<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting material Pursuant to Sec.240.141-11(C) or
Sec.240.14a-12
INVITRO INTERNATIONAL
- ---------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- ----------------------------------------------------------------------
Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(I)(1),
14a-6(I)(2) or Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(I)(3)
[ ] 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:
- ----------------------------------------------------------------
<PAGE>
[X] 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>
INVITRO INTERNATIONAL
NOTICE OF ANNUAL MEETING
JANUARY 31, 1997
Notice is hereby given that the Annual Meeting of Shareholders of
INVITRO INTERNATIONAL, a California corporation (the "Company"), will
be held at the principal office of the Company, 16632 Millikan Avenue,
Irvine, California 92606, on Friday, January 31, 1997 at 10:00 A.M.
local time. The Annual Meeting will be held for the following
purposes, as more fully described in the attached Proxy Statement:
1. To elect a Board of six (6) Directors ("Proposal 1").
2. To consider and act upon a proposed amendment to the
Company's articles of incorporation for the purpose of
effecting a 1-for-10 reverse stock split with respect
to its issued and outstanding Common Stock ("Proposal
2").
3. To consider and act upon any other matters which may
properly come before the meeting or any adjournment
thereof.
In accordance with the provisions of the Bylaws, the Board of
Directors has fixed the close of business on December 9, 1996 as the
record date for the determination of the holders of Common Stock
entitled to notice of and to vote at the Annual Meeting.
Whether or not you expect to attend the meeting in person, please
complete, date and sign the enclosed proxy card and mail it as
promptly as possible in the enclosed envelope to assure representation
of your shares at the meeting.
By Order of the Board of Directors,
/s/ William M. Curtis
WILLIAM M. CURTIS,
Secretary
Irvine, California
December 30, 1996
<PAGE>
InVitro International
16632 Millikan Avenue
Irvine, California 92606
PROXY STATEMENT
----------------------
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
----------------------
PROXIES
The enclosed proxy is solicited on behalf of the management and
Board of Directors of INVITRO INTERNATIONAL, a California corporation
(the "Company" or "InVitro"), for use at the Company's Annual Meeting
of Shareholders and at any and all adjournments thereof. Any
shareholder has the power to revoke his or her proxy at any time
before it is voted. A proxy may be revoked at any time prior to its
exercise by delivering a written notice of revocation to the Secretary
of the Company at its principal office address listed above, by a
subsequent proxy executed by the person executing the prior proxy and
presented to the Secretary of the Company, or by attendance at the
meeting and voting in person by the person executing the proxy.
The cost of preparing, assembling and mailing this Notice of
Annual Meeting and Proxy Statement and the enclosed proxy card will be
paid by the Company. Following the mailing of this Proxy Statement,
directors, officers and regular employees of the Company may solicit
proxies by mail, telephone, telegraph or personal interview. Such
persons will receive no additional compensation for such services.
Brokerage houses and other nominees, fiduciaries and custodians
nominally holding shares of the Company's common stock of record will
be requested to forward proxy soliciting material to the beneficial
owners of such shares, and will be reimbursed by the Company for their
reasonable charges and expenses in connection therewith. This Proxy
Statement was first mailed to the Company's shareholders on or about
January 6, 1997.
A copy of the Company's 1996 Annual Report to Shareholders, which
includes financial statements for its last fiscal year ended September
30, 1996, is being concurrently mailed on or about January 6, 1997 to
each shareholder of record as of the close of business on December 9,
1996.
VOTING SECURITIES
The holders of record of the Company's common stock at the close
of business on December 9, 1996, the record date for the Annual
Meeting, are entitled to notice of and to vote at the Annual Meeting.
The Company had 14,028,300 shares of common stock ("Common Stock")
outstanding as of December 9, 1996. Each share of Common Stock
entitles the holder thereof to one vote on each matter to be acted
upon at the meeting and, in the election of directors, shareholders
may be allowed to cumulate votes in accordance with Section 708 of the
California General Corporation Law. Abstentions and broker
"non-votes" will be counted in determining the number of shares
present for a quorum but will not be voted for election of directors
or on other proposals and will have the same effect as abstentions.
The right to cumulate votes for a nominee will exist only if a
candidate's name, other than the six nominees listed below, has been
placed in nomination prior to the voting and any shareholder gives
notice at the meeting prior to the voting of that shareholder's
intention to cumulate his or her votes. In cumulative voting, each
shareholder has the right to accumulate his or her votes and give one
nominee a number of votes equal to the number of directors to be
elected multiplied by the number of his or her shares, or to
distribute<PAGE>
the votes on the same principle among as many nominees as he or she
shall determine, and the nominees receiving the highest number of
votes up to the number of directors to be elected shall be elected.
In the event anyone other than the six nominees listed below shall be
nominated for election as a director, the persons named in the proxy
will have the authority, to be exercised in their discretion, to vote
cumulatively for less than all the nominees.
The following table sets forth information (except as otherwise
indicated by footnote) as to shares of Common Stock owned on December
9, 1996 by (i) each person known by management to beneficially own
more than 5% of the Company's outstanding Common Stock, (ii) each of
the Company's directors, nominees for election as directors and the
named executive officers in the Summary Compensation Table, and (iii)
all executive officers, directors and nominees for election as
directors as a group:
<TABLE>
<CAPTION>
Common Stock (2)
-----------------------
Name or Group (1) Shares % of Class
----------------------- ---------- ----------
<S> <C> <C>
Directors, Nominees and Named Executive Officers:
Dennis E. Chenoweth (3) .......................... 40,000 0.3%
William M. Curtis (4) ............................ 137,260 1.0%
Irwin J. Gruverman (5) ........................... 801,022 5.7%
David A. Reed (6) ................................. 25,000 0.2%
Jeffrey A. Safchik (7) ........................... 769,333 5.3%
W. Richard Ulmer (8) ............................. 278,332 1.9%
All officers and directors
as a group [six persons] (9) .................. 2,050,947 13.7%
</TABLE>
- -----------------
(1) The persons named in the table have sole voting and investment
power with respect to all shares shown to be beneficially owned
by them, subject to community property laws where applicable and
the information contained in the footnotes to this table. Unless
otherwise indicated in the following footnotes, the address of
each person in the table is 16632 Millikan Avenue, Irvine,
California 92606.
(2) Common Stock includes, where applicable, Common Stock
beneficially owned and shares issuable upon exercise of stock
options or warrants that were fully exercisable or exercisable
within a period of 60 days from December 9, 1996 (the "Record
Date").
