SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.(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 Section 240.14a-12
THIRD WAVE TECHNOLOGIES, INC.under Rule 14a-12
Third Wave Technologies, Inc.
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(Name of Registrant as Specified in Its Charter)
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(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)(1) 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):
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(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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THIRD WAVE TECHNOLOGIES, INC.
---------------------
20022003 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 5, 200210, 2003
---------------------
To our Shareholders:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Third
Wave Technologies, Inc., a Delaware corporation (the "Company"), will be held at
the offices of the Company, 502 South Rosa Road, Madison, Wisconsin 53719 on
June 5, 200210, 2003 at 9:00 a.m., local time, for the following purposes:
(1) To elect three (3) directors each to serve for a term of three (3)
years
expiring upon the 20052006 annual meeting of shareholders or until their
successors are elected and qualified;
(2) To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the year ending December 31, 2002;2003; and
(3) To transact any other business which is properly presented and
which would ordinarily be presented at an annual meeting of shareholders.the
meeting.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice. Only shareholders of record at the close of
business on April 19, 200218, 2003 are entitled to notice of and to vote at this
meeting.
All shareholders are invited to attend the meeting in person. However, to
assure your representation at the meeting, you are urged to sign and return the
enclosed proxy as promptly as possible in the postage prepaid envelope enclosed
for that purpose. Any shareholder attending the meeting may vote in person even
if a proxy is returned.
By Order of the Board of Directors,
/s/ LANCE FORS, PH.D
Lance Fors, Ph.D.Ph.D
Chairman of the Board and
Chief Executive Officer
April 26, 200225, 2003
THIRD WAVE TECHNOLOGIES, INC.
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PROXY STATEMENT FOR THE
20022003 ANNUAL MEETING OF THE SHAREHOLDERS
JUNE 5, 200210, 2003
---------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of Third Wave Technologies, Inc.
(the "Company", "us", "we" or "our") for use at the annual meeting of
shareholders to be held on Wednesday,Tuesday, June 5, 200210, 2003 at 9:00 a.m., local time, or
at any adjournment or adjournments thereof, for the purposes set forth herein
and in the accompanying notice of annual meeting of shareholders. The annual
meeting will be held at the principal executive offices of the Company at 502
South Rosa Road, Madison, Wisconsin 53719. The telephone number at that location
is (608) 273-8933.
These proxy solicitation materials are being mailed on or about April 26,
200225,
2003 to all shareholders entitled to vote at the meeting.
RECORD DATE
Shareholders of record at the close of business on April 19, 2002,18, 2003, the
record date for the meeting, are entitled to notice of and to vote at the
meeting. At the record date, 39,396,35139,578,774 shares of the Company's common stock
were issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a duly
executed proxy bearing a later date, by attending the shareholder meeting and
voting in person or by delivering to the Secretary of the Company, at the
Company's principal executive offices, a written notice of revocation.
VOTING AND SOLICITATION
Each shareholder is entitled to one vote for each share held as of the
record date for the meeting. Shareholders will not be entitled to cumulate their
votes in the election of directors.
The cost of soliciting proxies will be borne by the Company. The Company
expects to reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and employees, without additional compensation, personally
or by telephone, telegram, facsimile or other means of communication. We have
engaged Georgeson & Co. to assist us in distributing materials, for a fee
estimated at $7,125,$5,000, plus reimbursement of out-of-pocket expenses.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
Votes cast by proxy or in person at the annual meeting will be tabulated by
the inspector of elections appointed for the meeting and will determine whether
a quorum is present.
We need a majority of the shares of common stock issued and outstanding on
the record date present, in person or by proxy, to have a quorum to allow us to
hold the annual meeting. Shares that are voted "For", "Against" or "Abstain"
with respect to any matter are treated as being present at the meeting.
In the election of directors, you can withhold your vote for any nominee.
Withheld votes will be excluded entirely from the vote on the election of
directors and will have no effect on the outcome. On the ratification of the
appointment of Ernst & Young LLP, you can vote to "abstain". If you vote to
"abstain", your vote will have the effect of a vote against the ratification.
If you hold shares through a broker, follow the voting instructions you
receive from your broker. If you do not submit voting instructions with respect
to a matter and your broker does not vote your shares on that matter (so-called
"broker non-votes"), your shares will not be counted in determining the outcome
of the vote on that matter.
Any proxy whichthat is returned using the form of proxy enclosed and which is
not marked as to a particular item will be voted for the election of the three
nominees named in this proxy statement, for the ratification of the appointment
of the independent auditors, and as the proxy holders deem advisable on other
matters that may come before the meeting, as the case may be, with respect to
the items not marked.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented by suchthose
shareholders at the Company's annual meeting to be held in 20032004 must be
submitted in writing to the Secretary of the Company at the Company's executive
offices and received by the Company no later than December 27, 200226, 2003 in order
that suchthose proposals may be considered for possible inclusion in the proxy
statement and form of proxy relating to that meeting.
In addition, the by-laws of the Company provide that any shareholder
entitled to vote may nominate persons for election as directors or propose
business to be brought before a meeting, or both, only if the shareholder has
given timely notice in proper written form of suchthe shareholder's intent to make sucha
nomination or propose such business. To be timely, suchthe shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company not less than 120 days in advance of the first anniversary date of
mailing of the Company's proxy statement released to shareholders in connection
with the previous year's annual meeting of shareholders, unless no annual
meeting was held in the previous year or the date of the annual meeting has been
changed by more than 30 days from the date contemplated at the time of the
previous year's proxy statement, in which case, to be timely such notice must be
so received a reasonable time before the solicitation is made. The by-laws
contain provisions regarding information that must be set forth in the
shareholder's notice in order for it to be in proper form.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's board of directors currently consists of sevennine persons,
divided into three classes serving terms of three years. Shareholders elect one
class of directors at each annual meeting. Three directors are to be elected at
this annual meeting each to hold office until the 20052006 annual meeting of
shareholders or until a successor has been duly elected and qualified. The other
classes of directors will be elected at the Company's annual meetings of
shareholders to be held in 20032004 and 2004. The nominating committee of the
Company's board of directors is currently evaluating candidates to be appointed
to fill the vacancy in class of directors continuing in office until the 2003
annual meeting of shareholders, caused by the resignation of a director.
In the event that2005.
If any of the nominees for director at the annual meeting becomes
unavailable or declines to serve as a director at the time of the annual
meeting, the proxy holders will vote the proxies in their discretion for any
nominee who is designated by the current board of directors to fill the vacancy.
It isWe do not expected thatexpect any of the nominees willto be unavailable to serve.
The names of the three nominees for election to the board of directors at
the annual meeting, their ages as of the record date for the meeting, and
certain information about them are set forth below. The names of 2
the current
directors with unexpired terms, their ages as of the record date, and certain
information about them are also stated below.
