<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)
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
<PAGE>
LIFE TECHNOLOGIES, INC.
9800 Medical Center Drive
Rockville, Maryland 20850
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 23, 2000
The Annual Meeting of Stockholders of Life Technologies, Inc. (the
"Company") will be held at The Ritz-Carlton, 1700 Tysons Boulevard, McLean,
Virginia 22102, on Tuesday, May 2, 2000, at 10:00 a.m., local time, for the
following purposes:
(1) To elect three directors;
(2) To ratify the selection by the Company's Board of Directors of the firm of
PricewaterhouseCoopers LLP as auditors of the Company for fiscal year 2000;
and
(3) 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 March 10, 2000 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
You are cordially invited to attend the meeting in person. Whether or not
you plan to attend the meeting in person, please indicate your votes on the
enclosed proxy and date, sign and return it in the postage-prepaid envelope
provided for your use. If you attend the meeting, you may revoke your proxy and
vote your shares in person.
By Order of the Board of Directors,
C. Eric Winzer
Secretary
[LOGO]
<PAGE>
LIFE TECHNOLOGIES, INC.
9800 Medical Center Drive
Rockville, Maryland 20850
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, May 2, 2000, 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 23, 2000, 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., 445 Park Avenue, New York, New York
10022, to assist in distributing proxies, for which they will be paid a fee of
$2,000.00, 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.
Record Date and Voting Rights
Only stockholders of record at the close of business on March 10,
2000, are entitled to vote at the Annual Meeting or any and all adjournments
thereof. On March 10, 2000, there were 25,017,451 shares of Common Stock
outstanding, each of which shares 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 but will not be counted with
respect to the
1
<PAGE>
specific matter being voted upon. "Broker non-votes" are shares held by brokers
or nominees who 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.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 1, 2000 (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. 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 of Beneficial Ownership Percentage of
Beneficial Owner of Common Stock (1) Common Stock
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dexter Corporation ("Dexter") 18,815,447 shares (2) 75.2 %
One Elm Street
Windsor Locks, CT 06096
Dexter Acquisition Delaware, Inc. 5,569,187 shares (3) 22.3 %
One Elm Street
Windsor Locks, CT 06096
Samuel J. Heyman 3,506,270 (4) (5) (6) 14.0 %
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
International Specialty Products Inc. 3,506,270 (4) (5) (6) 14.0 %
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
ISP OPCO Holdings Inc. 3,384,600 (4) (5) 13.5 %
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
ISP Investments Inc. 3,384,600 (4) (5) 13.5 %
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
The 13D Group 5,417,991 shares (7) 21.7 %
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
c/o ISP Management Company, Inc.
1361 Alps Road
Wayne, New Jersey 07470
Thomas H. Adams, Ph.D. 14,633 shares (8) *
Bruce H. Beatt -
Kathleen Burdett -
R. Barry Gettins, Ph.D. -
Peter G. Kelly 4,500 shares (9) *
Joseph C. Stokes, Jr. 26,666 shares (10) *
J. Stark Thompson, Ph.D. 72,816 shares (11) *
K. Grahame Walker -
George M. Whitesides, Ph.D. 6,900 shares (12) *
John V. Cooper 27,333 (13) *
Thomas M. Coutts 26,667 (14) *
Brian D. Graves 7,500 (15) *
Derek E. Woods, Ph.D 29,167 (16) *
All directors, nominees, and executive 291,604 shares (17) *
officers as a group (18 persons)
</TABLE>
__________________________________
* Less than 1.0%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC"), based on factors including
voting and investment power with respect to shares. Percentage of
beneficial ownership is based on shares of the Company's Common Stock
outstanding as of March 1, 2000. Shares of Common Stock subject to options
or warrants currently exercisable, or exercisable within 60 days after
March 1, 2000, are deemed outstanding for the purpose of computing the
percentage ownership of the person holding such options or warrants, but
are not deemed outstanding for computing the percentage ownership of any
other persons.