(3) Includes stock options held by Dr. Chenoweth that were fully
exercisable or exercisable within a period of 60 days from the
Record Date covering 40,000 shares of Common Stock at an option
price of $1.00 per share.
(4) Includes 108,927 shares owned by Mr. Curtis plus stock options
held by Mr. Curtis that were fully exercisable as of the Record
Date covering 28,333 shares of Common Stock at option prices
ranging from $1.375 to $1.50 per share. Mr. Curtis' business
address is 25241 Buckskin Drive, Laguna Hills, California 92653.
(5) Includes 210,676 shares owned by Mr. Gruverman and stock options
held by Mr. Gruverman that were fully exercisable as of the
Record Date covering 8,333 shares of Common Stock at an option
price of $1.375 per share plus 582,013 shares owned by three
investment limited partnerships for which Mr. Gruverman is the
general partner. Mr. Gruverman has the power to vote and dispose
of shares owned by the limited partnerships but disclaims
beneficial ownership of shares held by limited partnerships in
which he is a general partner. Mr. Gruverman's business address
is 30 Ossipee Road, Newton, Massachusetts 02164.
(6) Includes stock options held by Mr. Reed that were fully
exercisable as of the Record Date covering 25,000 shares of
Common Stock at an option price of $1.00 per share. Mr. Reed's
business address is 24681 La Plaza, Suite 240, Dana Point,
California 92629.
(7) Includes stock options held by Mr. Safchik that were fully
exercisable as of the Record Date covering 58,333 shares of
Common Stock at option prices ranging from $1.375 to $2.00 per
share, 211,000 shares beneficially owned by Greenstreet Partners,
an affiliate of Mr. Safchik, and warrants that are fully
exercisable as of the Record Date covering 500,000 shares of
Common Stock exercisable at $1.75 per
2
<PAGE>
share held by Greenstreet Partners. Mr. Safchik disclaims
beneficial ownership of shares and warrants held by Greenstreet
Partners. Mr. Safchik's business address is 701 Brickell Avenue,
Suite 2420, Miami, Florida 33131.
(8) Includes 5,000 shares owned by Mr. Ulmer plus stock options that
were fully exercisable or exercisable within a period of 60 days
from the Record Date covering 273,332 shares of Common Stock at
option prices ranging from $1.00 to $1.75 per share.
(9) Includes shares described in Notes 3 through 8 above.
ELECTION OF DIRECTORS
The six persons named below have been nominated by management for
election as directors to serve until the next Annual Meeting of
Shareholders to be held in 1998 and until their respective successors
are elected and shall qualify. All nominees have served as directors
of the Company since its last Annual Meeting of Shareholders except
for David A. Reed who was first elected a director on August 5, 1996.
Unless otherwise instructed, the enclosed proxy will be voted for
election of the following nominees, except that the persons designated
as proxies reserve full discretion to cast their votes for another
person recommended by management in the unanticipated event that any
nominee is unable or declines to serve.
<TABLE>
<CAPTION>
Name of Nominee Age Director Since
------------------------------ --- ----------------
<S> <C> <C>
W. Richard Ulmer 54 November 1994
Dennis E. Chenoweth 52 August 1995
Irwin J. Gruverman (1)(2)(3) 63 March 1993
David A. Reed 63 August 1996
Jeffrey A. Safchik (2)(3) 45 February 1994
William M. Curtis (1)(2)(3) 56 September 1985
-------------------------------------------------
(1) Member of Stock Option Committee.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
</TABLE>
W. RICHARD ULMER has served as President, Chief Executive Officer
and a director of the Company since November 15, 1994. Mr. Ulmer
started his career in the health care and pharmaceutical industry at
Merck, Sharp & Dome in 1964. For approximately 25 years from 1967 to
1992, he was employed by Allergan, Inc., an integrated specialty
pharmaceutical and medical device company headquartered in Southern
California. During that period Mr. Ulmer held various key management
positions, including marketing and sales management positions from
1967 to 1977; Director of Sales and Marketing for Allergan
International from 1977 to 1979; Vice President of U.S. Sales and
Marketing from 1979 to 1981; Senior Vice President of U.S. Operations
from 1981 to 1985; President of Allergan Pharmaceuticals from 1985 to
1988; President of Allergan Medical Optics -Surgical Products and
Services Division from 1988 to 1990; and President of Herbert
Laboratories (Allergan Herbert) from 1991 to 1992. Mr. Ulmer was
self-employed as a consultant from 1992 to 1994 and served as
President of Wilshire Transdermal, a subsidiary of Wilshire
Technologies, from March 1994 to November 1994 where he was employed
to develop a turnaround strategy. Mr. Ulmer received a B.A. degree in
Economics from Brown University in 1964 and completed the Advanced
Management Program at Harvard University in 1980.
DENNIS E. CHENOWETH was employed as Senior Vice President of
InVitro on February 21, 1995 and was elected a director of the Company
on August 24, 1995. Following the completion of an analysis and
reformatting of the Company's product lines for in vitro safety tests,
Dr. Chenoweth's position with the Company was changed in October 1996
from a full-time employee to a part-time consultant by mutual
agreement between the Company and Dr. Chenoweth. After receiving a
Ph.D. degree in Biochemistry from Northwestern University in 1970 and
an M.D. degree from the University of California, Irvine in 1975, he
completed residency training in Pathology at the University of
California, San Diego in 1977. Dr. Chenoweth began his scientific
research career in 1978 as an Assistant Member at Scripps Clinic and
Research Foundation. In 1981, he was appointed Associate Professor of
the Pathology Department at the University of
3
<PAGE>
California, San Diego. During his five years in that position from
1981 to 1986, he conducted medical research and taught at the medical
school. Dr. Chenoweth joined the research staff at Baxter Healthcare
in 1986. While at Baxter Healthcare, he was promoted to the position
of Vice President of Research and Development in its Fenwal Division
and also served as a scientific founder of its Immunotherapy Division
located in Santa Ana, California. In 1994, Dr. Chenoweth relocated to
Menlo Park, California, where he served both as President and Chief
Operating Officer of Geneic Sciences, Inc. and as Senior Vice
President of Operations for Titan Pharmaceuticals. He was the first
President of Geneic Sciences, an early-stage biotechnology company
that focused on the development of cell separation products for use in
allogeneic transplantation procedures. Dr. Chenoweth received his MBA
degree from Pepperdine University in 1995. He is the author of more
than 100 peer-reviewed scientific publications and a member of
numerous scientific societies.
