis of cash compensation prepared by Frederick W. Cook &
Co. in 1997. The Board considered the consultant's analysis (which has been
updated annually since 1991) in determining its stock option grants.
The stock options granted in 1997 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.
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<PAGE>
COMPENSATION TO CHIEF EXECUTIVE OFFICER
In 1997, J. Stark Thompson, Ph.D., Chief Executive Officer of the Company,
received a base salary of $433,750, an increase of 8.3% over his 1996 base
salary. In addition, 5.4% of the Company's Incentive Pool, or $276,154, was paid
to Dr. Thompson as a bonus in 1997, compared with 6.1% of the Incentive Pool, or
$330,413 in 1996. Although the Company achieved its performance criteria in
1997, it did not exceed such goals to the same extent as it did in 1996. As a
result, Dr. Thompson's incentive compensation decreased 16.4% in 1997 compared
with the prior year. Dr. Thompson's total compensation in 1997 decreased 2.9%
over 1996. It is our view that total cash compensation paid to Dr. Thompson in
1997 is consistent with the Compensation Committee's compensation philosophy.
In 1997, Dr. Thompson also received options to purchase 100,000 shares of
Common Stock at an exercise price of $34.41 per share. The grants were given to
reinforce the relationship between the Company's performance and the Chief
Executive Officer's future earnings. The Compensation Committee took into
consideration the report prepared by the Company's independent executive
compensation consultant in recommending to the Board the stock option grants for
Dr. Thompson.
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 1997 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.
CONCLUSION
The Compensation Committee believes 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 believes that compensation
paid to its executives during 1997, including the Chief Executive Officer,
reflects the Company's compensation goals and policy.
COMPENSATION & ORGANIZATION COMMITTEE
K. Grahame Walker, Chairman
Thomas H. Adams
Kathleen Burdett
Frank E. Samuel, Jr.
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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, 1992)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NASDAQ
STOCK
LIFE MARKET NASDAQ
Measurement Period TECHNOLOGIES, (U.S. AND PHARMACEUTICAL RUSSELL
(Fiscal Year Covered) INC. FOREIGN) STOCKS 2000
- --------------------- --------------- --------- -------------- --------------
<S> <C> <C> <C> <C>
Measurement Pt-12/31/1992 $100.0 $100.0 $100.0 $100.0
FYE 12/31/1993 $ 86.0 $118.9 $ 89.1 $115.8
FYE 12/31/1994 $ 91.6 $116.7 $ 67.1 $112.3
FYE 12/31/1995 $129.1 $149.9 $122.7 $157.7
FYE 12/31/1996 $178.9 $174.7 $123.1 $193.1
FYE 12/31/1975 $239.9 $213,7 $127.2 $236.2
</TABLE>
21
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, K. Grahame Walker, chairman, Thomas H. Adams, Kathleen
Burdett, and Frank E. Samuel, Jr. served as members of the Company's
Compensation and Organization Committee. No member of the Compensation and
Organization Committee was during the 1997 fiscal year or at any other time an
officer or employee of the Company. No executive officer of the Company served
on the board of directors or compensation committee of another entity that has
one or more executive officers serving as a member of the Company's Board of
Directors or Compensation and Organization Committee.
COMPENSATION OF DIRECTORS
In 1997, each non-employee director of the Company (except Mr. Walker, Mr.
Beatt 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 during the period January 1, 1997 to April 15, 1997,
and $1,000 (with the chairman of each committee receiving $2,000) for each
committee meeting attended after April 15, 1997. Pursuant to the terms of the
Company's Non-Employee Directors' Annual Retainer Plan, each non-employee
director (except Mr. Walker, Mr. Beatt and Ms. Burdett who elected not to
participate in the Plan) received a grant of 150 shares of Common Stock on April
1, 1997 and October 1, 1997. Pursuant to the Plan each non-employee director
(except Mr. Walker, Mr. Beatt and Ms. Burdett) will receive a grant of 150
shares of Common Stock of the Company on April 1, 1998 and on October 1, 1998.
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, Mr. Beatt and Ms. Burdett who elected not
to participate in the Plan) was granted an option to purchase 6,750 shares of
Common Stock on October 1, 1997 at a per share price of $31.875 (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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1997 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 $25,000. 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.
Mr. Beatt is a director of the Company; he is also vice president, general
counsel and secretary of Dexter. Ms. Burdett is a director of the Company; she
is also vice president and chief financial officer of Dexter. Dr. Whitesides is
a director of Dexter.
