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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant | þ | |
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)) | |
þ | Definitive Proxy Statement | |
¨ | Definitive Additional Materials | |
¨ | Soliciting Material Pursuant to § 240.14a-12 |
Molecular Devices Corporation
Payment of Filing Fee (Check the appropriate box)
þ | 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): | |||||
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: | ||||
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1. | To elect directors to serve for the ensuing year and until their successors are elected. | |
2. | To approve the Molecular Devices Corporation 2005 Equity Incentive Plan. | |
3. | To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as Molecular Devices’ independent registered public accounting firm for the fiscal year ending December 31, 2005. | |
4. | To conduct any other business properly brought before the meeting. |
By Order of the Board of Directors | |
James C. Kitch | |
Secretary |
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Stockholder of Record: Shares Registered in Your Name |
Beneficial Owner: Shares Registered in the Name of a Broker or Bank |
• | Election of eight directors; | |
• | The approval of the Molecular Devices Corporation 2005 Equity Incentive Plan; and | |
• | The ratification of Ernst & Young LLP as Molecular Devices’ independent registered public accounting firm for the fiscal year ending December 31, 2005. |
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Stockholder of Record: Shares Registered in Your Name |
• | To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive. | |
• | To vote using the enclosed proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct. |
Beneficial Owner: Shares Registered in the Name of Broker or Bank |
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• | You may submit another properly completed proxy card with a later date. | |
• | You may send a written notice that you are revoking your proxy to Molecular Devices’ Secretary at 1311 Orleans Drive, Sunnyvale, California 94089. | |
• | You may attend the Annual Meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy. |
• | For the election of directors, the eight nominees receiving the most “For” votes (among votes properly cast in person or by proxy) will be elected. Broker non-votes will count towards the quorum but will have no effect. |
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• | Proposal No. 2, the approval of the Molecular Devices Corporation 2005 Equity Incentive Plan, must receive a “For” vote from the majority of shares present and entitled to vote either in person or by proxy to be approved. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect. | |
• | Proposal No. 3, the ratification of Ernst & Young LLP as Molecular Devices’ independent registered public accounting firm for the fiscal year ending December 31, 2005, must receive a “For” vote from the majority of shares present and entitled to vote either in person or by proxy to be approved. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect. |
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Name | Age | Position Held with Molecular Devices | ||||
Joseph D. Keegan, Ph.D. | 51 | President and Chief Executive Officer; Director | ||||
Moshe H. Alafi | 76 | Director | ||||
David L. Anderson | 61 | Director | ||||
A. Blaine Bowman | 58 | Director | ||||
Paul Goddard, Ph.D. | 55 | Director | ||||
André F. Marion | 69 | Director | ||||
Harden M. McConnell, Ph.D. | 77 | Director | ||||
J. Allan Waitz, Ph.D. | 69 | Director |
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Name | Audit | Compensation | Nominating | |||||||||
Moshe H. Alafi | X | |||||||||||
David L. Anderson | X | X | ||||||||||
A. Blaine Bowman | X | X | ||||||||||
Paul Goddard, Ph.D. | X | X | ||||||||||
André F. Marion | X | X | X | |||||||||
J. Allan Waitz, Ph.D. | X | X |
Audit Committee |
Compensation Committee |
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Nominating Committee |
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Audit Committee | |
A. Blaine Bowman | |
Paul Goddard, Ph.D. | |
André F. Marion |
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Number of Shares | ||||
Underlying | ||||
Name and Position | Options Granted | |||
Non-employee directors as a group | 28,000 |
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Fiscal Year Ended | |||||||||
December 31, | |||||||||
2004 | 2003 | ||||||||
Audit Fees | $ | 959,000 | $ | 260,000 | |||||
Audit-Related Fees | 313,000 | 229,000 | |||||||
Tax Fees | — | 199,000 | |||||||
All Other Fees | — | — | |||||||
Total Fees | $ | 1,272,000 | $ | 688,000 | |||||
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Beneficial Ownership(1) | ||||||||
Number of | Percent of | |||||||
Beneficial Owner | Shares | Total | ||||||
Brown Capital Management, Inc.(2) 1201 North Calvert Street Baltimore, Maryland 21202 | 2,066,070 | 12.2 | % | |||||
Wellington Management Company, LLP(3) 75 State Street Boston, Massachusetts 02109 | 1,043,700 | 6.2 | % | |||||
Joseph D. Keegan, Ph.D.(4) | 372,216 | 2.2 | % | |||||
Moshe H. Alafi(5) | 348,540 | 2.1 | % | |||||
Harden M. McConnell, Ph.D.(6) | 247,467 | 1.5 | % | |||||
Timothy A. Harkness(7) | 189,165 | 1.1 | % | |||||
Robert J. Murray(8) | 134,399 | * | ||||||
A. Blaine Bowman(9) | 120,666 | * | ||||||
Patricia C. Sharp(10) | 130,042 | * | ||||||
David L. Anderson(11) | 69,407 | * | ||||||
Paul Goddard, Ph.D.(12) | 42,500 | * | ||||||
J. Allan Waitz, Ph.D.(13) | 39,000 | * | ||||||
Thomas J. O’Lenic(14) | 43,306 | * | ||||||
André F. Marion(15) | 27,000 | * | ||||||
All directors and executive officers as a group (17 persons)(16) | 2,226,881 | 12.3 | % |
* | Less than one percent. |
(1) | This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13G filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, Molecular Devices believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 16,914,149 shares outstanding on March 15, 2005, adjusted as required by rules promulgated by the SEC. Unless otherwise indicated, the address of each of the individuals and entities listed in this table is c/o Molecular Devices at the address on the first page of this proxy statement. | |
