<PAGE>
SCHEDULE 14A
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(c)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Strategic Diagnostics Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by Registration Statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________
(2) Form, Schedule or Registration Statement No.: ____________
(3) Filing Party: ____________________________________________
(4) Date Filed: ______________________________________________
<PAGE>
STRATEGIC DIAGNOSTICS INC.
128 Sandy Drive
Newark, Delaware 19713
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 20, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Strategic Diagnostics Inc. (the "Company") will be held at the
Christiana Hilton, 100 Continental Drive, Newark, Delaware 19713, on Tuesday,
May 20, 1997 at 10:00 a.m. for the following purposes:
1. To elect four Class I directors of the Company to serve for a
two-year term until the 1999 Annual Meeting of Stockholders and until their
respective successors are duly elected and qualified;
2. To consider and act upon any other matters which may properly be
brought before the Meeting and at any adjournments or postponements thereof.
Any action may be taken on the foregoing matters at the Meeting on the date
specified above, or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned, or to which the Meeting may be
postponed.
The Board of Directors has fixed the close of business on April 10, 1997 as
the record date for determining the stockholders entitled to notice of and to
vote at the Meeting and at any adjournments or postponements thereof. Only
stockholders of record of the Company's Common Stock and Series A Preferred
Stock at the close of business on that date will be entitled to notice of and to
vote at the Meeting and at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed form of proxy which is
being solicited by the Board of Directors and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Meeting may vote in
person, even if they have previously delivered a signed proxy.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Martha C. Reider
-----------------------------------
Martha C. Reider
Secretary
Newark, Delaware
April 18, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
STRATEGIC DIAGNOSTICS INC.
128 Sandy Drive
Newark, Delaware 19713
------------
PROXY STATEMENT
------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Strategic Diagnostics Inc.
(the "Company") for use at the Annual Meeting of Stockholders of the Company to
be held on Tuesday, May 20, 1997, and at any adjournments or postponements
thereof (the "Meeting"). At the Meeting, stockholders will be asked to vote
upon the election of four Class I directors of the Company and to act upon
any other matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about April 18, 1997. The Board
has fixed the close of business on April 10, 1997 as the record date for the
determination of stockholders entitled to notice of and to vote at the Meeting
(the "Record Date"). Only stockholders of record of the Company's Common Stock
and Series A Preferred Stock, (collectively, the "Stock"), at the close of
business on the Record Date will be entitled to notice of and to vote at the
Meeting. As of the Record Date, there were 13,063,145 shares of Common Stock and
2,164,362 shares of Series A Preferred Stock outstanding and entitled to vote at
the Meeting. Holders of the Stock outstanding as of the close of business on the
Record Date will be entitled to one vote for each share held by them.
The presence, in person or by proxy, of holders of at least a majority of
the total number of outstanding shares of the Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Meeting.
Abstentions and broker non-votes are each included in the number of shares
present at the Meeting for purposes of establishing a quorum. The affirmative
vote of the holders of a plurality of the shares of the Stock present or
represented at the Meeting is required for the election of Class I directors and
thus, abstentions and broker non-votes have no effect on the outcome of the
election of directors.
Stockholders of the Company are requested to complete, sign, date and
promptly return the accompanying Proxy Card in the enclosed postage-prepaid
envelope. Shares represented by a properly executed proxy received prior to the
vote at the Meeting and not revoked will be voted at the Meeting as directed on
the proxy. If a properly executed proxy is submitted and no instructions are
given, the proxy will be voted FOR the election of the four nominees for Class I
directors of the Company named in this Proxy Statement. It is not anticipated
that any matters other than those set forth in this Proxy Statement will be
presented at the Meeting. If other matters are presented, proxies will be voted
in accordance with the discretion of the proxy holders.
A stockholder of record as of the Record Date may revoke a proxy at any time
before it has been exercised by filing a written revocation with the Secretary
of the Company at the address of the Company set forth above; by filing a duly
executed proxy bearing a later date; or by appearing in person and voting by
ballot at the Meeting. Any stockholder of record as of the Record Date attending
the Meeting may vote in person whether or not a proxy has been previously given,
but the presence (without further action) of a stockholder at the Meeting will
not constitute revocation of a previously given proxy.
