-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MoC7cR36/V/qb1FwttTb8AtOSk2Pvm9DOSlw6RK2tiGK0GF3emVZA2bD6/Azs9bU c4ff8KRrVqdDI4BVh7QRtg== 0000914039-96-000112.txt : 19960510 0000914039-96-000112.hdr.sgml : 19960510 ACCESSION NUMBER: 0000914039-96-000112 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960509 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEXTER CORP CENTRAL INDEX KEY: 0000028582 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 060321410 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05542 FILM NUMBER: 96558293 BUSINESS ADDRESS: STREET 1: ONE ELM ST CITY: WINDSOR LOCKS STATE: CT ZIP: 06096 BUSINESS PHONE: 2036279051 MAIL ADDRESS: STREET 1: ONE ELM ST CITY: WINDSOR LOCKS STATE: CT ZIP: 06096 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to ______________________ _____________________________ Commission file number 1-5542 THE DEXTER CORPORATION ------------------------------- (Exact name of registrant as specified in its charter) CONNECTICUT 06-0321410 (State or other jurisdiction of (I.R.S. Employer) incorporation or organization) Identification No.) ONE ELM STREET, WINDSOR LOCKS, CONNECTICUT 06096 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (860) 292-7675 - ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) N/A - ------------------------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. CLASS Outstanding at April 30, 1996 - -------------------------- ----------------------------- COMMON STOCK, PAR VALUE $1 23,893,187 SHARES - -------------------------- ----------------------------- 2 PART I FINANCIAL INFORMATION Item 1 - Financial Statements Reference is made to the following consolidated financial statements which are incorporated herein by reference: (a) Exhibit 99a - Condensed Statement of Income for the three months ended March 31, 1996 and 1995. (b) Exhibit 99b - Condensed Statement of Financial Position as of March 31, 1996, December 31, 1995, and March 31, 1995. (c) Exhibit 99c - Condensed Statement of Cash Flows for the three months ended March 31, 1996 and 1995. (d) Exhibit 99d - Net Sales by Market for the three months ended March 31, 1996 and 1995. (e) Exhibit 99e - Notes to Consolidated Financial Statements. The unaudited financial data included herein as of March 31, 1996 and 1995, and for the three-month periods then ended, have been reviewed by the registrant's independent public accountants, Coopers & Lybrand L.L.P., and their report is attached. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported that net income for the first quarter of 1996 was $11.1 million, or $.46 per share, compared with $10.5 million, or $.43 per share, for the first quarter of 1995. Earnings increased 7% in the first quarter on a 4% increase in sales. Compared to the first quarter of 1995, the net effect of higher selling prices and higher raw material costs yielded a favorable impact of approximately $.03 per share. The effect of currency exchange rates, versus the first quarter of 1995, had an unfavorable impact of $.01 per share. Sales for the first quarter of 1996 were $277.2 million, a 4% increase over sales of $266.8 million, in the first quarter of 1995. The increase was due to a 2% gain in unit volume and selling price increases averaging 2%. Consolidated gross margin of 34.2% of net sales in the first quarter of 1996 improved by 2.1 percentage points from 32.1% in the first quarter of 1995. Higher gross margin at Life Technologies, Inc. and selling price increases at Dexter operations, more than offset the significant effects of 1995 raw material cost increases which continued to impact the first quarter of 1996. 3 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations, continued Marketing and administrative cost increased $5.8 million, or 12%, principally due to increased marketing expense at Life Technologies, Inc., which included consolidation of results from the 1995 acquisition of a controlling interest in their Japanese subsidiary. Other income was $2.2 million for the first quarter of 1996, a decrease of $.9 million, or 28%, from the first quarter of 1995. The majority of the decrease is due to the expiration of certain noncompete agreements. Products with strong sales performance in the first quarter of 1996 include printed wiring board and liquid encapsulation materials serving the electronics market, magnetic materials, food and beverage can coatings serving the European market, and sales of products at Life Technologies, Inc. Products with weaker performance include domestic nonwoven medical materials, food and beverage can coatings serving the domestic and Japanese markets, and acoustic materials serving the automotive market which was negatively affected by the recent automotive strike. In April 1996, the company announced that the Board of Directors authorized an additional repurchase of up to one million shares of the company's common stock. 