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.
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(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):
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and 0-11.
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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
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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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BIOSOURCE INTERNATIONAL, INC.
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 19, 2002
-----------
TO OUR STOCKHOLDERS:
Notice is hereby given that the 2002 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 19,
2002 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, 2002; 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 23, 2002, 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
June 5, 2002
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 19, 2002
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 2002 Annual Meeting of Stockholders
(the "Annual Meeting") to be held at Hyatt Westlake Plaza, 880 S. Westlake
Blvd., Westlake Village, California, 91361, on July 19th, 2002 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 23, 2002 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, 9,638,863 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 5, 2002.
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.
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. Pursuant to its authority under the Company's Bylaws, the Board of
Directors will appoint an individual to fill the vacancy on the Board when a
suitable candidate 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 2003 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.
2
INFORMATION WITH RESPECT TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to the
director nominees of the Company as of May 15, 2002.
NAME AGE POSITION
---- --- --------
Jean-Pierre L. Conte (1) 38 Interim Chairman of the Board of
Directors, Director and Director
Nominee
Leonard M. Hendrickson (1) 54 President and Chief Executive Officer,
Director and Director Nominee
David J. Moffa, Ph.D. (1) 59 Director and Director Nominee
John R. Overturf, Jr. (2) 41 Director and Director Nominee
Robert D. Weist (2) 62 Director and Director Nominee
Robert J. Weltman (2) 37 Director and Director Nominee
---------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
---------------------
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 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 became president and Chief Executive Officer on
October 15, 2001. He has been a director of BioSource since October 1993. Prior
to his position as President and Chief Executive Officer of the Company, Mr.
Hendrickson was President of Isotope Products Laboratories from February 1992 to
October 2001. 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 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 LabCorp in Pittsburgh, PA, a position he has held since 1985 and is
Chairman and CEO of ClinServices LLC since 1999. 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. 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
3
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. Mr. Weist also serves as a Vice Chairman of Hyseq, Inc. since
February 2000 and has been a director since May 1993. 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 Managing Director 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."
BOARD MEETINGS AND COMMITTEES
The Board of Directors held nine meetings during fiscal 2001. No director
attended less than 75% of all the meetings of the Board of Directors and those
committees on which he served in fiscal 2001.
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, 2001.
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. Five meetings of the Compensation Committee were held during
the year ended December 31, 2001.
COMPENSATION OF DIRECTORS
Our non-employee corporate directors currently are paid $2,000 for each
board meeting attended, and $1,000 per year for service on a board committee. We
also pay out of pocket expenses incurred by our directors in connection with
their attendance. In addition, non-employee directors receive an annual grant of
4,000 non-statutory stock options in December of each year, exercisable at the
fair market value of our common stock on the date of grant, and which fully vest
on the date of grant.
4
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.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------- -------------------------
YEAR NUMBER OF
NAME AND ENDED SECURITIES
PRINCIPAL POSITION (1) DECEMBER OTHER ANNUAL UNDERLYING ALL OTHER
31, SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- ----------------------- -------- ----------- ------- ------------ ---------- ------------
Leonard M. Hendrickson 2001 $49,000(2) $90,000 $173(3) 280,000
Chief Executive Officer
and President
David Thrower 2001 $200,000 $23,000 $324(3) 110,000
Senior Vice President 2000 28,750 8,750 27(3) 235,000 $13,224 (4)
Sales and Marketing
Charles Best 2001 $160,000 $23,500 $325(3) 87,500
Chief Financial Officer 2000 142,000 22,500 285(3) 20,000
and Executive Vice 1999 11,250 0 30,000
President
Russell D. Hays (6) 2001 $160,300 $0 $21,173(5) 0 $90,460 (4)
Chairman of the Board, 2000 107,000 56,164 129(3) 395,000 57,428 (4)
President and Chief
Executive Officer
Cy Cabradilla, Jr (7) 2001 $140,000 $22,000 $635(3) 52,500
Vice President, 2000 123,375 21,000 364(3) 12,000
Molecular Biology 1999 120,000 10,600 826(3) 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. Hendrickson joined the Company on October 15, 2001.