-1-
<PAGE>
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table presents, as of April 10, 1997, information as to (i)
the persons or entities known to the Company to be beneficial owners of more
than 5% of the Company's Common Stock and the Series A Preferred Stock, each
as a class, on April 10, 1997, (ii) each of the named officers appearing in
the Summary Compensation Table under "Executive Compensation" below, and
(iii) all directors and officers of the Company as a group, based on
representations of officers and directors of the Company and filings received
by the Company on Schedule 13G under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). As of such date, the Company had 13,063,145
shares of Common Stock issued and outstanding and 2,164,362 shares of Series
A Preferred Stock issued and outstanding. The number of shares and the
percentage beneficially owned by the persons or entities named in the table
and by all officers and directors as a group is presented in accordance with
Rule 13d-3 of the Exchange Act and includes, in addition to shares issued and
outstanding, unissued shares which are subject to issuance upon exercise of
options or warrants within 60 days of April 10, 1997. The address of the
individual beneficial owners is in care of the Company at its address listed
on the first page of this Proxy Statement.
<TABLE>
<CAPTION>
NO. OF SHARES
BENEFICIALLY OWNED(1) PERCENT OF CLASS
---------------------------- --------------------------
SERIES A SERIES A
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON PREFERRED COMMON PREFERRED
- -------------------------------------------------------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
Palo Alto Investors, Inc.
431 Florence Street, Suite 200
Palo Alto, California 94302................................... 1,227,500(2) -- 8.3% --
The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, Connecticut 06859.................................. 1,308,724(3) -- 10.0% --
DSV Partners IV
221 Nassau Street
Princeton, New Jersey 08542(4).............................. 214,997 1,082,181 1.6% 50.0%
Edison Venture Fund II, L.P.
997 Lenox Drive #3
Lawrenceville, New Jersey 08648(4).......................... 180,318 907,636 1.4% 41.9%
Edison Venture Fund II-PA, L.P.
997 Lenox Drive #3
Lawrenceville, New Jersey 08648(4).......................... 34,675 174,545 * 8.1%
Grover C. Wrenn............................................... 429,000(5) -- 3.2% --
Richard C. Birkmeyer.......................................... 1,946,906(6) -- 14.8% --
Richard J. Defieux(7)......................................... 214,993 1,082,181 1.6% 50.0%
Robert E. Finnigan............................................ 41,600(8) -- * --
Stephen O. Jaeger............................................. 1,309,924(9) -- 10.0% --
Kathleen E. Lamb.............................................. 554,931(10) -- 4.2% --
Curtis Lee Smith, Jr.......................................... 26,000(11) -- * --
Kevin R. Carter............................................... 16,000(11) -- * --
Yli Remo Vallejo.............................................. 39,000(11) -- * --
All Officers and Directors as a group (13 persons)............ 5,904,239(12) 1,082,181(7) 42.5% 50.0%
</TABLE>
- ------------------------
* Represents less than 1%.
-2-
<PAGE>
(1) Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the securities shown to be owned by such
stockholder. The inclusion herein of securities listed as beneficially owned
does not constitute an admission of beneficial ownership.
(2) Ownership of these shares was reported to the Company on Schedule 13G dated
February 13, 1997.
(3) Ownership of these shares was reported to the Company on Schedule 13D dated
January 9, 1997.
(4) Ownership of these shares was reported to the Company on Schedule 13D dated
January 9, 1997. Shares of Series A Preferred Stock are convertible into an
equal number of shares of Common Stock. Shares of Common Stock represent
shares underlying exercisable warrants.
(5) Includes 175,000 shares of Common Stock underlying exercisable options.
(6) Includes 75,661 shares of Common Stock underlying exercisable options.
(7) Mr. Defieux is a General Partner of Edison Partners II, L.P., the General
Partner of Edison Venture Fund II, L.P. and Edison Venture Fund II-PA, L.P.
