<PAGE> 1
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 240.14a-11(c) or 240.14a-12
BIOSOURCE INTERNATIONAL, 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
BIOSOURCE INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 27, 1997
TO THE STOCKHOLDERS OF
BIOSOURCE INTERNATIONAL, INC.:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of BioSource International, Inc. (the "Company"), which
will be held at the Warner Center Marriott Hotel, 21850 Oxnard Street, Woodland
Hills, CA 91367, on Friday, June 27, 1997, at 10:00 a.m. Pacific time, to
consider and act upon the following matters:
1. The election of directors;
2. To ratify the appointment of KPMG Peat Marwick LLP as the
Company's independent public accountants for the year ending
December 31, 1997; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournments of the Annual Meeting.
Only holders of record of Common Stock of the Company at the close of
business on April 28, 1997 will be entitled to notice of and to vote at the
Annual Meeting and any adjournments of the Annual Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. YOU ARE INVITED TO ATTEND THE
ANNUAL MEETING IN PERSON, BUT WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE.
IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY, IF YOU PREFER, REVOKE YOUR PROXY
AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
/s/ JAMES H. CHAMBERLAIN
James H. Chamberlain
Chairman of the Board,
President and Chief Executive Officer
820 Flynn Road
Camarillo, California 93012
(805) 987-0086
May 9, 1997
<PAGE> 3
BIOSOURCE INTERNATIONAL, INC.
-----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 27, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of BioSource International, Inc., a
Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders to be held at the Warner Center Marriott Hotel, 21850 Oxnard
Street, Woodland Hills, CA 91367, on Friday, June 27, 1997, at 10:00 a.m.
Pacific time. Accompanying this Proxy Statement is the Board of Directors' Proxy
for the Annual Meeting, which you may use to indicate your vote as to the
proposals described in this Proxy Statement.
All Proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted in favor of the proposals described in this Proxy Statement unless
otherwise directed. A stockholder may revoke his or her Proxy at any time before
it is voted either by filing with the Secretary of the Company, at its principal
executive offices, a written notice of revocation or a duly executed proxy
bearing a later date, or by attending the Annual Meeting and expressing a desire
to vote his or her shares in person.
The close of business on April 28, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting or any adjournments of the Annual Meeting. As of the record
date, the Company had outstanding 8,354,473 shares of common stock, par value
$0.001 per share (the "Common Stock"), the only outstanding voting security of
the Company. As of the record date, the Company had approximately 675
stockholders of record. A stockholder is entitled to cast one vote for each
share held on the record date on all matters to be considered at the Annual
Meeting.
With respect to the required vote on any particular matter, abstentions
will be treated as shares present and entitled to vote on the subject matter.
Thus, abstentions will be counted as "no" votes. Votes withheld by nominee
recordholders who did not receive specific instructions from the beneficial
owners of shares will not be treated as votes cast or as shares present or
represented and will reduce the absolute number (although not the percentage) of
affirmative votes needed for approval.
The Company's principal executive offices are located 820 Flynn Road,
Camarillo, California 93012. This Proxy Statement and the accompanying Proxy
were mailed to stockholders on or about May 9, 1997.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to the Company's Bylaws, the Board of Directors has fixed the
number of directors at five. Each of the five nominees listed below are to be
elected for a one year term at the Annual Meeting. At the 1997 Annual Meeting,
each director will be elected for a term expiring at the 1998 annual meeting.
<PAGE> 4
INFORMATION WITH RESPECT TO EACH NOMINEE AND THE EXECUTIVE OFFICERS.
The following table sets forth certain information with respect to each
nominee and executive officer of the Company as of May 2, 1997.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
James H. Chamberlain 49 Chairman of the Board,
President, Chief Executive Officer,
Director and Director Nominee
Leonard M. Hendrickson 49 Director and Director Nominee
John R. Overturf, Jr. 36 Director and Director Nominee
David J. Moffa, Ph.D. 54 Director and Director Nominee
Robert D. Weist 57 Director and Director Nominee
Anna Anderson 41 Chief Financial Officer, Executive
Vice President - Finance
Gus Davis 49 Chief Operating Officer, Executive
Vice President Sales and Marketing
</TABLE>
Brief statements setting forth the principal occupation and employment
during the past five years, the year in which first elected as director and
other information concerning each nominee appear below.
