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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 under rule 14a-12
CALIPER TECHNOLOGIES CORP.
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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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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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.
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CALIPER TECHNOLOGIES CORP.
605 FAIRCHILD DRIVE
MOUNTAIN VIEW, CA 94043
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 26, 2001
TO THE STOCKHOLDERS OF CALIPER TECHNOLOGIES CORP.:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of CALIPER
TECHNOLOGIES CORP., a Delaware corporation, will be held on Tuesday, June 26,
2001 at 2:00 p.m. local time at our principal executive offices at 605 Fairchild
Drive, Mountain View, CA 94043 for the following purposes:
1. To elect one director to hold office until the 2004 annual meeting of
stockholders and until his successor is elected.
2. To ratify the selection of Ernst & Young LLP as our independent auditors
for the fiscal year ending December 31, 2001.
3. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
The board of directors has fixed the close of business on April 27, 2001 as
the record date for the determination of stockholders entitled to notice of and
to vote at this annual meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
/s/ ROBERT L. JONES
Robert L. Jones
Secretary
Mountain View, California
April 30, 2001
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
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CALIPER TECHNOLOGIES CORP.
605 FAIRCHILD DRIVE
MOUNTAIN VIEW, CA 94043
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PROXY STATEMENT
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FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 26, 2001
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the board of directors of
Caliper Technologies Corp., a Delaware corporation, for use at the annual
meeting of stockholders to be held on Tuesday, June 26, 2001 at 2:00 p.m., local
time, or at any adjournment or postponement thereof, for the purposes set forth
herein and in the accompanying notice of annual meeting. The annual meeting will
be held at our principal executive offices at 605 Fairchild Drive, Mountain
View, CA 94043. We intend to mail this proxy statement and accompanying proxy
card on or about May 21, 2001, to all stockholders entitled to vote at the
annual meeting.
SOLICITATION
We will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of common stock beneficially owned by
others to forward to such beneficial owners. We may reimburse persons
representing beneficial owners of common stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by our directors, officers or other regular employees. No
additional compensation will be paid to our directors, officers or other regular
employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of our common stock at the close of business on
April 27, 2001, will be entitled to notice of and to vote at the annual meeting.
At the close of business on April 27, 2001, we had outstanding and entitled to
vote 23,928,024 shares of common stock.
Each holder of record of our common stock on such date will be entitled to
one vote for each share held on all matters to be voted upon at the annual
meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing a written
notice of revocation or a duly executed proxy bearing a later date with our
secretary at our principal executive offices at 605 Fairchild Drive, Mountain
View, CA 94043, or it may be revoked by attending the meeting and voting in
person. Attendance at the meeting will not, by itself, revoke a proxy.
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STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, the deadline
for submitting a stockholder proposal for inclusion in our proxy statement and
form of proxy for our 2002 annual meeting of stockholders is December 31, 2001.
Pursuant to our bylaws, stockholders who wish to bring matters or propose
nominees for director at our 2002 annual meeting of stockholders must provide
specified information to us between February 26, 2002 and March 28, 2002 unless
the date of our 2002 annual meeting of stockholders is before May 27, 2002 or
after July 26, 2002, in which case the dates for submission of such matters or
proposals shall be not more than 120 days and not less than 90 days before the
2002 annual meeting of stockholders. Stockholders are also advised to review our
bylaws, which contain additional requirements with respect to advance notice of
stockholder proposals and director nominations.
PROPOSAL 1
ELECTION OF DIRECTORS
Our restated certificate of incorporation and bylaws provide that our board
of directors shall be divided into three classes, each class consisting, as
nearly as possible, of one-third of the total number of directors, with each
class having a three-year term. Vacancies on the board may be filled only by
persons elected by a majority of the remaining directors. A director elected by
the board to fill a vacancy (including a vacancy created by an increase in size
of our board of directors) shall serve for the remainder of the full term of the
class of directors in which the vacancy occurred and until such director's
successor is elected and qualified.
Our board of directors presently consists of seven members. There are three
directors in the class whose term of office expires in 2001. These directors are
Charles M. Hartman, David V. Milligan, Ph.D. and Michael Steinmetz, Ph.D., of
which only Dr. Milligan is standing for re-election. Mr. Hartman and Dr.
Steinmetz have advised the board that they do not wish to stand for re-election.
As a result, the board of directors will be reduced to five members as of the
close of the annual meeting. If elected at the annual meeting, Dr. Milligan
would serve until the 2004 annual meeting and until his successor is elected and
qualified, or until his earlier death, resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the nominees named below. In the event that the nominee should be
unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. Dr. Milligan has agreed to serve if elected, and we have no reason to
believe that he will be unable to serve.
Presented below is biographical information for the nominee and for each
person whose term of office as a director will continue after the annual
meeting.
NOMINEE FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2004 ANNUAL MEETING
David V. Milligan, Ph.D., age 60, has been a director since October 1996
and the Chairman of the Board since April 1997. He has been a Vice President and
Special Limited Partner of Bay City Capital, a merchant bank, since 1997. From
1979 to 1996, Dr. Milligan served in a variety of management positions at Abbott
Laboratories, a healthcare products company. During his career at Abbott
Laboratories he led both the diagnostic products and pharmaceutical products
research and development organizations and was Senior Vice President and Chief
Scientific Officer when he retired at the end of 1996. He is also non-executive
Chairman of Versicor, Inc. as well as a director of Collabra Pharma, ICOS
Corporation and Reliant Pharmaceuticals. He is a member of the chemistry
department advisory boards of the University of California, Berkeley and
Princeton University. Dr. Milligan holds an A.B. in Chemistry from Princeton
University and an M.S. and a Ph.D. in Organic Chemistry from the University of
Illinois.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF THE NAMED NOMINEE
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DIRECTORS CONTINUING IN OFFICE UNTIL THE 2002 ANNUAL MEETING
Daniel L. Kisner, M.D., age 54, has served as our President and Chief
Executive Officer since February 1999 and as a director since March 1999. From
May 1994 to January 1999, Dr. Kisner served as a President and Chief Operating
Officer of Isis Pharmaceuticals, Inc., a biotechnology company. From February
1993 to May 1994, Dr. Kisner served as Executive Vice President and Chief
Operating Officer of Isis Pharmaceuticals, Inc. From March 1991 to February
1993, he served as Executive Vice President of Isis Pharmaceuticals, Inc. and
was responsible for business and product development, and manufacturing. From
December 1988 to March 1991, Dr. Kisner served as Division Vice President of
Pharmaceutical Development for Abbott Laboratories. Dr. Kisner has held a
tenured position in the Division of Oncology at the University of Texas, San
Antonio School of Medicine and is certified by the American Board of Internal
Medicine in Internal Medicine and Medical Oncology. Dr. Kisner holds a B.A. from
Rutgers University and an M.D. from Georgetown University.