4 PART II OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders The annual meeting of the shareholders of the company was held on April 25, 1996, where the following actions were taken: (a) The election of two new members to the Board of Directors of Ms. Henrietta Holsman Fore, Chairman and Chief Executive Officer of Holsman International and, Chairman and President of Stockton Wire Products; and Mr. Edgar G. Hotard, President of Praxair, Inc., and the re- election to the Board of Directors of Mr. Bernard M. Fox, Chairman, President and Chief Executive Officer of Northeast Utilities; Mr. K. Grahame Walker, Chairman, President and Chief Executive Officer of The Dexter Corporation; and George M. Whitesides, Ph.D., Professor of Chemistry at Harvard University. The votes for each director were as follows:
Director For Withheld - -------- --- -------- Ms. Henrietta Holsman Fore 19,314,161 819,358 Mr. Bernard M. Fox 19,318,536 814,983 Mr. Edgar G. Hotard 19,327,545 805,974 Mr. K. Grahame Walker 19,304,313 829,206 George M. Whitesides, Ph.D. 19,319,031 814,488
In addition, the following directors continue in office for the terms expiring as indicated: Mr. Robert M. Furek (1998), Ms. Martha Clark Goss (1998), Glen L. Urban, Ph.D. (1998), Mr. Charles H. Curl (1997), Mr. Peter G. Kelly (1997), and Mr. Jean-Francois Saglio (1997). (b) The adoption of The Dexter Corporation's 1996 Non-Employee Directors' Stock Plan was approved. The votes for the approval of The Dexter Corporation's 1996 Non-Employee Director's Stock Plan were as follows:
For Against Abstain --- ------- ------- 18,457,216 1,472,328 203,975
(c) The adoption of The Dexter Corporation's Senior Management Executive Incentive Plan was approved. The votes for the approval of the Dexter Corporation's Senior Management Executive Incentive Plan were as follows:
For Against Abstain --- ------- ------- 18,546,887 988,522 598,110
5 Item 4 - Submission of Matters to a Vote of Security Holders, continued (d) The selection of Coopers & Lybrand L.L.P. as auditors of the company for the year 1996 was ratified. The votes for selection of Coopers & Lybrand L.L.P. were as follows: For Against Abstain --- ------- ------- 20,060,297 27,032 46,190 (e) The shareholder proposal that the Board of Directors adopt a policy concerning severance agreements with officers and directors of the company was rejected. The Board of Directors had recommended that this proposal be rejected. The votes for this shareholder proposal were as follows: For Against Abstain Broker Nonvotes --- ------- ------- --------------- 8,239,946 9,563,683 990,151 1,339,739 Item 5 - Other Information Effective in April 1996, R. Barry Gettins, Ph.D. was appointed Senior Vice President -- Operations Development and David G. Gordon was appointed a Vice President of the company and Senior Division President of the Dexter Nonwovens Division. Item 6 - Exhibits and Reports on Form 8-K (a) Exhibit 10L -- The Dexter Corporation's 1996 Non-Employee Directors' Stock Plan Exhibit 10M -- The Dexter Corporation's Senior Management Executive Incentive Plan Exhibit 15 of Part 1 -- Letter to Securities and Exchange Commission re: Incorporation of Accountants' Reports Exhibit 27 of Part 1 -- Financial Data Schedule Exhibit 99 of Part 1 -- First Quarter 1996 Financial Statements and Notes (b) No reports on Form 8-K were filed during the quarter for which this report was filed. 6 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE DEXTER CORPORATION May 9, 1996 /s/ Kathleen Burdett Date _____________________ ----------------------------- Kathleen Burdett Vice President and Chief Financial Officer (Principal Financial Officer) May 9, 1996 /s/ George Collin Date _____________________ ------------------------------ George Collin Controller (Principal Accounting Officer) 7 INDEX TO EXHIBITS Exhibit No. 10L The Dexter Corporation's 1996 Non-Employee Directors' Stock Plan 10M The Dexter Corporation's Senior Management Executive Incentive Plan 15 Letter to Securities and Exchange Commission re: Incorporation of Accountants' Report 27 Financial Data Schedule 99 First Quarter 1996 Financial Statements and Notes EX-10.L 2 1996 NON-EMPLOYEE DIRECTORS' STOCK PLAN 1 Exhibit 10L THE DEXTER CORPORATION 1996 NON-EMPLOYEE DIRECTORS' STOCK PLAN 1. Purpose. The purpose of The Dexter Corporation 1996 Non-Employee Directors' Stock Plan is to advance the interests of the Company and its stockholders by enabling members of the Board who are not employees of the Company or any of its subsidiaries to receive shares of the Company's Common Stock in lieu of all or a portion of the annual cash retainer fee they receive for services on the Board. 