JAMES H. CHAMBERLAIN has served as Director, President and Chief
Executive Officer of the Company and its predecessor, BioSource Industries,
Inc., since it was founded in October 1989, and was elected as its Chairman of
the Board in November 1993. Previously, Mr. Chamberlain was Manager for Business
Development for Amgen, Inc., where he started and managed the Amgen Biologicals
Division. Mr. Chamberlain has held various executive positions with Browning
Ferris Industries and Amersham Corporation, a biomedical company, and was a
research biochemist for Wm. H. Rorer Pharmaceutical, a major pharmaceutical
company. He received his Bachelor of Arts degree from West Virginia University,
and studied biochemistry at the University of Pittsburgh.
LEONARD M. HENDRICKSON has been a Director of the Company since October
1993. Mr. Hendrickson is the President of Isotope Products Laboratories, a
privately held company, a position he has held since February 1992. From
February 1990 to January 1992, Mr. Hendrickson served as the principal
consultant for Microchemics, a marketing and business development consulting
firm which he founded. Prior to that time, Mr. Hendrickson served as the
Director of Marketing for Scicor, a diagnostics laboratory in Indianapolis, and
held various executive positions with Amersham Corporation. Mr. Hendrickson has
also held positions with Marion Laboratories, a pharmaceutical company, and
Standard Oil Company. Mr. Hendrickson holds a Bachelor of Science degree from
the University of Pennsylvania and a Masters in Business Administration from
American University in Washington D.C.
DAVID J. MOFFA, PH.D., has been a Director of the Company since April
1995. Dr. Moffa serves: as the Regional Director and as special projects
director for Lab Corporation of America, Inc. (Fairmont, WV), positions he has
held since 1982 and 1984, respectively; as Director of Medical Arts Lab/RBL, a
position he has held since 1985; and as Director of Lab Corporation of America,
Inc. (Altoona, PA), a position he has held since 1990.
2
<PAGE> 5
Dr. Moffa also serves as an advisor and consultant to various diagnostic,
scientific and health care facilities, and is an owner and developer of GM
Realty and Moffa Properties. Prior to serving in his current positions, Dr.
Moffa has served as a Director and General Manager of BioMedical Reference and
Roche BioMedical Labs, as President, Chief Executive Officer and a Director of
BioPreps Laboratories, Inc., as Assistant Professor of Medical Biochemistry and
Director of Dental Biochemistry Programs at the West Virginia University School
of Medicine, as NIH Post Doctoral Fellow and Instructor in Medical Biochemistry
as well as a Graduate Research Assistant at the West Virginia University School
of Medicine. Dr. Moffa also serves on a number of committees and boards of
directors of various privately held companies and governmental offices. Dr.
Moffa has completed a post doctoral fellowship in Clinical Biochemistry at the
West Virginia University National Institutes of Health, holds a Ph.D in Medical
Biochemistry from the West Virginia University School of Medicine, a Masters of
Science degree in Biochemistry from West Virginia University and a Bachelor of
Arts degree in Pre-Medicine from West Virginia University.
JOHN R. OVERTURF, JR. has been a Director of the Company since
September 1993. Mr. Overturf serves: as the President of R.O.I., Inc., a private
investment company, a position he has held since July 1993; and as President of
the Combined Penny Stock Fund, Inc., a closed-end stock market fund, a position
he has held since September 1996. From September 1993 until September 1996, Mr.
Overturf served as Vice President of The Rockies Fund, Inc., a closed-end stock
market fund. From June 1984 until February 1992, Mr. Overturf served as Vice
President of Colorado National Bank. Mr. Overturf holds a Bachelor of Science
degree in Finance from the University of Northern Colorado. ROBERT D. WIEST has
been a director of the Company since April 1996. Mr. Wiest has been President of
Weist Associates (a management consulting firm) since April 1992. From January
1986 through April 1992, Mr. Weist was a consultant to and Senior Vice
President, Administration, General Counsel and Secretary of Amgen, Inc., having
served as Vice President, General Counsel and Secretary from March 1982 through
January 1986. Mr. Weist holds a Juris Doctor degree from New York University and
a Masters in Business Administration from the University of Chicago.