Regis P. McKenna, age 61, has been a director since September 1998. Mr.
McKenna has been Chairman of The McKenna Group, an international consulting firm
specializing in the application of information and telecommunications
technologies to business strategies, since 1970. Mr. McKenna is on the board of
The Economic Strategies Institute and the Competitiveness Council. He is
Chairman of the Board of the Santa Clara University Center for Science,
Technology and Society and was a founding board member of Smart Valley. He is a
trustee of Santa Clara University and President of the Board of Trustees for the
New Children's Shelter of Santa Clara County. Mr. McKenna is on the board of
directors of Cylink Corporation and a number of high technology start-up
companies. Mr. McKenna holds a B.A. from Duquesne University.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2003 ANNUAL MEETING
Anthony B. Evnin, Ph.D., age 60, has been a director since June 1996. He
has been a General Partner of Venrock Associates, a venture capital partnership
focusing on biotechnology companies, since 1975. He is also a director of GPC
Biotech AG, Sonic Innovations, Inc. and Triangle Pharmaceuticals, Inc. Dr. Evnin
holds an A.B. from Princeton University and a Ph.D. in Chemistry from
Massachusetts Institute of Technology.
Robert T. Nelsen, age 37, has been director since September 1995. Since
July 1994, Mr. Nelsen has served as a senior principal of various venture
capital funds associated with ARCH Venture Partners, including ARCH Venture Fund
II, L.P., ARCH Venture Fund III, L.P., ARCH Venture Fund IV, L.P. and ARCH
Venture Fund V, L.P. From April 1987 to July 1994, Mr. Nelsen was Senior Manager
at ARCH Development Corporation, a company affiliated with the University of
Chicago, where he was responsible for new company formation. Mr. Nelsen is also
a director of Illumina, Inc., Adolor Corporation and Genomica, Inc. Mr. Nelsen
holds a B.S. in Biology and Economics from the University of Puget Sound and an
M.B.A. from the University of Chicago.
BOARD COMMITTEES AND MEETINGS
During the year ended December 31, 2000, our board of directors held seven
meetings. The board has an audit committee and a compensation committee.
The audit committee meets with our independent auditors at least annually
to review the results of the annual audit and discuss the financial statements;
recommends to the board of directors the independent auditors to be retained;
oversees the independence of the independent auditors; evaluates the independent
auditors' performance; and receives and considers the independent auditors'
comments as to controls, adequacy of staff and management performance and
procedures in connection with audit and financial controls. The audit committee
consists of three directors, currently Drs. Evnin, Milligan and Steinmetz. The
audit committee met two times during 2000. All members of the audit committee
are independent (as independence is defined in Rule 4200(a)(14) of the NASD
listing standards) except for Dr. Milligan, who received $80,000 under a
consulting arrangement with Caliper during fiscal 2000. The board of directors
has determined that in light of Dr. Milligan's intimate knowledge of Caliper and
his long-standing service on the board of directors and audit committee, and as
a result of his financial security the consulting fee paid to Dr. Milligan would
not affect his independence in his role on the audit committee, it is required
by our best
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interests and the best interests of our stockholders for Dr. Milligan to serve
on the audit committee. The audit committee has adopted a written Audit
Committee Charter that is attached to this notice as Appendix A.
Our compensation committee reviews and recommends to the board of directors
the compensation and benefits of all our officers and reviews general policy
relating to compensation and benefits of our employees. The compensation
committee also administers the issuance of stock options and other awards under
our stock plans. Current members of the compensation committee are Messrs.
Hartman, McKenna and Nelsen. The compensation committee met two times in 2000.
During the year ended December 31, 2000, all directors attended 75% or more
of the aggregate of the meetings of the board and the committees on which they
served held during the period for which he was a director.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Our board of directors has selected Ernst & Young LLP as our independent
auditors for the fiscal year ending December 31, 2001, and has further directed
that management submit the selection of independent auditors for ratification by
the stockholders at the annual meeting. Ernst & Young LLP has audited our
financial statements since the year ended December 31, 1996. Representatives of
Ernst & Young LLP are expected to be present at the annual meeting, will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
Audit Fees. During the year ended December 31, 2000, the aggregate fees
billed by Ernst & Young LLP for the audit of our financial statements for the
year and for the quarterly review of our financial statements during fiscal 2000
were approximately $263,800.
Financial Information Systems Design and Implementation Fees. During the
fiscal year ended December 31, 2000, no fees were billed by Ernst & Young LLP
for information technology consulting services.
All Other Fees. During the year ended December 31, 2000, the aggregate fees
billed by Ernst & Young LLP for other professional services were approximately
$124,132, consisting entirely of audit related services. Audit related services
generally include fees for accounting, consulting and SEC registration
statements.
The audit committee has determined the rendering of other professional
services by Ernst & Young LLP is compatible with maintaining Ernst & Young LLP's
independence.