Mr. Defieux shares voting and investment powers with the other general
partners of Edison Partners II, L.P. with respect to the shares owned by
such funds. Mr. Defieux does not own any outstanding securities of the
Company in his individual capacity and disclaims beneficial ownership
of shares held by such funds except as to his proportionate partnership
interest therein. Shares of Series A Preferred Stock are convertible
into an equal number of shares of Common Stock. Shares of Common Stock
represent shares underlying exercisable warrants.
(8) Includes 36,000 shares of Common Stock subject to exercisable options and
5,600 shares of Common Stock owned jointly with Dr. Finnigan's wife.
(9) Includes 1,308,724 shares of Common Stock held by The Perkin-Elmer
Corporation ("Perkin-Elmer"). Mr. Jaeger, the Perkin-Elmer designee to the
Company's Board of Directors, is the Vice President, Treasurer and Chief
Financial Officer of Perkin-Elmer. As such, he is deemed to share voting and
dispositive control, and therefore to have beneficial ownership of the
Company's Common Stock held by Perkin-Elmer.
(10) Ms. Lamb is the Vice President of Finance of EM Science, Inc., a division
of EM Industries, Inc. As such, she is deemed to share voting and
dispositive control, and therefore to have beneficial ownership of the
Company's Common Stock held by EM Industries, Inc. Ms. Lamb does not own
any outstanding securities of the Company in her individual capacity and
disclaims beneficial ownership of the shares held by EM Industries, Inc.
(11) Consists of shares of Common Stock underlying exercisable options.
(12) Includes 609,173 shares of Common Stock subject to exercisable options,
5,600 shares of Common Stock owned jointly by Dr. Finnigan and his wife and
214,993 warrants to purchase Common Stock which are currently exercisable.
-3-
<PAGE>
ELECTION OF A CLASS OF DIRECTORS
The Company is the entity resulting from the merger (the "Merger") of EnSys
Environmental Products, Inc. ("EnSys"), and Strategic Diagnostics Inc., a
privately held company ("SDI"), which occurred on December 30, 1996 pursuant to
an Agreement and Plan of Merger between such parties (the "Merger Agreement").
Pursuant to the Merger, SDI's outstanding securities were converted into EnSys
securities at a ratio prescribed in the Merger Agreement. EnSys was the
surviving entity and it changed its name to Strategic Diagnostics Inc. Upon
consummation of the Merger, Mr. Birkmeyer and the other officers of SDI became
officers of the Company and Mr. Wrenn became its Chairman.
The Company's Fourth Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation") which was effective concurrently with
the consummation of the Merger on December 30, 1996, provides that the Board
will consist of seven members, three initially selected by EnSys (Messrs.
Wrenn, Finnigan and Smith), three initially selected by SDI (Messrs.
Birkmeyer and Defieux and Ms. Lamb) and the remaining member (Mr. Jaeger)
initially selected by Perkin-Elmer. The Merger Agreement and the Company's
By-Laws require the Company to nominate the Class I directors identified
below for election as directors at the Meeting and to nominate the Class II
directors identified below for election at the Company's 1998 annual meeting.
The Board is divided into two classes of directors with each director
serving a two-year term. Each year only one class of directors is subject to a
stockholder vote. Four Class I directors will be elected each to a two-year term
at the Meeting. The members of Class I are Grover C. Wrenn, Richard C.
Birkmeyer, Kathleen E. Lamb and Curtis Lee Smith, Jr.; and of Class II are
Richard J. Defieux, Robert E. Finnigan and Stephen O. Jaeger. The Class II
members of the Board are not standing for election and their terms expire in
1998.
Grover C. Wrenn, Richard C. Birkmeyer, Kathleen E. Lamb and Curtis Lee
Smith, Jr. are the nominees for election to the Board at the Meeting. Such
nominees if elected, will hold office until the annual meeting in 1999 and until
their successor is duly elected and qualified. The affirmative vote of a
plurality of the shares of the Stock present or represented at the Meeting and
entitled to vote is required for the election of the Class I Directors. Unless
otherwise instructed, the persons named in the accompanying proxy will vote
"FOR" the election of Grover C. Wrenn, Richard C. Birkmeyer, Kathleen E. Lamb
and Curtis Lee Smith, Jr. as Class I Directors.
