SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement of the Commission Only
[ ] Definitive Additional Materials (as permitted by Rule
[ ] Soliciting Material Pursuant to 14a-6(e)(2))
Rule 14a-11(c) or Rule 14a-12
BIOSOURCE INTERNATIONAL, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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 transactions 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 filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing. (1) Amount previously paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing party:
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(4) Date filed:
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BIOSOURCE INTERNATIONAL, INC.
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 26, 2001
-----------
TO OUR STOCKHOLDERS:
Notice is hereby given that the 2001 Annual Meeting of Stockholders of
BioSource International, Inc. (the "Company") will be held at the Hyatt Westlake
Plaza, 880 S. Westlake Blvd., Westlake Village, California, 91361, on July 26,
2001 at 9:00 a.m., Pacific time. The Annual Meeting is being held for the
following purposes:
1. To elect six directors to hold office for one year and until their
respective successors have been elected. The persons nominated by our Board
of Directors, Jean-Pierre L. Conte, Leonard M. Hendrickson, David J. Moffa,
Ph.D., John R. Overturf, Jr., Robert D. Weist and Robert J. Weltman, are
described in the accompanying Proxy Statement;
2. To ratify the appointment of KPMG, LLP, as our independent public
accountants for the year ending December 31, 2001; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
Only stockholders of record of our common stock at the close of business on
May 29, 2001, are entitled to notice of and to vote at the Annual Meeting and at
any adjournments or postponements thereof.
All stockholders of record are cordially invited to attend the Annual
Meeting in person. However, to ensure your representation at the Annual Meeting,
you are urged to mark, sign and return the enclosed Proxy as promptly as
possible in the postage prepaid envelope enclosed for that purpose. Any
stockholder of record attending the Annual Meeting may vote in person, even
though he or she has returned a Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ CHARLES C. BEST
-----------------------------------
Charles C. Best,
CHIEF FINANCIAL OFFICER AND
EXECUTIVE V.P., FINANCE
Camarillo, California
May 30, 2001
IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE AS PROMPTLY AS
POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOU OWN SHARES
REGISTERED IN DIFFERENT NAMES OR AT DIFFERENT ADDRESS, EACH CARD SHOULD BE
COMPLETED AND RETURNED.
BIOSOURCE INTERNATIONAL, INC.
542 FLYNN ROAD
CAMARILLO, CALIFORNIA 93012
(805) 987-0086
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 26, 2001
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of BioSource International, Inc., a Delaware
corporation (the "Company"), for use at the 2001 Annual Meeting of Stockholders
(the "Annual Meeting") to be held at Hyatt Westlake Plaza, 880 S. Westlake
Blvd., Westlake Village, California, 91361, on July 26th, 2001 at 9:00 a.m.,
Pacific time, and at any adjournments or postponements thereof, for the purposes
set forth herein and in the attached Notice of Annual Meeting of Stockholders.
Accompanying this Proxy Statement is the Board of Directors' Proxy for the
Annual Meeting, which you may use to indicate your vote on the proposals
described in this Proxy Statement.
All Proxies which are properly completed, signed and returned to us prior
to the Annual Meeting, and which have not been revoked, will unless otherwise
directed by the stockholder be voted in accordance with the recommendations of
the Board of Directors set forth in this Proxy Statement. A stockholder of
record may revoke his or her Proxy at any time before it is voted either by
filing with our Secretary, at our principal executive offices, a written notice
of revocation or a duly executed proxy bearing a later date, or by attending the
Annual Meeting and expressing a desire to vote his or her shares in person.
The close of business on May 29, 2001 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting or at any adjournments or postponements of the Annual Meeting. At
the record date, 10,444,929 shares of common stock, par value $.001 per share,
were outstanding. Our common stock is the only outstanding class of our
securities entitled to vote at the Annual Meeting.
It is anticipated that this Proxy Statement and the accompanying Proxy will
be mailed to stockholders on or about June 8, 2001.
VOTING PROCEDURES
A stockholder is entitled to cast one vote for each share held of record on
the record date on all matters to be considered at the Annual Meeting. The six
nominees for election as directors at the Annual Meeting who receive the highest
number of affirmative votes will be elected. Abstentions and broker non-votes
will be included in the number of shares present at the Annual Meeting for the
purpose of determining the presence of a quorum. Abstentions will be counted
toward the tabulation of votes cast on proposals submitted to stockholders and
will have the same effect as negative votes, while broker non-votes will not be
counted as votes cast for or against such matters.
Page 1
ELECTION OF DIRECTORS
In accordance with our Bylaws, the Board of Directors has fixed the number
of directors at seven. At each annual meeting of stockholders, the directors are
elected, each for a one-year term. Six directors will be elected at the Annual
Meeting. The current vacancy on the Board of Directors is the result of the
recent resignation of Russell Hays in May of 2001. Pursuant to its authority
under the Company's Bylaws, the Board of Directors will appoint an individual to
fill the vacancy on the Board as soon as a suitable replacement can be
identified.
Unless otherwise instructed, the Proxy holders will vote the Proxies
received by them for the nominees named below. If any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting or any
postponements or adjournments, the Proxies will be voted for such other
nominee(s) as shall be designated by the current Board of Directors to fill any
vacancy. We have no reason to believe that any nominee will be unable or
unwilling to serve if elected as a director.
The Board of Directors proposes the election of the following nominees as
directors:
Jean-Pierre L. Conte
Leonard M. Hendrickson
David J. Moffa, Ph.D.
John R. Overturf, Jr.
Robert D. Weist
Robert J. Weltman
If elected, each nominee is expected to serve until the 2002 Annual Meeting
of Stockholders. The six nominees for election as directors at the Annual
Meeting who receive the highest number of affirmative votes will be elected.
The Board of Directors Unanimously Recommends a Vote "FOR" the Election of
the Nominees Listed Above.
Page 2
INFORMATION WITH RESPECT TO NOMINEES, CONTINUING DIRECTORS AND EXECUTIVE
OFFICERS
The following table sets forth certain information with respect to the
nominees, continuing directors, executive officers and other significant
executives of the Company as of May 29, 2001.
NAME AGE POSITION
- ---- --- --------
Jean-Pierre L. Conte (1) 37 Interim Chairman of the Board
of Directors, Director
and Director Nominee
Leonard M. Hendrickson (1) 53 Director and Director Nominee
David J. Moffa, Ph.D. (1) 58 Director and Director Nominee
John R. Overturf, Jr. (2) 40 Director and Director Nominee
Robert D. Weist (2) 61 Director and Director Nominee
Robert J. Weltman (2) 35 Director and Director Nominee
James H.Chamberlain 53 Interim Chief Executive Officer
Charles C. Best 41 Chief Financial Officer and
Executive Vice President,
Finance
David S. Thrower 37 Vice President, Global Marketing
Brent W. Keller 49 Vice President, Global Sales
and Business Development
Cirilo D. Cabradilla, Ph.D. 53 Vice President, Molecular
Biology
Kevin J. Reagan, Ph.D. 49 Vice President, Immunology
Jozef Vangenechten, Ph.D. 46 General Manager, BioSource
Europe, S.A.
<FN>
- ---------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
- ---------------------
</FN>
Brief statements setting forth the principal occupation and employment
during the past five years, the year in which first elected as director and
other information concerning each nominee and the executive officers appear
below.