(2) | Based upon a Schedule 13G filed with the SEC on February 9, 2005 by Brown Capital Management, Inc. (“BCM”) in its capacity as a registered investment adviser. Such shares are owned by various investment advisory clients of BCM, which is deemed to be a beneficial owner of such shares, due to its discretionary power to make investment decisions over such shares for its clients and its ability to vote such shares. BCM has sole dispositive power over such shares and has sole voting power over 779,920 of such shares. Persons other than BCM have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such shares. Schedule 13G provides information only as of December 31, 2004 and, consequently, BCM’s beneficial ownership of Molecular Devices’ common stock may have changed between December 31, 2004 and March 15, 2005. |
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(3) | Based upon a Schedule 13G filed with the SEC on February 14, 2005 by Wellington Management Company, LLP (“WMC”) in its capacity as an investment adviser. Such shares are owned of record by clients of WMC which clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such shares. In its capacity as an investment adviser, WMC may be deemed to beneficially own such shares. WMC has shared dispositive power over such shares and shared voting power over 723,500 of such shares. Schedule 13G provides information only as of December 31, 2004 and, consequently, WMC’s beneficial ownership of Molecular Devices’ common stock may have changed between December 31, 2004 and March 15, 2005. | |
(4) | Includes 5,766 shares held by the Keegan 1990 Revocable Trust UAD 4/27/90, of which Dr. Keegan is a trustee, and includes 351,968 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. | |
(5) | Includes 306,040 shares beneficially owned by Alafi Capital Company, of which Mr. Alafi, a director of Molecular Devices, is a general partner, and includes 42,500 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. | |
(6) | Includes 221,467 shares held by the Harden M. McConnell and Sophia G. McConnell Trust DTD 3/29/82, of which Dr. McConnell is a co-trustee, and includes 26,000 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. | |
(7) | Includes 182,654 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. | |
(8) | Includes 106,279 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. | |
(9) | Includes 48,166 shares beneficially owned by Dionex Corporation, of which Mr. Bowman is Chairman of the board, and includes 32,500 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. Mr. Bowman disclaims beneficial ownership of the shares held by Dionex Corporation within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
(10) | Includes 126,717 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. |
(11) | Includes 26,907 shares held by the Anderson Living Trust UAD 1/22/98, of which Mr. Anderson is a trustee, and includes 42,500 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. Mr. Anderson disclaims beneficial ownership of the shares held by the Anderson Living Trust UAD 1/22/98 within the meaning of Rule 13d-3 under the Exchange Act. |
(12) | Consists solely of shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. |
(13) | Includes 32,500 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. |
(14) | Includes 42,599 shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. |
(15) | Consists solely of shares that may be acquired within 60 days after March 15, 2005 pursuant to outstanding stock options. |
(16) | Includes 725,861 shares held by entities affiliated with certain directors and officers and 1,214,361 shares that certain directors and officers have the right to acquire within 60 days after March 15, 2005 pursuant to outstanding stock options. |
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Number of Securities | Number of Securities | |||||||||||
to be Issued | Weighted-Average | Remaining Available for | ||||||||||
upon Exercise | Exercise Price | Issuance under Equity | ||||||||||
of Outstanding | of Outstanding | Compensation Plans | ||||||||||
Options, Warrants | Options, Warrants | (Excluding Securities | ||||||||||
and Rights | and Rights | Reflected in Column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders | 2,912,935 | $ | 25.35 | 1,224,349 | (1) | |||||||
Equity compensation plans not approved by security holders(2) | 92,125 | $ | 17.99 | 6,032 | ||||||||
Total | 3,005,060 | $ | 25.12 | 1,230,381 | (1) | |||||||
(1) | Of these shares, 91,299 shares remained available for the grant of future rights under the Molecular Devices Corporation 1995 Employee Stock Purchase Plan. |
(2) | Represents shares issuable upon the exercise of outstanding options under the Molecular Devices Corporation 2001 Stock Option Plan and shares remaining available for issuance thereunder. The table does not include information with respect to shares subject to outstanding options granted under equity compensation arrangements assumed by Molecular Devices in connection with the acquisitions of LJL BioSystems, Inc. in August 2000 and Axon Instruments, Inc. in July 2004. As of December 31, 2004, a total of 508,592 shares of Molecular Devices’ common stock were issuable upon the exercise of outstanding options under those assumed arrangements at a weighted average exercise price of $21.63. No additional options may be granted under those assumed arrangements. |
Molecular Devices Corporation 2001 Stock Option Plan |
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Name | Age | Position Held with Molecular Devices | ||||
Joseph D. Keegan, Ph.D. | 51 | President, Chief Executive Officer | ||||
Timothy A. Harkness | 38 | Senior Vice President, Chief Financial Officer | ||||
Alan Finkel, Ph.D. | 52 | Senior Vice President, Chief Technology Officer | ||||
Steven Davenport | 39 | Vice President, European Operations | ||||
Jan Hughes | 44 | Vice President, Worldwide Marketing | ||||
Gillian M.K. Humphries, Ph.D. | 66 | Vice President, Strategic Affairs | ||||
Robert J. Murray | 56 | Vice President, Operations | ||||
Thomas J. O’Lenic | 41 | Vice President, North American Sales and Service | ||||
Patricia C. Sharp | 61 | Vice President, Human Resources | ||||
J. Richard Sportsman, Ph.D. | 52 | Vice President, Assay and Reagent Research and Development |
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Long-Term | |||||||||||||||||||||||||
Annual Compensation | Compensation | ||||||||||||||||||||||||
Other Annual | Securities | All Other | |||||||||||||||||||||||
Bonus | Compensation | Underlying | Compensation | ||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | ($)(1) | ($) | Options (#) | ($)(2) | |||||||||||||||||||