(2) Includes 5,569,187 shares of Common Stock of the Company held by Dexter
Acquisition Delaware, Inc., a wholly owned subsidiary of Dexter. Dexter has
the sole power to vote and direct the voting of 13,246,260 shares, the
shared power to vote and direct the voting of 5,569,187 shares and the
shared power to dispose of and direct the disposition of 18,815,447 shares
of Common Stock of the Company. This number of shares excludes 34,744,
63,668, 34,075, 8,322, 229,692 and 3,265 shares of common stock of Dexter
beneficially owned by Mr. Beatt, Ms. Burdett, Dr. Gettins, Mr. Kelly, Mr.
Walker and Dr. Whitesides, respectively, constituting an aggregate of
373,766 shares, or approximately 1.6% of the outstanding shares of Dexter,
as of December 31, 1999. The shares of Dexter beneficially owned by Mr.
Beatt, Ms. Burdett, Dr. Gettins and Mr. Walker include 11,834, 19,333,
23,834 and 101,500 shares, respectively, which they may acquire within 60
days upon the exercise of stock options.
(3) Dexter Acquisition Delaware, Inc. has the shared power to vote, direct the
voting of and dispose of and direct the disposition of 5,569,187 shares of
Common Stock of the Company.
(4) This information is based on Annex VII of the Preliminary Proxy Statement
relating to Dexter Corporation, dated February 8, 2000, filed with the SEC
by International Specialty Products Inc.
3
<PAGE>
("ISP") and ISP Investments Inc. ("ISP Investments"), which specifies as
follows: ISP Investments (directly and through ISP Investments Grantor
Trust) has the sole power to vote, direct the voting of, dispose of and
direct the disposition of 2,932,600 shares of Common Stock of the Company.
ISP Opco Holdings Inc. ("ISP Opco"), by virtue of its indirect ownership of
all of the outstanding capital stock of ISP Investments, may be deemed to
own beneficially (solely for purposes of Rule 13d-3) all of the Common
Stock of the Company owned by ISP Investments. ISP, by virtue of its
ownership of all of the outstanding common stock of ISP Opco, may be deemed
to own beneficially (solely for purposes of Rule 13d-3) the Common Stock of
the Company owned by ISP Investments. Mr. Heyman, by virtue of his
beneficial ownership (as defined in Rule 13d-3) of approximately 76% of the
capital stock of ISP, may be deemed to own beneficially (solely for
purposes of Rule 13d-3) the Common Stock of the Company owned by ISP
Investments.
(5) This information is based on Annex VII of the Preliminary Proxy Statement
relating to Dexter Corporation, dated February 8, 2000, filed with the SEC
by ISP and ISP Investments, which specifies as follows: ISP Ireland has the
sole power to vote, direct the voting of, dispose of and direct the
disposition of 452,000 shares of Common Stock of the Company. ISP
Investments, by virtue of its indirect ownership of all of the outstanding
capital stock of ISP Ireland, may be deemed to own beneficially (solely for
purposes of Rule 13d-3) all of the Common Stock of the Company owned by ISP
Ireland. ISP Opco, by virtue of its indirect ownership of all of the
outstanding capital stock of ISP Investments, may be deemed to own
beneficially (solely for purposes of Rule 13d-3) all of the Common Stock of
the Company owned by ISP Ireland. ISP, by virtue of its ownership of all of
the outstanding common stock of ISP Opco, may be deemed to own beneficially
(solely for purposes of Rule 13d-3) the Common Stock of the Company owned
by ISP Ireland. Mr. Heyman, by virtue of his beneficial ownership (as
defined in Rule 13d-3) of approximately 76% of the capital stock of ISP,
may be deemed to own beneficially (solely for purposes of Rule 13d-3) the
Common Stock of the Company owned by ISP Ireland.