Stockholder ratification of the selection of Ernst & Young LLP as our
independent auditors is not required by our bylaws or otherwise. However, our
board is submitting the selection of Ernst & Young LLP to the stockholders for
ratification as a matter of good corporate practice. If the stockholders fail to
ratify the selection, the audit committee and the board will reconsider whether
or not to retain Ernst & Young LLP. 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 if they determine
that such a change would be in our best interests and that of our stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the annual meeting will
be required to ratify the selection of Ernst & Young LLP. Abstentions will be
counted toward the tabulation of votes cast on proposals presented to the
stockholders and will have the same effect as negative votes. Broker non-votes
are counted towards a quorum, but are not counted for any purpose in determining
whether this proposal has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents information regarding the beneficial ownership
of our common stock as of March 31, 2001 by:
- each director and nominee for director;
- each of the executive officers named in the Summary Compensation Table;
- all executive officers, directors and nominees as a group; and
- all those known by us to be beneficial owners of more than five percent
of our common stock.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Beneficial ownership also includes shares of
stock subject to options currently exercisable or convertible, or exercisable or
convertible within 60 days of the date of this table. This table is based upon
information supplied by officers, directors and principal stockholders and
Schedules 13D and 13G, if any, filed with the Securities and Exchange
Commission. Unless otherwise indicated in the footnotes to this table and
subject to community property laws where applicable, we believe that each of the
stockholders named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. Percentage of beneficial
ownership is based on 23,921,895 shares of our common stock outstanding as of
March 31, 2001, adjusted as required by rules promulgated by the Securities and
Exchange Commission. Unless otherwise indicated, the address of each of the
individuals and entities listed below is c/o Caliper at the address on the first
page of this proxy statement.
BENEFICIAL OWNERSHIP
SHARES ISSUABLE ----------------------------------
PURSUANT TO OPTIONS NUMBER OF
EXERCISABLE WITHIN SHARES (INCLUDING
60 DAYS OF NUMBER SHOWN IN PERCENTAGE
BENEFICIAL OWNER MARCH 31, 2001 FIRST COLUMN) OF TOTAL
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DIRECTORS AND EXECUTIVE OFFICERS
Daniel L. Kisner, M.D.(1)....................... 135,359 253,460 1.1%
Calvin Y. H. Chow(2)............................ 9,688 191,247 *
James L. Knighton............................... 61,087 89,329 *
Michael R. Knapp, Ph.D. ........................ 24,644 251,405 1.1
J. Wallace Parce, Ph.D.(3)...................... 60,636 244,672 1.0
David V. Milligan, Ph.D.(4)..................... 6,410 63,032 *
Anthony B. Evnin, Ph.D.(5)...................... -- 614,770 2.6
Charles M. Hartman(6)........................... -- 823,692 3.4
Regis P. McKenna(7)............................. 71,151 122,432 *
Robert T. Nelsen(8)............................. -- 24,018 *
Michael Steinmetz, Ph.D.(9)..................... -- 9,784 *
5% STOCKHOLDERS
Lombard Odier & Cie............................. -- 1,257,501 5.3
All executive officers, directors and nominees
as
a group (14 persons)(10)...................... 412,911 2,759,082 11.3%
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* Represents beneficial ownership of less than 1% of the outstanding shares
of our common stock.
(1) Includes 92,461 shares held by The Kisner Revocable Trust u/a/d 9/23/99, of
which Dr. Kisner is a trustee, 12,820 shares held by The Jordan Renee
Kisner Exempt Irrevocable Trust u/a/d 9/23/99, of which Dr. Kisner is a
trustee, and 12,820 shares held by The Griffin Daniel Kisner Exempt
Irrevocable Trust u/a/d 9/23/99, of which Dr. Kisner is trustee.
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(2) Does not include 42,092 shares held by Alan Chow, the brother of Calvin
Chow, as custodian for the children of Calvin Chow. Calvin Chow does not
have the power to revoke this arrangement and retains no voting or
investment power with respect to these shares.
(3) Includes 12,820 shares held by Charles Andrew Parce and 12,820 shares held
by Laura Marie Parce, the children of Dr. Parce.
(4) Includes 56,622 shares held by The David V. Milligan Trust dated October
19, 1991, of which Dr. Milligan is a trustee.
(5) Includes 321,821 shares held by Venrock Associates, 217,743 shares held by
Venrock Associates II, L.P. and 319 shares held by Venrock Management LLC.
Dr. Evnin is a general partner of Venrock Associates and a managing member
of Venrock Management LLC. Dr. Evnin disclaims beneficial ownership of
these shares except to the extent of his proportionate partnership interest
in these shares.
(6) Includes 755,737 shares held by CW Ventures II, L.P. Mr. Hartman is a
general partner of CW Ventures and disclaims beneficial ownership of these
shares except to the extent of his proportionate partnership interest in
these shares.
(7) Includes 51,281 shares held by The Regis P. and Dianne T. McKenna Trust, of
which Mr. McKenna is a trustee.
(8) Includes 5,000 shares held by ARCH Venture Fund II, L.P. Mr. Nelsen is a
managing director of ARCH Venture Corporation, which is the general partner
of ARCH Venture Partners, L.P., which is the general partner of ARCH
Management Partners II,L.P., which is the general partner of ARCH Venture
Fund II, L.P. Mr. Nelsen disclaims beneficial ownership of these shares
except to the extent of his proportionate partnership interest in these
shares.
(9) The shares are held by MPM Capital Advisors LLC, a wholly owned subsidiary
of MPM Capital L.P. Dr. Steinmetz is a partner of MPM Asset Management LLC.
Dr. Steinmetz disclaims beneficial ownership of these shares except to the
extent of his proportionate partnership interest in these shares.
(10) Total number of shares includes 1,562,048 shares of common stock held by
entities affiliated with directors and executive officers. See footnotes 1
and 3 through 9 above.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and persons who own more than ten percent of a
registered class of our equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of our common stock and our
other equity securities. Officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports
furnished to us and written representations that no other reports were required,
during the year ended December 31, 2000 all Section 16(a) filing requirements
were complied with by our officers, directors and greater than ten percent
beneficial owners except that one report, covering one transaction, although
filed timely by Mr. Radany, was amended to include a second transaction of a
grant of 1,000 shares.
EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION
Directors currently receive no cash compensation for their services as
members of our board of directors or for attendance at committee meetings,
although they may be reimbursed for expenses in connection with attendance at
board and committee meetings. Each of our non-employee directors also receives
stock option grants under the 1999 Non-Employee Directors' Stock Option Plan.
The number of shares of common stock that may be issued pursuant to options
granted under the directors' plan is currently 269,496 and is increased one day
after each annual meeting of stockholders by the greater of 0.3% of the
outstanding shares on a fully diluted basis or the number of shares that could
be issued under options granted under the directors' plan
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during the prior twelve-month period. The directors' plan is administered by our
board of directors, unless the board delegates administration to a committee
comprised of not less than two members of the board. Options granted under the
directors' plan are not intended to qualify as incentive stock options under the
Internal Revenue Code.