2
NOMINEES FOR ELECTION AT THE ANNUAL MEETING FOR TERMS ENDING IN 2006
NAME AGE PRINCIPAL OCCUPATION
- ---- --- -------------------------------------------
John Neis(1)(2)(3)........................ 47 Senior Partner, Venture Investors
Management LLC
Sam Eletr, Ph.D. ......................... 64 Retired; Former Chairman and CEO of Applied
Biosystems.
Gordon F. Brunner......................... 64 Partner, Living Longer Proactive Health;
retired Senior Vice President, Chief
Technology Officer, and member of the Board
of Directors of Procter & Gamble Co.
DIRECTORS CONTINUING IN OFFICE - TERMS ENDING IN 2004
NAME AGE PRINCIPAL OCCUPATION
- ---- --- --------------------
Lance Fors, Ph.D.......................... 45 Chairman of the Board, President and Chief
Executive Officer, Third Wave Technologies,
Inc.
David A. Thompson(3)...................... 61 Retired; Former Senior Vice President &
President, Diagnostic Division, Abbott
Laboratories
Kenneth R. McGuire........................ 61 Chief Executive Officer, Burbank Group of
Companies
DIRECTORS CONTINUING IN OFFICE - TERMS ENDING IN 2005
NAME AGE PRINCIPAL OCCUPATION
- ---- --- --------------------
Tom Daniel (1)Daniel(1)(2)(3)...................... 37....................... 38 Partner, Schroder Ventures
G. Steven Burrill (2)..................... 57Burrill(2)...................... 58 Chief Executive Officer, Burrill & Company
Lloyd M. Smith, Ph.D.(1)(3)............... 4748 Kellett Professor of Chemistry, University
of Wisconsin and Member, Scientific
Advisory Board, Third Wave Technologies,
Inc.
DIRECTOR CONTINUING IN OFFICE - TERM EXPIRING IN 2003
NAME AGE PRINCIPAL OCCUPATION
- ---- --- --------------------
John Neis (1)(2)(3)....................... 46 Senior Partner, Venture Investors
Management LLC
DIRECTORS CONTINUING IN OFFICE - TERMS EXPIRING IN 2004
NAME AGE PRINCIPAL OCCUPATION
- ---- --- --------------------
Lance Fors, Ph.D...................... 44 President and Chief Executive Officer,
Third Wave Technologies, Inc.
David A. Thompson(3).................. 60 Retired; Former Senior Vice President
& President, Diagnostic Division,
Abbott Laboratories
Kenneth R. McGuire.................... 60 Chief Executive Officer, Burbank Group
of Companies
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(1) Member of the compensation committee
(2) Member of the audit committee
(3) Member of the nominating committee
There are no family relationships among any of the directors or executive
officers of the Company.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING FOR TERMS EXPIRINGENDING IN 2005
Tom Daniel has served as one of our directors since October 1999. He is a
partner with Schroder Ventures, a venture capital investment firm, where he has
focused on life science investments in the United States and Europe since 1998.
From 1995 to 1998, Mr. Daniel was an associate with Domain Associates, a venture
capital firm focused on the life science. Mr. Daniel serves on the boards of
directors of several private companies. Mr. Daniel received an M.B.A. from
Harvard University and an M.A. from Oxford University.
G. Steven Burrill has served as one of our directors since October 1998.
Mr. Burrill is Chief Executive Officer of Burrill & Company, a Life Sciences
Private Merchant Bank which he founded in 1994. Prior to founding Burrill &
Company, Mr. Burrill was a partner of Ernst & Young from 1977 through 1993. Mr.
Burrill is a director of AgraQuest, Crosscart, DepoMed, MetriGenix, Sulis
Pharmaceuticals, Transgene, Targacept, and ValiGen. He is Chairman of the Boards
of AniGenics and Paradigm Genetics. Mr. Burrill received a B.B.A. from the
University of Wisconsin, Madison.
Lloyd M. Smith, Ph.D. has served as one of our directors since our
formation and also serves on our scientific advisory board. Dr. Smith is Kellett
Professor of Chemistry at the University of Wisconsin, Madison. Dr. Smith was
the primary inventor of automated DNA sequence analysis. Dr. Smith regularly
consults and advises us in our research and development efforts. He serves on
the scientific advisory boards of Curagen Corporation and HTS BioSystems, Inc.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
NOMINEES SET FORTH ABOVE.
3
DIRECTORS WHOSE TERMS EXTEND BEYOND THE ANNUAL MEETING2006
John Neis has served as one of our directors since August 1994. Mr. Neis is
Senior Partner of Venture Investors Management LLC, a firm that is the manager
and general partner of Madison, Wisconsin-based venture capital management
funds. He also serves on the Advisory Board of the Weinert Applied Ventures
Program at the University of Wisconsin. Mr. Neis received a B.S. in finance from
the University of Utah and an M.S. in business from the University of Wisconsin,
and is a Chartered Financial Analyst.
Gordon F. Brunner has served as one of our directors since January 2003.
Mr. Brunner is currently a partner with Living Longer Proactive Health and was
senior vice president, chief technology officer, head of worldwide research and
development, and a member of the board of directors of Procter & Gamble Co. He
has more than 40 years' experience leveraging innovative technology platforms to
the pharmaceutical, over-the-counter and consumer markets. He earned a B.S.
degree in biochemical engineering from the University of Wisconsin-Madison and
an M.B.A. from Xavier University.
3
Sam Eletr, Ph.D., has served as one of our directors since June 2002. Dr.
Eletr co-founded Applied Biosystems, Inc. and served as its Chairman and Chief
Executive Officer. Prior to founding Applied Biosytems, Dr. Eletr managed the
analytical and medical instruments group at Hewlett-Packard Co.'s corporate
research laboratories. Dr. Eletr most recently co-founded and served as chairman
and chief executive officer of Lynx Therapeutics Inc., a publicly traded
genomics company. He earned an M.A. in physics and a Ph.D. in biophysical
chemistry, both at the University of California-Berkeley.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
NOMINEES SET FORTH ABOVE.
DIRECTORS WHOSE TERMS EXTEND BEYOND THE ANNUAL MEETING
Lance Fors, Ph.D., our founder and Chairman of the Board, has served as our
President, Chief Executive Officer and one of our directors since our inception
in 1993. Dr. Fors received his Ph.D. in molecular biology from the California
Institute of Technology in 1990. Dr. Fors has over twenty years of research and
development experience and is the inventor on four19 issued and pending patents with an additional 13 pending in
the area of DNA and RNA sequence analysis.
David A. Thompson has served as one of our directors since August 1997. Mr.