The following table sets forth the name, age and principal occupation of
each director, including the nominees, and the year in which
he or she became a director.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND PRINCIPAL OCCUPATION AGE SINCE
- ---------------------------------------------------------------------------------------------- --- -----------
<S> <C> <C>
Grover C. Wrenn(1) 54 1992
Chairman of the Board; Previously Chief Executive Officer of EnSys
Richard C. Birkmeyer(1) 43 1996
President and Chief Executive Officer of the Company
Richard J. Defieux 45 1996
General Partner of Edison Partners, L.P.
Robert E. Finnigan, Ph.D 69 1991
Consultant
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C> <C>
Kathleen E. Lamb(1) 51 1996
Vice President of Finance of EM Science, Inc.
Curtis Lee Smith, Jr.(1) 69 1991
Chief Executive Officer of New Horizons Worldwide, Inc.
Stephen O. Jaeger 52 1996
Vice President, Chief Financial Officer and Treasurer of The Perkin-Elmer Corporation
</TABLE>
- ------------------------
(1) A nominee for election to the Board of Directors.
BACKGROUND OF DIRECTORS
Grover C. Wrenn, age 54, served as President and Chief Executive Officer
of EnSys from April 1995 until December 1996. Prior to being appointed its
President and CEO, Mr. Wrenn had served as a director of EnSys since 1992.
From 1993 until February 1995, Mr. Wrenn served as President, Chief Executive
Officer and a director of Applied Bioscience International, Inc. From 1982 to
1990, he was Chief Executive Officer and Founder of Environ International
Corporation, which merged with Applied Bioscience in 1990. Mr. Wrenn is a
director of Pharmakinetics Laboratories, Inc., a publicly-held company. Mr.
Wrenn also serves as Chairman of the Board of Trustees of Eckerd College, a
director of the University of North Carolina Public Health Foundation, and a
director of the Environmental Law Institute.
Richard C. Birkmeyer, age 43, cofounded SDI in 1990 and served as its
President and Chief Executive Officer and a director since inception. On
December 30, 1996, Mr. Birkmeyer was appointed a director of the Company and
became its president and Chief Executive Officer. Prior to founding SDI, Mr.
Birkmeyer was employed by E.I. duPont de Nemours from 1983 to 1990, where he
most recently served as a product manager. Mr. Birkmeyer received a Ph.D. in
Biochemistry/Immunology from the State University of New York at Binghamton and
his B.S. in Biology from the State University of New York at Plattsburgh. In
addition, Mr. Birkmeyer completed post-doctoral research in immunogenetics at
Iowa State University.
Richard J. Defieux, age 45, served as a director of SDI since 1993 and
was appointed as a director of the Company on December 30, 1996. Mr. Defieux
is a General Partner of Edison Partners, L.P., which is the general partner
of Edison Venture Fund, L.P., a private venture capital fund. Since 1990, Mr.
Defieux has also been a general partner of Edison Partners II, L.P., which is
the general partner of Edison Venture Fund II, L.P., and Edison Venture Fund
II-PA, L.P., and since 1994, a general partner of Edison Partners III, L.P.,
which is the general partner of Edison Venture Fund III, L.P. Prior to
joining Edison in 1987, Mr. Defieux was a General Partner of
Princeton/Montrose Partners, a venture capital firm. Mr. Defieux has been a
director of Liberty Technologies, Inc., since 1987. Mr. Defieux received his
B.A. and M.A. degrees in Geology from Boston University and his M.B.A. from
Columbia University.
Robert E. Finnigan, age 69, has served as a director of EnSys since 1991.
Dr. Finnigan was a member of the Scientific Advisory Board of EnSys and is a
consultant to Thermo Instrument Systems and other analytical instrument
manufacturers. From 1967 to 1990, Dr. Finnigan served in various executive roles
and as a director at Finnigan Corporation, an analytical instrument
manufacturer.
Kathleen E. Lamb, age 51, served as a director of SDI since 1996 and was
appointed as a director of the Company on December 30, 1996. Since 1991, Ms.
Lamb has been Vice President of Finance of EM Science, Inc. and, as of May
1996, General Manager of OEM Marketing for EM Science, Inc., a division of EM
Industries, Inc. which is an affiliate of Merck KGaA, Darmstadt, Germany.