IRWIN J. GRUVERMAN was elected a director of the Company on March
11, 1993 and Chairman of the Board on April 23, 1993. He founded and
serves as Chairman, Chief Executive Officer and a director of
Microfluidics International Corporation, a publicly-held supplier of
innovative formulation equipment and methodology to the health care,
food, cosmetics, home products and process industries. Prior to 1982,
Mr. Gruverman was Executive Vice President of the New England Nuclear
Division of E. I. DuPont & Company, with responsibility for health
care activities, including immunodiagnostics and radiopharmaceuticals.
He was responsible for the development and commercial success of
Thallium-201, an imaging agent for diagnosis of heart disease. He has
served since 1990 as the general partner of a series of limited
partnerships jointly organized by Mr. Gruverman and Searle Venture
Capital Co. under the name G & G Diagnostics to invest in medical
diagnostic opportunities in North America and Europe. Mr. Gruverman
is a licensed Professional Engineer and holds a B.S. degree in
chemical engineering from The Cooper Union, New York, and a M.S.
degree in Nuclear Engineering from Massachusetts Institute of
Technology. He serves as a director of the following publicly-held
companies in addition to the Company and Microfluidics International
Corporation: FiberChem, Inc. of Las Vegas, Nevada, a manufacturer of
environmental test equipment; and Endogen, Inc., Woburn,
Massachusetts, a supplier of specialty reagents and immunoassay test
kits.
DAVID A. REED was elected a director of the Company on August 5,
1996. He has been primarily employed since 1995 as President of DAR
Consulting Group, Dana Point, California, an independent consultant to
the health care industry, and Mr. Reed also serves as a special
advisor to the Health Care Practice Group of Deloitte & Touche LLP.
Mr. Reed served from 1990 through December 1994 as President and Chief
Executive Officer of St. Joseph Health System, Orange, California, a
nonprofit public benefit corporation that owns and operates hospitals
and other health care service entities. Prior to 1990, he was
employed for 11 years by Samaritan Health Services in Phoenix,
Arizona, completing that tenure as President of its multihospital
system and foundation. Mr. Reed has also served as President of Lenox
Hill Hospital, New York City, and as Administrator of the University
of Cincinnati teaching hospital. He has previously been active in
various state and metropolitan hospital associations, served as a
board member of the Council of Teaching Hospitals of the Association
of American Medical Colleges, and is a past Chairman of the Board and
Speaker of the House of Delegates of the American Hospital
Association. Mr. Reed serves as a director of Pacificare Health
Systems, Inc., Cyress, California, a publicly-held company engaged in
managed health care services for commercial, Medicare and Medicaid
members and a leader in the management, development and marketing of
diversified health maintenance organization products and related
services. He holds an M.S. degree from the University of Pittsburgh
Graduate School of Public Health Program in Medical and Hospital
Administration.
JEFFREY A. SAFCHIK was elected a director of InVitro on March 9,
1994. Mr. Safchik has been employed since 1994 as Managing Director
and Chief Financial Officer of Greenstreet Partners, a Florida based
investment fund and management consulting firm. During the period
from 1990 to 1993, he was involved with McCrory Corporation, initially
as a consultant concerning various strategic planning matters and then
as its Executive Vice President of Finance and Chief Financial
Officer. Prior to Mr. Safchik's involvement with McCrory Corporation,
he served as the Chief Financial Officer of a privately-held real
estate company from 1986 to 1990. Mr. Safchik holds a Master's degree
in taxation and is a certified public accountant.
WILLIAM M. CURTIS has served as an executive officer and director
of the Company since its inception in 1985. Mr. Curtis has been
principally engaged in a private law practice in Southern California
since 1976
4
<PAGE>
specializing in corporate, merger and acquisition, finance and
securities matters. He was associated with the New York law firm of
Willkie Farr & Gallagher from 1965 through 1970. Mr. Curtis served as
a vice president, general counsel and a director from 1971 through
1975 of Plant Industries, a publicly-held packaging company, and as a
director of Brennand-Paige Industries, Inc., a diversified publicly-
held company, from 1971 until sale of that company in 1983. Mr.
Curtis holds a law degree from Duke University.
There are no family relationships between any of the Company's
directors and executive officers. All directors hold office until the
next Annual Meeting of Shareholders and until their successors are
elected. Officers serve at the discretion of the Board of Directors.
The Board of Directors currently has three committees, the Stock
Option Committee, the Audit Committee and the Compensation Committee.
The Stock Option Committee is responsible for granting options
under the Company's employee stock option plans, establishing the
terms and conditions of options granted under those plans, and
administering employee stock options. Actions by the Stock Option
Committee during the fiscal year ended September 30, 1996 were at one
meeting of the full Board of Directors. Current members of the Stock
Option Committee include Messrs. Curtis and Gruverman.
The Audit Committee is responsible for meeting independently with
representatives of InVitro's independent accountants and with
representatives of senior management. The Audit Committee also is
responsible for reviewing the general scope of the audit, the fees
charged by independent accountants and matters relating to internal
control systems. The Audit Committee met once during the fiscal year
ended September 30, 1996 at a meeting of the full Board of Directors.
Current members of the Audit Committee include Messrs. Curtis,
Gruverman and Safchik.
The Compensation Committee is responsible for reviewing and
reporting to the Board on the recommended annual compensation for the
Company's Chief Executive Officer and for reviewing management
recommendations concerning compensation programs for other executive
officers. The Compensation Committee met once during the fiscal year
ended September 30, 1996 at a meeting of the full Board of Directors.
Current members of the Compensation Committee include Messrs. Curtis,
Gruverman and Safchik.
During the fiscal year ended September 30, 1996 the Board of
Directors held six meetings. No incumbent director attended fewer
than 75% of all meetings of the Board of Directors except that Mr.
Safchik attended four of the six Board meetings during the fiscal year
ended September 30, 1996.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY EXECUTIVE COMPENSATION
The following Summary Compensation Table indicates the cash
compensation paid by the Company as well as certain other
compensation, paid or accrued for its fiscal years ended September 30,
1996, 1995 and 1994 to each of InVitro's Chief Executive Officer and
other executive officers whose compensation exceeded $100,000 for the
fiscal year ended September 30, 1996:
<TABLE>
<CAPTION>
Annual Compensation (1) Long Term Compensation
------------------------------ -------------------------------
Awards Payouts
---------------------- -------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Fiscal Salary Bonus Compen- Awards Options/ Payouts Compen-
Principal Position Year(2) ($) (4) ($) sation($) ($) SARs(#) ($) sation($)
- ----------------------- ------- --------- --------- --------- --------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
W. Richard Ulmer 1996 $139,518 -0- (1) -0- -0- -0- -0-
President & Chief 1995 $140,626 -0- (1) -0- 410,000 -0- -0-
Executive Officer (3)
Dennis E. Chenoweth 1996 $125,849 -0- (1) -0- -0- -0- -0-
Senior Vice 1995 $70,615 $25,000 (1) -0- 210,000 -0- -0-
President (4)
</TABLE>
- -----------------------------------
(1) Total perquisites did not exceed the lesser of $50,000 or 10% of
the executive's annual salary and bonus.