Thompson retired from Abbott Laboratories in 1995 where he worked for over 30
years. He held several corporate officer positions with Abbott Laboratories
including: Senior Vice President & President Diagnostic Division 1983-1995, Vice
President Human Resources 1982-1983, Vice President Corporate Materials
Management 1981-1982 and Vice President Operations 1974-1981. Mr. Thompson
currently serves on the board of directors of Tripath, a diagnostic image
company, and St. Jude Medical Inc., a medical
device company.
Kenneth R. McGuire has served as one of our directors since October 1998.
In 1986, Mr. McGuire founded the first of the Burbank Group of Companies,
manufacturers of commercial aircraft noise suppression equipment. He has served
as Chief Executive Officer of the member companies of the Burbank Group since
their respective inceptions. Mr. McGuire received a B.S. from the United States
Naval Academy and a J.D. from Columbia University.
Tom Daniel has served as one of our directors since October 1999. He is
General Partner with Schroder Ventures Life Sciences, a venture capital
investment firm, where he has focused on life science investments in the United
States and Europe since 1998. From 1995 to 1998, Mr. Daniel was an associate
with Domain Associates, a United States venture capital firm focused on the life
sciences. Before Domain, Mr. Daniel worked for Charles River Ventures, a United
States venture capital firm focused on biotechnology investments. Mr. Daniel is
a director of Oxagen and Solexa and is responsible for investments in Cellzome,
Sunesis and a number of other private and public companies. Mr. Daniel received
an M.B.A. from Harvard Business School, was a member of a genetics research team
at the University of North Carolina, Chapel Hill from 1983-1984, and has an M.A.
in Biological Sciences from Oxford University.
G. Steven Burrill has served as one of our directors since October 1998.
Mr. Burrill is Chief Executive Officer of Burrill & Company, a Life Sciences
Private Merchant Bank which he founded in 1994. Prior to founding Burrill &
Company, Mr. Burrill was a partner of Ernst & Young from 1977 through 1993. Mr.
Burrill is a director of DepoMed, Galapagos Genomics, and Targacept. He
currently serves as Board Chairman for Paradigm Genetics and Pyxis Genomics. Mr.
Burrill received a B.B.A. from the University of Wisconsin, Madison.
Lloyd M. Smith, Ph.D. has served as one of our directors since our
formation and also serves on our scientific advisory board. Dr. Smith is Kellett
Professor of Chemistry and Director of the Genome Center at the University of
Wisconsin, Madison. Dr. Smith was the primary inventor of automated DNA sequence
analysis. Dr. Smith regularly consults and advises us in our research and
development efforts. He is chair of the scientific advisory boards of ProCognia
Ltd. and GenTel Corporation and a member of the scientific advisory board of
Curagen Corporation.
VOTE REQUIRED
Directors are elected by a plurality of the votes cast. Shares represented
by executed proxies will be voted, if authority to do so is not withheld, for
the election of the three nominees. Votes withheld from any director will have
no effect on the outcome.
4
BOARD MEETINGS, COMMITTEES AND DIRECTORSDIRECTOR COMPENSATION
The board of directors of the Company held a total of sevensix meetings during 20012002 and all
directors, attended at least 75% of the total number of meetings of the board
and committees of the board on which the director served during 2001.2002.
The board of directors has a compensation committee, an audit committee and
a nominating committee. From time to time, the board has created various ad hoc
committees for special purposes. No such committee is currently functioning.
The compensation committee consists of Messrs. Smith, Neis and Daniel. The
compensation committee makes recommendations to the board of directors regarding
our employee benefit plans and the compensation of officers. The compensation
committee held a total of one meetingfour meetings during 2001.2002.
The audit committee consists of Messrs. Neis, Burrill and Daniel. Each
member is "independent" as such term is defined in the listing standards of the
National Association of Securities Dealers. The audit committee makes
recommendations to the board of directors regarding the selection of independent
auditors, reviews the scope of audit and other services by our independent
auditors, reviews the accounting principles and auditing practices and
procedures to be used for our financial statements and reviews the results of
those audits. Information regarding the functions performed by the audit
committee and the number of meetings held during 2001,2002 is set forth in the
"Report of the Audit Committee", included in this proxy statement.
The nominating committee consists of Messrs. Daniel, Neis, Smith and
Thompson. The nominating committee evaluates and recommends candidates for
election or appointment to the Company's board of directors. The nominating committee was formed in April, 2002 and therefore did not hold anyheld
four meetings in 2001.2002. The nominating committee will consider director
candidates recommended by shareholders.
4
Recommendations may be sent to John
Comerford, Vice President, General Counsel and Secretary, 502 South Rosa Road,
Madison, Wisconsin 53719.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the compensation committee is currently, or has ever
been at any time since our formation, an officer or employee of the Company or
any of its subsidiaries. No member of the compensation committee serves as a
member of the board of directors or compensation committee of any entity that
has one of more officers serving as a member of our board of directors or
compensation committee.
DIRECTOR COMPENSATION
Upon initial election, our non-employee directors receive a stock option
grant of 30,000 options. The price of these options is determined by the fair
market value of the company stock on the date of grant. Following the third year
of initial election, our non-employee directors receive an annual grant of
10,000 options. Options vest at 25% per year on the anniversary date of the
option grant and accelerate upon change of control consistent with the terms
outlined in the company's stock option grant agreements.
Our non-employee directors receive an annual retainer of $12,000, a board
meeting fee of $1,500 for regularly scheduled board meetings physically
attended, and a board committee meeting participation fee of $500 per meeting.
Our directors are reimbursed for all director-related expenses incurred in
connection with attending board and committee meetings but are not compensated
for their services as board or committee members. We have in the past granted
non-employee directors options to purchase our common stock pursuanta
result of providing service to the terms of our stock plans, and our board continues to havecompany or at the discretion to
grant options to new non-employee directors. Our non-employee directors will
each annually receive automatic, nondiscretionary grants of options to purchase
5,000 shares of our common stock.company's request.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The board of directors has, based on the recommendationdetermination of the audit
committee, appointed Ernst & Young LLP as the independent auditors of the
Company for the current fiscal year ending December 31, 2002.2003. Ernst & Young LLP
have audited the Company's financial statements since its inception.
5
FEES PAID OR DUE TO ERNST & YOUNG LLP
Audit Fees. The aggregate fees for professional services rendered by Ernst
& Young LLP in connection with their 20012002 annual audit and reviews of financial
statements in our Quarterly Reports on Form 10-Q for 20012002 were approximately
$162,000.$261,500.
Financial Information Systems Design and Implementation Fees. The Company
did not engage Ernst & Young LLP to undertake any financial information systems
design and implementation work during 2001.2002.