ANNA ANDERSON became Executive Vice President - Finance and Chief
Financial Officer of the Company in 1994, and has served as Corporate Controller
and Chief Accounting Officer of the Company and its predecessor, BioSource
Industries, Inc., since June 1991. From January 1984 to May 1991, Ms. Anderson
was the Tax and Accounting Manager for El Camino Management Company, a private
investment company. From 1978 to 1984, Ms. Anderson was employed as tax and
audit staff with Mulford and Tignino Accountancy Corporation, Brickman &
Brickman, Certified Public Accountants, and Temkin, Zisken, Kahn and Matzner,
Certified Public Accountants. Ms. Anderson is a Certified Public Accountant and
holds a Bachelor of Science degree in Business Administration from California
State University, Northridge.
GUS DAVIS became Executive Vice President - Sales and Marketing and
Chief Operating Officer of the Company in June 1995. From February 1994 until
June 1995, Mr. Davis served as Vice President of Sales and Marketing of the
Company. Prior to that time, since February 1993, Mr. Davis was employed as Vice
President of Sales and Marketing at Genosis BioTechnology, a company engaged in
the manufacture of oligonucleotides. From January 1983 to January 1993, Mr.
Davis was employed as the Midwestern Area Manager for Pharmacia BioTechnology, a
company involved in the sale of reagents and capital equipment used to purify
samples. Mr. Davis received his Bachelor of Science and Masters degree in
Biology and Chemistry from Sam Houston State University.
During the year ended December 31, 1996, the Board of Directors met 4
times. Each director attended in excess of 75% of all meetings of the Board of
Directors held during the year.
The Board of Directors has established an Audit Committee of the Board
of Directors which directly oversees the work of the Company's auditors with
respect to financial and accounting matters. The Board of Directors also has
established a Compensation Committee to review and make recommendations with
respect to compensation of executive officers and key employees. Messrs.
Hendrickson and Moffa currently comprise the Compensation Committee and Messrs.
Overturf and Wiest currently comprise the Audit Committee.
3
<PAGE> 6
VOTE REQUIRED TO APPROVE PROPOSAL NO. 1
The affirmative vote of a majority of the outstanding shares of Common
Stock present in person or by proxy at the Annual Meeting and entitled to vote
will be required to elect each of the nominees for director.
RECOMMENDATION OF THE BOARD
The Board of Directors unanimously recommends a vote FOR the election
of the nominees listed above.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The principal independent public accounting firm utilized by the
Company during the years ended December 31, 1994, 1995, and 1996 was KPMG Peat
Marwick LLP, independent certified public accountants (the "Auditors"). It is
presently contemplated that the Auditors will be retained as the principal
accounting firm to be utilized by the Company throughout the year ending
December 31, 1997. The Company anticipates that a representative of the Auditors
will attend the Annual Meeting for the purpose of responding to appropriate
questions. At the Annual Meeting, a representative of the Auditors will be
afforded an opportunity to make a statement if the Auditors so desire.
VOTE REQUIRED TO APPROVE PROPOSAL NO. 2
Ratification of the appointment of the Auditors requires the
affirmative vote of a majority of the outstanding shares of Common Stock present
at the Annual Meeting in person or by proxy.
RECOMMENDATION OF THE BOARD
The Board of Directors unanimously approved the adoption of Proposal
No. 2. The Board of Directors unanimously recommends a vote FOR Proposal No. 2
ratifying the appointment of KPMG Peat Marwick LLP as the Company's independent
auditors.
4
<PAGE> 7
MANAGEMENT
EXECUTIVE COMPENSATION
The following table sets forth both cash and noncash compensation paid
or accrued by the Company during 1994, 1995 and 1996 with respect to James H.
Chamberlain, Chief Executive Officer and President of the Company, the only
executive officer whose salary and bonus exceeded $100,000 during 1996, Gus
Davis, Chief Operating Officer and Executive Vice President and Anna Anderson,
Chief Financial Officer and Executive Vice President (together, the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------- ------------------------------
YEAR NUMBER OF
ENDED SECURITIES
DECEMBER UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION 31, SALARY BONUS OPTIONS COMPENSATION
- ------------------------------------------- ----------- ---------- ---------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
James H. Chamberlain....................... 1996 $144,000 $113,072 137,500 $8,612(1)
Chairman of the Board 1995 129,000 15,000 100,000 720(2)
Chief Executive Officer and President 1994 110,000 47,518 -- 720(2)
Gus Davis.................................. 1996 $95,000 $20,000 -- $3,600(3)
Chief Operating Officer 1995 81,000 13,000 55,000 3,600(3)
and Executive Vice President 1994 61,000 -- 10,000 3,330(3)
Anna Anderson.............................. 1996 $95,000 $18,000 -- --
Chief Financial Officer 1995 80,000 9,000 25,000 --
and Executive Vice President 1994 69,000 -- -- --
</TABLE>
- ----------
(1) Consists of $7,222 for an auto lease paid by the Company and $1,390
for country club membership dues paid by the Company.