Joseph D. Keegan, Ph.D. | 2004 | $ | 396,667 | $ | 645,000 | $ | 28,515 | (3) | 60,000 | $ | 16,230 | ||||||||||||||
President and Chief | 2003 | 377,445 | 468,084 | 13,130 | (4) | 47,500 | 9,029 | ||||||||||||||||||
Executive Officer | 2002 | 364,999 | 370,000 | 13,800 | (5) | 60,000 | 11,887 | ||||||||||||||||||
Timothy A. Harkness | 2004 | 260,833 | 234,750 | 750 | (6) | 35,000 | 10,930 | ||||||||||||||||||
Senior Vice President | 2003 | 237,499 | 142,500 | — | 32,500 | 3,104 | |||||||||||||||||||
and Chief Financial Officer | 2002 | 224,999 | 110,000 | 74,275 | (7) | 35,000 | 4,560 | ||||||||||||||||||
Robert J. Murray | 2004 | 209,633 | 125,780 | — | 25,000 | 4,514 | |||||||||||||||||||
Vice President, | 2003 | 201,500 | 90,675 | — | 22,500 | 8,234 | |||||||||||||||||||
Operations | 2002 | 195,000 | 78,000 | — | 25,000 | 6,253 | |||||||||||||||||||
Patricia C. Sharp | 2004 | 209,633 | 125,780 | 13,659 | (7) | 25,000 | 3,848 | ||||||||||||||||||
Vice President, | 2003 | 201,500 | 100,750 | 13,659 | (7) | 25,000 | 5,191 | ||||||||||||||||||
Human Resources | 2002 | 195,000 | 87,750 | — | 27,500 | 5,293 | |||||||||||||||||||
Thomas J. O’Lenic | 2004 | 200,400 | 140,280 | 3,399 | (6) | 25,000 | 4,485 | ||||||||||||||||||
Vice President, North | 2003 | 191,167 | 95,583 | 2,152 | (6) | 22,500 | 3,757 | ||||||||||||||||||
American Sales and | 2002 | 185,000 | 65,167 | (8) | 21,718 | (9) | 40,000 | 3,396 | |||||||||||||||||
Service |
(1) | Represents amounts accrued by Molecular Devices in 2002, 2003 and 2004 but paid in 2003, 2004 and 2005 at the election of Molecular Devices. |
(2) | Represents the taxable portion of group life insurance paid by Molecular Devices, supplemental health plan amounts reimbursed by Molecular Devices, and Molecular Devices’ discretionary contributions to the executive officer’s 401(k) account. |
(3) | Consists of the following payments made by Molecular Devices: (i) $12,000 for the use of an automobile and (ii) $16,515 for professional services. |
(4) | Consists of the following payments made by Molecular Devices: (i) $12,000 for the use of an automobile and (ii) $1,130 for professional services. |
(5) | Consists of the following payments made by Molecular Devices: (i) $12,000 for the use of an automobile and (ii) $1,800 for professional services. |
(6) | Consists of payments made by Molecular Devices for the use of an automobile. |
(7) | Represents loan amount forgiven by Molecular Devices for the previous payment of certain taxes. |
(8) | Represents $9,567 in commissions earned and $55,600 in bonuses earned. |
(9) | Consists of the following payments made by Molecular Devices: (i) $1,118 for the use of an automobile, (ii) $12,496 for relocation costs, and (iii) $8,104 in reimbursement for taxes related to the payment of relocation costs. |
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Individual Grants | Potential Realizable Value | |||||||||||||||||||||||
at Assumed Annual Rates | ||||||||||||||||||||||||
Number of | Percentage of | of Stock Price | ||||||||||||||||||||||
Securities | Total Options | Appreciation for Option | ||||||||||||||||||||||
Underlying | Granted to | Exercise or | Term(3) | |||||||||||||||||||||
Options | Employees in | Base Price | Expiration | |||||||||||||||||||||
Name | Granted (#)(1) | Fiscal Year(2) | ($/SH) | Date | 5% ($) | 10% ($) | ||||||||||||||||||
Joseph D. Keegan, Ph.D. | 60,000 | 12.13 | % | $ | 19.66 | 02/11/14 | $ | 741,844 | $ | 1,879,979 | ||||||||||||||
Timothy A. Harkness | 35,000 | 7.08 | % | 19.66 | 02/11/14 | 432,742 | 1,096,654 | |||||||||||||||||
Robert J. Murray | 25,000 | 5.06 | % | 19.66 | 02/11/14 | 309,102 | 783,324 | |||||||||||||||||
Patricia C. Sharp | 25,000 | 5.06 | % | 19.66 | 02/11/14 | 309,102 | 783,324 | |||||||||||||||||
Thomas J. O’Lenic | 25,000 | 5.06 | % | 19.66 | 02/11/14 | 309,102 | 783,324 |
(1) | The options have a ten-year term, subject to earlier termination upon death, disability or termination of employment. Options vest at the rate of 25% per year. The exercise price per share was equal to the fair market value of Molecular Devices’ common stock on the date of grant. |
(2) | Based upon options to purchase 494,500 shares granted to employees of Molecular Devices during the fiscal year ended December 31, 2004. |
(3) | The potential realizable value is calculated based on the term of the option at its time of grant, or ten years, compounded annually. Assumed stock price appreciation of 5% and 10% is used pursuant to rules promulgated by the SEC. The potential realizable value is calculated by assuming that the stock price on the date of grant appreciates at the indicated rate for the entire term of the option and that the option is exercised and sold on the last day of its term at the appreciated price. No gain to the optionee is possible unless the stock price increases over the option term. |
Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised In-the | |||||||||||||||||||||||
Shares | Options at December 31, | Money Options at | ||||||||||||||||||||||
Acquired on | Value | 2004 (#)(1) | December 31, 2004 ($)(2) | |||||||||||||||||||||
Exercise | Realized | |||||||||||||||||||||||
Name | (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Joseph D. Keegan, Ph.D. | — | — | 316,031 | 112,969 | $ | 162,907 | $ | 139,956 | ||||||||||||||||
Timothy A. Harkness | — | — | 163,280 | 64,220 | 186,052 | 93,099 | ||||||||||||||||||
Robert J. Murray | — | — | 92,530 | 45,470 | 62,008 | 64,792 | ||||||||||||||||||
Patricia C. Sharp | — | — | 112,343 | 47,657 | 46,482 | 70,768 | ||||||||||||||||||
Thomas J. O’Lenic | 28,468 | $ | 139,287 | 29,474 | 47,658 | 6,902 | 64,792 |
(1) | Reflects shares vested and unvested at December 31, 2004. |
(2) | Value is based on the fair market value of Molecular Devices’ common stock at December 31, 2004 ($20.10) with respect to in-the-money options minus the exercise price of the options. |
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Chief Executive Officer Key Employee Agreement |
• | Molecular Devices will retain Dr. Keegan as a consultant for a period of one year following his termination, during which time he will be entitled to a monthly cash payment equal to 1/12th of the sum of (i) his annual base salary in effect at the time of his termination plus (ii) the bonus amount Dr. Keegan would have earned at 100% of target for the year in which the termination occurs. | |