(6) This information is based on Annex VII of the Preliminary Proxy Statement
relating to Dexter Corporation, dated February 8, 2000, filed with the SEC
by ISP and ISP Investments, which specifies as follows: ISP has the sole
power to vote, direct the voting of, dispose of and direct the disposition
of 121,670 shares of Common Stock of the Company. Mr. Heyman, by virtue of
his beneficial ownership (as defined in Rule 13d-3) of approximately 76% of
the capital stock of ISP, may be deemed to own beneficially (solely for
purposes of Rule 13d-3) the Common Stock of the Company owned by ISP.
(7) This figure is based on information set forth in Amendment No. 8 to a
Schedule 13D of the Company dated January 28, 2000, filed with the SEC,
which filing indicates that the following persons are part of the 13D Group
and beneficially own and have sole or shared voting and dispositive power
as to the number of shares indicated next to the person's name in the table
below:
<TABLE>
<CAPTION>
Sole Shared Sole Shared
Beneficial Voting Voting Dispositive Dispositive
Name Ownership Power Power Power Power
--------- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C>
ISP Opco Holdings, Inc 3,384,600 0 3,384,600 0 3,384,600
ISP Investments Inc 3,384,600 2,932,600 452,000 2,932,600 452,000
ISP Ireland 452,000 452,000 0 452,000 0
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
International Specialty 3,506,270 121,670 3,384,600 121,670 3,384,600
Products Inc
Bear, Stearns & Co Inc. 432,826 340,826 92,000 340,826 92,000
Frederick R. Adler 714,895 714,895 0 714,895 0
The Cohen Revocable Trust 397,100 397,100 0 397,100 0
A. Chang 135,500 135,500 0 135,500 0
York Capital Management, L.P. 78,700 78,700 0 78,700 0
Dinan Management L.L.C 78,700 0 78,700 0 78,700
JGD Management Corp. 23,100 23,100 0 23,100 0
York Investment Limited 129,600 129,600 0 129,600 0
Dinan Management Corporation 129,600 0 129,600 0 129,600
James G. Dinan 231,400 231,400 0 231,400
</TABLE>
The filing indicates that the foregoing persons are parties to a letter
agreement dated December 3, 1999 pursuant to which the parties agreed to extend
through September 30, 2000 the provisions of the respective group agreements to
which such persons are parties pursuant to which, among other things, they
generally agreed (i) not to sell or otherwise dispose of any shares of Common
Stock of the Company unless all of the parties mutually agreed (or, in the case
of Bear, Stearns & Co., Inc., sell shares which would reduce its ownership below
300,000 shares) and (ii) not to enter into any other contract, arrangement,
understanding or relationship with any other persons with respect to equity
securities of the Company without the written consent of the other parties.
(8) Consists of 1,133 shares of Common Stock owned by Dr. Adams and 13,500
shares of Common Stock which Dr. Adams may acquire upon the exercise of
stock options.
(9) Consists of 4,500 shares of Common Stock which Mr. Kelly may acquire
upon the exercise of stock options.
(10) Consists of 2,006 shares of Common Stock owned by Mr. Stokes and 24,660
shares of Common Stock which Mr. Stokes may acquire upon the exercise
of stock options.
(11) Consists of 72,666 shares of Common Stock Dr. Thompson may acquire upon
the exercise of stock options and 150 shares of Common Stock owned by
Dr. Thompson's wife, of which Dr. Thompson may be deemed to be the
beneficial owner. Dr. Thompson disclaims beneficial ownership of the
150 shares owned by his wife.
5
<PAGE>
(12) Consists of 150 shares of Common Stock owned by Dr. Whitesides and
6,750 shares of Common Stock which Dr. Whitesides may acquire upon the
exercise of stock options.
(13) Consists of 27,333 shares of Common Stock Mr. Cooper may acquire upon
the exercise of stock options.