(2) Information set forth in the table represents data for the fiscal
years ended September 30, 1996 ("1996") and 1995 ("1995"). No
person listed in the table was employed by the Company during the
fiscal year ended September 30, 1994.
(3) Mr. Ulmer was first elected President and Chief Executive Officer
of the Company on November 15, 1994.
(4) Dr. Chenoweth was first employed by the Company on February 21,
1995. Following the completion of an analysis and reformatting
of the Company's product lines for in vitro safety tests, Dr.
Chenoweth's position with the Company was changed in October 1996
from a full-time employee to a part-time consultant by mutual
agreement between the Company and Dr. Chenoweth.
STOCK OPTIONS
The following tables summarize stock option activity during the
fiscal year ended September 30, 1996 for each of the named officers
shown in the table under "Summary Executive Compensation" above:
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year Ended September 30, 1996
----------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options/SARs Price Appreciation
Underlying Granted to Exercise or for Option Term
Options/SARs Employees in Base Price Expiration ------------------------
Name Granted (#) Fiscal Year ($/sh) Date 5% ($) 10% ($)
- --------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
W. Richard Ulmer -0- n/a n/a n/a n/a n/a
Dennis E. Chenoweth -0- n/a n/a n/a n/a n/a
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values
-----------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
at Fiscal Year-End (#)(1) at Fiscal Year-End
($)(2)
Shares Acquired Value -------------------------
- -------------------------
Name on Exercise (#) Realized ($) Exercisable/Unexercisable
Exercisable/Unexercisable
- ---------------------- --------------- ------------ ---------- -------------- -----------
- -------------
<S> <C> <C> <C> <C> <C> <C>
W. Richard Ulmer -0- n/a 190,000 / 220,000 -0- / -0-
Dennis E. Chenoweth -0- n/a 90,000 (3)/ 120,000 (3) -0- / -0-
</TABLE>
- -------------------------------------
(1) All options listed in the table are exercisable at option prices
equal to fair market value on the date of grant.
(2) No unexercised options were in-the-money at September 30, 1996
based upon the fair market value for the common stock on that
date of $9/16 per share.
(3) Options covering 150,000 shares listed in the table were
cancelled in October 1996 due to a change in Dr. Chenoweth's
employment status. As of December 31, 1996, Dr. Chenoweth held
options to purchase 60,000 shares exercisable at $1.00 per share
of which options for 40,000 shares were exercisable.
<TABLE>
<CAPTION>
Long-Term Incentive Plans -- Awards in Last Fiscal Year (1)
------------------------------------------------------------------
Performance
Number of or Other
Shares, Units Period Until
or Other Maturation
Name Rights or Payout Threshold Target Maximum
- ---------------------- ------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
W. Richard Ulmer -0- n/a (1) n/a n/a n/a
Dennis E. Chenoweth -0- n/a (1) n/a n/a n/a
</TABLE>
- -----------------------------------
(1) The Company does not have any compensation plans involving stock
appreciation rights or long-term incentive or deferred pension or
profit-sharing plans.
COMPENSATION OF DIRECTORS
Directors do not receive cash compensation for their services on
the Company's Board of Directors except for reimbursement of travel
expenses.
Pursuant to the 1996 Stock Option Plan for Non-Employee Directors
(the "Director Plan"), on the first business day of each fiscal year
each non-employee director is automatically granted, without further
action by the Board, a stock option to purchase 25,000 shares of the
Company's Common Stock. The exercise price per share of all options
granted under the Director Plan is equal to 100% of the fair market
value of the Common Stock on the date of grant, but in no event less
than $1.00 per share. Options granted under the Director Plan are
exercisable as to one-third of the shares subject to such options on
the first anniversary of the date of grant and as to an additional
one-third of the shares subject to the option on each successive
anniversary of the date of grant, provided the optionee has
continuously served as a member of the Board of Directors through such
date. Each option expires ten years after date of grant. During the
fiscal year ended September 30, 1996, options covering a total of
75,000 shares were granted on October 2, 1995 to three directors
exercisable at an option price of $1.375 per share under the Director
Plan.
David A. Reed received a stock option covering 25,000 shares of
Common Stock under the Company's 1992 Stock Option Plan at the date of
his election as a director on August 5, 1996. This option is fully
exercisable for a term of five years from the date of grant at an
option price of $1.00 per share. The closing price of the Company's
Common Stock on August 5, 1996 was $0.6875 per share.
The Company's Bylaws permit compensation of directors, and the
Board reserves the right to change its policy as to compensation of
directors from time to time.
7
<PAGE>
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company has a written employment agreement with W. Richard
Ulmer, its President and Chief Executive Officer.
The employment agreement with Mr. Ulmer executed in November 1995
provides for an annual base salary of $160,000. Effective October 1,
1995, Mr. Ulmer's base annual salary was reduced at his request to
$140,000 in consideration of additional stock options granted to Mr.
Ulmer on September 1, 1995 covering 160,000 shares exercisable at
$1.00 per share vesting one-third annually from date of grant. At the
time of his employment, Mr. Ulmer received a stock option covering
250,000 shares of the Company's common stock under the Company's 1992
Stock Option Plan exercisable at $1.75 per share, the fair market
value on date of grant on November 7, 1994. Exercisability of that
stock option vests one-third each year commencing on the first
anniversary date of his employment. See "Stock Options" above.
Additional stock options covering 250,000 shares and fully vested on
date of grant will be granted to Mr. Ulmer and will be exercisable at
fair market value on date of grant if the Company attains three
consecutive fiscal quarters of positive earnings from operations, as
defined in the agreement, at any time through September 30, 1997. Mr.
Ulmer's employment agreement further provides he is entitled to
severance pay if his employment is involuntarily terminated, other
than for cause, equal to 12 months base salary.
The employment agreement described contains inventions assignment
and confidentiality provisions in favor of the Company and requires
the executive officer to devote his full business time to the
activities of the Company.