All Other Fees. The aggregate fees for all other services rendered by
Ernst & Young LLP in 20012002 was approximately $57,000,$51,020, consisting of audit related
services of approximately $20,000$15,145 and non-audit services of approximately
$37,000.$35,875. Audit related services generally include fees for accounting
consultations and registration statements.
Representatives of Ernst & Young LLP are expected to be present at the
annual meeting with the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions. If
shareholders fail to ratify the selection, the audit committee and the board
will reconsider whether or not to retain that firm. Even if the selection is
ratified, the audit committee and the board in their discretion may direct the
appointment of different independent auditors at any time during the year.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.2003.
VOTE REQUIRED
The ratification of the appointment of Ernst & Young LLP requires the
affirmative vote of a majority of the shares of common stock represented at the
annual meeting and entitled to vote thereon.
56
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by us during 1999,
2000,
2001 and 20012002 to our chief executive officer and our next four most highly
compensated other executive officers who received salary compensation of more
than $100,000 during 20012002 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
---------------------------
ANNUAL COMPENSATION SECURITIES
----------------------------- UNDERLYING ALL OTHER
NAME PRINCIPAL POSITION(S) YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATIONOPTIONS/SARS(#) COMPENSATION($)
- ---- --------------------- ---- --------- ---------- ------------ --------------------------- ---------------
Dr. Lance Fors......... President, Chief 2001 $357,512 $166,800 141,480 N/A2002 $398,239 $150,000 291,000 $ 2,826(2)
Executive Officer, 2001 $384,790 $0 141,480
Chairman, Director 2000 $295,005 $68,850$317,513 $166,600 693,600
Director 1999 $255,000 $80,000 85,000
John J. Puisis(1)...... Senior Vice 2002 $253,380 $150,000 145,000 $20,705(2)
President, Chief 2001 $ 60,93865,587 $2,111,864 275,000 $4,924(2)
Chief$ 4,924(2)
Financial Officer,
Ian Edvalson........... Senior Vice President 2001 $232,500 $98,000 81,000 N/A
of Business and 2000 $180,000 $22,500 120,000
Corporate Development 1999 $106,250 $20,000 96,000
Rocky Ganske........... Chief Operating
Officer 2001 $232,500 $83,000 81,000 N/A
2000 $176,000 $21,300 135,600
1999 $131,000 $24,000 30,000
Dr. Bruce Neri......... Senior Vice 2002 $247,549 $75,000 145,000
President, Research 2001 $206,250 $98,000$221,987 $0 59,400 N/A
Research
& Development 2000 $180,000 $24,750$193,734 $68,750 62,400
1999 $154,500 $28,800 9,600Ivan Trifunovich(3).... Senior Vice 2002 $260,713 $0 100,000
President & 2001 $ 0 $0 210,000
General Manager,
Genomics Business
Unit
John Comerford(4)...... Vice President, 2002 $209,879 $15,000 140,000
General Counsel & 2001 $200,461 0 81,000
Secretary 2000 $ 53,539 $21,678 39,600
- ---------------
(1) Mr. Puisis joined us in September 2001.
(2) Consists of relocation expenses paid by us.
(3) Mr. Trifunovich joined us in December 2001.
(4) Mr. Comerford joined us in September 2000.
OPTION GRANTS IN 20012002
The following table sets forth information relating to stock options
granted during 20012002 to the Named Executive Officers. In accordance with the
rules of the Securities and Exchange Commission, also shown below is the
potential realizable value over the term of the option (the period from the
grant date to the expiration date) based on assumed rates of stock appreciation
of 5% and 10%, compounded annually. These amounts are mandated by the Securities
and Exchange Commission and do not represent our estimate of
7
future stock price. Actual gains, if any, on stock option exercises will depend
on the future performance of our common stock.
INDIVIDUAL GRANTS
-----------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -----------------------------
NAME GRANTED(#)(1) 2001(2)2002(2) SHARE($) DATE 5% ($) 10% ($)
- ---- ------------- ------------ --------- ---------- ------------- -------------
Dr. Lance Fors....... 141,480 9.52 11.00291,000 12.61 2.13 6/12/2011 $ 540,870 $1,783,0802012 389,808 987,849
John J. Puisis....... 275,000 18.49 6.27 8/24/2011 $1,084,372 $2,748,010
Ian Edvalson......... 81,000 5.45 11.00145,000 6.28 2.13 6/12/2011 $ 309,658 $1,020,8482012 194,234 492,227
Dr. Bruce Neri....... 59,400 3.99 11.00145,000 6.28 2.13 6/12/2011 $ 227,083 $ 748,622
Rocky Ganske......... 81,000 5.45 11.002012 194,234 492,227
Ivan Trifunovich..... 100,000 4.33 2.13 6/12/2011 $ 309,658 $1,020,8482012 133,955 339,467
John Comerford....... 140,000 6.07 2.13 6/12/2012 187,536 475,254
- ---------------
(1) For each of the Named Executive Officers, 25% of the options vest on each of
the first four anniversaries of the date of grant (which was August 24, 2001
for Mr. Puisis and June 12, 2001 for each of the other Named Executive
Officers).
6
date.
(2) We granted options to purchase a total of 1,486,8902,307,950 shares of common stock
during 2001.2002.
AGGREGATE OPTION EXERCISES IN 20012002 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information for the Named Executive Officers
relating to option exercises in 20012002 and the number and value of securities
underlying exercisable and unexercisable options held at December 31, 2001:2002:
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 20012002 DECEMBER 31, 2001(2)2002(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ----------- ------------- ----------- -------------
Dr. Lance Fors....... 0 0 406,500 578,580 $628,479 $ 78,597601,770 674,310 99,792 119,310
John J. Puisis....... 0Puisis.......... 0 0 275,000 0 $217,250
Ian Edvalson......... 0 0 120,000 177,000 $265,680 $ 88,560
Rocky Ganske......... 0 0 127,500 169,500 $371,385 $ 27,675145,000 59,450
Dr. Bruce Neri....... 0 0 151,800 99,600 $753,768 $ 8,856181,650 214,750 184,800 59,450
Ivan Trifunovich..... 0 0 52,500 257,500 41,000
John Comerford....... 0 0 48,750 211,850 57,400
- ---------------
(1) Value realized reflects the fair market value of our common stock underlying
the option on the date of exercise minus the aggregate exercise price of the
option.
(2) Value of unexercised in-the-money options are based on a value of $7.05$2.54 per
share, the fair market value of our common stock on December 31, 2001.2002.
Amounts reflected are based on the value of $7.05$2.54 per share, minus the per
share exercise price, multiplied by the number of shares underlying the
option.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
The Company and Mr. PuisisWe have entered into an employment agreement with Mr. Puisis that provides
for an initial base salary of $225,000 and a target annual bonus of no less than
22.5% of base salary. The agreement provided for thean initial option grant to Mr.