• | The outstanding stock options held by Dr. Keegan as of the date of his termination will become fully vested and exercisable as of that date. |
• | Dr. Keegan will be entitled to a single lump-sum payment equal to the sum of (i) 24 months of his annual base salary in effect at the time of his termination, plus (ii) a bonus amount equal to twice what Dr. Keegan would have earned at 100% of target for the year in which the termination occurs. | |
• | The outstanding stock options held by Dr. Keegan as of the date of his termination will become fully vested and exercisable as of that date. |
Chief Financial Officer Employment Agreement |
• | Molecular Devices will retain Mr. Harkness as a consultant for a period of one year following his termination, during which time he will be entitled to a monthly cash payment equal to 1/12th of the sum of (i) his annual base salary in effect at the time of his termination plus (ii) the bonus amount Mr. Harkness would have earned at 100% of target for the year in which the termination occurs. | |
• | The outstanding stock options held by Mr. Harkness as of the date of his termination will become fully vested and exercisable as of that date. |
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• | Mr. Harkness will be entitled to a single lump-sum payment equal to the sum of (i) 18 months of his annual base salary in effect at the time of his termination, plus (ii) 1.5 times the bonus amount Mr. Harkness would have earned at 100% of target for the year in which the termination occurs. | |
• | The outstanding stock options held by Mr. Harkness as of the date of his termination will become fully vested and exercisable as of that date. |
Vice President Employment Agreements |
• | Ms. Sharp was eligible to receive an initial annual base salary of $185,000 per year and an initial bonus of $50,000. Ms. Sharp is also eligible to receive certain discretionary bonuses. | |
• | Ms. Sharp was eligible to receive options to purchase 47,500 shares of Molecular Devices common stock. The options vest over four years with 11,875 shares vesting on each anniversary of the employment date. | |
• | Ms. Sharp was eligible to receive an aggregate of 2,500 shares of restricted common stock. The shares would be granted ratably and quarterly over a period of two years. Molecular Devices also agreed to loan Ms. Sharp amounts required for the payment of tax obligations related to these share grants. |
Change in Control Severance Benefit Plan |
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• | Base Salary. Salary for the Chief Executive Officer is based principally on the Committee’s evaluation of corporate and individual performance, as well as competitive pay practices. The salaries for all other executive officers are determined by the Committee on the basis of similar criteria. | |
• | Bonus. Executive bonuses are primarily based on an evaluation of individual and company-wide performance against qualitative and quantitative measures. | |
• | Long-Term Incentive Compensation. Long-term incentive awards, comprised of stock option grants, are designed to insure that incentive compensation is linked to the long-term performance of Molecular Devices. |
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Compensation Committee | |
David L. Anderson | |
André F. Marion | |
J. Allan Waitz, Ph.D. |
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By Order of the Board of Directors | |
James C. Kitch | |
Secretary |
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1. | General. |
2. | Definitions. |
(a) “Affiliate”means (i) any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, and (ii) any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. The Board shall have the authority to determine (i) the time or times at which the ownership tests are applied, and (ii) whether “Affiliate” includes entities other than corporations within the foregoing definition. | |
(b) “Board”means the Board of Directors of the Company. | |
(c) “Capitalization Adjustment”has the meaning ascribed to that term in Section 11(a). | |
(d) “Change in Control”means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: |
(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or |
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any other Exchange Act Person from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because the level of Ownership held by any Exchange Act Person (the“Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur; | |
(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; | |
(iii) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur; | |
(iv) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or | |
(v) individuals who, on the date this Plan is adopted by the Board, are members of the Board (the“Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board;provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board. |
The term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company. | |
Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Stock Awards subject to such agreement;provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply. | |
(e) “Code”means the Internal Revenue Code of 1986, as amended. | |
(f) “Committee”means a committee of one (1) or more members of the Board to whom authority has been delegated by the Board in accordance with Section 3(c). | |
(g) “Common Stock”means the common stock of the Company. | |
(h) “Company”means Molecular Devices Corporation, a Delaware corporation. |
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(i) “Continuous Service”means that the Participant’s service with the Company or an Affiliate, whether as an Employee or Director, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service. For example, a change in status from an employee of the Company to a Director shall not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy or in the written terms of the Participant’s leave of absence. | |
(j) “Corporate Transaction”means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: |
(i) a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries; | |
(ii) a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company; | |
(iii) the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or | |
(iv) the consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise. |
(k) “Covered Employee”means the chief executive officer and the four (4) other highest compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code. | |