JEAN-PIERRE L. CONTE has served as a director of the Company since February
2000 and was appointed as Interim Chairman of the Board in May 2001. Mr. Conte
is a Managing Director of Genstar Capital LLC, which is the sole general partner
of Genstar Capital Partners II, L.P., a private equity investment firm, and a
Managing Director of Genstar Capital L.P., which is the sole general partner of
Genstar Capital Partners III, L.P. Prior to joining Genstar in 1995, he was a
principal for six years at the NTC Group, Inc., a private equity investment
firm. He is a director of several private companies. Mr. Conte earned a Masters
of Business Administration from Harvard University Graduate School of Business
and a Bachelor of Arts from Colgate University. Mr. Conte has been appointed to
the Board of Directors pursuant to an investor rights agreement among Genstar,
Stargen and us, which is described under "Relationships and Related
Transactions."
LEONARD M. HENDRICKSON has been a Director of the Company since October
1993. Mr. Hendrickson is the President of Isotope Products Laboratories, a
position he has held since February 1992. From February 1990 to January 1992,
Mr. Hendrickson served as the principal consultant for Microchemics, a marketing
and business development consulting firm that he founded. Mr. Hendrickson also
serves on the board of directors of Isotope Products Laboratories, a subsidiary
of Eckert & Ziegler AG. Mr. Hendrickson holds a Bachelor of Science degree from
the University of Pennsylvania and a Masters in Business Administration from
American University in Washington D.C.
DAVID J. MOFFA, PH.D. has been a Director of the Company since April 1995.
Dr. Moffa serves as the Regional Director and as special projects director for
Lab Corporation of America, Inc. located in Fairmont, WV, positions he has held
since 1982 and 1984, respectively. In addition, Mr. Moffa currently serves as a
Director of
Page 3
LabCorp in Pittsburgh, PA, a position he has held since 1985. Dr. Moffa also
serves as an advisor and consultant to various diagnostic, scientific and health
care facilities, and is an owner and developer of GM Realty and Moffa
Properties. Dr. Moffa also serves on a number of committees and boards of
directors of various privately held companies and governmental offices,
including One Valley Bank, Inc. Dr. Moffa has completed a post doctoral
fellowship in Clinical Biochemistry at the West Virginia University National
Institutes of Health, holds a Ph.D. in Medical Biochemistry from the West
Virginia University School of Medicine, a Masters of Science degree in
Biochemistry from West Virginia University and a Bachelor of Arts degree in
Pre-Medicine from West Virginia University.
JOHN R. OVERTURF, JR. has been a director of the Company since September
1993. Mr. Overturf serves as the President of R.O.I., Inc., a private investment
company, a position he has held since July 1993. He also serves as President of
the Combined Penny Stock Fund, Inc., a closed-end stock market fund, a position
he has held since 1996. From September 1993 until September 1996, Mr. Overturf
served as Vice President of The Rockies Fund, Inc., a closed-end stock market
fund. Mr. Overturf holds a Bachelor of Science degree in Finance from the
University of Northern Colorado.
ROBERT D. WEIST has been a director of the Company since April 1996. Mr.
Weist has been President of Weist Associates, a management consulting firm,
since April 1992. From January 1986 through April 1992, Mr. Weist was a
consultant to and Senior Vice President, Administration, General Counsel and
Secretary of Amgen, Inc., having served as Vice President, General Counsel and
Secretary from March 1982 through January 1986. Mr. Weist holds a Juris Doctor
degree from New York University and a Masters in Business Administration from
the University of Chicago.
ROBERT J. WELTMAN has served as a director of BioSource since February
2000. He is a Principal of Genstar Capital L.P., the sole general partner of
Genstar Capital Partners II, L.P., a private equity investment firm. Mr. Weltman
joined Genstar in August 1995. Prior to joining Genstar, from July 1993 to July
1995, Mr. Weltman was an Associate with Robertson, Stephens & Company, an
investment banking firm. Mr. Weltman holds an AB degree in chemistry from
Princeton University. Mr. Weltman has been appointed to the Board of Directors
pursuant to an investor rights agreement among Genstar, Stargen and us, which is
described under "Relationships and Related Transactions"
JAMES H. CHAMBERLAIN was appointed as the Company's Interim Chief Executive
Officer in May 2001. Before retiring in September 2000, Mr. Chamberlain had
served as Director, President and Chief Executive Officer of the Company and its
predecessor, BioSource Industries, Inc., since it was founded in October 1989,
and was elected as its Chairman of the Board in November 1993. Prior to 1993,
Mr. Chamberlain was Manager for Business Development for Amgen, Inc., where he
started and managed the Amgen Biologicals Division. Mr. Chamberlain has held
various executive positions with Browning Ferris Industries and Amersham
Corporation, a biomedical company, and was a research biochemist for Wm. H.
Rorer Pharmaceutical, a major pharmaceutical company. He received his Bachelor
of Arts degree from West Virginia University, and studied biochemistry at the
University of Pittsburgh.
CHARLES C. BEST joined the Company in December 1999 as Chief Financial
Officer. Prior to his employment at BioSource, Mr. Best served four and a half
years as Vice President and Chief Financial Officer of Cogent Light
Technologies, Inc., a company engaged in the manufacture of surgical lighting
instruments. From 1989 to 1995, Mr. Best worked in various positions including
Corporate Controller for 3D Systems, Inc., a company engaged in the manufacture
and sale of high tech rapid prototyping equipment. Mr. Best is a CPA and holds a
Bachelor of Science degree in Business Administration and Accounting from San
Diego State University.
DAVID THROWER became Senior Vice President of Global Marketing in November
2000. Mr. Thrower served as Senior Vice President of Global Marketing for GN
Resound, Inc. from 1998 to 1999. From 1993 to 1998 Mr. Thrower worked for
Quattro Consulting, Inc. and served as their Vice President from 1996 to 1998.
Mr. Thrower holds a Master degree in Business Administration from Harvard
Graduate School of Business Administration, and a Bachelor's degree in
Mathematics and Computational Sciences from Stanford University.
BRENT KELLER became Senior Vice President of Global Sales and Marketing in
November 2000. Prior to joining BioSource, Mr. Keller served as Director of
Marketing, Sales and Business Development with Chemicon International from 1999
to 2000. From 1994 to 1999 Mr. Keller held the position of General Manager of
Instrument Systems with Stratagene. From 1987 to 1994, Mr. Keller was Founder
and President of Conceptual Marketing International. He has also held various
executive management positions with Beckman Instruments, Infinitek, Inc.,
Page 4
Becton Dickinson and Bio-Rad Labs. Mr. Keller received a Bachelor of Science in
Biology from Rensselaer Polytechnic Institute and a Masters of Business
Administration from Pepperdine University.
CIRILO C. CABRADILLA, JR., PH.D. became Vice President of Molecular Biology
and President of our Keystone division in November 1995. From 1991 to 1995, Dr.