Puisis listed under "Option Grants in 2001" and for the one-time sign-on bonus to Mr. Puisis (the "Sign-on Bonus")
listed under "Summary Compensation Table" to partially compensate Mr. Puisis for
certain moneys lost upon Mr. Puisis beginning employment with the Company.us. Mr. Puisis'
employment may be terminated by either the Companyus or Mr. Puisis at any time, except that
(i) if the Company terminateswe terminate Mr. Puisis for "cause" (as defined in the employment
agreement) or Mr. Puisis voluntarily terminates his employment other than for
"good reason" (as defined in the employment agreement) within the first
twelve months, Mr. Puisis must repay to the Company $1,400,000 of the Sign-on
Bonus and if any such termination occurs after the first twelve
months but within the first twenty-four months, Mr. Puisis must repay to the Companyus
$700,000 of the Sign-on Bonus and (ii) if the Company terminateswe terminate Mr. Puisis other than for
"cause" or Mr. Puisis voluntarily terminates his employment for "good reason",
Mr. Puisis would receive a lump sum severance payment equal to one year's base
salary and a pro-rated portion of his target bonus and continued coverage for
one year under the Company'sour health and other welfare benefit plans. The employment
agreement with Mr. Puisis defines "good reason" to include (i) Dr. Fors
voluntarily ceasing to be the CEO or Chairman of the
Company's8
board of directors within eighteen months of the beginning of Mr. Puisis'
employment and (ii) a resignation by Mr. Puisis following a "change of control"
(as defined in the employment agreement), but not earlier than six months after
the change in control.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes the number of outstanding options granted to
employees and directors, as well as the number of securities remaining available
for future issuance, under our compensation plans as of December 31, 2002.
NUMBER OF
SECURITIES
REMAINING AVAILABLE
FOR FUTURE ISSUANCE
NUMBER OF SECURITIES WEIGHTED AVERAGE UNDER EQUITY
TO BE ISSUED UPON EXERCISE PRICE COMPENSATION PLANS
EXERCISE OF OUT- OF OUTSTANDING (EXCLUDING SECURITIES
STANDING OPTIONS, OPTION WARRANTS REFLECTED IN THE
PLAN CATEGORY WARRANTS AND RIGHTS AND RIGHTS FIRST COLUMN)
- ------------- -------------------- ---------------- ---------------------
Equity compensation plans approved by
security holders......................... 6,140,859 $5.35 2,801,587
Equity compensation plans not approved by
security holders......................... 0 0 0
Total...................................... 6,140,859 $5.35 2,801,587
========= ===== ==========
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report is provided to shareholders by the compensation
committee of the board of directors:
The compensation committee of the board of directors, which is composed of
three non-employee directors, is responsible for the administration of the
Company's compensation programs. These programs include base salary for
executive officers and both annual and long-term incentive compensation
programs. The Company's compensation programs are designed to provide a
competitive level of total compensation and
7
include incentive and equity
ownership opportunities linked to the Company's performance and shareholder
return.
Compensation Philosophy. The Company's overall executive compensation
philosophy is based on a series of guiding principles derived from the Company's
values, business strategy and management requirements. These principles are
summarized as follows:
- Provide competitive levels of total compensation which will enable the
Company to attract and retain the best possible executive talent;
- Motivate executives to achieve optimum performance for the Company;
- Align the financial interest of executives and shareholders through
equity-based plans; and
- Provide a total compensation program that recognizes individual
contributions as well as overall business results.
Compensation Program. The compensation committee is responsible for
reviewing and recommending to the board the compensation and benefits of all
officers of the Company and establishes and reviews general policies relating to
compensation and benefits of employees of the Company. The compensation
committee is also responsible for the administration of the Company's 2000 Stock
Plan. There are two major components to the Company's executive compensation:
base salary and potential cash bonus, as well as potential long-term
compensation in the form of stock options. The compensation committee considers
the total current and potential long-term compensation of each executive officer
in establishing each element of compensation.
1. Base Salary. In setting compensation levels for executive
officers, the compensation committee reviews competitive information relating to
compensation levels for comparable positions at biotechnology and
9
high technology companies. In addition, the compensation committee may,
from time to time, hire compensation and benefit consultants to assist in
developing and reviewing overall salary strategies. Individual executive
officer base compensation may vary based on time in position, assessment of
individual performance, salary relative to internal and external fairness
and the critical nature of the position relative to the success of the
Company.
2. Long-Term Incentives. The Company's 2000 Stock Plan provides for
the issuance of stock options to officers and employees of the Company to
purchase shares of the Company's common stock at an exercise price equal to
the fair market value of such stock on the date of grant. Stock options are
granted to the Company's executive officers and other employees both as a
reward for past individual and corporate performance and as an incentive
for future performance. The compensation committee believes that
stock-based performance compensation arrangements are essential in aligning
the interests of management and the shareholders in enhancing the value of
the Company's equity.
3. Benefits. The Company provides benefits to the Named Executive
Officers that are generally available to all employees of the Company. The
amount of executive level benefits and perquisites, as determined in
accordance with the rules of the Securities and Exchange Commission
relating to executive compensation, did not exceed 10% of total salary and
bonus for the calendar year 20012002 for any executive officer.
Section 162(m) of the Internal Revenue Code Limitations on Executive
Compensation. In 1993, Section 162(m) was added toof the United States Internal Revenue Code. Section 162(m)Code may
limit the Company's ability to deduct for United States federal income tax
purposes compensation in excess of $1,000,000 paid to the Company's chief
executive officer and its four other highest paid executive officers in any one
fiscal year. No executive officer of the Company received any such compensation
in excess of this limit during fiscal 2001,
except for Mr. Puisis, as a result of the one-time Sign-on Bonus.2002.
The total compensation of Dr. Fors, the Company's Chief Executive Officer,
is consistent with the Company's overall executive compensation philosophy as
described above, and the compensation of Dr. Fors was based on the factors
described above.
8
It is the opinion of the compensation committee that the aforementioned
compensation policies and structures provide the necessary discipline to
properly align the Company's corporate economic performance and the interest of
the Company's shareholders with progressive, balanced and competitive executive
total compensation practices in an equitable manner.
The foregoing report shall not be "soliciting material" or to be "filed"
with the Securities and Exchange Commission, nor shall such information be
incorporated by reference into any future filing under this Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, except to
the extent the Company specifically incorporates it by reference into such
filing.
Respectfully submitted,
The compensation committee of the
board of directors
Lloyd Smith, Ph.D.