STOCK OPTION PLANS
The Company provides a long-term incentives tied to performance
of its Common Stock through stock option plans. Plans in which
employees are eligible to participate are structured to allow a Stock
Option Committee and the Board of Directors discretion in creating
equity incentives for employees, officers, directors and consultants
which assist the Company in motivating and retaining the appropriate
talent needed to conduct its business.
Options to purchase the Company's Common Stock have been granted
and are currently outstanding under the Company's 1988, 1991 and 1992
stock option plans (the "1988 Plan," "1991 Plan," and "1992 Plan",
respectively) and the 1996 Stock Option Plan for Non-Employee
Directors ("Director Plan"), collectively referred to as the "Option
Plans". Each of the Option Plans were adopted by the Board and
approved by shareholders. All options outstanding to date under the
Option Plans were granted at not less than 100% of market price for
the Common Stock on the date of grant.
All employees, officers and directors are eligible for grants
under the 1988, 1991 and 1992 Plans and non-employee directors are
eligible for grants under the Director Plan. The Company to date has
generally limited the grant of options under its Option Plans so that
at no time will there be outstanding options in the aggregate that
would cover shares numbering in excess of 10% of the number of shares
of Common Stock issued and outstanding, subject to discretionary
adjustment by the Board of Directors for unusual circumstances.
Shares subject to options outstanding and unexercised at September 30,
1996 under all the Option Plans represented approximately 7.7% of the
total Common Stock then outstanding. If any option granted under the
Option Plans expires or terminates without having been exercised in
full, the shares covered by the unexercised portion of the option may
be used again for new grants under the plans.
The 1988, 1991 and 1992 Option Plans provide for the granting of
incentive stock options pursuant to Section 422 of the Internal
Revenue Code of 1986, as amended. The exercise price of all incentive
stock options for Common Stock granted under the Option Plans must be
at least equal to the fair market value of such shares on the date of
grant. With respect to any participant who owns stock possessing more
than 10% of the voting rights of the Company's outstanding capital
stock, the exercise price of any incentive stock option must be not
less than 110% of fair market value on the date of grant. In
addition, the 1991 and 1992 Plans provide that options granted
thereunder may be either incentive stock options or, at the discretion
of the Company, stock options which do not qualify as incentive stock
options under the Code. To date, all options
8
<PAGE>
granted under the 1988, 1991 and 1992 Plans are intended as incentive
stock options, except for options covering approximately 78,571 shares
under the 1992 Plan. Options granted under the Director Plan are not
intended to qualify as incentive stock options under the Code.
The maximum term for each option under the Option Plans is 10
years. To date, options under the Director Plan have a term of ten
years and no option granted under the 1988, 1991 or 1992 Plans has a
term in excess of five years.
In the event of termination of employment, options under the
1988, 1991 or 1992 Plans will terminate and may be exercised during a
three month period after termination to the extent the option was
exercisable on the date of termination, but in no event after the date
the option would have expired in the absence of termination of
employment. In the event termination of employment was caused by
death or permanent disability, the period of exercisability is
extended under the 1988, 1991 or 1992 Plans to one year after the date
of termination, but in no event after the date the option would have
expired in the absence of termination of employment.
If a participating director in the Director Plan terminates
service on the Board as the result of disability or mandatory
retirement pursuant to Board policy, previously granted options will
continue to become exercisable in accordance with their terms (one-
third of the option may be exercised after the first, second and third
anniversary of the date of grant) but must be exercised within five
years of such termination and in any event within 10 years of grant.
In the event of the death of the holder of any unexercised option
under the Director Plan either while serving on the Board or within
five years after termination as the result of disability or mandatory
retirement, all of the holder's outstanding options will become
immediately exercisable by his or her legal representative. If death
occurs while the holder is a director, unexercised options must be
exercised within five years of death. If death occurs after
retirement, such options must be exercised within two years of death
or five years after retirement, whichever is later. If a
participating director terminates service on the Board for any reason
other than retirement, disability or death, his or her outstanding
options may be exercised only to the extent that they were exercisable
at the time of such termination and expire three months after such
termination.
No option granted under the Option Plans may be transferred by
the optionee other than by will or the laws of descent and
distribution and each option is exercisable during the lifetime of the
optionee only by such optionee. Adjustments will be made in the
number and kind of shares subject to the Option Plans and outstanding
options, and in the option price of outstanding options, in the event
of any change in the Company's outstanding shares by reason of any
stock split or stock dividend, recapitalization, merger,
consolidation, combination or exchange of shares or other similar
corporate change.
1988 PLAN. The 1988 Plan was adopted and approved by
shareholders on July 28, 1988, and no options under the 1988 Plan may
be granted after July 28, 1998. The 1988 Plan covers options for up
to 150,000 shares of Common Stock. At September 30, 1996, options to
purchase 140,600 shares had been exercised under the 1988 Plan,
unexercised options were outstanding to purchase 4,000 shares of
Common Stock (all of which are exercisable in the fiscal year ending
September 30, 1997) at an average exercise price of $1.00 per share,
and up to 5,400 shares were available for future grants of options
under the 1988 Plan. As of September 30, 1996, no options
exercisable under the 1988 Plan were held by executive officers of
InVitro.
1991 PLAN. The 1991 Plan was adopted on May 16, 1991 and
approved by shareholders on March 27, 1992, covering up to 300,000
shares of Common Stock. At September 30, 1996, options to purchase
79,583 shares had been exercised under the 1991 Plan, unexercised
options were outstanding to purchase 201,000 shares of Common Stock
(all of which are exercisable in the fiscal year ending September 30,
1997) at an average exercise price of $1.08 per share, and up to
19,417 shares were available for future grants of options under the
1991 Plan. As of September 30, 1996, options covering a total of
160,000 shares exercisable at an average price of $1.00 per share were
held by one executive officer of the Company under the 1991 Plan.
1992 PLAN. The 1992 Plan was adopted on October 16, 1992 and
approved by shareholders on April 23, 1993, covering up to 1,000,000
shares of Common Stock. At September 30, 1996, options to purchase
46,225 shares had been exercised under the 1992 Plan, unexercised
options were outstanding to purchase 799,900
9
<PAGE>
shares of Common Stock (of which 646,232 shares are exercisable in the
fiscal year ending September 30, 1997) at an average exercise price of
$1.46 per share, and up to 153,875 shares were available for future
grants of options under the 1992 Plan. As of September 30, 1996,
options covering a total of 480,000 shares exercisable at an average
price of $1.41 per share were held by three executive officers of the
Company under the 1992 Plan.