Option grants under the directors' plan are non-discretionary. Pursuant to
the terms of the directors' plan, each person who is first elected as a
non-employee director will automatically be granted an option to purchase 20,000
shares of common stock upon such election. The initial grant will be fully
exercisable upon the date of grant and will vest monthly over five years. In
addition, one day after each annual meeting of our stockholders, each
non-employee director will automatically receive another option if the recipient
has been a non-employee director for at least the prior six months. The annual
grant will cover 6,400 shares for the chairman of the board and 3,200 shares
otherwise, will be fully exercisable upon the date of grant and will vest in 12
months. The exercise price of options granted under the directors' plan is equal
to 100% of the fair market value of the common stock subject to the option on
the date of the grant and the term of options granted under the directors' plan
is ten years.
In the event of a dissolution or liquidation, then outstanding options
under the directors' plan will terminate immediately prior to the event. In the
event of a sale, lease or disposition of substantially all of our assets, or if
we are acquired pursuant to a merger or consolidation, then the surviving entity
will either assume or replace all outstanding options under the directors' plan.
If the surviving entity declines to do so, then generally the vesting and
exercisability of the options will accelerate. However, if an option is assumed
or replaced but the optionholder is not elected to the board of directors of the
surviving corporation at the first meeting of the board after the event, the
vesting of the options will accelerate by 18 months.
During the last fiscal year, we granted options to purchase a total of
22,400 shares of our common stock to our non-employee directors, at an exercise
price per share of $58.50. The fair market value of our common stock on the date
of grant was $58.50 per share (based on the closing sales price reported on the
Nasdaq Stock Market for the last market trading day prior to the date of grant).
Our Chairman of the Board received an option to purchase 6,400 shares of our
common stock and all other non-employee directors received an option to purchase
3,200 shares of our common stock. Under our consulting agreement with Regis P.
McKenna, we also granted Mr. McKenna an option to purchase 19,230 shares of our
common stock. The consulting agreement with Mr. McKenna is described further
below.
As of March 31, 2001, a total of 22,400 options have been granted under the
directors' plan. As of March 31, 2001, no options had been exercised under the
directors' plan.
We have entered into consulting agreements with Dr. Milligan and Mr.
McKenna and into an employment agreement with Dr. Kisner. See the section below
entitled "Certain Relationships and Related Transactions" for a description of
the agreement with Dr. Milligan and "Employment, Severance and Change of Control
Agreements" for a description of Dr. Kisner's agreement.
We entered into a twelve-month consulting agreement with Regis P. McKenna,
a member of our board of directors, on April 30, 1997. This agreement has been
renewed and remains in effect. Under the terms of this agreement, Mr. McKenna
agreed to provide assistance in developing our technology and business
strategies. In exchange, Mr. McKenna was allowed to purchase 19,230 shares of
our common stock at $0.62 per share and granted options to purchase 38,640
shares of common stock at $0.97 per share. In June 2000, Mr. McKenna was granted
an option to purchase an additional 19,230 shares of common stock at $58.06 per
share. This option vests in twelve equal monthly installments beginning in May
2000. We also granted Mr. McKenna stock options in connection with his services
as a member of our board of directors as described above.
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COMPENSATION OF EXECUTIVE OFFICERS
The following table presents summary information for the years ended
December 31, 2000, December 31, 1999 and December 31, 1998, regarding
compensation awarded or paid to, or earned by, our Chief Executive Officer and
our other four most highly compensated executive officers whose salary and bonus
for 2000 were in excess of $100,000.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------- ------------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION UNDERLYING OPTIONS COMPENSATION
- --------------------------- ---- -------- -------- ------------ ------------------ ------------
Daniel L. Kisner, M.D.(1)... 2000 $379,173 $173,254 -- -- $286,363
President and Chief 1999 293,013 175,000 -- 641,025 418,270
Executive Officer 1998 -- -- -- -- --
Calvin Y. H. Chow(2)........ 2000 259,896 70,172 -- 7,500 10,405
Chief Operating Officer 1999 235,816 45,198 -- 96,153 --
1998 194,775 38,000 -- 64,102 --
James L. Knighton(3)........ 2000 253,514 75,294 -- 8,000 286,395
Executive Vice President 1999 111,962 18,375 -- 269,230 --
and Chief Financial Officer 1998 -- -- -- -- --
Michael R. Knapp, 2000 222,048 71,944 -- 7,500 1,779
Ph.D.(4)..................
Vice President of 1999 203,952 29,475 -- 57,692 --
Corporate
Development 1998 165,746 22,000 -- 32,051 --
J. Wallace Parce, 2000 222,048 71,994 -- 7,500 10,977
Ph.D.(5)..................
Vice President of Research 1999 203,952 29,475 -- 57,692 --
1998 186,200 22,000 -- 32,051 --
- ---------------
(1) Dr. Kisner joined us in February 1999. Dr. Kisner's all other compensation
in 2000 consisted of $61,383 for relocation assistance and related taxes,
$122,713 related to forgiveness of a portion of Dr. Kisner's housing loan,
$92,035 for income taxes payable on the loan forgiveness, $9,000 for
professional matters and $1,242 for term life insurance premiums for the
benefit of Dr. Kisner. Dr. Kisner's all other compensation in 1999 consisted
of $246,370 for relocation assistance and related taxes, $98,228 related to
forgiveness of a portion of Dr. Kisner's housing loan and $73,672 for income
taxes payable on the loan forgiveness.
(2) Mr. Chow's all other compensation in 2000 consisted of $9,000 for
professional matters and $1,405 for term life insurance premiums for the
benefit of Mr. Chow. Mr. Chow's 1998 bonus includes $19,000 received in cash
and 19,644 shares of common stock received in lieu of cash.
(3) Mr. Knighton joined us in September 1999. Mr. Knighton's all other
compensation in 2000 consisted of 6,250 shares of common stock with a fair
market value of $237,113, $38,610 for bonus payable at time of exercise of
$1.56 per share plus an additional amount to cover taxes, $9,000 for
professional matters, and $1,672 for term life insurance premiums for the
benefit of Mr. Knighton.
(4) Dr. Knapp's all other compensation in 2000 consisted of $1,779 for term life
insurance premiums for the benefit of Dr. Knapp. Dr. Knapp's 1998 bonus
includes $14,740 received in cash and 7,506 shares of common stock received
in lieu of cash.