(2) Consists of country club membership dues paid by the Company.
(3) Consists of a car allowance paid by the Company.
5
<PAGE> 8
STOCK OPTION GRANTS
The following table sets forth information regarding stock options
granted in 1996 to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OF
OPTIONS EMPLOYEES IN BASE PRICE
NAME GRANTED(1) FISCAL YEAR(2) ($/SH.)(3) EXPIRATION DATE
- ------------------------------------------- --------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
James H. Chamberlain....................... 137,500 26.65% $5.25 1/01/06
Chairman of the Board, Chief
Executive Officer and President
Gus Davis.................................. -- -- -- --
Chief Operating Officer and Executive
Vice President
Anna Anderson.............................. -- -- -- --
Chief Financial Officer
and Executive Vice President
</TABLE>
- ----------
(1) Options granted in 1996 vest over a four year period.
The options were granted for a term of ten years.
(2) Options covering an aggregate of 516,000 shares were granted to
employees of the Company and its subsidiary during the year ended
December 31, 1996.
(3) The exercise price and the tax withholding obligations related to
exercise may be paid by delivery of already owned shares, subject to
certain conditions.
STOCK OPTIONS
The following table summarizes information with respect to the number
of shares of Common Stock underlying stock options held by the Named Executive
Officers at December 31, 1996 and the value of unexercised options at December
31, 1996 based upon the closing price of the Common Stock on the Nasdaq Small
Cap Market on December 31, 1996 ($6,875 per share) less the exercise price
thereof.
AGGREGATED YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, DECEMBER 31,
SHARES 1996 1996
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ------------------------------------------------------ ---------- -------- -------------- --------------
<S> <C> <C> <C> <C>
James H. Chamberlain.................................. 12,500(1) $114,750 200,000 / $1,040,625 /
Chairman of the Board, Chief Executive Officer and 137,500 $257,812
President
Gus Davis............................................. __ __ 47,187 / $260,045 /
Chief Operating Officer and Executive Vice President 17,813 $100,423
Anna Anderson......................................... 12,500 $110,063 67,707 / $359,498 /
Chief Financial Officer and Executive Vice President 7,293 $37,376
</TABLE>
- ----------
(1) Since December 31, 1996, an option to purchase 137,500 shares of Common
Stock was granted at an exercise price of $5.25 per share to
Mr. Chamberlain.
6
<PAGE> 9
PRIOR PERFORMANCE OF COMPANY COMMON SHARES
The following chart presents for the five year period commencing on
December 31, 1991 and ending on December 31, 1996, the yearly percentage change
in the Company's cumulative total return on its Common Stock with the cumulative
total return for the same period, assuming reinvestment of dividends, of the
NASDAQ Stock Market Index (US) (January 1, 1991 = $100) and the Hambrecht &
Quist Biotechnology index (January 1, 1991 = $100). "Cumulative total return" of
the Company's Common Stock is measured by dividing (i) the difference between
the Company's share price at the end and beginning of the measurement period,
with share prices adjusted for stock splits and stock dividends effected during
the period. The information contained in the performance graph shall not be
deemed "soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates it by reference into such filing. The stock price performance on
the following graph is not necessarily indicative of future stock price
performance.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
12/91 12/92 12/93 12/94 12/95 12/96
<S> <C> <C> <C> <C> <C> <C>
Biosource Intl 100 312 335 202 834 1,008
NASDAQ Stock Market (U.S.) 100 116 134 131 185 227
H & Q Biotechnology 100 89 77 73 124 114
</TABLE>
7
<PAGE> 10
REPORT OF COMPENSATION COMMITTEE
The Report of the Compensation Committee, which discusses certain
matters relating to the compensation of the executive officers of the Company,
is attached to this Proxy Statement as Appendix A.