(3) Consists of group life insurance premiums paid by the Company
(4) Relocation expenses.
(5) Consists of $20,527 for accrued vacation paid by the Company upon
termination and $646 for a group life insurance premium paid by the
Company.
(6) Mr. Hays resigned as of May 18, 2001.
(7) Mr. Cabradilla resigned as of May 10, 2002.
</FN>
5
OPTION GRANTS IN FISCAL YEAR 2001
The following table sets forth certain information regarding the grant of
stock options made during the fiscal year ended December 31, 2001 to the Named
Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
NUMBER OF PERCENT OF POTENTIAL REALIZABLE
SECURITIES TOTAL OPTIONS VALUE OF ASSUMED ANNUAL
UNDERLYING GRANTED TO AVG. EXERCISE RATES OF STOCK PRICE
OPTIONS EMPLOYEES IN OF BASE PRICE EXPIRATION APPRECIATION FOR OPTION
NAME GRANTED(1) FISCAL YEAR(2) ($/SH.)(3) DATE TERM (1)
5%($) 10%($)
- ---------------------- ---------- -------------- ------------- ---------- ---------- ----------
Leonard M. Hendrickson 280,000 24% $5.19 10/15/11 $2,367,977 $5,113,080
David Thrower 110,000 9% $5.74 9/17/11 $396,895 $857,001
Charles Best 87,500 8% $8.78 12/19/11 $483,054 $1,043,040
Cy Cabradilla Jr (4) 52,500 5% $8.17 12/19/11 $269,607 $582,152
- ----------
<FN>
(1) Options granted in 2001 vest over various periods. The options were granted
for a term of 10 years.
(2) Options covering an aggregate of 1,165,750 shares were granted to employees
of the Company and its subsidiary during the year ended December 31, 2001.
(3) The exercise price and the tax withholding obligations related to exercise
might be paid by delivery of already owned shares, subject to certain
conditions.
(4) Mr. Cabradilla resigned as of May 10, 2002. 5,833 of the 52,500 options
granted to Mr. Cabradilla in 2001 have vested. Any shares that will not
vest or are not exercised will return to the Plans.
</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 2001, 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, 2001 ($8.30 per share).
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
SHARES NUMBER OF SECURITIES
ACQUIRED UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ON VALUE OPTIONS AT IN-THE-MONEY OPTIONS AT
NAME EXERCISE REALIZED DECEMBER 31, 2001 DECEMBER 31, 2001
- ---------------------- -------- -------- -------------------------- --------------------------
(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--- --- ----------- ------------- ----------- -------------
Leonard M. Hendrickson -- -- 71,000 280,000 $310,900 $870,800
David Thrower -- -- 58,750 286,250 -- 293,000
Charles Best -- -- 16,500 117,500 55,890 97,650
Cy Cabradilla (1) -- -- 31,228 62,772 133,002 36,250
- ----------
<FN>
(1) Mr. Cabradilla resigned as of May 10, 2002 and as a result, options granted
to Mr. Cabradilla that will not vest or are unexercised will return to the
Plans.
</FN>
6
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
We have entered into an employment agreement with Leonard M. Hendrickson to
serve as our President and Chief Executive Officer, effective as of October 15,
2001. Pursuant to this agreement Mr. Hendrickson receives an annual base salary
of $250,000, which we may increase, at the Board's sole discretion, at the end
of each year of his employment. In addition to the base salary to be paid to Mr.
Hendrickson, the Company paid a one time signing bonus to him in the amount of
$90,000 upon the commencement of his employment. In addition, Mr. Hendrickson is
eligible to receive an annual bonus under the Company's management incentive
plan. The agreement terminates on December 31, 2004. In the event that Mr.
Hendrickson's employment is terminated without cause or due to a "change of
control" during the term of the agreement, the Company is obligated to continue
paying Mr. Hendrickson's then-current base salary for a period of 12 months
following the effective date of such termination. Also, in certain instances
involving a "change of control," all stock options which have been granted to
Mr. Hendrickson that are unvested at the time of such change of control shall
become immediately vested and exercisable. According to our agreement with Mr.