Prior to joining EM Science, Inc., Ms. Lamb was the Vice President of
Finance for EM Diagnostics Systems. She is also a member of the Board of
Directors of M.E. Gordon & Associates and has taught finance courses at Rowan
College in New Jersey. Ms. Lamb received her B.S. in Accounting and MBA from
Drexel University.
Curtis Lee Smith, Jr., age 69, has served as a director of EnSys since 1991.
Mr. Smith served as Chairman of the Board and Chief Executive Officer of Handex
Corp., an environmental consulting and remediation company, from 1986 to 1996.
He is now Chairman of the Board and Chief Executive Officer of New Horizons
Worldwide, Inc., an owner and franchisor of computer training centers.
Stephen O. Jaeger, age 52, served as a director of SDI since August 1996 and
was appointed as a director of the Company on December 30, 1996. Mr. Jaeger has
been Vice President and Chief Financial Officer of Perkin-Elmer since 1995, and
since 1996 he has also been the Treasurer of Perkin-Elmer. Prior to his
employment by Perkin-Elmer in March 1995, Mr. Jaeger was employed by Houghton
Mifflin and Company from 1987 to 1995, most recently as Executive Vice
President, Chief Financial Officer and Treasurer, and served on its board of
directors. Prior to joining
-5-
<PAGE>
Houghton Mifflin and Company, he served as Senior Vice President and Chief
Financial Officer of British Petroleum North America, Inc. from 1979 to 1987.
Mr. Jaeger is also a director of INSO Corporation.
COMPENSATION OF DIRECTORS
Directors are entitled to receive compensation for their services as
determined by a majority of the Board. However, directors that are employees
and who receive compensation for their services as such, are not entitled to
receive any compensation for their services as a director of the Company.
Board members are entitled to reimbursement for travel related expenses
incurred in attending meetings of the Board and its committees. On May 19,
1996, pursuant to EnSys' 1995 Stock Option Plan, each non-employee director
of EnSys received a non-qualified stock option to purchase 3000 shares of
EnSys common stock at an exercise price of $2.125 per share. The recipients
of such options included Messrs. Finnigan and Smith.
The Company entered into an agreement as of December 30, 1996, (the "New
Agreement") with Mr. Wrenn in his capacity as Chairman of the Board (the
"Chairman") which, except as to certain enumerated provisions, terminated a
previous employment agreement of April 11, 1995 between him and EnSys. The
New Agreement provides for minimum annual compensation of $80,000. To the
extent that Mr. Wrenn is called upon to render services to the Company in
excess of eight days per month, he will be entitled to proportional
additional compensation based on an annualized rate of $200,000 which,
together with his minimum compensation, will not exceed $200,000 per year.
Mr. Wrenn's compensation is subject to annual increases as determined by the
Compensation Committee of the Board. Additionally, pursuant to the New
Agreement, Mr. Wrenn received a stock option grant for 100,000 shares of
Common Stock which vests at a rate of twenty-five percent on the date of
grant and twenty-five percent on each subsequent annual anniversary of the
grant date. Under the surviving provisions of his previous employment
agreement, Mr. Wrenn is entitled to receive his previous salary and certain
other benefits for a period of one year subsequent to December 30, 1996.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The board of directors of EnSys held eleven meetings during the fiscal year
ended December 31, 1996. Each of the directors attended at least 75% of the
aggregate of the total number of meetings of the board of directors of EnSys and
of the committees of which he or she was a member which were held during the
period he or she was a director or committee member.
The Audit Committee of the EnSys board of directors met once in 1996. The
members of the Audit Committee commencing on the effective date of the Merger
or December 30, 1996 were Mr. Jaeger, Ms. Lamb and Mr. Smith. The Audit
Committee recommends outside accountants, reviews the results and scope of
the annual audit and the services provided by the Company's independent
auditors and the recommendations of the auditors with respect to the
accounting systems and controls. The Audit Committee of the Company's Board
was established on December 30, 1996 and did not meet during the fiscal year
ended December 31, 1996. SDI had an Audit Committee which performed similar
functions for SDI and which met twice in 1996.