(5) Dr. Parce's all other compensation in 2000 consisted of $9,000 for
professional matters and $1,977 for term life insurance premiums for the
benefit of Dr. Parce. Dr. Parce's 1998 bonus includes $14,740 received in
cash and 7,506 shares of common stock received in lieu of cash.
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STOCK OPTION GRANTS AND EXERCISES
We grant options to our executive officers under our 1999 Equity Incentive
Plan. As of March 31, 2001, options to purchase a total of 3,482,036 shares were
outstanding under the incentive plan and options to purchase 870,530 shares
remained available for grant thereunder.
The following tables show for the fiscal year ended December 31, 2000,
certain information regarding options granted to, exercised by, and held at year
end by, each of the individuals listed in the Summary Compensation Table.
The exercise price of each option was equal to the closing sales price of
our common stock as reported on the Nasdaq Stock Market for the last market
trading day prior to the date of grant. The exercise price may be paid in cash,
promissory notes, in shares of our common stock valued at fair market value on
the exercise date or through a cashless exercise procedure involving a same-day
sale of the purchased shares. The options granted to Messrs. Chow and Knighton,
and Drs. Knapp and Parce, vest as to 25% of the shares one year from the date of
grant and 1/48 of the shares each month thereafter. Each of the options has a
ten-year term, subject to earlier termination if the optionee's service with us
ceases. Under certain circumstances following a change of control, the vesting
of such option grants may accelerate and become immediately exercisable. See the
section entitled "Employment, Severance and Change of Control Arrangements"
below for a description of our agreements with Dr. Kisner concerning stock
options that have been granted to him.
The potential realizable value is calculated based on the ten-year term of
the option at the time of grant. Stock price appreciation of 5% and 10% is
assumed pursuant to rules promulgated by the Securities and Exchange Commission
and does not represent our prediction of our stock price performance. The
potential realizable values at 5% and 10% appreciation are calculated by
assuming that the stock price on the date of grant, $77.00, appreciates at the
indicated annual rate, compounded annually for the entire term of the option and
that the option is exercised and sold on the last day of its term for the
appreciated stock price. On April 27, 2001, the closing sales price of our
common stock was $21.63.
Percentages shown under "Percentage of Total Options Granted in 2000" are
based on an aggregate of 916,681 options granted to employees, consultants and
directors of Caliper under our stock option plans during 2000.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
------------------------------------------------------------------------- -----------------------
NUMBER OF PERCENTAGE OF TOTAL
SECURITIES UNDERLYING OPTIONS GRANTED EXERCISE PRICE EXPIRATION
NAME OPTION GRANTED IN 2000 PER SHARE DATE 5% 10%
---- --------------------- ------------------- -------------- ---------- ---------- ----------
Daniel L. Kisner,
M.D. ................. -- -- -- -- -- --
Calvin Y. H. Chow....... 7,500 0.82% $77.00 3/16/10 $363,187 $920,386
James L. Knighton....... 8,000 0.87 77.00 3/16/10 387,399 981,745
Michael R. Knapp,
Ph.D.................. 7,500 0.82 77.00 3/16/10 363,187 920,386
J. Wallace Parce,
Ph.D. ................ 7,500 0.82 77.00 3/16/10 363,187 920,386
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AGGREGATE OPTION EXERCISES IN 2000 AND OPTION VALUES AT DECEMBER 31, 2000
The following table presents the aggregate option exercises during 2000,
and the number and value of securities underlying unexercised options that are
held by each of the individuals listed in the Summary Compensation Table as of
December 31, 2000.
Amounts shown under the column "Value Realized" are based on the closing
sales price of our common stock as reported on the Nasdaq Stock Market on the
date of exercise, less the exercise price. Amounts shown under the column "Value
of Unexercised In-the-Money Options at December 31, 2000" are based on the
closing price of our common stock ($47.00) on December 29, 2000 as reported on
the Nasdaq Stock Market, less the exercise price, without taking into account
any taxes that may be payable in connection with the transaction, multiplied by
the number of shares underlying the option, less the exercise price of the
shares underlying the option.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 2000 AT DECEMBER 31, 2000
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ---------- ----------- ------------- ----------- -------------
Daniel L. Kisner, M.D. ...... 69,000 $3,836,029 101,940 405,984 $4,692,298 $18,687,443
Calvin Y. H. Chow............ 0 0 57,327 131,123 2,594,407 5,541,726
James L. Knighton............ 15,000 758,825 52,306 209,924 2,295,187 8,860,425
Michael R. Knapp, Ph.D. ..... 10,000 596,578 36,108 84,650 1,638,368 3,464,593
J. Wallace Parce, Ph.D. ..... 0 0 45,574 85,184 2,073,821 3,489,440
EMPLOYMENT, SEVERANCE AND CHANGE OF CONTROL AGREEMENTS
In December 2000, our board of directors approved a change of control
severance and forward vesting plan for members of our senior management team,
including Calvin Y. H. Chow, James L. Knighton, Michael R. Knapp and J. Wallace
Parce. In the event any of these members of our senior management team are
terminated (including a constructive termination) without cause following an
acquisition or other change of control of Caliper, they will receive monthly
consulting payments equal to their monthly base salary at the time of
termination for 12 months or until they are employed by another company. To the
extent they are not able to receive comparable health insurance benefits, we
will also provide them with up to 12 months of continued health insurance
benefits. In addition, if such senior management team member is terminated
(including constructive termination) without cause during the first 13 months
following an acquisition or other change of control in Caliper, they will
receive accelerated vesting for 30 months for all of their outstanding options.
In September 1999, we entered into an employment agreement with James L.