(14) Consists of 26,667 shares of Common Stock Mr. Coutts may acquire upon
the exercise of stock options.
(15) Consists of 7,500 shares of Common Stock Mr. Graves may acquire upon
the exercise of stock options.
(16) Consists of 29,167 shares of Common Stock Dr. Woods may acquire upon
the exercise of stock options.
(17) Includes a total of 287,243 shares of Common Stock the respective
directors, nominees, and executive officers may acquire upon the
exercise of stock options.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (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 1999 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, except for John A.
Cottingham, an officer of the Company who did not timely file his Form 3; Daryl
J. Faulkner, an officer of the Company who did not timely file his Form 3; Peter
G. Kelly, a director of the Company who did not report timely one sale of shares
of Common Stock of the Company that occurred in December 1999; Dexter
Corporation, an owner of more than 10% of the shares of Common Stock of the
Company that failed to file one Form 4 in 1986 relating to one transaction, one
Form 4 in 1996 relating to one transaction, and Form 4s in 1999 relating to 23
transactions, all of which were addressed in a Form 5 filed with the SEC on
February 15, 2000; and Dexter Acquisition Delaware, Inc., an owner of more than
10% of the shares of Common Stock of the Company, that failed to file one Form 4
in 1998 relating to one transaction and one Form 4 in 1999 relating to one
transaction, both of which were addressed in a Form 5 filed with the SEC on
February 15, 2000.
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.
6
<PAGE>
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 2001,
three in the class whose term will expire in 2002, and three in the class whose
term will expire in 2003. At the Annual Meeting, three directors are to be
elected for terms expiring in 2003.
Unless otherwise specified, the enclosed proxy will be voted for the
election of Bruce H. Beatt, Peter G. Kelly, and K. Grahame Walker to serve until
the 2003 Annual Meeting of Stockholders and until their successors shall have
been duly elected and shall qualify. Messrs. Beatt, Kelly, and 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.
7
<PAGE>
Nominees
Term Expiring in 2003
<TABLE>
<CAPTION>
Principal Occupation During the
Past Five Years and Other
Name Age Director Since Directorships
- ---- --- -------------- -------------------------------
<S> <C> <C> <C>
Bruce H. Beatt (1) 47 April 1997 Vice President, General Counsel
and Secretary of Dexter since 1992.
Peter G. Kelly (1) 62 August 1998 Senior Principal of Updike, Kelly
& Spellacy, P.C. (attorneys) since
prior to 1993. Mr. Kelly also
serves as Chairman of Meridian
Worldwide L.LC. and Meridian
Americas L.LC (public affairs),
and Chairman of The PBN Company
(government affairs). Mr. Kelly is
a director of Dexter, Phillips
Screw Company (licensing and
manufacturing), and CNA
Corporation (a federally funded
research and development
corporation).
K. Grahame Walker (2) (3) 62 April 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.
</TABLE>
Other Directors
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) 44 April 1995 Vice President and Chief Financial
Officer of Dexter since January 1995.
She previously served as Vice President
and of Dexter from 1989 to January 1995.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C> <C>
George M. Whitesides, Ph.D. 60 April 1998 Mallinckrodt Professor of Chemistry of 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 MYIP. 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 and Geltex, Inc.
(medical products).
J. Stark Thompson, Ph.D. (3) 58 September 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 for 21 years.
</TABLE>
Term Expiring in 2002:
<TABLE>
<CAPTION>
Name Age Director Since Principal Occupation During the Past
- ---- --- -------------- ------------------------------------
Five Years and Other Directorships
----------------------------------
<S> <C> <C> <C>
Thomas H. Adams, Ph.D. (2) 57 April 1992 Chairman and Chief Executive Officer of Leucadia Technologies
(biotechnology company). 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. Dr.
Adams is a director of La Jolla Pharmaceuticals, Inc.