Prior to December 30, 1996, the Compensation Committee of the EnSys board of
directors held two meetings. The members of the Compensation Committee
commencing on the effective date of the Merger or December 30, 1996 were Mr.
Wrenn, Mr. Defieux and Dr. Finnigan. The Compensation Committee reviews and
approves salaries for all corporate officers, reviews and approves all incentive
and special compensation plans and programs, including stock options and related
longer term incentive compensation programs, reviews and approves management
succession planning, conducts special competitive studies and retains
compensation consultants as necessary and appropriate and recommends appropriate
programs and action on any of the above matters to the Board. The Compensation
Committee of the Company's Board was established on December 30, 1996 and did
not meet during the fiscal year ended December 31, 1996.
The Board selects nominees for election as directors of the Company. The
Board will consider a nominee for election to the Board recommended by a
stockholder of record if such recommendation is timely, in accordance with, and
is accompanied by the information required by, the Company's By-Laws. The
Company does not maintain a standing nominating committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors to file initial reports of ownership and reports of
change of ownership with the Securities and Exchange Commission (the "SEC").
The Company has a program to assist its officers and directors in complying
with the filing requirements of Section 16(a). Executive officers and
directors are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Based on a review of the copies of such
forms furnished to the Company and other information gathered by the Company,
the Company believes that during the preceding year the executive officers
and directors then subject to Section 16(a) complied with all Section 16(a)
filing requirements.
-6-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth certain
compensation information for each of the last three fiscal years with respect
to (i) EnSys' and the Company's Chief Executive Officers and (ii) each of
EnSys' two other most highly compensated officers based on salary and bonus
paid during 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------
SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
- --------------------------------------------------- --------- --------- --------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Grover C. Wrenn(1) 1996 157,500 117,688 100,000 172,334
Chairman, Previously President 1995 107,917 (2) -- 150,000 --
and CEO of EnSys
Richard C. Birkmeyer(3) 1996 -- -- 100,000 --
President and CEO
Kevin R. Carter 1996 112,927 48,668 16,000 --
Previously V.P. of Sales 1995 98,350 -- -- --
and Marketing 1994 100,350 -- -- --
Yli Remo Vallejo(4) 1996 111,476 46,350 -- 52,643
Previously V.P. of Research 1995 79,167 -- 39,000 --
and Development
</TABLE>
- ------------------------
(1) Effective December 30, 1996, Mr. Wrenn resigned as President and Chief
Executive Officer and was appointed Chairman. All Other Compensation
consists of $4,750 in EnSys contributions to Mr. Wrenn's 401(k)
account; $10,084 is premium payments on a long term disability policy and
$157,500 attributable to a severance payment in accordance with Mr. Wrenn's
prior employment agreement to be paid in installments in 1997.
(2) Mr. Wrenn's employment as President and Chief Executive Officer of EnSys
commenced on April 11, 1995.
(3) Mr. Birkmeyer's employment as President and Chief Executive Officer of the
Company commenced on December 30, 1996.
(4) Mr. Vallejo's employment by EnSys commenced on March 1, 1995. All Other
Compensation consists of $1,143 in EnSys contributions to Mr. Vallejo's
401(k) account and $51,500 attributable to a severance payment to be paid
in installments in 1997.
-7-
<PAGE>
Option Grants and Exercises in Fiscal Year 1996. The following tables
summarize option grants and exercises during 1996 to or by the officers named
in the Summary Compensation Table. In accordance with SEC rules, also shown
are the hypothetical gains or "option spreads," on a pre-tax basis, that
would exist for the respective options. These gains are based on assumed rate
of annual compound stock appreciation of 5% and 10% from the date the options
were granted over the full option term.
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------- --------------------
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES PERCENT OF STOCK PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION
OPTIONS GRANTED TO FOR OPTION TERM
GRANTED EMPLOYEES IN EXERCISE EXPIRATION --------------------
NAME (#)(1)(2) FISCAL YEAR (%) PRICE ($/SH) DATE 5% ($) 10% ($)
- ------------------------------------------------ ----------- ----------------- ------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Grover C. Wrenn 100,000 47.6% $ 2.00 12/30/06 125,779 138,748
Richard C. Birkmeyer 100,000 47.6% $ 2.20 12/30/01 60,782 134,312
</TABLE>
- ------------------------
(1) Options to acquire shares of Common Stock. All grants are under the
Company's Amended and Restated 1995 Stock Option Plan.