(l) “Director”means a member of the Board. | |
(m) “Disability”means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. | |
(n) “Employee”means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an “Employee” for purposes of the Plan. | |
(o) “Entity”means a corporation, partnership or other entity. | |
(p) “Exchange Act”means the Securities Exchange Act of 1934, as amended. | |
(q) “Exchange Act Person”means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the effective date of the Plan as set forth in Section 14, is the Owner, |
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directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities. | |
(r) “Fair Market Value”means, as of any date, the value of the Common Stock determined as follows: |
(i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported inThe Wall Street Journalor such other source as the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the date of determination, then the Fair Market Value shall be the closing selling price (or closing bid if no sales were reported) on the last preceding date for which such quotation exists. | |
(ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good faith. |
(s) “Incentive Stock Option”means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. | |
(t) “Non-Employee Director”means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act(“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3. | |
(u) “Nonstatutory Stock Option”means an Option not intended to qualify as an Incentive Stock Option. | |
(v) “Officer”means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. | |
(w) “Option”means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan. | |
(x) “Option Agreement”means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. | |
(y) “Optionholder”means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option. | |
(z) “Other Stock Award”means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 7(e). | |
(aa)“Other Stock Award Agreement”means a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject to the terms and conditions of the Plan. | |
(bb) “Outside Director”means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) |
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during the taxable year, has not been an officer of the Company or an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code. | |
(cc) “Own,” “Owned,” “Owner,” “Ownership”A person or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities. | |
(dd) “Participant”means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award. | |
(ee) “Performance Criteria”means the one or more criteria that the Board shall select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals may be based on any one of, or combination of, the following: (i) earnings per share; (ii) earnings before interest, taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization (EBITDA); (iv) net earnings; (v) total shareholder return; (vi) return on equity; (vii) return on assets, investment, or capital employed; (viii) operating margin; (ix) gross margin; (x) operating income; (xi) net income (before or after taxes); (xii) net operating income; (xiii) net operating income after tax; (xiv) pre- and after-tax income; (xv) pre-tax profit; (xvi) operating cash flow; (xvii) sales or revenue targets; (xviii) increases in revenue or product revenue; (xix) expenses and cost reduction goals; (xx) improvement in or attainment of expense levels; (xxi) improvement in or attainment of working capital levels; (xxii) economic value added (or an equivalent metric); (xxiii) market share; (xxiv) cash flow; (xxv) cash flow per share; (xxvi) share price performance; (xxvii) debt reduction; (xxviii) implementation or completion of projects or processes; (xxix) customer satisfaction; (xxx) total stockholder return; (xxxi) stockholders’ equity; and (xxxii) other measures of performance selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement. The Board shall, in its sole discretion, define the manner of calculating the Performance Criteria it selects to use for such Performance Period. | |
(ff) “Performance Goals”means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. The Board is authorized at any time in its sole discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants, (a) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development; (b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions; or (c) in view of the Board’s assessment of the business strategy of the Company, performance of comparable organizations, economic and business conditions, and any other circumstances deemed relevant. Specifically, the Board is authorized to make adjustment in the method of calculating attainment of Performance Goals and objectives for a Performance Period as follows: (i) to exclude the dilutive effects of acquisitions or joint ventures; (ii) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; and (iii) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common shareholders other than regular cash dividends. In addition, the Board is authorized to make adjustment in the method of calculating attainment of Performance Goals and objectives for a Performance Period as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the effects of changes to generally accepted accounting standards required by |
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the Financial Accounting Standards Board; (iv) to exclude the effects to any statutory adjustments to corporate tax rates; (v) to exclude the impact of any “extraordinary items” as determined under generally accepted accounting principles; and (vi) to exclude any other unusual, non-recurring gain or loss or other extraordinary item. | |
(gg) “Performance Period”means the one or more periods of time, which may be of varying and overlapping durations, as the Board may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Stock Award. | |
(hh) “Plan”means this Molecular Devices Corporation 2005 Equity Incentive Plan. | |
(ii) “Rule 16b-3”means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time. | |
(jj) “Securities Act”means the Securities Act of 1933, as amended. | |
(kk) “Stock Appreciation Right”means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 7(d). | |
(ll) “Stock Appreciation Right Agreement”means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions of the Plan. | |
(mm) “Stock Award”means any right granted under the Plan, including an Option, a Stock Purchase Award, Stock Bonus Award, a Stock Appreciation Right, a Stock Unit Award, or any Other Stock Award. | |