DIRECTOR PLAN. The Director Plan was adopted on August 24,
1995 and approved by shareholders on January 26, 1996, covering up to
500,000 shares of Common Stock. At September 30, 1996, no options to
purchase shares had been exercised under the Director Plan,
unexercised options were outstanding to purchase 75,000 shares of
Common Stock (of which 25,000 shares are exercisable in the fiscal
year ending September 30, 1997) at an average exercise price of $1.35
per share, and up to 425,000 shares were available for future
automatic grants of options under the Director Plan. On October 1,
1996, the first business day of the fiscal year ending September 30,
1996, options covering a total of 100,000 shares were granted
automatically under the Director Plan to four directors exercisable at
an option price of $1.00 per share. See "Compensation of Directors"
above.
401(k) SAVINGS AND INVESTMENT PLAN
In 1991, the Board of Directors adopted the InVitro International
401(k) Retirement Plan (the "401(k) Plan") pursuant to which employees
may defer compensation for income tax purposes under Section 401(k) of
the Internal Revenue Code of 1986, as amended (the "Code"). All
qualifying employees are eligible for the 401(k) Plan and may
contribute to their accounts, subject to certain limitations set forth
in the Code, up to 20% of their compensation, as defined in the Plan.
The Company does not make any contributions to the Plan. The amount
of deferred compensation is not taxed to the employee until
distributions upon retirement, death, disability or termination of
employment with the Company. Amounts in each participant's account
are invested at the discretion of the participant among several
investment alternatives.
Except as described above, the Company has no pension,
retirement, annuity, savings or similar benefit plan which provides
compensation to its executive officers or directors.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who
beneficially own more than 10% of the Company's stock, to file initial
reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission. Executive officers, directors and
greater than 10% beneficial owners are required by applicable
regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon a review of the copies of such forms furnished
to the Company, responses from the Company's executive officers and
directors in reply to monthly questionnaires, and information
involving securities transactions of which the Company is aware, the
Company believes that during the fiscal year ended September 30, 1996
all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than 10% beneficial shareholders were
complied with.
PROPOSAL 2 -- AUTHORIZATION OF 1-FOR-10 REVERSE STOCK SPLIT
CONSIDERATIONS AS TO THE PROPOSED AMENDMENT
The Company's Board of Directors believes it is advisable for the
issued and outstanding shares of the Company's Common Stock to be
recapitalized, by means of a 1-for-10 reverse stock split, into a
lesser number of shares of Common Stock issued and outstanding (the
"Reverse Stock Split").
10
<PAGE>
As of December 31, 1996, there were 14,028,300 shares of Common
Stock issued and outstanding. In addition, the Company has reserved
an aggregate of 2,114,641 shares of its Common Stock for possible
future issuance pursuant to outstanding stock options and warrants
described in the table below. In the event the Reverse Stock Split is
approved, the following table indicates the shares of Common Stock
that would be outstanding and reserved for outstanding options and
warrants after giving effect to the 1-for-10 Reverse Stock Split:
<TABLE>
<CAPTION>
After Proposed 1-for-10
Common Stock: Pre-Split Reverse Stock Split (1) Footnotes
- -------------------------------- ---------- ----------------------- ---------
<S> <C> <C> <C>
Outstanding at December 31, 1996 ........... 14,028,300 1,402,830
Common Stock reserved for:
Outstanding stock options:
1988 Stock Option Plan .................. 4,000 400 (2)
1991 Stock Option Plan .................. 211,000 21,100 (3)
1992 Stock Option Plan .................. 649,900 64,990 (4)
1996 Non-Employee Directors
Stock Option Plan ..................... 175,000 17,500 (5)
Outstanding common stock purchase warrants:
Series B expiring May 28, 1997 .......... 270,000 27,000 (6)
Series C expiring February 16, 1998 ..... 229,741 22,975 (7)
Series D expiring January 31, 1999 ...... 250,000 25,000 (8)
Series E expiring January 31, 1999 ...... 250,000 25,000 (8)
Series F expiring March 31, 1999 ........ 75,000 7,500 (9)
---------- ---------
Totals ........................... 16,142,941 1,614,295
========== =========
</TABLE>
- ---------------------------
(1) Fractional shares resulting from the Reverse Stock Split will be
rounded up to the nearest full share. Accordingly, amounts in
the above table may be increased by nominal amounts for rounding
up of fractional interests.
(2) Options currently outstanding at $1.00 per share; option exercise
prices will be adjusted to $10.00 per share if the Reverse Stock
Split is approved.
(3) Options currently outstanding ranging from $1.00 to $1.875 per
share; option exercise prices will be adjusted to range from
$10.00 to $18.75 per share if the Reverse Stock Split is
approved.
(4) Options currently outstanding ranging from $1.00 to $5.00 per
share; option exercise prices will be adjusted to range from
$10.00 to $50.00 per share if the Reverse Stock Split is
approved.
(5) Options currently outstanding ranging from $1.00 to $1.375 per
share; option exercise prices will be adjusted to range from
$10.00 to $13.75 per share if the Reverse Stock Split is
approved.
(6) Series B warrants are currently exercisable at $3.50 per share;
the warrant exercise price will be adjusted to $35.00 per share
if the Reverse Stock Split is approved.
(7) Series C warrants are currently exercisable at $4.00 per share;
the warrant exercise price will be adjusted to $40.00 per share
if the Reverse Stock Split is approved.
(8) Series D and Series E warrants are currently exercisable at $1.75
per share; the warrant exercise price will be adjusted to $17.50
per share if the Reverse Stock Split is approved.
(9) Series F warrants are currently exercisable at $1.25 per share;
the warrant exercise price will be adjusted to $12.50 per share
if the Reverse Stock Split is approved.
The proposed 1-for-10 Reverse Stock Split is deemed advisable to
increase the per share price of the Company's Common Stock and
decrease the number of securities outstanding, with a view to placing
the Company in a better position to maintain the listing of its Common
Stock on The Nasdaq SmallCap Market. To remain eligible for continued
listing on The Nasdaq SmallCap Market under current requirements, the
Company's Common Stock must maintain a minimum bid price of $1.00 or,
as an alternative if the bid price is
11
<PAGE>
less than $1.00, maintain capital and surplus of $2,000,000 and a
market value of the public float of $1,000,000. However, the Nasdaq
Stock Market recently announced proposed rule changes that would,
among other proposed changes, eliminate the alternative test and
require removal of listed status for any security trading at less than
a minimum bid price of $1.00 per share. Bid prices for the Company's
Common Stock have been consistently less than $1.00 per share
throughout the period from July 23, 1996 through December 27, 1996.