DIRECTOR COMPENSATION
Directors are elected annually to serve until the next annual meeting
of stockholders and until their successors are elected and qualified.
Nonemployee directors of the Company currently are paid $1,000 for each Board
meeting attended, and $1,000 per year for serving on a Board Committee. The
Company pays all out-of-pocket fees of attendance. In addition, non-employee
directors have received an annual grant of 10,000 non-statutory stock options
under the Company's 1993 Stock Incentive Plan, exercisable at the fair market
value of the Company's Common Stock on the date of grant, and which fully vest
on the date of grant. Pursuant to an amendment to the 1993 Plan adopted by the
Company's Board of Directors on April 5, 1996, after 1996, such annual grants
will be reduced to 4,000 non-statutory options.
STOCK INCENTIVE PLAN
In addition to the 1993 Stock Incentive Plan (the "1993 Plan"), the
Company has in effect the stock option plan of the Company's predecessor, the
BioSource Industries, Inc. 1992 Stock Incentive Plan (the "Predecessor Plan"),
and has granted non-statutory and incentive stock options outside of the 1993
Plan and the Predecessor Plan to purchase an aggregate of 402,500 shares of the
Company's Common Stock. The Predecessor Plan, which was adopted by the Company's
predecessor's Board of Directors and stockholders, provides for the issuance of
options to employees, officers and, under certain circumstances, directors of
the Company. The Board of Directors has suspended all issuances under the
Predecessor Plan; consequently, there are no shares available for issuance
pursuant to the Predecessor Plan.
The 1993 Plan provides for the issuance of options and stock purchase
rights (together, "Rights") to employees, officers and, under certain
circumstances, directors of the Company. Options granted under the 1993 Plan may
be either Incentive Stock Options or Non-Qualified Stock Options. The 1993 Plan
imposes no limit on the number of officers and other key employees to whom
awards may be made. At April 1, 1997, approximately 70 persons were eligible to
receive Rights under the 1993 Plan. An aggregate of 1,500,000 shares of the
Company's Common Stock are reserved for issuance under the 1993 Plan. Effective
July 1, 1996, the Company adopted an amendment to the 1993 Plan increasing the
number of shares of Common Stock reserved for issuance thereunder from 750,000
shares to 1,500,000 shares. At April 1, 1997, no options were outstanding under
the Predecessor Plan, 74,423 shares had been issued upon exercise of options
granted under the Predecessor Plan, 1,001,437 options were outstanding under the
1993 Plan, 97,998 shares had been issued upon exercise of options granted under
the 1993 Plan and 402,500 options were outstanding outside of the 1993 Plan and
the Predecessor Plan.
EMPLOYMENT AGREEMENT
Effective as of January 2, 1996, James Chamberlain entered into an
employment agreement with the Company which superseded Mr. Chamberlain's
existing Employment Agreement dated January 31, 1995. The term of the Employment
Agreement is three years. Pursuant to the terms of the Employment Agreement, Mr.
Chamberlain is to be paid an annual salary of $154,000 and $164,000 for each of
1997 and 1998, respectively, an annual bonus determined on the basis of the
Company's existing management incentive plan which is limited to $85,000 and
$100,000 for each of 1997 and 1998, respectively, and is to receive certain
additional benefits.
In the event there is a "change of control" of the Company, Mr.
Chamberlain may terminate his employment agreement, in which case, the Company
is obligated to continue to pay Mr. Chamberlain his then-current base salary for
a period of 12 months following the effective date of such termination. A
"change of control" includes (i) the acquisition by any person or entity of
shares of capital stock of the Company entitled to exercise 35% or more of the
total voting power of the Company, (ii) the execution by the Company of an
agreement to sell or otherwise transfer all or substantially all of its assets
or the execution by the Company of an agreement to merge, consolidate or
reorganize with any other corporation or entity, which results in less than 75%
of the total voting power represented by the capital stock or other equity
interests of the corporation or entity to which the Company's assets are sold or
transferred or surviving such merger, consolidation or reorganization being held
by the persons and entities who were holders of
8
<PAGE> 11
common stock of the Company on January 1, 1996, (iii) the issuance by the
Company, otherwise than on a pro rata basis, of additional shares of capital
stock representing (after giving effect to such issuance) more than 35% of the
total voting power of the Company, or (iv) if the persons who were the directors
of the Company as of January 1, 1996 cease to comprise a majority of the Board
of Directors of the Company.