Knighton to serve as our Chief Financial Officer at a base salary of $245,000 a
year starting in September 1999, with a sign-on bonus of $50,000 and an annual
discretionary bonus set by the board based upon specific objectives to be
determined, with a minimum bonus of 30% of his base salary guaranteed during the
first 12 months of employment. Mr. Knighton received a 2000 merit bonus of
$75,294 and his annual salary for 2001 has been set at $273,087. In addition,
pursuant to the employment agreement, Mr. Knighton received a stock bonus equal
to 6,250 shares in June 2000 as a result of our common stock trading at or above
$20.00 per share for six consecutive months. Pursuant to the employment
agreement, Mr. Knighton also received an option in October 1999 to purchase
269,230 shares of our common stock at an exercise price of $3.12 per share, plus
a bonus payable at the time of exercise in the amount of $1.56 per share of
stock exercised, plus an additional amount to cover taxes on the bonus. In
addition, Mr. Knighton is entitled to a housing loan of up to $500,000. The
employment agreement is at-will, and provides that if Mr. Knighton is terminated
without cause or Mr. Knighton voluntarily terminates his employment after a
constructive termination, he will be paid his base salary for 12 months in
monthly installments or until he becomes employed, whichever is earlier, and a
portion of his options will be partially accelerated.
In January 1999, we entered into an employment agreement with Daniel L.
Kisner, M.D. to serve as our President and Chief Executive Officer at a base
salary of $350,000 a year starting on February 28, 1999, with
10
13
an annual discretionary bonus of up to 50% of his base salary based upon
specific objectives to be agreed upon by Dr. Kisner and our board. Dr. Kisner
received a 2000 merit bonus of $173,254 and his annual salary for 2001 has been
set at $420,307. Pursuant to the employment agreement, Dr. Kisner received an
option to purchase 641,025 shares of our common stock at an exercise price of
$0.97 per share. This option vests over a period of five years in 60 equal
monthly installments. In addition, Dr. Kisner is entitled to a housing loan of
up to $500,000 which may be forgiven over time, and monthly mortgage assistance
to support a $500,000 mortgage, plus additional payments to compensate for the
tax payable on these portions of his compensation. In July 1999, we loaned Dr.
Kisner $425,000 with an annual interest rate of 5.96% in connection with the
purchase of a residence and in July 2000, we increased the loan amount by
$75,000 to a total of $500,000. The loan is described further in "Certain
Relationships and Related Transactions -- Indebtedness of Management" below. In
connection with Dr. Kisner's 2000 performance review, a total of $122,713 of his
housing loan and associated interest was forgiven. In addition, Dr. Kisner was
reimbursed $92,035 for the income tax payable on the loan forgiveness. The
employment agreement is at-will and contains a non-solicitation agreement. This
agreement also provides that if Dr. Kisner is terminated without cause or Dr.
Kisner voluntarily terminates his employment after a constructive termination,
he will be paid his then current salary for 12 months in monthly installments or
until he becomes employed, whichever is earlier, and a portion of his options
will be partially accelerated.
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS(1)
The audit committee of the board of directors in 2000 consisted of Drs.
Evnin, Milligan and Steinmetz. Under currently applicable rules, all members are
independent, except for Dr. Milligan who received compensation from Caliper
under a consulting arrangement. See "Proposal 1 -- Board Committees and
Meetings." The board of directors has adopted a written charter for the audit
committee, which is attached to this notice as Appendix A.
The audit committee oversees Caliper's financial reporting process on
behalf of the board of directors. Management has primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the committee reviewed
the audited financial statements in the Annual Report with management including
a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgements, and the clarity of
disclosures in the financial statements.
The committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgements as to
the quality, not just the acceptability, of Caliper's accounting principles and
such other matters as are required to be discussed with the committee under
generally accepted auditing standards. In addition, the committee has discussed
with the independent auditors the auditors' independence from management and
Caliper including the matters in the written disclosures required by the
Independence Standards Board and considered the compatibility of nonaudit
services with the auditors' independence.
The committee discussed with Caliper's independent auditors the overall
scope and plans for their audit. The committee meets with the independent
auditors, with and without management present, to discuss the results of their
examination, their evaluation of Caliper's internal controls, and the overall
quality of Caliper's financial reporting. The committee held two meetings during
fiscal 2000.
In reliance on the reviews and discussions referred to above, the committee
recommended to the board of directors and the board has approved that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2000 for filing with the Securities and Exchange
Commission. The committee and the board have also recommended, subject to
stockholder approval, the selection of Ernst & Young LLP as Caliper's
independent auditors for the year ending December 31, 2001.
AUDIT COMMITTEE
Anthony B. Evnin, Ph.D.
David V. Milligan, Ph.D.
Michael Steinmetz, Ph.D.
- ---------------
(1) Notwithstanding anything to the contrary set forth in any of our previous
filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this proxy statement, in whole or in part, the following report
shall not be incorporated by reference into any such filings.
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REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION(2)
The compensation committee of the board of directors in 2000 consisted of
Messrs. Hartman and Nelsen and Dr. Milligan until April 2000, and thereafter
consisted of Messrs. Hartman, McKenna and Nelsen, none of whom have ever been
executive officers or employees of Caliper. The committee is responsible for
establishing our compensation programs for all employees, including our
executive officers. For executive officers, the committee evaluates performance
and determines compensation policies and levels.
Compensation Philosophy
The goals of our compensation program are to align compensation with
business objectives and performance and to enable us to attract, retain and
reward executive officers and other key employees who contribute to our
long-term success and to motivate them to enhance long-term stockholder value.
Key elements of this philosophy are:
- We pay competitively with other biotechnology companies with which we
compete for talent. To ensure that our pay is competitive, we compare our
pay practices with these companies and set our pay parameters based on
this review.
- We provide significant equity-based incentives for executives and other
key employees to ensure that they are motivated over the long term to
respond to our business challenges and opportunities as owners and not
just as employees.
Salary. The committee annually reviews each executive officer's salary.
When reviewing salaries, the committee considers individual and corporate
performance, levels of responsibility, prior experience, breadth of knowledge
and competitive pay practices. The committee's objective is to set executive
compensation at the market average when compared to leading companies in the
biotechnology industry. The primary components of executive compensation are
base salary, annual incentives and long-term equity incentives.
Cash Bonus. The committee annually reviews each executive officer's bonus,
our aggregate bonus pool and the bonus allocations by employee position. Payment
of cash bonuses is tied to the accomplishment of specific corporate milestones
set at the beginning of the year and to each individual officer's year-end
performance review.
Equity Incentives. Our equity incentive program consists of the 1999 Equity
Incentive Plan and the 1999 Employee Stock Purchase Plan. Our option program
utilizes vesting periods (generally four years) to encourage key employees to
continue in our employ. Through option grants, executives receive significant
equity incentives to build long-term stockholder value. Under the incentive
plan, grants are made at 100% of fair market value on the date of grant.