Tom Daniel
John Neis
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of April 19, 200225, 2003 are set forth
below:
Lance Fors, Ph.D. (44)(45), our founder and Chairman of the Board, has served
as our President, Chief Executive Officer and one of our directors since our
inception in 1993. Dr. Fors received his Ph.D. in molecular biology from the
California Institute of Technology in 1990. Dr. Fors has over twenty years of
10
research and development experience and is the inventor on four19 issued and pending
patents with an additional 13 pending in the area of DNA and RNA sequence analysis.
John J. Puisis (42)(43) has served as our Senior Vice President, Chief
Financial Officer since September 2001. In January 2003, Mr. Puisis was also
assigned the title and duties of Chief Operating Officer. From 1996 until he
joined the Company, Mr. Puisis held senior management positions at the Spencer
Stuart and Egon Zehnder executive recruitment firms, specializing in recruiting
for the biotechnology and pharmaceutical industries. From 1989 to 1996, Mr.
Puisis held key financial executive positions at DEKALB Genetics and Kraft
Foods. Prior to 1989, Mr. Puisis held various positions at several large public
accounting firms. Mr. Puisis earned an M.B.A. from Northwestern University and a
B.A. in accounting from Northern Illinois University. He is a certified public
accountant.
Rocky E. Ganske (43) joined us in October 1996 as Vice President of
Operations and was promoted to Chief Operating Officer in July 2000. From 1980
until joining us, Mr. Ganske held various management positions in quality
engineering, quality assurance and regulatory compliance at Becton, Dickinson
and Company. Mr. Ganske received an Associates Applied Science Degree in
electronics technologies from the Utah Technical College.
Bruce Neri, Ph.D. (55)(56) joined us in July 1996 as Vice President of Research
and Development and was promoted to Senior Vice President of Research and
Development in July 1997. From 1991 until joining us, Dr. Neri was Vice
President of DNA probe development at Becton, Dickinson and Company. Prior to
1991, Dr. Neri directed Research and Development at Gene-Trak Systems, Angenics,
Inc., Instrumentation Laboratories and Abbott Laboratories. Dr. Neri is the
inventor on sixten United States patents, with an additional six19 pending in the area
of human in-vitro diagnostic products.products, and over 60 publications. Dr. Neri
received a B.A. in chemistry from Cornell College and a Ph.D. in analytical
chemistry from the University of Arizona.
Ian B. Edvalson (35) joined us in April 1999 as Vice President of Corporate
Strategy and General Counsel and was promoted to Senior Vice President of
Corporate and Business Development in July 2000. From 1994 until joining us, Mr.
Edvalson was a senior biotechnology licensing attorney at Wilson Sonsini
Goodrich & Rosati. Mr. Edvalson received a B.S. in microbiology, a B.A. in
Korean and a J.D. from the University of Chicago.
Ivan D. Trifunovich, Ph.D. (39) joined us as Senior Vice President and
General Manager of our Genomics business unit in February 2002.December 2001. From 1999 until
joining us, Dr. Trifunovich was, successively, Vice President
9
of e-Business and
Vice President of Research Strategy and Operations at Pharmacia Corp. Prior to
1999, Dr. Trifunovich was a Director of New Product Marketing at Johnson &
Johnson, Inc. From 1992 to 1997, Dr. Trifunovich held various positions at
Bristol-Meyers Squibb, Inc. Dr. Trifunovich earned his Ph.D. at UCLA and his
M.B.A. at the University of Pennsylvania's Wharton School of Business. He is the
holder of ten U.S. patents.
John Comerford (39)(40) joined us in September 2000 as Vice President, General
Counsel and Secretary. From 1998 until joining us, Mr. Comerford was Corporate
General Counsel and Secretary at Lunar Corporation, a publicly-traded medical
device company. From 1990 to 1997, Mr. Comerford was Associate Resident Counsel
at National Presto Industries, Inc. Prior to 1990, Mr. Comerford was a Staff
Attorney at Fort Howard Corporation. Mr. Comerford received a J.D. from
Marquette University and a B.A. in business administration from St. Norbert
College.
REPORT OF THE AUDIT COMMITTEE
The audit committee oversees the Company's financial reporting process on
behalf of the board of directors. The audit committee is governed by a written
charter approved by the board of directors. Management has the primary
responsibility for the financial statements and the reporting process including
the systems of internal controls. In fulfilling its oversight responsibilities,
the audit committee reviewed the audited financial statements in the Company's
Annual Report on Form 10-K, the unaudited financial statements in Quarterly
Reports on Form 10-Q, and financial result press releases with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The audit committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with accounting principles generally accepted in the United
States, their judgments as to the quality, not just the acceptability, of the
Company's accounting principles and such other matters as are required to be
discussed with the audit committee under auditing standards generally accepted
in the United States. In addition, the audit committee has discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 and the audit committee has discussed with the
independent auditors the auditors' independence from management
11
and the Company including the matters in the written disclosures required by the
Independence Standards Board Standard No. 1 and considered the compatibility of
non-audit services with the auditors' independence.
The audit committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The audit committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting.
The audit committee held fivesix meetings in 2001.2002. In reliance on the reviews
and discussions referred to above, the audit committee recommended to the board
of directors (and the board has approved) that the audited financial statements
be included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001.2002. The audit committee and the board have also recommended the
selection of the Company's independent auditors.
The foregoing report shall not be "soliciting material" or to be "filed"
with the Securities and Exchange Commission, nor shall such information be
incorporated by reference into any future filing under this Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, except to
the extent the Company specifically incorporates it by reference into such
filing.
Respectfully submitted,
The audit committee of the board of
directors
John Neis
G. Steven Burrill
Tom Daniel
10
PRINCIPAL SHAREHOLDERSSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
The following table shows information known to us with respect to the
beneficial ownership of our common stock as of April 19, 2002 by18, 2003 by:
- each person (or group of affiliated persons) who owns beneficially 5% or
more of our common stock;
- each of our directors;
- each of the Named Executive Officers; and
- all of our directors and executive officers as a group.
Except as indicated in the footnotes to this table and subject to community
property laws where applicable, the persons named in the table have sole voting
and investment power with respect to all shares of our common stock shown as
beneficially owned by them. Beneficial ownership and percentage ownership are
determined in accordance with the rules of the Securities and Exchange
Commission. Addresses for those individuals for which an address is not
otherwise indicated is: c/o Third Wave Technologies, Inc., 502 South Rosa Road,
Madison, Wisconsin 53719.