9
<PAGE> 12
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of March 31, 1997. Additionally, the
table below sets forth beneficial ownership regarding (i) each person (including
any group) known by the Company to be the beneficial owner of more than 5% of
the Common Stock, (ii) each director of the Company, and (iv) all directors and
executive officers of the Company as a group. Except as may be indicated in the
footnotes to the table, each of such persons has sole voting and investment
power with respect to all shares owned, subject to applicable community property
laws. The address of each person listed is in care of the Company, 820 Flynn
Road, Camarillo, California 93012.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
NAME AND ADDRESS SHARES(1) OF CLASS
- -------------------------------------- ---------------- -------------
<S> <C> <C>
James H. Chamberlain 764,185(2) 8.86%
Leonard M. Hendrickson 45,000(3) *
John R. Overturf, Jr. 34,000(4) *
David J. Moffa, Ph.D. 30,800(5) *
Robert D. Weist 24,000(6) *
Directors and executive officers as 1,037,351(7) 11.71%
a group (6 persons)
</TABLE>
- ----------
* Less than one percent.
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission that deem shares to be beneficially
owned by any person who has or shares voting or investment power with
respect to such shares. Unless otherwise indicated, the persons named
in this table have sole voting and sole investment power with respect
to all shares shown as beneficially owned, subject to community
property laws where applicable. In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire
the shares (for example, upon exercise of an option) within 60 days of
the date as of which the information is provided; in computing the
percentage ownership of any person, the amount of shares outstanding is
deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of these acquisition rights. As
a result, the percentage of outstanding shares of any person as shown
in the following table does not necessarily reflect the person's actual
voting power at any particular date.
(2) Includes (i) 274,479 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable; (ii) 486,156
shares of Common Stock held in the Chamberlain Family Trust for which
Mr. Chamberlain serves as trustee; (iii) 3,200 shares of Common Stock
held in Mr. Chamberlain's IRA Account; and (iv) 350 shares of Common
Stock held in the name of Mr. Chamberlain's spouse.
(3) Includes (i) 34,000 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable; (ii) 4,000
shares of Common Stock held of record by two of Mr. Hendrickson's minor
children; and (iii) 7,000 shares of Common Stock held in the
Microchemics Simplified Employee Pension Plan.
(4) Includes 32,000 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable.
(5) Includes (i) 26,500 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable; and
(ii) 2,000 shares of Common Stock held jointly with, or solely by,
Dr. Moffa's spouse.
(6) Includes 24,000 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable.
(7) Includes 503,185 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable.
10
<PAGE> 13
SECTION 16(A) COMPLIANCE
Based solely on its review of copies of reports filed by reporting
persons of the Company pursuant to Section 16(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or written representations from
certain reporting persons that no Form 5 filing was required for such person,
the Company believes that all filings required to be made by reporting persons
of the Company were timely made in accordance with the requirements of the
Exchange Act, except that a Form 5, Annual Statement of Beneficial Ownership,
was filed by each of Mr. Chamberlain and Ms.
Anderson in May 1997 which, in each case, was due on February 15, 1997.
AUDITORS
KPMG Peat Marwick LLP, independent certified public accountants, was
selected by the Board of Directors to serve as independent auditors of the
Company for the year ending December 31, 1997. Representatives of KPMG Peat
Marwick LLP are expected to be present at the Annual Meeting.
The Company engaged KPMG Peat Marwick LLP as its independent auditors
after dismissing Coopers & Lybrand in August 1994. In connection with its audits
and during the interim period preceding such dismissal, there were no
disagreements between the Company and Coopers & Lybrand on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, no report issued by Coopers & Lybrand with respect to the
Company's financial statements contains any adverse opinion or disclaimer of
opinion, or was qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change accountants was made by management
of the Company.
PROPOSALS OF STOCKHOLDERS
A proper proposal submitted by a stockholder for presentation at the
Company's 1998 annual meeting of stockholders and received at the Company's
executive offices no later than January 3, 1998, will be included in the
Company's proxy statement and form of proxy relating to the 1998 annual meeting
of stockholders.