Executives receive value from these grants only if our common stock appreciates
over the long term. The size of option grants is determined based on competitive
practices in the biotechnology industry and our philosophy of significantly
linking executive compensation with stockholder interests. The committee
believes this approach creates an appropriate focus on longer term objectives
and promotes executive retention. The Board granted options to purchase an
aggregate of 90,100 shares of our common stock to our executive officers in
2000.
We established the purchase plan both to encourage employees to continue in
our employ and to motivate employees through ownership interest. Under the
purchase plan, employees, including officers, may have up to 10% of their
earnings withheld for purchases of our common stock on certain dates specified
by our board. The price of common stock purchased will be equal to 85% of the
lower of the fair market value of the common stock on the relevant purchase date
or commencement date of the relevant offering period. The initial offering
- ---------------
(2) Notwithstanding anything to the contrary set forth in any of our previous
filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this proxy statement, in whole or in part, the following report
and performance graph shall not be incorporated by reference into any such
filings.
13
16
period under the purchase plan commenced on December 15, 1999 and there were two
purchases during fiscal 2000.
CHIEF EXECUTIVE OFFICER COMPENSATION
Dr. Kisner's salary and bonus for fiscal 2000 are consistent with the
criteria described above and with the compensation committee's evaluation of his
overall leadership and management of Caliper. The committee considered, among
other achievements, that 2000 was a year of significant change and growth for
Caliper. Caliper introduced new applications for the Agilent 2100 Bioanalyzer,
the LabChip(R) personal laboratory system marketed by our commercial partner,
Agilent Technologies. Caliper successfully delivered LabChip(R) high throughput
systems for drug screening to its Technology Access Program customers and
provided the first multi-capillary sipper chip system. In addition, we completed
a private placement of 2,300,000 shares of our common stock in August, raising
approximately $105 million. Dr. Kisner's compensation for 2000 is set forth in
the Summary Compensation Table. The committee has set Dr. Kisner's annual salary
for 2001 at $420,307.
FEDERAL TAX CONSIDERATIONS
Section 162(m) of the Internal Revenue Code limits Caliper to a deduction
for federal income tax purposes of no more than $1 million of compensation paid
to certain executive officers in a taxable year. Compensation above $1 million
may be deducted if it is "performance-based compensation" within the meaning of
the code.
The statute containing this law and the applicable Treasury regulations
offer a number of transitional exceptions to this deduction limit for
pre-existing compensation plans, arrangements and binding contracts. As a
result, the committee believes that at the present time it is quite unlikely
that the compensation paid to any executive officer in a taxable year that is
subject to the deduction limit will exceed $1 million. Therefore, the committee
has not yet established a policy for determining which forms of incentive
compensation awarded to its executive officers shall be designed to qualify as
"performance-based compensation." The committee intends to continue to evaluate
the effects of the statute and any applicable Treasury regulations and to comply
with code section 162(m) in the future to the extent consistent with Caliper's
best interests.
CONCLUSION
Through the plans described above, a significant portion of our
compensation program and Dr. Kisner's compensation are contingent on Caliper's
performance, and realization of benefits is closely linked to increases in
long-term stockholder value. We remain committed to this philosophy of pay for
performance, recognizing that the competitive market for talented executives and
the volatility of our business may result in highly variable compensation for a
particular time period.
COMPENSATION COMMITTEE
Charles M. Hartman
Regis P. McKenna
Robert T. Nelsen
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2000, Messrs. Hartman, McKenna and Nelsen and Dr.
Milligan served as members of the compensation committee of our board of
directors. No member of the compensation committee serves as a member of the
board of directors or compensation committee of any other entity that has one or
more executive officers serving as a member of our board of directors or
compensation committee. Prior to the formation of the compensation committee in
June 1996, our board of directors as a whole made decisions relating to
compensation of our executive officers.
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PERFORMANCE MEASUREMENT COMPARISON
The following graph shows the total stockholder return on an investment of
$100 in cash on December 15, 1999, including reinvestment of dividends, for:
- Caliper's common stock;
- the Nasdaq Stock Market (U.S.) and
- the Nasdaq Pharmaceutical Index.
COMPARISON OF 13 MONTH CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
CALIPER NASDAQ STOCK NASDAQ
TECHNOLOGIES CORP. MARKET (U.S.) PHARMACEUTICAL
------------------ ------------- --------------
12/15/99 100.00 100.00 100.00
12/31/00 293.75 67.73 155.13
CALIPER TECHNOLOGIES CORP
CUMULATIVE
TOTAL RETURN
--------------------
12/15/99 12/31/00
-------- --------
Caliper Technologies Corp. ........................... $100.00 $293.75
Nasdaq Stock Market (U.S.)............................ 100.00 67.73
Nasdaq Pharmaceutical Index........................... 100.00 155.13
This section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the company
under the Securities Act of 1933 or the Securities Exchange Act of 1934 whether
made before or after the date hereof and irrespective of any general
incorporation language in any such filing. Stockholder returns over the
indicated period should not be considered indicative of future stockholder
returns.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Employment and Consulting Agreements. As part of our ongoing program of
research and development, we entered into a twelve-month consulting agreement
with Dr. David V. Milligan, our Chairman of the Board, effective April 30, 1997.
This agreement may be renewed annually for up to five years and remains in
effect. Under the terms of this agreement, Dr. Milligan agreed to provide
consultation and advice concerning our core competitive strengths and the
development of optimal growth strategies. In exchange, we agreed to pay Dr.
Milligan $80,000 per year and granted Dr. Milligan a stock option to purchase
64,102 shares of our common stock at $0.47 per share. This option vests monthly
over a period of five years. We also granted Dr. Milligan stock options in
connection with his services as a member of our board of directors. See the
section above entitled "Director Compensation" for a description of these
grants.
Indebtedness of Management. In March 1997, we loaned Michael R. Knapp, our
Vice President of Corporate Development, $200,000 in connection with the
purchase of a residence. The interest on this loan is 6.61% per year and begins
to accrue on January 1, 2002. The principal and accrued interest is to be repaid
in five equal annual installments beginning June 30, 2002. The promissory note
will accelerate and become due and payable should Dr. Knapp's employment with us
be terminated for any reason. The promissory note is full recourse and is
secured by a deed of trust on the residence. In July 1999, we loaned Daniel L.