(2) Options were granted on December 31, 1996 and will become exercisable at a
rate of 25% immediately and 25% annually thereafter on the three successive
option grant date anniversaries.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED FISCAL YEAR-END (#) AT FISCAL YEAR-END(2)
ON VALUE -------------------------------- ------------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE UNEXERCISABLE
- --------------------------------- ----------- ------------- ------------- ----------------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Grover C. Wrenn -- -- 125,000 75,000 -- --
Richard C. Birkmeyer -- -- 75,661 75,000 91,696 --
Kevin R. Carter 28,365 39,002 16,000 -- -- --
Yli Remo Vallejo -- -- 39,000 -- -- --
</TABLE>
- ------------------------
(1) Value is calculated based on the difference between the option price and the
market price of the Common Stock on the date of exercise multiplied by the
number of shares to which the exercise relates.
(2) Value is calculated based on the difference between the option exercise
price and the market price of the Common Stock on December 31, 1996 ($2.00),
multiplied by the number of shares to which the option relates.
-8-
<PAGE>
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement, as of December 30, 1996,
with Mr. Birkmeyer, which provides for compensation at an annual rate of
$164,000 with annual increases of not less than 5% of the then current salary as
determined by the Compensation Committee. Additionally, Mr. Birkmeyer shall be
entitled to an annual bonus as determined by the Compensation Committee not to
exceed 75% of his then current salary. This agreement also granted Mr. Birkmeyer
an option to purchase 100,000 shares of the Company's Common Stock, which option
becomes exercisable at a rate of twenty-five percent immediately and twenty-five
percent annually thereafter on the three successive option grant date
anniversaries. Such option vests immediately upon a change of control of the
Company (as defined in Section 12 of the Company's Amended and Restated 1995
Stock Option Plan). This agreement is for a one year term and shall be
automatically extended for subsequent one year terms unless otherwise terminated
by the employee or the Board by giving not less than 60 days written notice. Mr.
Birkmeyer will be entitled to receive salary and benefits then in effect for one
year after termination of the agreement by Mr. Birkmeyer for good reason (as
defined in the agreement) or by the Company without cause.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 30, 1996, the Company terminated the previous employment
agreement with Mr. Wrenn as President and Chief Executive Officer of
EnSys. In connection with such termination, the Company is obligated to continue
to pay Mr. Wrenn his then present salary of $157,500 in installments during 1997
and provide certain other benefits to Mr. Wrenn for a period of one year.
OTHER MATTERS
INDEPENDENT AUDITORS
The accounting firm of Arthur Andersen LLP has served as the Company's
independent auditors since January 1997. A representative of Arthur Andersen LLP
will be present at the Meeting, will be given the opportunity to make a
statement if he or she desires and will be available to respond to appropriate
questions. KPMG Peat Marwick LLP was EnSys' principal accounting firm and was
dismissed by the Board in January 1997 and replaced by Arthur Andersen LLP,
which was SDI's principal accounting firm. KPMG Peat Marwick LLP's reports
on the financial statements of EnSys for the past two years contained no
adverse opinion or disclaimer of opinion nor were such reports qualified or
modified as to uncertainty, audit scope, or accounting principles.
Furthermore, during the past two years, there were no disagreements with KPMG
Peat Marwick LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure. A
representative of KPMG Peat Marwick LLP will not be present at the Meeting.
STOCKHOLDER PROPOSALS
The proxy rules of the SEC permit stockholders, after timely notice to
issuers, to present proposals for stockholder action in issuer proxy
statements where such proposals are consistent with applicable law, pertain
to matters appropriate for stockholder action and are not properly omitted by
issuer action in accordance with the proxy rules. Under applicable SEC rules,
such proposals must be received by the Company no later than December 19,
1997 to be considered for inclusion in the Company's proxy materials relating
to the 1998 Annual Meeting.