OTHER MATTERS
The Board of Directors is not aware of any matter to be acted upon at
the Annual Meeting other than described in this Proxy Statement. Unless
otherwise directed, all shares represented by the persons named in the
accompanying proxy will be voted in favor of the proposals described in this
Proxy Statement. If any other matter properly comes before the meeting, however,
the proxy holders will vote thereon in accordance with their best judgment.
EXPENSES
The entire cost of soliciting proxies will be borne by the Company.
Solicitation may be made by mail. The Company will request brokerage houses,
nominees, custodians, fiduciaries and other like parties to forward soliciting
material to the beneficial owners of the Company's Common Stock held of record
by them and will reimburse such persons for their reasonable charges and
expenses in connection therewith.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report for the year ended December 31, 1996 is
being mailed to stockholders along with this Proxy Statement. The Annual Report
is not to be considered part of the soliciting material.
11
<PAGE> 14
REPORT ON FORM 10-K
THE COMPANY UNDERTAKES, UPON WRITTEN REQUEST, TO PROVIDE, WITHOUT
CHARGE, EACH PERSON FROM WHOM THE ACCOMPANYING PROXY IS SOLICITED WITH A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, BUT EXCLUDING EXHIBITS THERETO. REQUESTS
SHOULD BE ADDRESSED TO BIOSOURCE INTERNATIONAL, INC., 820 FLYNN ROAD, CAMARILLO,
CALIFORNIA 93012, ATTENTION: CHIEF EXECUTIVE OFFICER.
12
<PAGE> 15
APPENDIX A
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The following report of the Compensation Committee of the Board of
Directors shall not be deemed to be incorporated by reference into any previous
filing by the Company under either the Securities Act of 1933 ("Securities Act")
or the Securities Exchange Act of 1934 ("Exchange Act") that incorporates future
Securities Act or Exchange Act filings in whole or in part by reference.
To the Board of Directors:
OVERVIEW OF EXECUTIVE COMPENSATION
The goal of the BioSource executive compensation program is to attract
and retain talented biotechnology and life sciences industry executives that are
necessary for the Company to maximize returns to stockholders.
There are three elements to the BioSource executive compensation
program designed to achieve those goals.
o Base salary levels appropriate for the stage of development
of BioSource.
o Equity participation through the BioSource stock option
program that will reward individuals when share prices
increase. Individuals are given grants that reflect their
relative impact on Company performance.
o Incentive compensation that rewards individual performance
when corporate goals are met.
Total executive compensation from salary and incentives are within a
competitive range for executives in the biotechnology and life sciences
industries, when compared to companies of similar size and stage of development.
Competitive compensation ranges are based on information derived at the
beginning of 1996 from the RADFORD survey of compensation levels in this
industry and additional companies chosen because of their comparable nature in
the biotechnology field.
Because most executives' compensation ranked in the bottom fifth in
these surveys, an important element in the compensation package is stock
options. The board supports the wide use of this incentive within BioSource.
While widely used, the total number of options outstanding is not expected to
result in undue dilution of stockholders' equity. The total amount of shares in
the BioSource stock option pool is approximately 22% of total shares
outstanding. This compares to the average of 17.5% of shares outstanding for
biotechnology companies in the RADFORD survey with 100-300 employees.
The Board has believed and continues to believe that a factor to be
considered when comparing these compensation parameters is that the employees of
BioSource believe in the long term growth of the Company. The management team
believes that attainment of future growth is less speculative for BioSource than
some of the peer group companies used in the compensation surveys. This will be
reflected in the future value of stock options that will outweigh the relatively
low compensation rankings attained by the management group in these surveys.
DISCUSSION OF CHIEF EXECUTIVE OFFICER COMPENSATION
In addition to the RADFORD survey, an additional comparison was
performed in 1996 against 12 other small public biomedical companies.
In the RADFORD survey, the base salary paid to the CEO was the lowest
in a group of 83 reporting companies with 51-149 employees. The compensation of
the CEO was also compared to a group of 12 other small public
A-1
<PAGE> 16
biomedical companies. In this group of 13, the CEO ranked 10th of the 13
companies, just above the bottom 25th percentile.