Hendrickson, a "change of control" occurs if (i) any person or entity (or group
of related persons or entities acting in concert) acquires shares of capital
stock of the Company entitled to exercise 35% or more of the total voting power
represented by all shares of capital stock of the Company then outstanding; or
(ii) the Company enters into an agreement to sell or otherwise transfer all or
substantially all of its assets or enters into an agreement to merge,
consolidate or reorganize with any other corporation or entity, as the result of
which less than 75% of the total voting power represented by the capital stock
or other equity interests of the corporation or entity to which the Company's
assets are sold or transferred or surviving such merger, consolidation or
reorganization are held by the persons and entities who were holders of common
stock of the Company immediately prior to such agreement; or (iv) the Company
issues otherwise than on a pro rata basis additional shares of capital stock
representing (after giving effect to such issuance) more than 35% of the total
voting power of the Company; or (v) the persons who were the directors of the
Company as of October 15, 2001 cease to comprise a majority of the Board of
Directors of the Company.
Effective as of December 17, 1999, Charles C. Best, our Chief Financial
Officer, entered into a separation agreement with us. In the event we experience
a "change of control," and the employment of Mr. Best 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" occurs if (i) any person or entity acquires shares of our
capital stock entitled to exercise 35% or more of the total voting power of our
stockholders, (ii) we enter into an agreement to sell or otherwise transfer all
or substantially all of our assets or to effect a merger, consolidation or
reorganization 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) we issue, otherwise than on a pro rata basis,
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.
Effective May 18, 2001, David Thrower, our Senior Vice President of Sales
and Marketing, entered into a separation agreement with us. In the event the
Company terminates Mr. Thrower's employment with the Company other than for
cause at any time (i) prior to July 15, 2002, or (ii) within six months
following a "change of control," we are required to pay Mr. Thrower his
then-current base salary for a period of 12 months following the effective date
of such termination. In addition, if the employment of Mr. Thrower is terminated
within six months of a "change of control" all stock options which have been
granted to Mr. Thrower that are unvested at the time of such change of control
shall become immediately vested and exercisable. According our agreement with
Mr. Thrower, a "change of control" is defined as the acquisition by any person
or entity unaffiliated with Genstar Capital LLC of capital stock representing at
least 40% of the total fully diluted shares of the Company.
7
STOCK OPTION PLANS
We adopted a Stock Option Plan (the "1993 Plan") in 1993. In January 2000,
our Board of Directors approved the 2000 BioSource International, Inc.
non-qualified stock option plan (the "2000 Plan," and together with the 1993
Plan, the "Plans"). The purpose of the Plans is to attract, retain and motivate
our officers, directors, employees, and under certain circumstances, our
consultants, by giving them incentives which are linked directly to increases in
the value of our common stock. 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 and 2000 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 (the "Code") or a
nonqualified stock option. 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.
The 2000 Plan authorizes the Compensation Committee to enter into
non-qualified stock options only. The maximum number of shares of common stock
that may be issued pursuant to awards granted under the 2000 Plan is 2,000,000,
subject to certain adjustments to prevent dilution.
Options granted under the Plans are generally exercisable at the rate of
25% each year, beginning one year from the date of grant, and generally expire
ten years from the date of grant.
The Company has stock option agreements that are outside the Plans. These
agreements are for non-qualified stock options only.
The following table summarizes our equity plan compensation information as
of December 31, 2001:
EQUITY COMPENSATION PLAN INFORMATION AS OF DECEMBER 31, 2001
(a) (b) (c)
Plan Category Number of Securities Weighted-average Number of Securities
to be Issued Upon Exercise Price of Remaining Available for
Exercise of Outstanding Options, Future Issuance Under
Outstanding Options, Warrants and Rights Equity Plans (Excluding
Warrants and Rights Securities Reflected in
Column (a))
- ----------------------------------------------------------------------------------------------------------
Equity Compensation Plans
Approved By Security Holders 781,102 $4.64 89,905
Equity Compensation Plans
Not Approved by Security
Holders 3,059,250 (1) $8.63 733,750
Total 3,840,352 $7.82 823,655
- ----------
<FN>
(1) Includes 1,287,000 warrants pursuant to a securities purchase agreement
dated January 10, 2000 with Genstar Capital Partners II L.P. and Stargen II
LLC.