Cabradilla served as President of Keystone Laboratories, Inc. From 1988 to 1991,
Dr. Cabradilla was Vice President, Product Development, of Vascor, a
pharmaceutical company. Dr. Cabradilla was an Assistant Professor of Viral
Oncology from 1996-1997 at the University of Pennsylvania, School of Veterinary
Medicine. He did his postdoctoral training at the National Cancer Institute from
1974-1977. Dr. Cabradilla received a Bachelor of Science and a Ph.D. degree in
BioChemistry from the university of California at Davis.
KEVIN J. REAGAN, PH.D., became Vice-President, Immunology in December 1996.
From 1991 to December 1996, Dr. Reagan served as the first Director of
Development Laboratories and then Vice President, Laboratory Operations at
Specialty Laboratories, Inc., a clinical reference lab. From 1990 to 1991, Dr.
Reagan was the Associate Director of AIDS/Hepatitis R&D at Ortho Diagnostics,
Inc., a Johnson & Johnson Company. Dr. Reagan received his Bachelor of Arts in
Biological Sciences from the University of Delaware. Dr. Reagan received both
his Masters and Ph.D. degrees in Microbiology
JOZEF VANGENECHTEN, PH.D. became Managing Director of BioSource Europe,
S.A. in February 1998. From 1988 to February 1998, Dr. Vangenechten worked for
Societe Generale de Surveillance, n.v., an international provider of
environmental compliance services, most recently as Managing Director of SGS's
EcoCare Environmental Services division.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held eight meetings during fiscal 2000. No director
attended less than 75% of all the meetings of the Board of Directors and those
committees on which he served in fiscal 2000.
The Board of Directors maintains an Audit Committee and a Compensation
Committee. The Audit Committee currently consists of Messrs. Overturf, Weist and
Weltman. The Audit Committee recommends the engagement of our independent public
accountants, reviews the scope of the audit to be conducted by such independent
public accountants, and meets with the independent public accountants and the
Chief Financial Officer to review matters relating to our financial statements,
our accounting principles and our system of internal accounting controls, and
reports its recommendations as to the approval of our financial statements to
the Board of Directors. Four meetings of the Audit Committee were held during
the year ended December 31, 2000.
The Compensation Committee currently consists of Messrs. Hendrickson, Conte
and Moffa. The Compensation Committee is responsible for considering and making
recommendations to the Board of Directors regarding executive compensation and
is responsible for administering our stock option and executive incentive
compensation plans. One meeting of the Compensation Committee was held during
the year ended December 31, 2000.
COMPENSATION OF DIRECTORS
Our non-employee directors currently are paid $2,000 for each board meeting
attended, and $1,000 per year for serving on a board committee. We pay all
out-of-pocket fees of attendance. In addition, non-employee directors have
received an annual grant of 4,000 non-statutory stock options under our stock
incentive plan, exercisable at the fair market value of our common stock on the
date of grant, and which fully vest on the date of grant.
Page 5
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, as to the Chief Executive Officer and as to
each of the other four most highly compensated officers whose compensation
exceeded $100,000 during the last fiscal year (the "Named Executive Officers"),
information concerning all compensation paid for services to us in all
capacities for each of the three years ended December 31 indicated below.
Annual Compensation Long Term Compensation
--------------------------------------- -----------------------------
Year Number of
Ended Other Securities
Name and Dec 31, Annual Underlying All Other
Principal Position (1) 2000 Salary Bonus Compensation Options Compensation
- -------------------------------- ------- ------------ -------- ------------ ------------ -------------
Russell D. Hays................. 2000 $ 107,000(2) $ 56,164 $ 105(13) 350,000(16) $ 57,428(3)
Chairman of the Board,
Chief Executive Officer and
President
James H. Chamberlain............ 2000 177,000(4) 75,000 24,849(5) 73,000(6)
Chairman of the Board 1999 250,000 90,000 17,634(7)
Chief Executive Officer and 1998 250,000 25,000 18,084(8) 100,000
President
Gus E. Davis.................... 2000 164,500(9) 52,000 5,890(10)
Chief Operating Officer 1999 154,000 55,000 6,499(11)
and Executive Vice President 1998 150,000 8,000 6,395(12) 25,000
Charles C. Best................. 2000 142,200 22,500 489(13)
Chief Financial Officer 1999 11,250(14) 0 0 30,000
and Executive Vice President
Richard O. Buford (15).......... 2000 99,700 18,750 404(13)
Vice President, Human 1999 102,718 13,700 614(13) 14,500
Resources and Secretary 1998 97,000 10,000 760(13) 5,000
- ----------
<FN>
(1) For a description of employment agreements between certain executive
officers and the Company, see "Employment Agreements with Executive
Officers" below.
(2) Mr. Hays joined the Company on September 18, 2000 and resigned as of May
18, 2001.
(3) Consists of relocation expenses, including travel and temporary housing
expenses.
(4) Mr. Chamberlain resigned as of September 18, 2000. As of May 21, 2001, Mr.
Chamberlain was appointed Interim CEO.
(5) Consists of $19,409 for an auto lease paid by the Company, $4,740 for
country club membership dues paid by the Company, and $700 for a group life
insurance premium paid by the Company.
(6) Consists of severance payments.
(7) Consists of $11,616 for an auto lease paid by the Company, $4,740 for
country club membership dues paid by the Company, and $1,278 for a group
life insurance premium paid by the Company.
(8) Consists of $11,616 for an auto lease paid by the Company, $4,740 for
country club membership dues paid by the Company, and $1,728 for a group
life insurance premium paid by the Company.
(9) Mr. Davis resigned as of December 31, 2000.
(10) Consists of $5,400 for a car allowance paid by the Company and $490 for a
group life insurance premium paid by the Company.
(11) Consists of $5,400 for a car allowance paid by the Company and $1,099 for a
group life insurance premium paid by the Company.
Page 6
(12) Consists of $4,955 for a car allowance paid by the Company and $1,440 for a
group life insurance premium paid by the Company.
(13) Consists of group life insurance premiums paid by the Company.
(14) Mr. Best joined the Company on December 1, 1999.
(15) Mr. Buford resigned as of February 15, 2001.
(16) All options granted to Mr. Hays were canceled in connection with his
resignation, effective May 18, 2001.
</FN>
OPTION GRANTS IN FISCAL YEAR 2000
The following table sets forth certain information regarding the grant of
stock options made during the fiscal year ended December 31, 2000 to the Named
Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF POTENTIAL REALIZABLE
SECURITIES PERCENT OF TOTAL VALUE OF ASSUMED ANNUAL
UNDERLYING OPTIONS GRANTED EXERCISE OF RATES OF STOCK PRICE
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION APPRECIATION FOR OPTION
NAME GRANTED(1) FISCAL YEAR(2) ($/SH.)(3) DATE TERM (1)
- ------------------------------- ----------- ---------------- ----------- ----------- -------------------------
5%($) 10%($)
---------- ----------
Russell D. Hayes(4)............ 350,000 27% 15.00 9/18/10 $3,301,697 $7,129,225
Charles C. Best................ 20,000 2% 16.56 12/15/10 $208,321 $449,820
Richard O. Buford.............. 10,000 1% 16.56 12/15/10 $104,161 $224,910
- ----------
<FN>
(1) Options granted in 2000 vest over various periods. The options were granted
for a term of 10 years.
(2) Options covering an aggregate of 1,314,198 shares were granted to employees
of the Company and its subsidiary during the year ended December 31, 2000.