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PROPOSAL NO. 2 - APPROVAL OF STOCK REPURCHASE PROGRAM
The Board of Directors (the "Board") has approved, and has authorized the
submission to the stockholders of, a program pursuant to which the Company would
be authorized to purchase up to 1,000,000 shares of its issued and outstanding
Common Stock over a period of 24 months (the "Stock Repurchase Program").
DESCRIPTION OF THE STOCK REPURCHASE PROGRAM
The Stock Repurchase Program would authorize the Company to purchase up to
1,000,000 shares (as adjusted for stock splits, dividends, subdivisions,
combinations, reclassifications, recapitalizations or other similar changes in
capitalization of the Company) of its issued and outstanding Common Stock over a
period of 24 months. Such 1,000,000 shares represent approximately 4.3% of the
shares of the Common Stock of the Company outstanding as of January 1, 1998.
If the Stock Repurchase Program is approved by the stockholders, the Board
will direct management to purchase up to 1,000,000 shares of the Company's
Common Stock. The purchases would be made from time to time for cash, in the
open market on the Nasdaq National Market or in privately negotiated
transactions. All purchases would be carried out in accordance with applicable
federal and state securities laws, including, without limitation, applicable
volume, timing, and price constraints imposed by the SEC's rules applicable to
issuer purchases. No shares would be purchased from any officer or director or
from a member of the immediate family of any officer or director of the Company.
The Company would accumulate any purchased shares in its treasury or, in
the discretion of the Board, retire any such shares. The Board currently
intends to direct management to repurchase up to 1,000,000 shares of Common
Stock; however, the timing and amount of any purchases, and the prices at which
such purchases are effected, will depend upon circumstances which cannot
presently be predicted, including, among others, the prices at which shares of
Common Stock will be available, the amount of funds which the Board determines
are available and should be applied for purchases, the Company's business and
financial condition and general economic and market conditions. All purchases
would have to be made within the 24-month period beginning upon stockholder
approval, if obtained.
Repurchases of shares of Common Stock pursuant to the Stock Repurchase
Program would have the effect of increasing the proportionate ownership of
stockholders whose shares are not repurchased. As of January 1, 1998, no person
was known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of the Company's Common Stock, except that (a)
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The Dexter Corporation ("Dexter") beneficially owned 12,246,664 shares or
approximately 52.5% of the outstanding shares and (b) the State of Wisconsin
Investment Board beneficially owned 1,549,500 shares or approximately 6.6% of
the outstanding shares. If the Company purchases the maximum 1,000,000 shares
authorized to be purchased pursuant to the Stock Repurchase Program and no such
shares are purchased from Dexter or the State of Wisconsin Investment Board,
then the shares beneficially owned by Dexter and the State of Wisconsin
Investment Board as of such date would represent 54.8% and 6.9%, respectively,
of the outstanding shares of Common Stock. As of January 1, 1998, the Company's
directors and executive officers as a group (19 persons) beneficially owned
864,803 shares of the Company's Common Stock (including 777,317 shares issuable
upon the exercise of options exercisable within 60 days of such date), which
constituted approximately 3.6% of the outstanding shares (including shares
issuable upon the exercise of options held by the Company's directors and
executive officers exercisable within 60 days of such date). If the Company
purchases the maximum 1,000,000 shares authorized to be purchased pursuant to
the Stock Repurchase Program and no such shares are purchased from any director
or executive officer (as is intended by the Stock Repurchase Program), the
shares beneficially owned by the Company's directors and executive officers as a
group at such date would constitute approximately 3.7% of the outstanding shares
(including shares issuable upon the exercise of options held by the Company's
directors and executive officers exercisable within 60 days of such date).
Although the current intention of the Board is to repurchase up to 1,000,000
shares, there can be no assurance that, if the Stock Repurchase Program is
approved by the stockholders, any shares will in fact be purchased by the
Company.
REASONS FOR THE STOCK REPURCHASE PROGRAM
The Board believes that the ability to repurchase shares of the Company's
stock from time to time is important to the maintenance of an appropriate
capital structure. In addition, the Board believes that the current market
price of the Company's Common Stock makes it a prudent investment for the
Company's surplus funds and that the repurchase of stock may have an accretive
effect on the Company's earnings per share. The repurchase of stock may also
offset the dilutive effect of the issuance of stock options under the Company's
stock option plans and provides shares for issuance in connection with future
acquisitions and mergers. However, as explained below in "Proposal No.2-
Approval of Amendment to the Certificate of Incorporation," the Company's
Certificate of Incorporation could be deemed to require the Board to obtain
stockholder approval before effecting a repurchase of shares when, as now, the
Company has a stockholder who beneficially owns 20% or more of its outstanding
Common Stock. Accordingly, approval of the Stock Repurchase Program will
authorize the Board to effect the repurchase of up to 1,000,000 shares of the
Company's Common Stock over a limited time period when such repurchases are, in
the judgment of the Board, in the best interests of the Company and its
stockholders.