R. Barry Gettins, Ph.D. (1) 58 February 1999 Retired December 1998 as Senior Vice President, Operations
and Technology Development, of Dexter. Prior to that, he
served in various senior management capacities at Dexter for
24 years.
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C> <C>
Joseph C. Stokes, Jr. 52 February 1999 Lecturer in International Finance, Eugene M. Isenberg School
of Management, University of Massachusetts at Amherst, since
September 1999. Senior Vice President and Chief Financial
Officer, Secretary and Treasurer of the Company from March 1,
1989 through March 31, 1999.
</TABLE>
__________________________________
(1) Member of the Audit Committee.
(2) Member of the Compensation and Organization Committee.
(3) Member of the Executive Committee.
The Board of Directors of the Company held six meetings in 1998 and
acted once by unanimous written consent in lieu of a meeting. 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 1999.
The Compensation and Organization Committee currently is composed of
three members, Mr. Walker, chairman, Dr. Adams and Ms. Burdett. 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 1999.
The Audit Committee currently is composed of four members, Ms. Burdett,
chairman, Mr. Beatt, Dr. Gettins and Mr. Kelly. 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 compliance with the Company's Code of Conduct, the integrity
of officers, accounting policies and internal controls and the quality of
published financial statements. The committee held two meetings in 1999.
In 1999 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.
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.
10
<PAGE>
THE BOARD OF DIRECTORS DEEMS ELECTION OF THE DIRECTOR NOMINEES NAMED IN
"PROPOSAL NO. I - ELECTION OF DIRECTORS" TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" EACH NOMINEE.
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) (2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D. 1999 $540,000 $128,200 66,000 $4,800
President, Chief Executive 1998 459,250 281,918 -- 4593
Officer and Director 1997 433,750 276,154 100,000 4338
Thomas M. Coutts 1999 275,000 65,900 35,000 --
Senior Vice President 1998 260,750 144,044 -- --
and General Manager 1997 253,750 119,821 45,000 --
John V. Cooper 1999 249,000 43,200 35,000 4,800
Senior Vice President and 1998 200,250 87,995 -- 4,800
General Manager 1997 188,500 90,384 25,000 4,750
Derek E. Woods, Ph.D 1999 240,000 43,800 25,000 4800
Senior Vice President, 1998 196,000 89,100 -- 4800
Research and Development 1997 186,000 83,200 20,000 4750
Brian D. Graves 1999 239,000 42,100 22,500 4,800
Vice President and 1998 198,000 88,663 -- 4,800
General Manager 1997 186,000 93,193 20,000 4,750
</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 contributions made by each participant in the
ESP up to a maximum Company match of three percent of annual base compensation
(to the extent such compensation does not exceed the statutory maximum of
$170,000). Mr. Coutts does not participate in the ESP.
(2) Does not include perquisites paid to any of the listed executive officers
which did not exceed the lesser of $50,000 or 10% of the total salary and bonus
reported for the officer.
11
<PAGE>
The following table sets forth information with respect to option
grants in 1999 to the persons named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Number of % of Total Option Term (4)
Securities Options Exercise ---------------
Underlying Granted to Base or
Options Employees in Price Expiration 5% ($) 10% ($)
Name Granted(#)(1) Fiscal Year (2) ($/sh)(3) Date ------ -------
- ---- ------------- --------------- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D. 66,000 13.64 % $36.7188 2/2/09 $1,524,089 $3,862,341
Thomas M. Coutts 35,000 7.23 36.7188 2/2/09 808,229 2,048,211
John V. Cooper 35,000 7.23 36.7188 2/2/09 808,229 2,048,211
Derek E. Woods, Ph.D. 25,000 5.17 36.7188 2/2/09 577,304 1,463,008
Brian D. Graves 22,500 4.65 36.7188 2/2/09 519,576 1,316,707
</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) Based upon options to purchase 484,000 shares granted to all employees
in 1999.
(3) The exercise price of all options granted during 1999 was equal to the
market value of the underlying Common Stock on the date of grant.