Kisner, M.D., our President and Chief Executive Officer, $425,000 in connection
with the purchase of a residence. In June 2000, we increased the loan amount by
$75,000 to a total of $500,000. The loan has a maximum term of six years with an
annual interest rate of 5.96%. At December 31, 2000, Dr. Kisner owed us
$435,477. In connection with Dr. Kisner's 2000 performance review, a total of
$122,713 of Dr. Kisner's housing loan and associated interest was forgiven.
Stock Options. See the section above entitled "Executive Compensation" for
a description of stock options granted to our directors and executive officers.
Indemnification Agreements. We have entered into indemnification agreements
with our directors and officers for the indemnification of these persons to the
full extent permitted by law. We also intend to execute these agreements with
future directors and officers.
OTHER MATTERS
Our board of directors knows of no other matters that will be presented for
consideration at the annual meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ ROBERT L. JONES
Robert L. Jones
Secretary
April 30, 2001
OUR ANNUAL REPORT TO THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 IS AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO: CORPORATE COMMUNICATIONS, CALIPER TECHNOLOGIES
CORP., 605 FAIRCHILD DRIVE, MOUNTAIN VIEW, CA 94043.
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APPENDIX A
CALIPER TECHNOLOGIES CORP.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
ORGANIZATION
The Audit Committee of the Board of Directors of Caliper Technologies Corp.
(the "Company") shall consist of at least three members of the Board of
Directors (the "Board"). The members of the Audit Committee shall meet the
independence and experience requirements of The Nasdaq Stock Market; provided,
however, that the Board may determine that one member shall not be required to
satisfy the independence requirements if in accordance with Rule
4310(c)(26)(B)(ii) of The Nasdaq Stock Market.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board in fulfilling its
responsibility to the stockholders, potential stockholders, and investment
community relating to corporate accounting and reporting practices of the
Company, and the quality and integrity of the financial reports of the Company.
In so doing, it is the responsibility of the Audit Committee to maintain free
and open means of communication between the directors, the independent auditors
and the financial management of the Company.
RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible in order to best react to
changing conditions and to ensure to the directors and stockholders that the
corporate accounting and reporting practices of the Company are in accordance
with all requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee shall:
- Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the Company and its
divisions and subsidiaries, which firm is ultimately accountable to the
Audit Committee and the Board, as representatives of the Company's
stockholders.
- Receive written statements from the independent auditors delineating all
relationships between the independent auditors and the Company consistent
with Independence Standards Board Standard No. 1, and consider and
discuss with the auditors any disclosed relationships or services that
could affect the auditors' objectivity and independence, and if so
determined by the Audit Committee, recommend that the Board take
appropriate action to oversee the independence of the auditors.
- Evaluate, together with the Board, the performance of the independent
auditors and, if determined by the Audit Committee, recommend that the
Board replace the independent auditors.
- Meet with the independent auditors and financial management of the
Company to review the scope of the proposed audit for the current year
and the audit procedures to be utilized, and at the conclusion thereof
review such audit, including any comments or recommendations of the
independent auditors.
- Review with the independent auditors and the Company's financial and
accounting personnel the adequacy and effectiveness of the accounting and
financial controls of the Company, and elicit any recommendations for the
improvement of such internal control procedures or particular areas where
new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any payments, transactions, or procedures that might be deemed
illegal or otherwise improper. Further, the Audit Committee periodically
should review Company policy statements to determine their adherence to
the code of conduct.
A-1
20
- Evaluate the cooperation received by the independent auditors during
their audit examination, including their access to all requested records,
data and information, and to elicit the comments of management regarding
the responsiveness of the independent auditors to the Company's needs.
- Review the financial statements contained in the annual report to
stockholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the stockholders.
Any changes in accounting principles should be reviewed.
- Meet with the independent auditors and senior management in separate
executive sessions to discuss any matters that the Audit Committee, the
independent auditors or senior management believe should be discussed
privately with the Audit Committee.
- Review accounting and financial human resources planning within the
Company.
- Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel and separate accountants
for this purpose if, in its judgment, such retention or investigation is
appropriate.
- Review and assess the adequacy of this charter annually and recommend any
proposed changes to the Board for approval.
- Submit the minutes of all meetings of the Audit Committee to, or discuss
the matters discussed at each Audit Committee meeting with, the Board.
- Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
- Perform such other functions and to have such power as it may deem
necessary or advisable in the efficient and lawful discharge of the
foregoing.
The operation of the Audit Committee shall be subject to the By-laws as in
effect from time to time and Section 141 of the Delaware General Corporation
Law.
A-2
21
PROXY
CALIPER TECHNOLOGIES CORP.
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, JUNE 26, 2001
CALIPER TECHNOLOGIES CORP.
605 FAIRCHILD DRIVE
MOUNTAIN VIEW, CA 94303
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON JUNE 26, 2001.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
By signing the proxy, you revoke all prior proxies and appoint Daniel L. Kisner,
M.D. and James L. Knighton, and each of them, with full power of substitution,
to vote your shares on the matters shown on the reverse side and any other
matters which may come before the Annual Meeting and all adjournments.
See reverse for voting instructions.
22
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1: To elect one Director to hold office until the 2004 Annual Meeting of
Stockholders.
NOMINEES: (01) David V. Milligan, Ph.D.
|_| FOR all nominees listed above. |_| WITHHOLD AUTHORITY
to vote for all nominees
listed above.
(INSTRUCTION: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDICATED NOMINEE,
WRITE THE NUMBER OF THE NOMINEE IN
THE BOX PROVIDED TO THE RIGHT.)
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2: To ratify the selection of Ernst & Young LLP as independent auditors of the
Company for its fiscal year ending December 31, 2001.
|_| FOR |_| AGAINST |_| ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address change? Mark Box |_|
Indicate changes below:
Date:
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Signature(s) in Box
Please sign exactly as your name(s) appear on Proxy. If held in
joint tenancy, all persons must sign. Trustees, administrators,
etc., should include title and authority. Corporations should
provide full name of corporation and title of authorized officer
signing the proxy.