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VOTE REQUIRED
Adoption of the Stock Repurchase Program requires the affirmative vote of
the holders of not less than eighty percent (80%) of the outstanding shares of
Common Stock of the Company entitled to vote. Accordingly, an abstention or
broker non-vote has the same legal effect as a vote "against" the matter.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 2 - APPROVAL OF STOCK REPURCHASE
PROGRAM" TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
25
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PROPOSAL NO. 3 - APPROVAL OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION
The Board has approved and recommends that Article EIGHTH, subsection
(3)(ii), of the Company's Certificate of Incorporation (the "Certificate") be
amended (the "Certificate Amendment") to authorize the Company, upon the
approval of the Board but without stockholder approval, to purchase shares of
any class of stock issued by it. The text of Article EIGHTH, subsection
(3)(ii), as in existence and as proposed to be amended, is attached to this
Proxy Statement as Appendix A and the following description is qualified in its
entirety by reference to such text.
DESCRIPTION OF THE CERTIFICATE AMENDMENT
Article SEVENTH of the Certificate authorizes the repurchase of shares of
the Company's stock upon approval of the Board and without a vote of the
stockholders. However, Article EIGHTH of the Certificate, which is designed in
part to ensure that all stockholders have the opportunity to receive a "fair
price" for their shares in the event of a change of control, could be deemed to
preclude the Company from repurchasing its stock without stockholder approval
when a single stockholder beneficially owns more than 20% of the Company's
outstanding Common Stock. Article EIGHTH prohibits, without stockholder
approval, a "Business Combination with a Related Person." As defined in
subsection (3)(ii) of Article EIGHTH, the term "Business Combination with a
Related Person" includes, among other transactions, any transaction which has
the direct or indirect effect of increasing the proportionate share of the
outstanding class of any of the Company's securities held by a person which
beneficially owns twenty percent (20%) or more of the Company's outstanding
Common Stock. A repurchase of Common Stock would have the effect of decreasing
the total number of shares of Common Stock outstanding and thus of increasing
the proportionate share ownership held by a beneficial owner of 20% or more of
the outstanding Common Stock (unless the shares repurchased were bought from
such 20% holder). Therefore, despite the express authority to repurchase stock
granted to the Board in Article SEVENTH, Article EIGHTH of the Certificate could
be deemed to preclude a repurchase without stockholder approval at any time
when, as now, there is a beneficial owner of 20% or more of the Company's Common
Stock. The Certificate Amendment would resolve this conflict between Articles
SEVENTH and EIGHTH by amending the definition of "Business Combination with a
Related Person" to state explicitly that repurchases of the Company's stock are
not encompassed within such definition and thus can be effected, as indicated in
Article SEVENTH, upon approval of the Board but without stockholder approval.
As set forth above under "Proposal No. 2 - Approval of Stock Repurchase
Program," the Company is currently seeking stockholder approval of a plan to
authorize the repurchase of up to 1,000,000 shares of Common Stock over a 24-
month period. Because Dexter holds approximately 52.4% of the outstanding
shares of Common Stock, Article EIGHTH as currently in effect could be deemed to
prohibit any repurchase without prior stockholder approval. Adoption of the
Certificate Amendment will provide the Company with greater flexibility in the
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<PAGE>
future implementation of stock repurchase programs and will eliminate the delay
and expense of calling a stockholders' meeting when the Board deems such
repurchases to be warranted.
The Board views the Certificate Amendment as a means of resolving an
apparent contradiction between two provisions of the Company's Certificate. The
General Corporation Law of the State of Delaware permits a corporation to
purchase its stock upon approval of the board of directors and without a
stockholder vote. Adopting the Certificate Amendment would ensure that the
Company's ability to purchase its own stock is not impaired simply because of
the existence of a stockholder who owns 20% or more of the outstanding shares.
REASONS FOR THE CERTIFICATE AMENDMENT
For the reasons set forth above under "Proposal No. 2 Approval of Stock
Repurchase Program," the Board believes that repurchases of shares of the
Company's stock from time to time serve valid and important corporate purposes.
However, the requirement of stockholder approval when 20% or more of the
Company's Common Stock is owned by one person limits the Company's ability to
make repurchases in a timely and beneficial manner. Approval of the Certificate
Amendment would authorize the Board, without stockholder approval, to effect
repurchases of shares of the Company's stock from time to time. The Board's
decision to effect repurchases would depend upon circumstances existing at the
time, including, among others, the prices at which shares of Common Stock are
available and the amount of funds which the Board determines should be applied
for purchases.