12
SHARES BENEFICIALLY OWNED
---------------------------------------------------------------------------------------
SHARES SUBJECT TO
BENEFICIAL OWNER TOTAL NUMBER OPTIONS PERCENTPERCENTAGE
- ---------------- ------------ ----------------- -----------------
5% SHAREHOLDERS:
State of Wisconsin Investment Board(1)................... 3,957,900................ 5,523,000 0 10.0%
Mazama Capital Management, Inc.(2)....................... 2,273,70013.96%
Bank of America Corporation(2)........................ 3,419,450 0 5.8%8.64%
NAMED EXECUTIVE OFFICERS AND DIRECTORS:
Lance Fors, Ph.D.(3)..................................... 2,653,520 406,500 6.7%.................................. 2,507,816 601,770 6.24%
John Puisis.............................................. 1,200 0 *
Rocky Ganske............................................. 129,853 127,500Puisis........................................... 293,698 275,000 *
Bruce Neri, Ph.D......................................... 168,383 151,800Ph.D...................................... 202,188 181,650 *
Ian Edvalson............................................. 137,420 135,000Ivan Trifunovich...................................... 52,500 52,500 *
John Comerford........................................ 69,824 48,750 *
Lloyd M. Smith, Ph.D.(4)................................. 1,982,400 8,400 5.0%.............................. 2,043,600 16,800 5.16%
John Neis(5)............................................. 1,828,725 8,400 4.6%.......................................... 1,837,125 16,800 4.64%
David A. Thompson(6)..................................... 49,200 49,200Thompson..................................... 58,800 58,800 *
Tom Daniel(7)............................................ 1,329,841 8,400 3.4%Daniel(6)......................................... 1,338,426 16,800 3.38%
G. Steven Burrill(8)..................................... 1,039,263 8,400 2.6%Burrill(7).................................. 1,047,663 16,800 2.65%
Kenneth R. McGuire....................................... 4,425,850 8,400 11.2%McGuire(2)................................. 3,119,850 16,800 7.88%
Gordon F. Brunner..................................... 6,000 0 *
Sam Eletr............................................. 0 0 *
All directors and executive officers as a group (13
persons)............................................... 13,763,903 931,200 34.2%............................................ 12,577,490 1,302,470 30.77%
- ---------------
* indicates less than 1%
(1) Based on information provided in the Schedule 13G filed by the State of
Wisconsin Investment Board ("SWIB") with the Securities and Exchange
Commission on April 4, 2002.February 14, 2003. The address of SWIB is P.O. Box 7842,
Madison, Wisconsin 53707.
(2) Based on information provided in the Schedule 13G filed by Mazama Capital
Management,Bank of America
Corporation ("BAC"), NB Holdings Corporation ("NBH"), Bank of America NA
("BA"), BANA #1 LLC ("BANA") and Bank of America Strategic Solutions, Inc.
("MCM"BASS") with the Securities and Exchange Commission on January 31, 2002, MCMFebruary 14, 2003.
The Schedule 13G reports that BANA and BASS have shared voting and
dispositive power with respect to 3,417,450 of those shares, BA has sole
dispositionvote and dispositive power with respect to 2,000 of those shares, and BAC
and NBH have shared voting and dispositive power with respect to all
2,273,7003,419,450 shares. The Schedule 13G reports that the shares reported in the
Schedule are owned by Mr. McGuire and sole voting power with respecthave been pledged by Mr. McGuire to 1,962,800 of those
shares.BA
to secure certain obligations under a loan agreement. The address of MCMBAC is
One S.W. Columbia, Suite 1860, Portland,
Oregon 97258.100 N. Tryon Street, Charlotte, NC 28255.
(3) Includes 1,974,0001,900,800 shares of common stock held in a voting trust for the
benefit of Dr. Fors' family members. Dr. Fors and his wife, Charlotte H.
Selover, are co-trustees of this voting trust.
(4) Includes 244,800148,800 shares of common stock held in a voting trust for the
benefit of Dr. Smith's family members. Dr. Smith is the sole trustee of the
saidthis
voting trust.
(5) Includes 1,196,550369,787 shares held by Venture Investors of Wisconsin and 445,200Wisconsin; 269,400
shares held by Venture Investors Early Stage II Limited Partnership andPartnership; 170,400
shares held by Venture Investors Early Stage 11
Fund III Limited Partnership.
The address of Venture Investors of Wisconsin,
Inc. is 505 South Rosa Road, Madison, Wisconsin 53719.
(6) Mr. Thompson's address is 40 South Wynstone Drive, North Barrington, IL
60010.
(7) Includes 798,202774,312 shares owned by Schroder Ventures International Life
Sciences Fund II LPI, 464,400LPI; 329,524 shares held by Schroder Ventures International
Life Sciences Fund II LPII, 24,000LPII; 88,630 shares held by Schroder Ventures
International Life Sciences Fund II LPIII, 6,000LPIII; 22,282 shares held by Schroder
Ventures Co-Investment Scheme, 3,600International Life Sciences Fund Group Co-Investments Scheme;
11,842 shares held by Schroder Ventures International Life Sciences Fund II
Strategic Partners LP,LP; and 25,200 shares held by Schroder Ventures
Investments Limited. Mr. Daniel is a manager of a company that provides
consulting services to Schroder Ventures funds. Mr. Daniel disclaims
beneficial ownership of the shares held by the
13
various Schroder Venture funds. The address of Schroder Ventures International
Life Sciences Fund II, LPI, Schroder Ventures International Life Sciences Fund
II LPII, and Schroder Ventures International Life Sciences Fund II LPIII is 787
Seventh875
Third Avenue, 34th22nd Floor, New York, NY 10019.10022-6225. The address of Schroder
Ventures Co-Investment Scheme is 22 Church Street, Hamilton Bermuda, HM11.HM 11, Bermuda.
The address of Schroder Ventures Investments Limited is P.O. Box 255,
Barfield House, St. Julian's Avenue, St. Peter Port, Guernsey GY1 4ND
Channel Islands, United Kingdom.
The address of any other entities
affiliated with Tom Daniel is 20 Southhampton Street, London UK WC2E 7QG.
(8)(7) Includes 1,020,863 shares held by the Burrill Agbio Capital Fund, LP. Mr.
Burrill is general partner of Burrill Agbio Capital Fund, LP and disclaims
beneficial ownership of these shares except to the extent of his pecuniary
interest in these shares.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and any persons who beneficially own more than ten
percent of our common stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common
stock. To our knowledge, based solely on review of the copies of such reports
sent to us and written representations that no other reports were required, we
believe that during the year ended December 31, 2001,2002, our directors, officers
and ten percent shareholders complied with their Section 16(a) filing
requirements, except that eachthe initial statement of Mr. Preston Tsao (who has resigned as a
director of the Company) and Mr. Neisbeneficial ownership for Dr.