(nn) “Stock Award Agreement”means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. | |
(oo) “Stock Bonus Award”means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 7(b). | |
(pp) “Stock Bonus Award Agreement”means a written agreement between the Company and a holder of a Stock Bonus Award evidencing the terms and conditions of a Stock Bonus Award grant. Each Stock Bonus Award Agreement shall be subject to the terms and conditions of the Plan. | |
(qq) “Stock Purchase Award”means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 7(a). | |
(rr) “Stock Purchase Award Agreement”means a written agreement between the Company and a holder of a Stock Purchase Award evidencing the terms and conditions of a Stock Purchase Award grant. Each Stock Purchase Award Agreement shall be subject to the terms and conditions of the Plan. | |
(ss) “Stock Unit Award”means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 7(c). | |
(tt) “Stock Unit Award Agreement”means a written agreement between the Company and a holder of a Stock Unit Award evidencing the terms and conditions of a Stock Unit Award grant. Each Stock Unit Award Agreement shall be subject to the terms and conditions of the Plan. | |
(uu) “Subsidiary”means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%). |
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(vv) “Ten Percent Stockholder”means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate. |
3. | Administration. |
(i) To determine from time to time (1) which of the persons eligible under the Plan shall be granted Stock Awards; (2) when and how each Stock Award shall be granted; (3) what type or combination of types of Stock Award shall be granted; (4) the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to a Stock Award; and (5) the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person. | |
(ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. | |
(iii) To amend the Plan or a Stock Award as provided in Section 12. | |
(iv) To terminate or suspend the Plan as provided in Section 13. | |
(v) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan. | |
(vi) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside the United States. |
(i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. | |
(ii) Section 162(m) and Rule 16b-3 Compliance. In the sole discretion of the Board, the Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. In addition, the Board or the Committee, in its sole discretion, may (1) delegate to a committee of one or more members of the Board who need not be Outside Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Stock Award, or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code, and/or (2) delegate to a committee of one or more members of the Board who need not be Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. |
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4. | Shares Subject to the Plan. |
5. | Eligibility. |
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6. | Option Provisions. |
(a) Term. The Board shall determine the term of an Option;provided, however, that subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date of grant. | |
(b) Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner consistent with the provisions of Section 424(a) of the Code. | |
(c) Exercise Price of a Nonstatutory Stock Option. The exercise price of each Nonstatutory Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner consistent with the provisions of Section 424(a) of the Code. | |
(d) Consideration. The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board shall have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The methods of payment permitted by this Section 6(d) are: |
(i) by cash or check; | |
(ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds; | |
(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock; | |
(iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price;provided, however, the Company shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such holding back of whole shares;provided, however, shares of Common Stock will no longer be outstanding under an Option and will not be exercisable thereafter to the extent that (i) shares are used to pay the exercise price pursuant to the “net exercise,” (ii) shares are delivered to the Participant as a result of such exercise, and (iii) shares are withheld to satisfy tax withholding obligations; or |
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(v) in any other form of legal consideration that may be acceptable to the Board. |
(e) Transferability of Options. The Board may, in its sole discretion, impose such limitations on the transferability of Options as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options shall apply: |
(i) Restrictions on Transfer. An Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. | |
(ii) Domestic Relations Orders. Notwithstanding the foregoing, an Option may be transferred pursuant to a domestic relations order. | |
�� (iii) Beneficiary Designation. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. |
(f) Vesting Generally. The total number of shares of Common Stock subject to an Option may vest and therefore become exercisable in periodic installments that may or may not be equal. The Option may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section 6(f) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. | |
(g) Termination of Continuous Service. In the event that an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous Service) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder’s Continuous Service (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. | |
(h) Extension of Termination Date. An Optionholder’s Option Agreement may provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service (other than upon the Optionholder’s death or Disability or upon a Change in Control) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of a period of three (3) months after the termination of the Optionholder’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. | |
(i) Disability of Optionholder. In the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. |
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(j) Death of Optionholder. In the event that (i) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death, or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionholder’s death, but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, after the Optionholder’s death, the Option is not exercised within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. | |