(4) These amounts represent assumed rates of appreciation in the price of
the Company's Common Stock during the terms of the options in
accordance with rates specified in applicable federal securities
regulations. Actual gains, if any, on stock option exercises will
depend on the future price of the Common Stock and overall stock market
conditions. The 5% rate of appreciation over the 10-year option term of
the $36.7188 stock price on the date of grant would result in a stock
price of $60. The 10% rate of appreciation over the 10-year option term
of the $36.7188 stock price on the date of grant would result in a
stock price of $94. There is no representation that the rates of
appreciation reflected in this table will be achieved.
12
<PAGE>
The following table provides information on option exercises in fiscal
year 1999 by the executive officers named in the Summary Compensation Table and
the value of such officers' unexercised options at December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Numbers of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at Fiscal Year End (#) at Fiscal Year End ($) (1)
Shares ---------------------- --------------------------
Acquired on Value
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Stark Thompson, Ph.D. 11,000 $163,250 50,666 99,333 $576,158 $657,431
Thomas M. Coutts 11,666 167,699 15,000 50,000 122,288 326,817
John V. Cooper -0- -0- 15,666 43,333 196,721 272,464
Derek E. Woods, Ph.D. -0- -0- 20,833 31,666 355,643 200,437
Brian D. Graves 13,333 125,592 -0- 29,166 -0- 185,828
</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 OTC Bulletin
Board on December 31, 1999 ($42.5625).
Pension and Retirement Benefits
The Company has a qualified pension plan for substantially all United
States 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. Due to favorable investment performance the Company's
pension plan is currently over funded. Accordingly, the Company will not make a
contribution to the pension plan for 1999. 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.
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 15 participants, including Dr. Thompson, Messrs. Coutts,
Cooper, and Graves, and Dr. Woods. Unless otherwise stipulated by the Board of
Directors, such annual benefits will be reduced ratably for employment of less
than, and will not be increased for employment of more than, 20 years of service
with the Company.
13
<PAGE>
The following table illustrates the estimated annual benefit (prior to
an offset for other retirement benefits received) which participants are
entitled to receive under the supplemental retirement plan, on a straight life
annuity basis assuming retirement at age 65 in the indicated compensation
classification with certain years of service. If the annual retirement benefits
payable to a participant under other Company-related plans and plans of other
employers (plus his or her primary Social Security benefit) exceed the annual
retirement benefit shown in the table, the participant will instead receive the
benefits payable under those other plans.
SUPPLEMENTAL RETIREMENT PLAN TABLE
<TABLE>
<CAPTION>
Average
Final YEARS OF SERVICE
----------------
Compensation 15 Years 20 Years 25 Years 30 Years 35 Years
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$200,000 82,500 110,000 110,000 110,000 110,000
300,000 123,750 165,000 165,000 165,000 165,000
400,000 165,000 220,000 220,000 220,000 220,000
500,000 206,250 275,000 275,000 275,000 275,000
600,000 247,500 330,000 330,000 330,000 330,000
700,000 288,750 385,000 385,000 385,000 385,000
</TABLE>
The number of credited years of service as of December 31, 1999, for
the executive officers named in the Summary Compensation Table was eleven for J.
Stark Thompson, eight for John V. Cooper, four for Derek E. Woods, and 19 for
Brian D. Graves. Thomas M. Coutts does not participate in the pension plan.
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 at the next quarterly enrollment date following attainment of age
20. 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, 1999, the number of credited
years of service for Mr. Coutts was 27. The estimated annual benefit payable as
of December 31, 1999, to Mr. Coutts at normal retirement at age 60 was
approximately (pound)119,877 (equivalent to approximately $189,370) based on the
maximum number of years of service allowable.
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 with certain of its
executive officers, including the executive officers named in the Summary
Compensation Table, effective as of February 13, 1997, (or later dates for
executives who joined the Company or were promoted after such date) 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.