</FN>
The Compensation Committee of our Board of Directors currently administers
our Plans.
8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Messrs. Hendrickson, Moffa
and Conte. The compensation Committee is responsible for considering and making
recommendations to the Board of Directors regarding executive compensation and
is responsible for administrating our stock option and executive incentive
compensation plans. Of the members of the compensation committee, only Mr.
Hendrickson is a current or former officer or employee of the Company. None of
our executive officers or Directors served as a member of the board of directors
of any other entity of which an executive officer or Director 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 our 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 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 2001, Russell D. Hays, our former Chairman of the Board, Chief
Executive Officer and President, and George Uveges, our former Chief Operating
Officer, resigned. We also hired Leonard M. Hendrickson as our new President and
Chief Executive Officer. In setting the base salary for Mr. Hendrickson, the
Compensation Committee took into account the salary ranges of industry
competitors, Mr. Hendrickson's prior experience and expected contributions, and
the relative importance of his respective position in terms of achieving the
Company's objectives.
Effective as of October 15, 2001, Leonard M. Hendrickson became the
Company's President and Chief Executive Officer. In 2001, Mr. Hendrickson
received a pro-rated portion of his annual base salary of $250,000, which we may
increase, at the Board's sole discretion, at the end of each year of his
employment. In addition to the base salary to be paid to Mr. Hendrickson, the
Company paid a one time signing bonus to him in the amount of $90,000 upon the
commencement of his employment. In connection with his initial engagement, the
Company also granted Mr. Hendrickson options to purchase 280,000 shares of the
Company's common stock. Mr. Hendrickson's compensation package was established
based upon a comparative analysis of other similarly situated chief executive
officers conducted by the Compensation Committee, in consultation with a
professional recruiting firm hired as a
9
consultant to the Company to assist in the process of retaining a new President
and Chief Executive Officer. Mr. Hendrickson 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
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, 2001.
The Committee reviewed the audited financial statements of the Company as
of and for the fiscal year ended December 31, 2001, 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, 2001, for filing with the Securities Exchange
Commission (the "SEC").
AUDIT COMMITTEE
John R. Overturf, Jr.
Robert D. Weist
Robert J. Weltman
10
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. 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, 2001, all our executive
officers, directors and greater-than-ten percent stockholders complied with all
Section 16(a) filing requirements, except for the following: Jean-Pierre L.
Conte and Robert J. Weltman each filed an Annual Report of Beneficial Ownership
on Form 5 for the calendar year ended December 31, 2001 which included a report
relating to options that were granted during the calendar year ended December
31, 2000, which transaction should have been reported on an Annual Report of
Beneficial Ownership on Form 5 for the calendar year ended December 31, 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 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.
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, former President, and
Chief Executive Officer of the Company pursuant to which Mr. Hays agreed to
purchase 40,000 shares of the our common stock at $15.00 per share. We also
entered into a Securities Purchase Agreement, effective as of September 5, 2000,
with George Uveges, former Chief Operating Officer of the Company 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.
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, 1996
to December 31, 2001, 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, 1996 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.
Cumulative Total Return
- --------------------------------------------------------------------------------
12/96 12/97 12/98 12/99 12/00 12/01
- --------------------------------------------------------------------------------
BIOSOURCE INTERNATIONAL, INC. 100.00 92.73 42.73 115.46 222.73 120.73
NASDAQ STOCK MARKET (U.S.) 100.00 122.48 172.68 320.89 193.01 153.15
JP MORGAN H & Q BIOTECHNOLOGY 100.00 101.22 154.14 329.48 354.22 294.61
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, 2002. KPMG has served as the principal independent public accounting firm
utilized by us during the years ended December 31, 1994 through 2001. 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 $138,000 in fees for professional
services rendered for the audit of our annual financial statements for the
fiscal year ended December 31, 2001 and the reviews of the financial statements
included our Form 10-Q's for fiscal 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
In 2001, 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 $59,000 for all other
non-audit services, performed in fiscal 2001. These non-audit services consisted
primarily of state, federal, and international income tax services.