The incentive cash compensation paid to the CEO was well below the
average of 26% in the RADFORD survey, and total cash compensation remained in
the bottom 10% of reporting companies. The bonus was less than that to which the
CEO was entitled under his employment agreement based on the Company's increase
in operating income. The CEO voluntarily agreed to reduce the bonus to which he
was entitled due to the cash position of the Company. The Company attempted to
offset this reduction in bonus by granting an option to the CEO for 137,500
shares at the then-current market price of $5.25 per share.
The Board expects the Company to continue to maintain executive
salaries consistent with the revenue levels of the Company, profitability and a
policy of overall cost control. It is also recognized that the Chief Executive
Officer, as founder and largest stockholder of the Company, may share
proportionately in its growth and development through his equity holdings.
However, it is not the intention of the Board to maintain indefinitely
the executive compensation levels within BioSource at a low level compared to
other companies in the biotechnology and life sciences fields. As the Company
continues to progress, it is planned that salary and incentive compensation for
the CEO will trend toward the middle of this group.
DISCUSSION OF SENIOR EXECUTIVE COMPENSATION
The average salary of the executives reporting to the CEO also ranks
low among comparable companies. The Board believes this is reflective of both
the early stage of the Company's development and the relative time in position
for these executives as a group. Because of the relative pay, stock options have
been used widely as a compensation tool within this group. As with the Chief
Executive Officer, the achievement of improved earnings will be reflected in
compensation trending toward the mid-range of compensation for comparable
companies.
Each senior executive of the Company, including the CEO, has personal
achievement goals to which incentive compensation is tied. To receive incentive
compensation, corporate goals must also be attained.
Compensation Committee of the Board of Directors:
Leonard M. Hendrickson
David J. Moffa, Ph.D.
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<PAGE> 17
BIOSOURCE INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned, a Stockholder of BIOSOURCE INTERNATIONAL, INC., a Delaware
corporation (the "Company"), hereby nominates, constitutes and appoints James H.
Chamberlain and Anna Anderson, and each of them, the proxies of the undersigned,
each with full power of substitution, to attend, vote and act for the
undersigned at the Annual Meeting of Stockholders of the Company, to be held on
June 27, 1997, and any postponements or adjournments thereof, and in connection
therewith, to vote and represent all of the shares of the Company which the
undersigned would be entitled to vote, as follows:
A VOTE FOR ALL PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS:
PROPOSAL 1. TO ELECT THE BOARD OF DIRECTORS' FIVE NOMINEES AS DIRECTORS.
<TABLE>
<S> <C> <C>
James H. Chamberlain David S. Moffa, Ph.D. John R. Overturf, Jr.
Leonard M. Hendrickson Robert D. Weist
</TABLE>
[ ] FOR ALL NOMINEES LISTED ABOVE (except as marked to the contrary below)
[ ] AGAINST [ ] WITHHELD
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space below:)
- --------------------------------------------------------------------------------
The undersigned hereby confer(s) upon the proxies and each of them discretionary
authority with respect to the election of directors in the event that any of the
above nominees is unable or unwilling to serve.
PROPOSAL 2. TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK, LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1997.
[ ] FOR [ ] AGAINST [ ] WITHHELD
<PAGE> 18
The undersigned hereby revokes any other proxy to vote at the Annual
Meeting, and hereby ratifies and confirms all that said attorneys and proxies,
and each of them, may lawfully do by virtue hereof. With respect to matters not
known at the time of the solicitation hereof, said proxies are authorized to
vote in accordance with their best judgment.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH ABOVE
OR, TO THE EXTENT NO CONTRARY DIRECTION IS INDICATED, WILL BE TREATED AS A GRANT
OF AUTHORITY TO VOTE FOR ALL PROPOSALS. IF ANY OTHER BUSINESS IS PRESENTED AT
THE ANNUAL MEETING, THIS PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE PROXIES.
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated May 9, 1997, relating to the
Annual Meeting.
Dated:____________, 1997
Signature:_____________
Signature:_____________
Signature(s) of
Stockholder(s)
(See Instructions Below)
The Signature(s) hereon
should correspond exactly
with the name(s) of the
Stockholder(s) appearing
on the Share Certificate.
If stock is jointly held,
all joint owners should
sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give
full title as such. If
signer is a corporation,
please sign the full
corporation name, and
give title of signing
officer.
[ ] Please indicate by checking this box if you anticipate attending the Annual
Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BIOSOURCE
INTERNATIONAL, INC.