14
<PAGE>
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, Mr. Cooper, and Dr. Woods and one and one-half times for all other
executive officers at the Company's pay band 19 or higher) of an executive's
annual base salary plus the higher of his or her 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 or her 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
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
15
<PAGE>
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.
REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE
ON EXECUTIVE COMPENSATION
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. and Kathleen Burdett.
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.
16
<PAGE>
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.
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. 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 785 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 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 1999 were as follows: revenues, 40%; earnings, 40%; and
performance profit, 20%. 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.
17
<PAGE>
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 comparable
biotechnology and life science companies 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.
The stock options granted in 1999 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 above the exercise price.
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 because the full benefit of the compensation
package cannot be realized unless stock price appreciation occurs in a number of
years.
In order to provide the Board with an objective perspective of
competitive stock option programs, the Board of Directors engaged an outside
executive compensation firm 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. The Board considered the consultant's analysis
in determining its stock option grants.
Stock options were granted to the executive officers of the Company in
February 1999.
Compensation to Chief Executive Officer
In 1999, J. Stark Thompson, Ph.D., Chief Executive Officer of the
Company, received a base salary of $540,000, an increase of 17.6% over his 1998
base salary. In addition, 3.96% of the Company's Incentive Pool, or $128,200,
was paid to Dr. Thompson as a bonus for 1999, compared with 5.4% of the
Incentive Pool, or $281,918 for 1998. It is our view that total cash
compensation paid to Dr. Thompson in 1999 is consistent with the Compensation
Committee's compensation philosophy.
In 1999, Dr. Thompson also received options to purchase 66,000 shares
of Common Stock at an exercise price of $36.7188 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 executive compensation
consultant in recommending to the Board the stock option grants for Dr.
Thompson.
18
<PAGE>
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 and 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. Although the Compensation Committee considers
the net cost to the Company in making all compensation decisions (including, for
this purpose, the potential limitation on deductibility of executive
compensation), there is no assurance that compensation realized with respect to
any particular award will qualify as "performance based" compensation. Those
portions of the executives' compensation that are not "performance based" and
that exceed the cap will not be tax deductible by the Company.
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 1999, 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
19
<PAGE>
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, NASDAQ STOCK MARKET INDEX,
NASDAQ PHARMACEUTICAL STOCK INDEX AND RUSSELL 2000 INDEX
--------------------------------------------------------
<TABLE>
<CAPTION>
================================================================================================================================
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
LIFE TECHNOLOGIES, INC. $100.0 $140.9 $195.3 $261.4 $307.3 $337.9
NASDAQ STOCK MARKET $100.0 $140.4 $171.8 $209.8 $290.1 $534.7
NASDAQ PHARMACEUTICAL STOCKS $100.0 $183.4 $184.0 $190.0 $242.0 $450.3
RUSSELL 2000 INDEX $100.0 $128.4 $149.6 $183.1 $178.4 $216.4
================================================================================================================================
</TABLE>
Note: Assumes an initial Investment of $100 on December 31, 1994. Total return
includes reinvestment of dividends.
Compensation Committee Interlocks and Insider Participation
During 1999 K. Grahame Walker, Chairman, Thomas H. Adams, Ph.D. and
Kathleen Burdett served as members of the Company's Compensation and
Organization Committee. No member of the Compensation and Organization Committee
was during the 1999 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 1999, each non-employee director of the Company (except Mr. Walker,
Mr. Beatt and Ms. Burdett) received a $20,000 retainer fee which was paid
quarterly, an additional fee of $1,000 for each Board meeting attended, and
$1,000 for each committee meeting attended (with the chairman of each committee
receiving $2,000).
Effective February 1, 1999, the Non-Employee Directors' Annual Retainer
Plan and the 1996 Non-Employee Directors' Stock Option Plan were terminated by
the Company's Board of Directors.