As of December 27, 1996, the closing bid price for the Company's
Common Stock as quoted by The Nasdaq SamllCap Market was $ 7/32 per
share.
The Board also believes that a higher market price per share may
enable the Company to better avail itself of equity financing or
acquisition opportunities in the future. There can be no assurance,
notwithstanding the Reverse Stock Split, that the Company's Common
Stock will remain qualified for listing on The Nasdaq SmallCap Market
or on another securities exchange.
One disadvantage of a Reverse Stock Split is that certain holders
of the Company's Common Stock currently holding so-called "round lots"
(i.e., 100 shares or an even multiple of 100 shares) may no longer own
round lots and may incur higher commissions on the sale of their
shares which are typically charged for odd lot transactions. Other
possible disadvantages include the prospect that the overall value of
shares affected by a Reverse Stock Split may decline notwithstanding
the fact that the percentage ownership of each Common Stock
shareholder in the equity of the Company will not change.
After considering all of the above factors, the Board of
Directors has recommended that stockholders adopt Proposal 2 which
would approve an amendment to the Company's articles of incorporation
for the purpose of effecting a 1-for-10 Reverse Stock Split with
respect to its issued and outstanding Common Stock.
PROPOSED AMENDMENT; CONVERSION OF SHARES
If Proposal 2 to approve a 1-for-10 Reverse Stock Split is
adopted, an amendment to the articles of incorporation would reduce
the authorized number of shares of Common Stock from 40 million to 4
million shares. In addition, the following sentences will be added to
the first paragraph of Article III to the Company's articles of
incorporation:
"Each share of the corporation's Common Stock issued and
outstanding as of the close of business on [date to be
determined], 1997 shall be automatically converted into one-
tenth (1/10th) of one share of the Common Stock of the
Corporation. Any fractional share that would otherwise exist
as a result of such conversion shall be rounded up to the
nearest full share."
Based upon the 14,028,300 shares of Common Stock issued and
outstanding as of December 27, 1996, after the Effective Date the
Company would have approximately 1,402,830 shares of Common Stock
issued and outstanding without giving effect to shares reserved for
issuance as described in the table above.
If Proposal 2 is approved, the 1-for-10 Reverse Stock Split will
become effective at the close of business on a date selected by the
Company's management (the "Effective Date"). On the Effective Date,
the Reverse Stock Split will result in one share of Common Stock,
without par value, being outstanding for each ten (10) issued and
outstanding shares of Common Stock, without par value. Outstanding
shares will be automatically converted without any action on the part
of shareholders of the Company and without regard to the date or dates
certificates representing shares of Common Stock are, at the option of
shareholders, physically surrendered for transfer or exchange.
Any fractional share which might result from the Reverse Stock
Split will be rounded up to a full share.
Each existing certificate representing shares of the Company's
Common Stock will, until surrendered or exchanged as described below,
be deemed, for all corporate purposes, to evidence ownership of the
whole number of shares of the Company's Common Stock as appropriately
adjusted for the Reverse Stock Split and if transferred or sold, will
automatically be reissued in the transferee's name in the new
post-split number of shares. Further, any rights to acquire Common
Stock under outstanding options and warrants as of the Effective Date
will be subject to automatic adjustment to reflect the 1-for-10
reverse split of the Common Stock.
12
<PAGE>
Shareholders need not contact the Company or its transfer agent
as a result of the Reverse Stock Split. Upon the Effective Date of
the Reverse Stock Split, the Company's transfer agent will mail
transmittal forms to all holders of record of the Common Stock in the
event shareholders desire to request issuance of a new certificate.
The Company's transfer agent, American Stock Transfer & Trust Company,
40 Wall Street, 46th Floor, New York, New York 10005, telephone number
(718) 921-8200, will effect the exchange of certificates after the
Effective Date.
{Bold} The Board of Directors unanimously approved the adoption
of Proposal 2 for the Reverse Stock Split as of December 9, 1996, and
recommends that shareholders vote FOR the adoption of Proposal 2. An
affirmative vote by the holders of a majority of the voting rights
represented by shares of Common Stock entitled to vote at the Meeting
is required for approval of Proposal 3. Unless indicated to the
contrary, the enclosed proxy will be voted FOR adoption of Proposal 2.
{/Bold}
COMPARATIVE STOCK PERFORMANCE GRAPH
The following graph sets forth the change in the Company's
cumulative shareholder return on its Common Stock at the end of each
of the last five fiscal years. The graph is based upon the market
price for InVitro's Common Stock compared with the cumulative total
returns of (i) the NASDAQ Composite Index and (ii) an index of a group
of peer companies in the biotechnology field with similar market
capitalizations selected by the Company, consisting of Biocircuits
Corp., Gamma Biologicals Inc., Gull Laboratories Inc., Incstar Corp.,
Meridian Diagnostics Inc. and Synbiotics Corp.
{GRAPH INSERTED HERE}
<TABLE>
<CAPTION>
9/30/91 9/30/92 9/30/93 9/30/94 9/30/95 9/30/96
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
InVitro 100.00 31.42 360.45 54.56 39.68 14.88
NASDAQ
Composite 100.00 110.70 144.77 145.06 198.06 232.87
Peer Group 100.00 116.79 104.06 78.90 120.24 154.70
</TABLE>
(1) The changes in the above graph are based upon the assumption that
$100 had been invested in InVitro Common Stock, in the NASDAQ
Composite Index and in the peer group index on September 30,
1991. The total cumulative dollar returns on the graph represent
the value that such investments would have had at each of the
dates indicated assuming, where applicable, reinvestment of
dividends.
(2) Prices of InVitro Common Stock reflected in the above table
include the $3.78 on September 30, 1991, $1 3/16 on September 30,
1992, $13 5/8 on September 30, 1993, $2 1/16 on September 30,
1994, $1 1/2 on September 29, 1995 and $ 9/16 on September 30,
1996.
13
<PAGE>
CERTAIN TRANSACTIONS
AGREEMENT WITH MIRAGEN INC.
The Company entered into a Distributorship Agreement on March 11,
1996 to market the Guardian-DNA identification system developed and
supplied by Miragen Inc. ("Miragen"), of Irvine, California. The
Company believes that Guardian DNA is an effective, long-term
identification system that overcomes limitations inherent in
traditional fingerprint and photograph identification methods, as well
as providing additional instructional information and materials for
parents relating to child safety.