(3) The exercise price and the tax withholding obligations related to exercise
may be paid by delivery of already owned shares, subject to certain
conditions.
(4) All options granted to Mr. Hays were canceled in connection with his
resignation, effective May 18, 2001.
</FN>
OPTION EXERCISES AND STOCK OPTIONS HELD AT FISCAL YEAR END
The following table sets forth, for those Named Executive Officers who held
stock options at fiscal year end, certain information regarding options
exercised in fiscal year 2000, the number of shares of common stock underlying
stock options held and the value of options held at fiscal year end based upon
the last reported sales price of the common stock on the Nasdaq market on
December 31, 2000 ($15.31 per share).
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
SHARES NUMBER OF SECURITIES
ACQUIRED UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ON VALUE OPTIONS AT IN-THE-MONEY OPTIONS AT
EXERCISE REALIZED DECEMBER 31, 2000 DECEMBER 31, 2000
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------- --------- ----------- ------------- ----------- -------------
Russell D. Hays (1).......... - - - 350,000 - $109,500
James H. Chamberlain (2)..... 70,000 1,741,250 367,500 - $ 4,632,653 -
Gus E. Davis (3)............. 90,000 2,040,782 - - - -
Charles C. Best.............. 3,500 80,718 4,625 41,875 51,914 497,182
Richard O. Buford (4)........ 31,500 734,062 22,000 10,000 292,911
0
- ----------
<FN>
(1) Resigned as of May 18, 2001, all options canceled.
(2) Resigned as of September 18, 2000, and appointed Interim CEO as of May 21,
2001.
(3) Resigned as of December 31, 2000.
(4) Resigned as of February 15, 2001.
</FN>
Page 7
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
Effective as of May 18, 2001, the Company has entered into an agreement
with James H. Chamberlain pursuant to which Mr. Chamberlain agreed to serve as
the Company's Interim Chief Executive Officer for a period of up to six months.
In exchange, the Company has agreed to pay Mr. Chamberlain a salary of $30,000
per month during this period and grant Mr. Chamberlain options to purchase
10,000 shares of common stock. In addition, the Company agreed to extend the
term of Mr. Chamberlain's previously existing Separation and Consulting
Agreement until December 31, 2002 and increase the consulting payment due to Mr.
Chamberlain under that agreement to $3,000 per month for the period from March
17, 2002 through December 31, 2002.
Effective as of December 17, 1999, Charles C. Best entered into a
separation agreement with us. In the event we experience a "change of control,"
and the employment of Mr. Best with us is terminated within one year of the
"change of control," we are obligated to continue to pay Mr. Best his
then-current base salary for a period of 12 months following the effective date
of such termination. For purposes of Mr. Best's separation agreement, a "change
of control" includes (i) the acquisition by any person or entity of shares of
our capital stock entitled to exercise 35% or more of the total voting power of
our stockholders, (ii) the execution by us of an agreement to sell or otherwise
transfer all or substantially all of our assets or the execution by us of an
agreement to merge, consolidate or reorganize with any other corporation or
entity, which results in less than 75% of the total voting power represented by
the capital stock or other equity interests of the corporation or entity to
which our assets are sold or transferred or surviving such merger, consolidation
or reorganization being held by the persons and entities who were holders of our
common stock immediately prior to such agreement, (iii) the issuance by us,
otherwise than on a pro rata basis, of additional shares of capital stock
representing (after giving effect to such issuance) more than 35% of the total
voting power of our stockholders, or (iv) if the persons who were our directors
as of the date of the separation agreement cease to comprise a majority of our
Board of Directors.
The Company has also entered into a separation agreement with each of David
Thrower and Brent Keller. In the event that Mr. Thrower or Mr. Keller are
terminated by the Company other than "for cause" (as defined in the separation
agreements), the Company is obligated for a period of 12 months following the
date of such termination to pay the terminated executive his then-current base
salary and continue to provide his medical benefits.
STOCK OPTION PLANS
We adopted a Stock Option Plan (the "1993 Plan") in 1993. The purpose of
the 1993 Plan is to attract, retain and motivate certain of our key employees by
giving them incentives which are linked directly to increases in the value of
our common stock. Each of our officers, directors and employees and under
certain circumstances, our consultants are eligible to be considered for the
grant of awards under the 1993 Plan. The maximum number of shares of common
stock that may be issued pursuant to awards granted under the 1993 Plan is
2,000,000, subject to certain adjustments to prevent dilution. Any shares of
common stock subject to an award which for any reason expires or terminates
unexercised are again available for issuance under the 1993 Plan.
The 1993 Plan authorizes the Compensation Committee to enter into any type
of arrangement with an eligible employee that, by its terms, involves or might
involve the issuance of (1) shares of our common stock, (2) an option, warrant,
convertible security, stock appreciation right or similar right with an exercise
or conversion privilege at a price related to our common stock, or (3) any other
security or benefit with a value derived from the value of our common stock. Any
stock option granted may be an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, or a nonqualified
stock option.
As of May 22, 2001, the Board had granted options under the 1993 Plan
covering an aggregate of 2,000,000 shares of common stock to certain of our
directors, officers and employees, of which options to purchase 816,951 shares
were outstanding.
In January 2000, our Board of Directors approved the 2000 BioSource
International, Inc. non-qualified stock option plan (the "2000 Plan"). Under the
2000 Plan, non-qualified stock options may be granted to full-time employees,
part-time employees, directors and consultants of the Company to purchase a
maximum of 2,000,000 shares of the company's common stock. Options granted under
the 2000 Plan are generally exercisable at the rate of 25% each year beginning
one year from the date of grant. The stock options generally expire ten years
from the date of grant. As of May 22, 2001, the Board had granted options under
the 2000 Plan covering an aggregate of 1,090,000 shares of common stock to
certain of our directors, officers and employees, all of which were outstanding.
Page 8
The Compensation Committee of our Board of Directors currently administers
our stock option plans.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Messrs. Hendrickson, Moffa
and Conte. None of the members of the Compensation Committee is a current or
former officer or employee of the Company. None of our executive officers served
as a member of the compensation committee or other similar committee or the
board of directors of any other entity of which an executive officer served on
our Board of Directors.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors determines
compensation paid to each of our executive officers and administers the 1993 and
2000 Stock Option Plans.
The objectives of our executive compensation policy include (1) attracting,
motivating and retaining talented executives by providing compensation that is
competitive with comparable companies, (2) maintaining compensation levels that
are consistent with the company's financial objectives and operating performance
and (3) aligning the interests of executive officers and stockholders through
bonuses based on the company's performance and by providing equity compensation.
Our compensation program currently consists of base salary and incentive
compensation in the form of cash bonuses and/or stock options.
In arriving at an initial compensation offer to an individual, the
Compensation Committee considers determinants of the individual's market value
including experience, education, accomplishments and reputation, as well as the
level of responsibility to be assumed, in relation to the market value of such
qualifications and industry standards. When determining subsequent adjustments
to an individual's annual salary, the Compensation Committee also evaluates the
importance to stockholders of that person's continued service. The Compensation
Committee also reviews the annual salaries of our executive officers in relation
to the company's financial performance, annual budgeted financial goals and its
position in the industry. This is a judgment process, exercised by the
Compensation Committee with the advice of management and other consultants.