20
<PAGE>
Certain Relationships and Related Transactions
In 1999, the Company received the benefit of certain services performed
by personnel employed by Dexter Corporation, the Company's majority shareholder.
These were primarily internal audit services, for which the Company paid Dexter
$25,000. Dexter also purchased insurance for the Company for which the Company
was charged its pro rata share of the cost of such insurance. In 1999 Dexter
engaged Bain & Company ("Bain"), a consulting firm, to evaluate opportunities
for Dexter to increase its participation in the life sciences market. In
conjunction therewith, Bain conducted a review of the Company's business and
strategic opportunities and made a presentation to the Company, for which the
Company paid Bain a fee of $750,000. Dexter received a report from Bain that was
based in part on Bain's evaluation of the Company's strategic opportunities.
Dexter paid a fee to Bain for services provided to Dexter.
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. Mr. Kelly and Dr. Whitesides are directors of Dexter.
PROPOSAL NO. 2 - RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors, upon recommendation of its Audit Committee, has
selected the firm of PricewaterhouseCoopers LLP, independent certified public
accountants, to audit the accounts of the Company for fiscal year 2000, 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 PricewaterhouseCoopers LLP 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.
PricewaterhouseCoopers LLP audited the accounts of the Company and
certain employee benefit plans for fiscal year 1999. In connection with its
audit function, PricewaterhouseCoopers LLP reviewed the Company's 1999 quarterly
and annual reports to its stockholders and certain filings with the SEC. In
addition, during fiscal year 1999, PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers
LLP, 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 the ratification of the appointment of
PricewaterhouseCoopers LLP as the independent auditors of the
21
<PAGE>
Company. Abstentions and broker non-votes have the same legal effect as a vote
"against" this proposal.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO 2 - RATIFICATION OF SELECTION
OF AUDITORS" TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at the 2001
Annual Meeting of Stockholders of the Company must be received by the Company no
later than November 23, 2000, for inclusion in the Board of Directors' proxy
statement and form of proxy relating to the meeting. Any stockholder who intends
to present a proposal at the Company's 2001 Annual Meeting of Stockholders
without requesting the Company to include such proposal in the Company's proxy
statement must notify the Company not later than February 6, 2001, of his, her
or its intention to present the proposal. Otherwise, the Company may exercise
discretionary voting with respect to such stockholder proposal pursuant to
authority conferred on the Company by proxies to be solicited by the Board of
Directors of the Company and delivered to the Company in connection with the
meeting.
22
<PAGE>
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,
C. Eric Winzer
Secretary
Dated: March 23, 2000
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999 WAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND WILL
BE SENT, WITHOUT THE ACCOMPANYING EXHIBITS, WITHOUT CHARGE TO ANY STOCKHOLDER
REQUESTING IT IN WRITING FROM:
LIFE TECHNOLOGIES, INC.
ATTN: CORPORATE SECRETARY
9800 MEDICAL CENTER DRIVE
ROCKVILLE, MARYLAND 20850
23
<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 MAY 2, 2000
C. Eric Winzer and J. Stark Thompson, Ph.D. 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 March 10, 2000, at the Annual
Meeting of Stockholders to be held at 10:00 a.m., local time, on Tuesday, May 2,
2000, at The Ritz-Carlton, 1700 Tysons Boulevard, McLean, Virginia 22102, 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: Bruce H. Beatt, Peter G. Kelly, 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. RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR FISCAL YEAR 2000
[_] For [_] Against [_] Abstain
Discretionary authority is hereby granted with respect to such other matters as
may properly come before the Annual Meeting.
Date: ______________________________, 2000
Important: Each joint owner shall sign. _________________________________
Executors, administrators, trustees, etc. Signature
should give full title.
The above-signed acknowledges receipt of the
Notice of Annual Meeting of Stockholders and _________________________________
the Proxy Statement furnished therewith. Signature (if held jointly)