The Company holds exclusive rights to market and distribute
Guardian DNA products to birthing centers, hospitals and other
institutional obstetric markets such as pediatricians and
obstetricians, in the U.S. and abroad for an initial three year term,
renewable annually thereafter. To maintain exclusive marketing rights
under the Distributorship Agreement, the Company is required to attain
minimum purchase quotas in various periods during the term of the
Distributorship Agreement, ranging from at least 20,000 units in the
first year and at least 36,000 units in the second year of the
agreement. Minimum purchase quotas for the third year of the
agreement will be determined by mutual agreement approximately 120
days before that period commences. The failure to attain minimum
purchase quotas for two consecutive months or in any three months
during a period of twelve consecutive months will provide Miragen with
rights of either terminating the Distributorship Agreement or
converting thhe Company's marketing rights to a non-exclusive basis
unless the Company could negotiate reductions in minimum purchase
quotas, as to which there is no assurance.
Two of the Company's officers, directors and shareholders,
Messrs. Irwin J. Gruverman and William M. Curtis, are also officers,
directors and shareholders of Miragen Inc., which was founded in March
1993. Messrs. Gruverman and Curtis both abstained from participating
in the negotiation of the Company's Distributorship Agreement with
Miragen Inc. The Board of Directors believes that the terms of its
Distributorship Agreement with Miragen are no less favorable to
InVitro than could have been obtained from an independent third party,
and the Distributorship Agreement has been approved by all
disinterested members of the Company's Board of Directors.
OTHER
William M. Curtis, a director and corporate Secretary of the
Company, renders corporate legal services to the Company. During the
fiscal year ended September 30, 1996, legal fees accrued by the
Company for legal services rendered by Mr. Curtis were $25,000.
GENERAL
INDEPENDENT PUBLIC ACCOUNTANTS
McGladrey & Pullen, L.L.P. acted as the Company's independent
public accountants for the fiscal years ending September 30, 1996 and
1995. McGladrey & Pullen, L.L.P. has advised the Company it had no
direct or indirect financial interest in the Company during the time
it has acted as independent auditor for the Company. The Company
expects that a representative of McGladrey & Pullen, L.L.P. will be
present at the Annual Meeting and will have the opportunity to make a
statement, if he or she so desires, and that such representative will
be available to respond to appropriate questions.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any proposal, relating to a proper subject, which a shareholder
may intend to present for action at the 1998 Annual Meeting of
Shareholders, and which such shareholder may wish to have included in
the Company's proxy materials for such meeting, in accordance with the
provisions of Rule 14a-8 promulgated under the Securities Exchange Act
of 1934, must be received in proper form by the Company at its
principal office not later than September 30, 1997. It is suggested
any such proposal be submitted by certified mail - return receipt
requested.
14
<PAGE>
ANNUAL REPORT ON FORM 10-KSB
A copy of InVitro's Annual Report on Form 10-KSB for the fiscal
year ended September 30, 1996, without exhibits, as filed with the
Securities and Exchange Commission ("Commission"), is included in the
Annual Report mailed with this Proxy Statement and is otherwise
available to shareholders without charge upon written request
addressed to Cheryl Daniel, InVitro International, 16632 Millikan
Avenue, Irvine, California 92606. Reports, proxy statements and other
information filed by the Company with the Commission subsequent to May
6, 1996 are also available through the Commission's EDGAR Database of
Corporate Information which can be accessed on the Internet at the
Commission's URL address, http://www.sec.gov/edgarhp.htm
OTHER BUSINESS
Management is not aware of any matters to come before the Annual
Meeting other than those stated in this Proxy Statement. However,
inasmuch as matters of which management is not now aware may come
before the meeting or any adjournment thereof, the proxies confer
discretionary authority with respect to acting thereon, and the
persons named in such proxies intend to vote, act and consent in
accordance with their best judgment with respect thereto. Upon
receipt of such proxies, in the form enclosed and properly signed, in
time for voting, the shares represented thereby will be voted as
indicated thereon and in this Proxy Statement.
By Order of the Board of Directors,
/s/ William M. Curtis
WILLIAM M. CURTIS, Secretary
Irvine, California
December 30, 1996
15
<PAGE>
INVITRO INTERNATIONAL
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 31, 1997
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned shareholder of INVITRO INTERNATIONAL hereby
appoints IRWIN J. GRUVERMAN, W. RICHARD ULMER and WILLIAM M. CURTIS,
and each of them, the true and lawful attorneys, agents and proxies of
the undersigned, with full power of substitution to each of them, to
vote all shares of common stock which the undersigned may be entitled
to vote at the Annual Meeting of Shareholders of the Corporation to be
held on January 31, 1997, and at any adjournment of such meeting, with
all powers which the undersigned would possess if personally present,
for the following purposes:
(Continued and to be signed on the other side)
<PAGE>
[X] Please mark your
votes as in this
example.
<TABLE>
<S> <C> <C> <S> <C> <C> <C>
1. FOR WITHHELD 2. FOR AGAINST WITHHELD
Election of [ ] [ ] [ ] [ ] [ ]
Directors
A proposal authorizing an amendment to the Company's
articles
Nominees: DENNIS E. CHENOWETH, of incorporation to effect a 1-for-10 reverse stock split
as
WILLIAM M. CURTIS, to the outstanding Common Stock.
IRWIN J. GRUVERMAN,
DAVID A. REED, 3. [ ] [ ] [ ]
JEFFREY A. SAFCHIK and
W. RICHARD ULMER Considering and acting upon any other matter which may
properly
come before the meeting or any adjournment thereof.
FOR, except vote withheld from
the following nominee(s):
- -------------------------------------------
</TABLE>
This Proxy when properly executed will
be voted in the manner directed herein
by the undersigned shareholder. If no
direction is made, this proxy will be
voted "FOR" the election of the
director nominees listed, "FOR" the
approval of Proposal 2, and in
accordance with the best judgment of
the proxies on any other matters which
may properly come before the meeting.
If cumulative voting procedures are
invoked at the meeting, and this proxy
card indicates "FOR" or gives no
direction on Proposal 1, the
designated proxies are authorized to
distribute the votes represented by
this proxy in their discretion so as
to elect the maximum number of
management nominees which may be
elected by cumulative voting.
The undersigned acknowledges receipt
of the Notice of Annual Meeting and
Proxy Statement dated December 30,
1996.
PLEASE MARK, SIGN, DATE AND MAIL THIS
PROXY IN THE ENVELOPE PROVIDED
SIGNATURE(S) _______________________________ DATE
____________________
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title
as such.