Cash bonuses were awarded for during the past year, which were determined
on the basis of accomplishments measured against a management incentive plan
that was prepared by management and approved by the Compensation Committee.
Stock options are prospective incentives, aimed at keeping and motivating
key people by letting them share in the value they create for stockholders. They
are awarded at times deemed appropriate by the Compensation Committee in amounts
intended to secure the full attention and best efforts of executives upon whose
future performance the company's success will depend.
During 2000, James H. Chamberlain, our former Chairman of the Board, Chief
Executive Officer and President, resigned. In addition, Gus E. Davis, our former
Chief Operating Officer resigned. The Company hired two new executive officers,
Russell D. Hays as Chairmain of the Board, Chief Executive Officer and
President, and George Uveges as Chief Operating Officer. In setting base
salaries for Mr. Hays and Mr. Uveges, the Compensation Committee took into
account the salary ranges of industry competitors, their respective prior
experience and expected contributions, and the relative importance of their
respective positions in terms of achieving the Company's objectives.
Effective as of September 18, 2000, Russell D. Hays became the Company's
Chief Executive Officer. In 2000, Mr. Hays received a pro-rated portion of his
annual base salary of $395,000 and a cash bonus of $52,164. In connection with
his initial engagement, the Company also granted Mr. Hays options to purchase
350,000 shares of the Company's common stock. Mr. Hay's compensation package was
established based upon a comparative analysis of other similarly situation chief
executive officers conducted by the compensation committee. Mr. Hays also
participates in the management incentive plan approved by the Compensation
Committee.
COMPENSATION COMMITTEE
Leonard M. Hendrickson
David J. Moffa, Ph.D.
Jean-Pierre L. Conte
Page 9
REPORT OF THE AUDIT COMMITTEE
In accordance with its written charter adopted by the Board of Directors (a
copy of which is attached as Appendix "A" to this Proxy Statement), the Audit
Committee assists the Board in fulfilling its responsibility for oversight of
the quality and integrity of the accounting, auditing and financial reporting
practices of the Company. All of the members of the Audit Committee are
independent (as independence is defined in Rule 4200(a)(15) of the National
Association of Securities Dealers' listing standards).
In discharging its responsibility for oversight of the audit process, the
Audit Committee obtained from the independent auditors, KPMG LLP, a formal
written statement describing any relationships between the auditors and the
Company that might bear on the auditors' independence consistent with the
Independent Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," discussed with the auditors any relationships that might impact the
auditors' objectivity and Independence and satisfied itself as to the auditors'
independence.
The Audit Committee discussed and reviewed with the independent auditors
the communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and discussed and reviewed the results of
the independent auditors' examination of the financial statements for the year
ended December 31, 2000.
The Committee reviewed the audited financial statements of the Company as
of and for the fiscal year ended December 31, 2000, with management and the
independent auditors. Management has the responsibility for preparation of the
Company's financial statements and the independent auditors have the
responsibility for examination of those statements. Based upon the
above-mentioned review and discussions with management and the independent
auditors, the Audit Committee recommended to the Board that the Company's
audited financial statements be included in its Annual Report on Form 10-K for
the fiscal year ended December 31, 2000, for filing with the Securities Exchange
Commission (the "SEC").
AUDIT COMMITTEE
John R. Overturf, Jr.
Robert D. Weist
Robert J. Weltman
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, requires our
executive officers, directors, and persons who own more than ten percent of a
registered class of our equity securities to file reports of ownership and
changes in ownership with SEC. Executive officers, directors and
greater-than-ten percent stockholders are required by SEC regulations to furnish
us with all Section 16(a) forms they file. Other than as set forth below, based
solely on our review of the copies of the forms received by us and written
representations from certain reporting persons that they have complied with the
relevant filing requirements, we believe that, during the year ended December
31, 2000, all our executive officers, directors and greater-than-ten percent
stockholders complied with all Section 16(a) filing requirements. Messrs.
Hendrickson, Moffa and Overturf each filed a Form 5 on March 29, 2001; Mr. Weist
filed a Form 5 on April 5, 2001; and Messrs. Conte and Weltman each filed a Form
5 in May 2001, all of which Form 5's reported options granted in December 2000
and should have been filed on or before February 15, 2000. Mr. Best filed a Form
4 on May 10, 2001 reporting options granted in December 2000, which option
grants should have been reported on a Form 5 prior to February 15, 2001. Messrs.
Thrower and Keller each filed a Form 3 on May 15, 2001, which should have been
filed in November 2000.
RELATIONSHIPS AND RELATED TRANSACTIONS
WITH DIRECTORS AND EXECUTIVE OFFICERS
On January 10, 2000, we entered into a securities purchase agreement with
Genstar Capital Partners II, L.P. and Stargen II LLC. Pursuant to this
agreement, we sold Genstar and Stargen a total of 371,300 shares, including
364,244 to Genstar and 7,056 to Stargen, of our Series B Preferred Stock for
$9,000,312 in the aggregate. These shares were initially convertible into
1,485,200 shares, including 1,456,976 for Genstar and 28,224 for Stargen, of
Page 10
our common stock. In addition, we issued to Genstar and Stargen warrants to
purchase a total of 1,287,000 shares of our common stock, including 1,262,542 to
Genstar and 24,458 to Stargen, exercisable at $7.77 per share. Under the
investor rights agreement among Genstar, Stargen and us, executed in connection
with the securities purchase agreement, Genstar and Stargen also have the right
to appoint two out of our seven directors to our Board of Directors as long as
they beneficially own, in the aggregate, at least 750,000 shares of common
stock, or one director if they beneficially own at least 495,000 shares.
Pursuant to the investor rights agreement, we appointed Jean-Pierre L. Conte, a
Managing Director of Genstar Capital LLC, and Robert J. Weltman, a Vice
President of Genstar Capital LLC, to our Board of Directors. Genstar and Stargen
also have the right of first refusal to purchase additional shares and the right
to require us to register their shares of our common stock underlying the
preferred stock and the warrants. The consummation of the securities purchase
agreement, including the issuance of the shares of Series B Preferred Stock and
the warrants, occurred on February 15, 2000. Pursuant to the securities purchase
agreement, we paid a $270,009 transaction fee to Genstar Capital LLC and
reimbursed all of the fees and expenses of approximately $195,426, incurred by
Genstar Capital Partners and its affiliates in connection with the securities
purchase agreement.
On September 20, 2000, pursuant to the terms of the Certificate of
Designation of Preferences, Rights and Limitations of our Series B Preferred,
all issued and outstanding shares of Series B Preferred Stock were automatically
converted into an aggregate of 1,556,574 shares of common stock, including
1,526,922 shares of common stock issued to Genstar and 29,652 shares of common
stock issued to Stargen.