(k) Early Exercise. The Option may include a provision whereby the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. The Company shall not be required to exercise its repurchase option until at least six (6) months (or such longer or shorter period of time necessary to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option. |
7. | Provisions of Stock Awards other than Options. |
(i) Purchase Price. At the time of the grant of a Stock Purchase Award, the Board will determine the price to be paid by the Participant for each share subject to the Stock Purchase Award. To the extent required by applicable law, the price to be paid by the Participant for each share of the Stock Purchase Award will not be less than the par value of a share of Common Stock. | |
(ii) Consideration. At the time of the grant of a Stock Purchase Award, the Board will determine the consideration permissible for the payment of the purchase price of the Stock Purchase Award. The purchase price of Common Stock acquired pursuant to the Stock Purchase Award shall be paid either: (i) in cash or by check at the time of purchase, (ii) by past services rendered to the Company, or (iii) in any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. | |
(iii) Vesting. Shares of Common Stock acquired under a Stock Purchase Award may be subject to a share repurchase right or option in favor of the Company in accordance with a vesting schedule to be determined by the Board. | |
(iv) Termination of Participant’s Continuous Service. In the event that a Participant’s Continuous Service terminates, the Company shall have the right, but not the obligation, to repurchase or otherwise reacquire, any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination under the terms of the Stock Purchase Award Agreement. At the Board’s election, the price paid for all shares of Common Stock so repurchased or reacquired by the Company may be at the lesser of: (i) the Fair Market Value on the relevant date, or (ii) the Participant’s original cost for such shares. The Company shall not be required to exercise its repurchase or reacquisition option until at |
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least six (6) months (or such longer or shorter period of time necessary to avoid a charge to earnings for financial accounting purposes) have elapsed following the Participant’s purchase of the shares of stock acquired pursuant to the Stock Purchase Award unless otherwise determined by the Board or provided in the Stock Purchase Award Agreement. | |
(v) Transferability. Rights to purchase or receive shares of Common Stock granted under a Stock Purchase Award shall be transferable by the Participant only upon such terms and conditions as are set forth in the Stock Purchase Award Agreement, as the Board shall determine in its sole discretion, and so long as Common Stock awarded under the Stock Purchase Award remains subject to the terms of the Stock Purchase Award Agreement. |
(i) Consideration. A Stock Bonus Award may be awarded in consideration for (i) past services actually rendered to the Company or an Affiliate, or (ii) any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. | |
(ii) Vesting. Shares of Common Stock awarded under the Stock Bonus Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board. | |
(iii) Termination of Participant’s Continuous Service. In the event a Participant’s Continuous Service terminates, the Company may receive via a forfeiture condition, any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination of Continuous Service under the terms of the Stock Bonus Award Agreement. | |
(iv) Transferability. Rights to acquire shares of Common Stock under the Stock Bonus Award Agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the Stock Bonus Award Agreement, as the Board shall determine in its sole discretion, so long as Common Stock awarded under the Stock Bonus Award Agreement remains subject to the terms of the Stock Bonus Award Agreement. |
(i) Consideration. At the time of grant of a Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law. | |
(ii) Vesting. At the time of the grant of a Stock Unit Award, the Board may impose such restrictions or conditions to the vesting of the Stock Unit Award as it, in its sole discretion, deems appropriate. | |
(iii) Payment. A Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Stock Unit Award Agreement. |
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(iv) Additional Restrictions. At the time of the grant of a Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Stock Unit Award after the vesting of such Stock Unit Award. | |
(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Stock Unit Award, as determined by the Board and contained in the Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Stock Unit Award credited by reason of such dividend equivalents will be subject to all the terms and conditions of the underlying Stock Unit Award Agreement to which they relate. | |
(vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Stock Unit Award Agreement, such portion of the Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service. |
(i) Strike Price and Calculation of Appreciation. Each Stock Appreciation Right will be denominated in shares of Common Stock equivalents. The appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater than an amount equal to the excess of (i) the aggregate Fair Market Value (on the date of the exercise of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number of share of Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right, and with respect to which the Participant is exercising the Stock Appreciation Right on such date, over (ii) an amount (the strike price) that will be determined by the Board at the time of grant of the Stock Appreciation Right. | |
(ii) Vesting. At the time of the grant of a Stock Appreciation Right, the Board may impose such restrictions or conditions to the vesting of such Stock Appreciation Right as it, in its sole discretion, deems appropriate. | |
(iii) Exercise. To exercise any outstanding Stock Appreciation Right, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. | |
(iv) Payment. The appreciation distribution in respect to a Stock Appreciation Right may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. | |