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.
13
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth as of May 15, 2002 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)
---------------- ---------------------- -----------
Genstar Capital LLC (3) 3,436,856 31.4%
Jean-Pierre L. Conte (3) 3,392,189 31.0%
Kennedy Capital Management, Inc. (4) 868,625 9.0%
Dimensional Funds Advisors Inc. (5) 535,100 5.6%
Leonard M. Hendrickson (6) 109,400 1.1%
David J. Moffa, Ph.D. (7) 39,900 *
John R. Overturf, Jr. (8) 22,000 *
Robert D. Weist (9) 65,000 *
Robert J. Weltman (10) 11,333 *
David Thrower (11) 62,083 *
Charles C. Best (12) 43,790 *
Cy Cabradilla (13) 38,581 *
All of the directors and executive
officers as a group (nine persons) (13) 3,793,012 33.7%
- ----------
* 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
March 21, 2000.
(2) Percentage ownership is based on 9,638,863 shares of common stock
outstanding as of May 15, 2002.
(3) Genstar Capital Partners II, L.P. holds 2,032,809 shares of common stock
and 1,262,542 shares of common stock issuable upon exercise of 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. Includes 16,000 stock options held by Mr. Conte
and Mr. Weltman. In addition, Mr. Conte holds 30,000 shares of common
stock, Mr. Weltman holds 3,333 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
14
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.
(4) As disclosed in the Schedule 13G filed with the Securities and Exchange
Commission on February 15, 2002 by Kennedy Capital Management, Inc. Gary D.
Campbell.
(5) As disclosed in the Schedule 13G filed with the Securities and Exchange
Commission on January 30, 2002 by Dimensional Fund Advisors, Inc. Michael
T. Scardina.
(6) 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 15, 2002; (ii) 26,500 shares of common stock owned;
(iii) 4,000 shares of common stock held of record by two of Mr.
Hendrickson's minor children; and (iii) 7,900 shares of common stock held
in the Microchemics Simplified Employee Pension Plan.
(7) Includes (i) 32,500 shares of common stock reserved for issuance upon
exercise of stock options that are currently exercisable or are exercisable
within 60 days of May 15, 2002; (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.
(8) Includes (i) 20,000 shares of common stock reserved for issuance upon
exercise of stock options that are currently exercisable or are exercisable
within 60 days of May 15, 2002; and (ii) 2,000 shares of common stock
owned.
(9) Includes 65,000 shares of common stock reserved for issuance upon exercise
of stock options that are currently exercisable or are exercisable within
60 days of May 15, 2002.
(10) Includes (i) 3,333 shares of common stock held directly. (ii) 8,000 shares
of common stock reserved for issuance upon exercise of stock options that
are currently exercisable or are exercisable within 60 days of May 15,
2002. Mr. Weltman is also a Managing Director of Genstar Capital LP 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.
(11) Includes 62,083 shares of common stock reserved for issuance upon exercise
of stock options that are currently exercisable or are exercisable within
60 days of May 15, 2002.
(12) Includes 43,790 shares of common stock reserved for issuance upon exercise
of stock options that are currently exercisable or are exercisable within
60 days of May 15, 2002.
(13) Includes 38,581 shares of common stock reserved for issuance upon exercise
of stock options that are currently exercisable or are exercisable within
60 days of May 15, 2002. Mr. Cabradilla resigned as of May 10, 2002.
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.
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 1, 2003.
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, 2001, 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 24, 2002
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.
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.
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.
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, LEONARD M. HENDRICKSON 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 19, 2002, 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 J. 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:)
---------------------------------------------------------------------------
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, 2002.
[_] 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 23, 2001, relating to the
Annual Meeting.
Dated:___________________________, 2002
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.