Eletr was filed one late report relating to one
transaction.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 1998, the Company and Burrill Agbio Capital Fund, L.P., a
venture capital fund managed by Mr. Burrill, a director of the Company, formed
Third Wave Agbio, Inc. ("Agbio"). The Company received shares of common stock of
Agbio which represented 50 percent of the total outstanding shares of Agbio, and
the Company granted to Agbio an exclusive worldwide license in the field of
agriculture to all of the Company's technology. In December 1999 the Company
entered into an agreement with Agbio under which the Company develops
agricultural applications of its Invader operating system for the field of
agriculture. Under this agreement the Company also provided administrative and
management services to Agbio and during 2001 the Company billed Agbio $552,000
for research and development activities and administrative and managerial
services which the Company believes to be the fair market value of those
services. On December 14, 2001, the Company purchased the remaining 50% of Agbio
from Burrill Agbio Capital Fund, L.P. and R. Glen Donald for an aggregate of
925,000 shares of the Company's common stock valued at $6.53 per share on the
date of issuance. In addition, 25,391 options to purchase the Company's common
stock were issued to replace existing Agbio options.late.
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative return
on our common stock against the NASDAQ Stock Market U.S. Index (the "NASDAQ
Index") and a peer group composed of the companies listed below (the "Peer
Group"). The graph assumes a $100 investment on February 9, 2001 (the date of
our initial public offering) in each of our common stock, the NASDAQ Index and
the Peer Group and 12
assumes that all dividends, if paid, were reinvested. This
table does not forecast future performance of our common stock.
PERFORMANCE GRAPH(PERFORMANCE GRAPH)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2/09/9/01 3/31/01 6/30/01 9/30/01 12/31/01 3/31/02 6/30/02 9/30/02 12/31/02
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Third Wave Technologies, Inc
TWTI 100.00 63.64 93.91 57.45 66.82 30.45 20.36 12.27 24.45
NASDAQ 100.00 74.48 87.44 60.66 78.93 74.68 59.22 47.43 54.05
Peer Group 100.00 53.57 65.66 37.12 62.5453.61 65.69 37.14 62.56 39.95 28.58 18.98 19.17
14
The Peer Group consists of the following companies: Applera Corporation,
Orchid Biosciences, Inc., Sequenom, Inc., Affymetrix, Inc. and Nanogen, Inc.
The foregoing graph and accompanying material shall not be "soliciting
material" or to be "filed" with the Securities and Exchange Commission, nor
shall such information be incorporated by reference into any future filing under
this Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent the Company specifically incorporates it by
reference into such filing.
OTHER MATTERS
The Company knowsWe know of no other matters to be submitted to the shareholders at the
meeting. If any other matters properly come before the shareholders at the
meeting, it is the intention of the persons named in the enclosed form of proxy
to vote the shares they represent as the board of directors may recommend.
By Order of the Board of Directors,
/s/ LANCE FORS, PH.D.
Lance Fors, Ph.D.
Chairman of the Board and
Chief Executive Officer
Dated: April 26, 2002
1325, 2003
15
THIRD WAVE TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
THIRD WAVE TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2 BELOW.
The undersigned shareholder of Third Wave Technologies, Inc., a Delaware corporation (the "Company"),
hereby acknowledges receipt of the Proxy Statement of the Company dated April 26, 2002 and hereby appoints Lance Fors and John
Comerford, and each of them, proxies and attorneys in fact, with full power to each of substitution, on behalf and in the name of
the undersigned, to represent the undersigned at the Annual Meeting of Shareholders of the Company to be held at the offices of the
Company at 9:00 a.m. on Wednesday, June 5, 2002 and any adjournment or adjournments thereof, and to vote all shares of common stock
of the Company whichTHIRD WAVE TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
THIRD WAVE TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2 BELOW.
The undersigned shareholder of Third Wave Technologies, Inc., a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Proxy Statement
of the Company dated April 25, 2003 and hereby appoints Lance Fors and John
Comerford, and each of them, proxies and attorneys in fact, with full power to
each of substitution, on behalf and in the name of the undersigned, to represent
the undersigned at the Annual Meeting of Shareholders of the Company to be held
at the offices of the Company at 9:00 a.m. on Tuesday, June 10, 2003 and any
adjournment or adjournments thereof, and to vote all shares of common stock of
the Company that the undersigned would be entitled to vote if the undersigned
were present, as follows:
1. The election of the following persons as directors of the Company to
serve until their successors shall be duly elected and qualified:
NAME OF NOMINEE FOR AGAINST
- ----------------------------------------------------------------------------------------------------------------------
Tom Daniel------------------------- ------------------------- ------------------------
Gordon F. Brunner [ ] [ ]
G. Steven BurrillSam H. Eletr [ ] [ ]
Lloyd M. Smith, Ph.D. [ ]John Neis [ ] For, except vote withheld from the following nominee(s):
2. To ratify the appointment of Ernst & Young LLP as independent auditors of the Company for the fiscal year
ending December 31, 2002.[ ]
For, except vote withheld from the following nominee(s):
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 2003.
[ ] For [ ] Against [ ] Abstain
3. In their discretion, upon any such other matters which may properly
come before the meeting or any adjournments thereof.
[ ] Grant Authority [ ] Withhold Authority
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INDICATION ABOVE. IN
THE ABSENCE OF SUCH INDICATION, THIS PROXY
20
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INDICATION ABOVE. IN THE ABSENCE OF SUCH INDICATION, THIS
PROXY WILL BE VOTED FOR MANAGEMENT'S SLATE OF DIRECTORS AND FOR ALL OTHER ITEMS SET FORTH ABOVE AND, IN THE DISCRETION OF THE
PROXYHOLDERS, ON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
DATED:
Signature of Shareholder
DATED: , 2002
------------------------------
--------------------------
Signature of Shareholder
--------------------------
PLEASE PRINT NAME(S)
- ------------------------------------
I plan to attend the meeting: [ ] Yes [ ] No
Taxpayer Identification No. (or Social Security Number):
--------------WILL BE VOTED FOR MANAGEMENT'S SLATE OF DIRECTORS AND FOR ALL OTHER ITEMS SET
FORTH ABOVE AND, IN THE DISCRETION OF THE PROXYHOLDERS, ON ANY OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
DATED:
-------------------------, 2003
- --------------------------------
Signature of Shareholder
- --------------------------------
PLEASE PRINT NAME(S)
- --------------------------------
I plan to attend the meeting: [ ] Yes [ ] No
Taxpayer Identification No. (or Social Security Number):
----------------------
Sign exactly as your name(s) appear(s) on the stock certificate(s). A
corporation is requested to sign its name by its President or other authorized
officer, with the office held designated. Executors, administrators, trustees,
etc., are requested to so indicate when signing. If a stock is registered in two
names, both should sign.
SHAREHOLDERS SHOULD SIGN THIS PROXY PROMPTLY AND RETURN IT IN THE ENCLOSED
ENVELOPE.
PLEASE RETURN ALL PAGES OF THIS PROXY