In connection with the respective engagements of Russell D. Hays as our
President, Chief Executive Officer and Chairman of the Board of Directors, and
George Uveges as our Chief Operating Officer, we entered into a Securities
Purchase Agreement, effective as of August 9, 2000, with Genstar Capital
Partners II, L.P. Genstar agreed to purchase from us 300,000 shares of our
common stock at $15.00 per share. Genstar subsequently assigned its right to
purchase 30,000 of these shares to Jean-Pierre L. Conte and 3,333 of the shares
to Robert Weltman. Both Mr. Conte and Mr. Weltman currently serve on our Board
of Directors. Genstar assigned its right to purchase an additional 33,334 of
these shares to certain other individuals affiliated with Genstar. We also
entered into a Securities Purchase Agreement, effective as of August 9, 2000,
with Russell D. Hays, pursuant to which Mr. Hays agreed to purchase 40,000
shares of the our common stock at $15.00 per share. We further entered into a
Securities Purchase Agreement, effective as of September 5, 2000, with George
Uveges, pursuant to which Mr. Uveges agreed to purchase 11,428 shares of the our
common stock at $21.875 per share. The closing of each of these transactions
occurred on September 28, 2000.
During portions of 2000, James H. Chamberlain, our former Chief Executive
Officer and current Interim Chief Executive Officer, had been indebted to us in
the aggregate principal amount of $350,000. Mr. Chamberlain has repaid this loan
in full and is no longer indebted to the Company.
Page 11
PERFORMANCE GRAPH
The following graph sets forth the percentage change in cumulative
total shareholder return of our common stock during the period from December 31,
1995 to December 31, 2000, compared with the cumulative returns of the Nasdaq
Stock Market (U.S. Companies) Index and the JP Morgan H & Q Biotechnology Index.
The comparison assumes $100 was invested on December 31, 1995 in our common
stock and in each of the foregoing indices. The stock price performance on the
following graph is not necessarily indicative of future stock price performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG BIOSOURCE INTERNATIONAL, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE JP MORGAN H & Q BIOTECHNOLOGY INDEX
[OBJECT OMITTED]
BioSource International, Inc. (BIOI)
-------------------------------------------------------
CUMULATIVE TOTAL RETURN
-------------------------------------------------------
12/95 12/96 12/97 12/98 12/99 12/00
BIOSOURCE INTERNATIONAL, INC. 100 121 112 52 140 269
NASDAQ STOCK MARKET (U.S.) 100 123 151 213 395 238
JP MORGAN H & Q BIOTECHNOLOGY 100 92 93 142 304 327
Page 12
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors recommended and the Board has
selected, subject to ratification by a majority vote of the shareholders in
person or by proxy at the Annual Meeting, the firm of KPMG, LLP to continue as
our independent public accountant for the current fiscal year ending December
31, 2001. KPMG has served as the principal independent public accounting firm
utilized by us during the years ended December 31, 1994 through 2000. We
anticipate that a representative of KPMG will attend the Annual Meeting for the
purpose of responding to appropriate questions. At the Annual Meeting, a
representative of KPMG will be afforded an opportunity to make a statement if
they so desire.
AUDIT FEES
KPMG billed us a total of approximately $107,578 in fees for professional
services rendered for the audit of our annual financial statements for the
fiscal year ended December 31, 2000 and the reviews of the financial statements
included our Form 10-Q's for fiscal 2000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
In 2000, KPMG did not render any professional services for the Company in
connection with financial information systems design and implementation.
ALL OTHER FEES
KPMG billed us an aggregate of approximately $345,885 for all other
non-audit services performed in fiscal 2000.
The Audit Committee of the Board of Directors has reviewed and considered
whether the provision of services other than those services related the audit of
the annual financial statements and reviews of the quarterly financial
statements is compatible with maintaining KPMG's independence as our principal
independent accounting firm.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL NO. 2
RATIFYING THE APPOINTMENT OF KPMG, LLP AS OUR INDEPENDENT AUDITORS.
Page 13
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth as of May 21, 2001 certain information
relating to the ownership of our common stock by (i) each person known by us to
be the beneficial owner of more than five percent of the outstanding shares of
our common stock, (ii) each of our directors, (iii) each of our executive
officers, and (iv) all of our executive officers and directors as a group.
Except as may be indicated in the footnotes to the table and subject to
applicable community property laws, each such person has the sole voting and
investment power with respect to the shares owned. Unless otherwise indicated,
the address of each person listed is in care of BioSource International, Inc.,
542 Flynn Road, Camarillo, California 93012, and the address of Messrs. Conte,
Weltman and Genstar Capital LLC is 555 California Street, Suite 4850, San
Francisco, California 94104.
NUMBER OF SHARES OF
COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED (1) PERCENT (2)
---------------- ---------------------- -----------
Jean-Pierre L. Conte (3)........................... 3,363,405 28.7%
Genstar Capital LLC (3)............................ 3,270,567 27.9
Franklin Advisors (4).............................. 974,000 9.3
The St. Paul Companies, Inc. (5)................... 600,000 5.7
James H. Chamberlain (6)........................... 507,906 4.7
Leonard M. Hendrickson (7)......................... 84,200 *
Robert D. Weist (8)................................ 61,000 *
David J. Moffa, Ph.D. (9).......................... 35,900 *
John R. Overturf, Jr. (10)......................... 18,000 *
Charles C. Best (11)............................... 8,375 *
Robert J. Weltman (12)............................. 7,333 *
All of the directors and executive
officers as a group (eight persons) (13)........ 4,086,119 33.4%
- ----------
<FN>
* Less than one percent.
(1) Under Rule 13d-3, certain shares may be deemed to be beneficially owned by
more than one person (if, for example, persons share the power to vote or
the power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the
shares (for example, upon exercise of an option) within 60 days of the date
as of which the information is provided. In computing the percentage
ownership of any person, the amount of shares outstanding is deemed to
include the amount of shares beneficially owned by such person (and only
such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does
not necessarily reflect the person's actual ownership or voting power with
respect to the number of shares of common stock actually outstanding at May
21, 2001.
(2) Percentage ownership is based on 10,444,717 shares of common stock
outstanding as of May 21, 2001.
(3) Genstar Capital Partners II, L.P. holds 2,008,025 shares of common stock
and 1,262,542 shares of common stock issuable upon exercise of options and
warrants and Stargen II LLC holds 34,380 shares of common stock and 24,458
shares of common stock issuable upon exercise of warrants, all of which are
currently convertible or exercisable. In addition, Mr. Conte holds 30,000
shares of common stock and options to purchase 4,000 shares of common
stock. Richard F. Hoskins holds 16,667 shares of common stock and Richard
D. Paterson holds 16,667 shares of common stock. Genstar Capital LLC is the
general partner of Genstar Capital Partners II, L.P. Mr. Conte, Mr. Hoskins
and Mr. Paterson are the managers and managing directors of Genstar Capital
LLC and are members of Stargen, and Mr. Paterson is the Administrative
Member of Stargen. In such capacities Messrs. Conte, Hoskins and Paterson
may be deemed to beneficially own shares of common stock beneficially held
by Genstar Capital Partners and Stargen, but disclaim such beneficial
ownership, except to the extent of their economic interest in these shares.
Messrs. Conte, Hoskins, Paterson, Genstar Capital LLC, Genstar Capital
Partners II, L.P. and Stargen II LLC may be deemed to be
acting as a group in relation to their respective holdings in BioSource but
do not affirm the existence of any such group.
Page 14
(4) As disclosed in the Schedule 13G filed with the SEC on February 1, 2001
jointly by Franklin Advisors, Inc., Franklin Resources, Inc., Charles B.