VOTE REQUIRED
Adoption of the Certificate Amendment requires the affirmative vote of the
holders of not less than eighty percent (80%) of the outstanding shares of
Common Stock of the Company entitled to vote. Accordingly, an abstention or
broker non-vote has the same legal effect as a vote "against" the matter.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 3 APPROVAL OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION" TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
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<PAGE>
PROPOSAL NO. 4 - 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 1998, 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 1997. In connection with its audit
function, Coopers & Lybrand L.L.P. reviewed the Company's 1997 quarterly and
annual reports to its stockholders and certain filings with the SEC. In
addition, during fiscal year 1997, 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. Accordingly, an
abstention or broker non-vote has the same legal effect as a vote "against"
the proposal.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 4 - RATIFICATION OF SELECTION OF
AUDITORS" TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
28
<PAGE>
STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at the 1999
Annual Meeting of Stockholders of the Company must be received by the Company no
later than November 16, 1998, 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 16, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE SENT WITHOUT CHARGE
AFTER MARCH 31, 1998, TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM:
LIFE TECHNOLOGIES, INC.
ATTN: JOSEPH C. STOKES, JR., SECRETARY
9800 MEDICAL CENTER DRIVE
ROCKVILLE, MARYLAND 20850
29
<PAGE>
APPENDIX A
AMENDMENT TO CERTIFICATE OF INCORPORATION
Following is the text of Article EIGHTH, subsection (3)(ii), of the
Company's Certificate of Incorporation. The Amendment to the Certificate of
Incorporation would add the language shown in bold italics below.
(ii) The term "Business Combination with a Related Person" shall mean (a)
the consolidation or merger of the Corporation or any Subsidiary with or into
any "Related Person" (as hereinafter defined) or any other corporation (whether
or not itself a Related Person) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of a Related Person, (b) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one
or a series of transactions) to or with any Related Person or any Affiliate of a
Related Person of any Substantial Part of the assets or business of the
Corporation or any Subsidiary, (c) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition, of all or any Substantial Part of the assets of a
Related Person or an Affiliate of a Related Person to the Corporation or a
Subsidiary, (d) the issuance or transfer by the Corporation or a Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Related Person or any Affiliate of any
Related Person, except the issuance of shares of Common Stock of the Corporation
to The Dexter Corporation pursuant to the terms of a Merger Agreement, dated
September 1, 1983, between the Corporation and Bethesda Research Laboratories,
Inc., (e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving a Related Person), which has
the effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by any
Related Person or any Affiliate of any Related Person, EXCEPT AS A RESULT OF
IMMATERIAL CHANGES DUE TO FRACTIONAL SHARE ADJUSTMENTS OR AS A RESULT OF ANY
PURCHASE OR REDEMPTION OF ANY SHARES OF STOCK BY THE CORPORATION, (f) a
Combination or Majority Share Acquisition involving a Related Person in which
the Corporation is the Acquiring Corporation and its Common Stock is issued or
transferred in connection with such Combination or Majority Share Acquisition,
and (g) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination with a Related
Person.
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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 14, 1998
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 20, 1998, at the Annual
Meeting of Stockholders to be held at 10:00 a.m., local time, on Tuesday, April
14, 1998, 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.
<PAGE>
1. ELECTION OF DIRECTORS
Nominees: Kathleen Burdett, George M. Whitesides and J. Stark Thompson for
three-year terms.
[ ] For all listed nominees (except for nominee(s)
whose name(s) appear(s) below):
-------------------------------------
-------------------------------------
[ ] Withhold Authority to vote for the listed nominees.
2. APPROVAL OF STOCK REPURCHASE PROGRAM.
[ ] For [ ] Against [ ] Abstain
3. APPROVAL OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO AUTHORIZE THE
BOARD OF DIRECTORS TO REPURCHASE SHARES WITHOUT STOCKHOLDER APPROVAL.
[ ] For [ ] Against [ ] Abstain
4. RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
AUDITORS OF THE COMPANY FOR FISCAL YEAR 1998.
[ ] For [ ] Against [ ] Abstain
Discretionary authority is hereby granted with respect to such other matters as
may properly come before the Annual Meeting.
Date: , 1998
----------------
Important: Each joint owner shall sign.
Executors, administrators trustees, etc., ----------------------------------
should give full title. Signature
The above-signed acknowledges receipt of
the Notice of Annual Meeting of ----------------------------------
Stockholders and the Proxy Statement Signature (if held jointly)
furnished therewith.