(v) Termination of Continuous Service. In the event that a Participant’s Continuous Service terminates, the Participant may exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise such Stock Appreciation Right as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the Stock Appreciation Right Agreement), or (ii) the expiration of the term of the Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after termination, the Participant does not exercise his or her Stock Appreciation Right within the time specified herein or in the Stock Appreciation Right Agreement (as applicable), the Stock Appreciation Right shall terminate. |
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8. | Covenants of the Company. |
9. | Use of Proceeds from Sales of Common Stock. |
10. | Miscellaneous. |
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11. | Adjustments upon Changes in Common Stock; Corporate Transactions. |
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(i) Stock Awards May Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to Stock Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation may choose to assume or continue only a portion of a Stock Award or substitute a similar stock award for only a portion of a Stock Award. The terms of any assumption, continuation or substitution shall be set by the Board in accordance with the provisions of Section 3. | |
(ii) Stock Awards Held by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue Stock Awards outstanding under the Plan or substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the“Current Participants”), the vesting of such Stock Awards (and, if applicable, the time at which such Stock Awards may be exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in full to a date prior to the effective time of such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall lapse (contingent upon the effectiveness of the Corporate Transaction). | |
(iii) Stock Awards Held by Former Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue Stock Awards outstanding under the Plan or substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, the vesting of such Stock Awards (and, if applicable, the time at which such Stock Award may be exercised) shall not be accelerated and such Stock Awards (other than a Stock Award consisting of vested and outstanding shares of Common Stock not subject to the Company’s right of repurchase) shall terminate if not exercised (if applicable) prior to the effective time of the Corporate Transaction;provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall not terminate and may continue to be exercised notwithstanding the Corporate Transaction. | |
(iv) Payment for Stock Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event a Stock Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Stock Award may not exercise such Stock Award but will receive a payment, in such form as may be determined by the Board, equal in value to the excess, if any, of (i) the value of the property the holder of the Stock Award would have received upon the exercise of the Stock Award, over (ii) any exercise price payable by such holder in connection with such exercise. |
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12. | Amendment of the Plan and Stock Awards. |
13. | Termination or Suspension of the Plan. |
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14. | Effective Date of Plan. |
15. | Choice of Law. |
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DETACH HERE | ZMOD62 |
PROXY
MOLECULAR DEVICES CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 26, 2005
The undersigned hereby appoints Joseph D. Keegan, Ph.D., and Timothy A. Harkness, and each of them, as attorneys and proxies of the undersigned, with full power of substitution, to vote all shares of stock of Molecular Devices Corporation which the undersigned may be entitled to vote at the Annual Meeting of Stockholders of Molecular Devices Corporation to be held at the Company’s corporate headquarters, located at 1311 Orleans Drive, Sunnyvale, California 94089, on Thursday, May 26, 2005 at 10:30 a.m., local time, and at any and all postponements, continuations and adjournments thereof, with all powers that the undersigned would possess if personally present, upon and in respect of the following matters and in accordance with the following instructions, with discretionary authority as to any and all other matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, AS MORE SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
SEE REVERSE SIDE | CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SEE REVERSE SIDE |
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MOLECULAR DEVICES CORPORATION
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL | ZMOD61 |
x | Please mark votes as in this example. | #MOD |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2 AND 3 BELOW.
Proposal 1. | To elect directors to serve for the ensuing year and until their successors are elected. | |
Nominees: | Joseph D. Keegan, Ph.D., Moshe H. Alafi, David L. Anderson, A. Blaine Bowman, Paul Goddard, Ph.D., André F. Marion, Harden M. McConnell, Ph.D., and J. Allan Waitz, Ph.D. |
FOR ALL NOMINEES LISTED ABOVE (EXCEPT AS MARKED TO THE CONTRARY BELOW) | o | o | WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE |
____________________________________________
To withhold authority to vote for any nominee(s), write
such nominee(s)’ name(s) above.
FOR | AGAINST | ABSTAIN | ||||||
Proposal 2. | To approve the Molecular Devices Corporation 2005 Equity Incentive Plan. | o | o | o | ||||
Proposal 3. | To ratify the selection of Ernst & Young LLP as Molecular Devices’ independent registered public accounting firm for the fiscal year ending December 31, 2005. | o | o | o |
Please sign exactly as your name appears hereon. If the stock is registered in the names of two or more persons, each should sign. Executors, administrators, trustees, guardians and attorneys-in-fact should add their titles. If signer is a corporation, please give full corporate name and have a duly authorized officer sign, stating title. If signer is a partnership, please sign in partnership name by authorized person.
Please vote, date and promptly return this proxy in the enclosed return envelope which is postage prepaid if mailed in the United States.
Signature: ___________________________________ Date: ______________ Signature: ___________________________________ Date: ______________