Johnson and Rupert H. Johnson, Jr. The address of each of these persons as
disclosed with the SEC is 777 Mariners Island Blvd, San Mateo, California
94404.
(5) As disclosed in the Schedule 13G filed with the SEC on April 17, 2001
jointly by The St. Paul Companies, Inc. and St. Paul Fire and Marine
Insurance Company. The address of each of these persons as disclosed with
the SEC is 386 Washington Street, St. Paul, Minnesota 55102.
(6) Includes (i) 316,000 shares of common stock reserved for issuance upon
exercise of stock options that are currently exercisable or are exercisable
within 60 days of May 21, 2001; (ii) 188,406 shares of common stock held in
the Chamberlain Family Trust for which Mr. Chamberlain serves as trustee;
(iii) 3,400 shares of common stock held in Mr. Chamberlain's IRA Account;
and (iv) 100 shares of common stock held as custodian for Mr. Chamberlain's
granddaughter.
(7) Includes (i) 71,000 shares of common stock reserved for issuance upon
exercise of stock options that are currently exercisable or are exercisable
within 60 days of May 21, 2001; (ii) 1,300 shares of common stock owned;
(iii) 4,000 shares of common stock held of record by two of Mr.
Hendrickson's minor children; and (iv) 7,900 shares of common stock held in
the Microchemics Simplified Employee Pension Plan.
(8) Includes 61,000 shares of common stock reserved for issuance upon exercise
of stock options that are currently exercisable or are exercisable within
60 days of May 21, 2001.
(9) Includes (i) 28,500 shares of common stock reserved for issuance upon
exercise of stock options that are currently exercisable or are exercisable
within 60 days of May 21, 2001; (ii) 550 shares of common stock held solely
by Dr. Moffa's spouse; (iii) 4,000 shares of common stock held jointly with
Dr. Moffa's spouse; and (iv) 2,850 shares of common stock held directly.
(10) Includes (i) 16,000 shares of common stock reserved for issuance upon
exercise of stock options that are currently exercisable or are exercisable
within 60 days of May 21, 2001; and (ii) 2,000 shares of common stock
owned.
(11) Includes 8,375 shares of common stock reserved for issuance upon exercise
of stock options that are currently exercisable or are exercisable within
60 days of May 21, 2001.
(12) Includes (i) 3,333 shares of common stock held directly; and (ii) 4,000
shares of common stock reserved for issuance upon exercise of stock options
that are currently exercisable or are exercisable within 60 days of May 21,
2001. Mr. Weltman is also a Vice President and a member, but not a managing
member, of Genstar Capital LLC and a member, but not a managing member, of
Stargen II LLC. Mr. Weltman does not have power to vote or dispose of, or
to direct the voting or disposition of, any securities beneficially owned
by Genstar Capital LLC or Stargen II LLC. Mr. Weltman disclaims that he
beneficially owns any shares of common stock beneficially owned by Genstar
Capital LLC or Stargen II LLC, except to the extent of his economic
interest in shares owned by Genstar Capital LLC or Stargen II LLC.
(13) Includes (i) 508,875 shares of common stock reserved for issuance upon
exercise of stock options that are currently exercisable or are exercisable
within 60 days of May 21, 2001; (ii) 1,287,000 shares of common stock
reserved for issuance upon exercise of warrants; and (iii) 2,290,244 shares
of common stock owned.
</FN>
SERIES A PREFERRED STOCK
In February 1999, the Board of Directors declared a dividend of one
preferred share purchase right for each share of common stock outstanding on
March 2, 1999. The purchase rights are subject to the terms and conditions of
the Rights Agreement dated February 25, 1999, filed with the Securities and
Exchange Commission on March 1, 1999, on Form 8-A. Initially, and until a
distribution date occurs, no separate rights certificates will be issued, the
rights are not exercisable, and the rights are transferred with the common
shares and are not transferable separately from the common shares.
The rights agreement was amended twice during 2000. First, in January 2000,
in connection with the issuance of Series B Preferred Stock and warrants to
Genstar Capital Partners and Stargen, and then again, in September 2000, in
connection with the sale of common stock to Genstar Capital Partners and certain
of its affiliates. Collectively, the results of these amendments were to include
Genstar Capital, Stargen, Jean-Pierre Conte, Robert Weltman, Richard Hoskins,
Richard Paterson, and their affiliates as "Exempt Persons" under the rights
agreement. In addition, the amendments exclude from the definition of
"Distribution Date" (a) the date of the approval, execution or delivery of the
securities purchase agreements with Stargen and Genstar Capital Partners and its
affiliates and (b) the consummation of the transactions contemplated by those
agreements.
Page 15
STOCKHOLDER PROPOSALS
Any stockholder of record who intends to present a proposal at the next
Annual Meeting of Stockholders for inclusion in our Proxy Statement and Proxy
form relating to such Annual Meeting must submit such proposal to us at our
principal executive offices by January 2, 2002.
SOLICITATION OF PROXIES
It is expected that the solicitation of proxies will be primarily by
mail. The cost of solicitation by management will be borne by us. We will
reimburse brokerage firms and other persons representing beneficial owners of
shares for their reasonable disbursements in forwarding solicitation material to
such beneficial owners. Proxies may also be solicited by certain of our
directors and officers, without additional compensation, personally or by mail,
telephone, telegram or otherwise for the purpose of soliciting such proxies.
ANNUAL REPORT ON FORM 10-K
OUR ANNUAL REPORT ON FORM 10-K, WHICH HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 2000, WILL BE MADE
AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO CHARLES C.
BEST, CHIEF FINANCIAL OFFICER, BIOSOURCE INTERNATIONAL, INC., 542 FLYNN ROAD,
CAMARILLO, CALIFORNIA 93012
ON BEHALF OF THE BOARD OF DIRECTORS
/S/ CHARLES C. BEST
-----------------------------------
Charles C. Best
CHIEF FINANCIAL OFFICER AND
EXECUTIVE V.P., FINANCE
Camarillo, California
May 30, 2001
Page 16
APPENDIX A
AUDIT COMMITTEE CHARTER
OF
BIOSOURCE INTERNATIONAL, INC.
1. ORGANIZATION
This charter (the "CHARTER") governs the operations of the audit committee
(the "AUDIT COMMITTEE") of the Board of Directors (the "BOARD") of BioSource
International, Inc. (the "COMPANY"). The Audit Committee shall review and
reassess the Charter at least annually and will amend the charter, if
appropriate, with the approval of the Board.
o COMPOSITION. The Committee shall be appointed by the Board and shall
be comprised of at least three directors, each of whom must be
independent of management and the Company. The Board will also select
a chairman for the Audit Committee. Each member of the Audit Committee
shall be considered independent if they have no relationship that may
interfere with the exercise of their independence from management and
the Company. In addition, each member of the Audit Committee must be
independent as defined by the National Association of Securities
Dealers. A member of the Audit Committee will not be considered
independent if the member (i) is employed by the Company or any of its
affiliates for the current year or any of the past three years; (ii)
accepts compensation from the Company or any of its affiliates in
excess of $60,000 during the previous year, other than compensation
for board service, benefits under a tax-qualified retirement plan, or
non-discretionary compensation; (iii) is a member of the immediate
family of an individual who is, or has been in any of the past three
years, employed by the Company or any of its affiliates as an
executive officer; (iv) is a partner in, or a controlling shareholder
or executive officer of, any for-profit business organization to which
the Company made, or from which the Company received, payments (other
than those arising solely from investments in the Company's
securities) that exceed 5% of the Company's or business organization's
consolidated gross revenues for that year, or $200,000, whichever is
more, in any of the past three years; or (v) is employed as an
executive of another entity where any of the Company's executives
serve on that entity's compensation committee.
o QUALIFICATIONS OF MEMBERS. All Audit Committee members shall be
financially literate and experienced in reading and understanding
financial statements, including the Company's balance sheet, income
statement and statement of cash flow (or will become able to do so
within a reasonable period of time after his or her appointment to the
Audit Committee). At least one member of the Company's Audit Committee
shall have past employment experience in finance or accounting or have
a professional certification in accounting or other comparable
experience.
2. STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board in fulfilling
their oversight responsibility to the shareholders, potential shareholders, the
investment community, and others relating to the Company's financial statements
and the financial reporting process, the systems of internal accounting and
financial controls, the internal audit function, the annual independent audit of
the Company's financial statements and the legal compliance and ethics programs
as established by management and the Board. In so doing, it is the
responsibility of the Audit Committee to maintain free and open communication
between the Audit Committee, the independent auditors, the internal auditors and
the management of the Company. In discharging its oversight role, the Audit
Committee is empowered to investigate any matter brought to its attention with
full access to all books, records, facilities and personnel of the Company and
the power to retain outside counsel, or the other experts for this purpose.
Page A-1
3. RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board and report the
results of its activities to the Board. Management is responsible for preparing
the Company's financial statements, and the independent auditors are responsible
for auditing those financial statements. The Audit Committee in carrying out its
responsibilities believes its policies and procedures should remain flexible in
order to best react to changing conditions and circumstances. The Audit
Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices and
ethical behavior.
The following shall be the principal recurring processes of the Audit
Committee in carrying out its oversight responsibilities. The processes are set
forth as a guide with the understanding that the Audit Committee may supplement
them as appropriate.
o The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate.
o The Audit Committee shall have a clear understanding with management
and the independent auditors that the independent auditors are
ultimately accountable to the Board and the Audit Committee, as
representatives of the Company's shareholders.
o The Audit Committee shall have the ultimate authority and
responsibility to evaluate and, where appropriate, replace the
independent auditors. Annually, the Audit Committee shall review and
recommend to the board the selection of the Company's independent
auditors.
o The Audit Committee shall discuss with the auditors their independence
from management and the Company including any relationships that may
potentially impair their independence, as required by Independence
Standards Board Statement No. 1. The Audit Committee is responsible
for ensuring that the independent auditors submit on a periodic basis
to the Audit Committee a formal written statement delineating all
relationships between the independent auditors and the Company.
o The Audit Committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their respective
audits including the adequacy of staffing and compensation.
o The Audit Committee shall discuss with management, the internal
auditors and the independent auditors the adequacy and effectiveness
of the accounting and financial controls, including the Company's
system to monitor and manage business risk and legal and ethical
compliance programs.
o The Audit Committee shall meet separately with the internal auditors
and the independent auditors, with and without management present, to
discuss the results of their examinations.
o The Audit Committee shall review with financial management and the
independent auditors the Company's quarterly financial results and any
related press releases prior to the release of earnings.
o The Audit Committee shall meet with management and the independent
auditors and review and approve the interim financial statements and
quarterly report on Form 10-Q prior to the filing or distribution of
the quarterly report. In addition, the Audit Committee shall discuss
the results of the quarterly review and any other matters required to
be communicated to the Audit Committee by the independent auditors
under generally accepted auditing standards. The chair of the Audit
Committee may represent the entire Audit Committee for the purposes of
this review.
Page A-2
o The Audit Committee shall meet with management and the independent
auditors and review the financial statements to be included in the
Company's Annual Report on Form 10-K (or the annual report to
shareholders if distributed prior to the filing of Form 10-K),
including their judgment about the quality, not just acceptability, of
accounting principles, the reasonableness of significant judgments and
the clarity of the disclosures in the financial statements. In
addition, the Audit Committee shall review and formally approve the
Company's Annual Report on Form 10-K prior to filing or distribution.
The Audit Committee shall discuss the results of the annual audit and
any other matters required to be communicated to the Audit Committee
by the independent auditors under generally accepted auditing
standards, including the matters required to be communicated to audit
committees pursuant to Statement of Accounting Standards No. 61.
o The Audit Committee shall prepare an annual report to the Company's
shareholders as required by the Securities and Exchange Commission.
The report should be included in the Company's annual proxy statement.
Page A-3
BIOSOURCE INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned, a Stockholder of BIOSOURCE INTERNATIONAL, INC., a Delaware
corporation (the "Company"), hereby nominates, constitutes and appoints
JEAN-PIERRE L. CONTE, JAMES H. CHAMBERLAIN and CHARLES C. BEST, or any one of
them, as proxy of the undersigned, each with full power of substitution, to
attend, vote and act for the undersigned at the Annual Meeting of Stockholders
of the Company, to be held on July 26, 2001, and any postponements or
adjournments thereof, and in connection therewith, to vote and represent all of
the shares of the Company which the undersigned would be entitled to vote, as
follows:
A VOTE FOR ALL PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS:
Proposal 1. To elect the Board of Directors' six nominees as directors.
Jean-Pierre L. Conte Leonard M. Hendrickson David S. Moffa, Ph.D.
John R. Overturf, Jr. Robert D. Weist Robert J. Weltman
[_] FOR ALL NOMINEES LISTED ABOVE (except as marked to the contrary
below)
[_] WITHHELD
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below:)
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The undersigned hereby confer(s) upon the proxies and each of them
discretionary authority with respect to the election of directors in the
event that any of the above nominees is unable or unwilling to serve.
Proposal 2. To ratify the appointment of KPMG, LLP as the Company's independent
public accountants for the year ending December 31, 2001.
[_] FOR [_] AGAINST [_] ABSTAIN
The undersigned hereby revokes any other proxy to vote at the Annual
Meeting, and hereby ratifies and confirms all that said attorneys and proxies,
and each of them, may lawfully do by virtue hereof. With respect to matters not
known at the time of the solicitation hereof, said proxies are authorized to
vote in accordance with their best judgment.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH
ABOVE OR, TO THE EXTENT NO CONTRARY DIRECTION IS INDICATED, WILL BE TREATED AS A
GRANT OF AUTHORITY TO VOTE FOR ALL PROPOSALS. IF ANY OTHER BUSINESS IS PRESENTED
AT THE ANNUAL MEETING, THIS PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE PROXIES.
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated May 30, 2001, relating to the
Annual Meeting.
Dated:______________________________, 2001
Signature:________________________________
Signature:________________________________
Signature(s) of Stockholder(s)
(See Instructions Below)
The Signature(s) hereon should correspond
exactly with the name(s) of the
Stockholder(s) appearing on the Share
Certificate. If stock is jointly, all
joint owners should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give full
title as such. If signer is a corporation,
please sign the full corporation name, and
give title of signing officer.
[_] Please indicate by checking this box if you anticipate
attending the Annual Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF BIOSOURCE INTERNATIONAL, INC.