GENERAL
The Board knows of no matter other than the foregoing to be brought
before the meeting. However, the enclosed proxy gives discretionary authority
in the event any additional matters should be properly presented.
The Company's 1996 Annual Report, including financial statements for the
fiscal year ended December 31, 1996, accompanies this Proxy Statement. The
Company will provide free of charge to any stockholder from whom a
-9-
<PAGE>
proxy is solicited pursuant to this Proxy Statement, upon written request
from such stockholder, a copy of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 which was filed with the SEC.
Requests for such report should be directed to Strategic Diagnostics Inc.,
128 Sandy Drive, Newark, Delaware 19713, Attention: Arthur Koch, Chief
Financial Officer.
The accompanying proxy is solicited by and on behalf of the Board, whose
notice of meeting is attached to this Proxy Statement. The entire cost of such
solicitation will be borne by the Company. In addition to the use of the mails,
proxies may be solicited by personal interview, telephone or telegram by
directors, officers and other employees of the Company who will not be specially
compensated for these services. Additionally, the Company will request that
brokers, nominees, custodians and other fiduciaries forward soliciting materials
to the beneficial owners of shares held of record by such brokers, nominees,
custodians and other fiduciaries. The Company will reimburse such persons for
their reasonable expenses in connection therewith.
Certain information contained in this Proxy Statement relating to the
occupation and security holdings of the directors and officers of the Company is
based upon information received from the individual directors and officers.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN
THE ENCLOSED RETURN ENVELOPE.
STRATEGIC DIAGNOSTICS INC.
Newark, Delaware
April 18, 1997
-10-
<PAGE>
STRATEGIC DIAGNOSTICS INC.
128 Sandy Drive
Newark, Delaware 19713
Annual Meeting of Stockholders - May 20, 1997
Proxy Solicited on Behalf of the Board of Directors
The undersigned, revoking all prior proxies, hereby appoints Morton E.
Finnigan and Richard J. Defieux as Proxies, with full power of substitution to
each, to vote for and on behalf of the undersigned at the 1997 Annual Meeting
of Stockholders of STRATEGIC DIAGNOSTICS INC. to be held at the Christiana
Hilton, 100 Continental Drive, Newark, Delaware 19713, on Tuesday, May 20,
1997, at 10:00 a.m. local time, and at any adjournment or adjournments
thereof. The undersigned hereby directs the said proxies to vote in
accordance with their judgment on any matters which may properly come before
the Annual Meeting, all as written in the Notice of Annual Meeting, receipt
of which is hereby acknowledged, and to act on the following matters set
forth in such notice as specified by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSAL 1.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees, custodians, and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If the stockholder is a
corporation, the signature should be that of an authorized officer who should
indicate his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- ------------------------------------
- ------------------------------- ------------------------------------
- ------------------------------- ------------------------------------
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
<S> <C>
1. Election of Class I Directors
With- For All
For held Except
- -----------------------------
STRATEGIC DIAGNOSTICS INC. Grover C. Wrenn
- ----------------------------- Richard C. Birkmeyer
Kathleen E. Lamb / / / / / /
Curtis Lee Smith, Jr.
NOTE: If you do not wish your shares voted "For" a particular
nominee, mark the "For All Except" box and strike a line
through the nominee's(s') name(s). Your shares will be voted
for the remaining
RECORD DATE SHARES: nominee(s).
In their discretion, the proxies are authorized to vote upon
any other business that may properly come before the meeting
or at any adjournment thereof.
-------------
Date
Please be sure to sign and date this Proxy.
- ------------------------------------------------------------------ Mark box at right if an address change or comment
has been noted on the reverse side of this card. / /
- ---Stockholder sign here---------------------Co-owner sign here--
DETACH CARD DETACH CARD
</TABLE>
STRATEGIC DIAGNOSTICS INC.
Dear Stockholder,
Please take note of the important information regarding the Company's
management and financial results enclosed with this Proxy Ballot.
Your vote on the election of the Company's directors counts and you are
strongly encouraged to exercise your right to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
You vote must be received prior to the annual Meeting of Stockholders, May 20,
1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Strategic Diagnostics Inc.