2. Definitions. (a) "Board" means the Board of Directors of the Company. (b) "Change of Control" means the occurrence of any of the following events: (i) The Company is merged, consolidated or reorganized into or with another corporation or other legal person, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the then outstanding securities of such corporation or person immediately after such transaction are held in the aggregate by the holders of voting stock of the Company immediately prior to such transaction; (ii) The Company sells or otherwise transfers all or substantially all of its assets to another corporation or other legal person, and as a result of such sale or transfer less than a majority of the combined voting power of the then outstanding securities of such corporation or person immediately after such sale or transfer is held in the aggregate by the holders of voting stock of the Company immediately prior to such sale or transfer; (iii) There is a report filed on Schedule 13D or Schedule 14D-1(or any successor schedule, form or report), each as promulgated pursuant to the Exchange Act, disclosing that any person has become the beneficial owner of securities representing 19% of the voting stock of the Company; or (iv) If, during any period of two consecutive years, individuals who at the beginning of any such period constitute the directors of the Company cease for any reason to constitute at least a majority thereof. (c) "Committee" means the Compensation and Organization Committee of the Board. (d) "Common Stock" means the Common Stock of the Company, par value $1.00 per share. (e) "Company" means The Dexter Corporation, its successors and assigns. (f) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. (g) "Fair Market Value" means the closing price of Common Stock reported for the New York Stock Exchange on the last trading day preceding the relevant payment date. (h) "Retainer" means the annual cash retainer fee payable to a director for his or her services on the Board. (i) "Non-Employee Director" means a member of the Board who is not an employee of the Company or any of its subsidiaries. 2 Exhibit 10L, continued (j) "Plan" means this 1996 Non-Employee Directors' Stock Plan. 3. Eligible Participants. Each Non-Employee Director shall be eligible to participate in the Plan. 4. Administration. The Plan shall be administered by the Committee. The Committee shall, subject to the provisions of the Plan, have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decisions of the Committee in the administration of the Plan, as described herein, shall be final and conclusive. The Committee may authorize any one or more of its members or any officer of the Company to execute and deliver documents on behalf of the Committee. 5. Election to Receive Common Stock. Each Non-Employee Director shall have the right to elect, on forms provided by the Company, to receive all or a portion of the Retainer in the form of shares of Common Stock. Any part of the Retainer elected to be paid in shares of Common Stock shall be payable in one installment on the date of the Company's annual meeting of shareholders, provided, however, that in 1996 such payment shall be made on June 30, 1996. The number of shares of Common Stock to be issued at the time of payment shall be determined by dividing the amount elected to be taken in the form of shares of Common Stock by the Fair Market Value of such shares. Such election shall be made annually for the following calendar year, shall be irrevocable, and must be received by the Committee at least six months prior to the date on which the Common Stock is to be issued. Except as otherwise provided in Section 6 hereof, shares of Common Stock issued under this Section 5 shall be unrestricted and freely transferable. 6. Restriction on Shares. The shares of Common Stock issued under Section 5 hereof shall, at the election of the Non-Employee Director (which election must be in writing and shall be delivered to the Secretary of the Company no later than the last business day of the calendar year prior to the year for which the election is to be effective), be restricted and may not be sold, hypothecated or transferred (including, without limitation, transfer by gift or donation) except that such restrictions shall lapse upon: (a) Death of the Non-Employee Director; (b) Disability of the Non-Employee Director preventing continued service on the Board; (c) Retirement of the Non-Employee Director from service as a director of the Company in accordance with the policy on retirement of directors then in effect; (d) Termination of services as a director with the consent of a majority of the members of the Board other than the Non-Employee Director; or (e) A Change of Control, as defined in Section 2(b). If a Non-Employee Director ceases to be a director of the Company for any other reason, the shares of Common Stock issued to such Non-Employee Director subject to this Section 6 shall be forfeited and revert to the Company. The certificates for shares of Common Stock which are subject to this Section 6 shall be held by the Company until lapse of restrictions as provided in this Section 6, provided, however, the Non-Employee Director shall be entitled to all voting, dividend and distribution rights for such shares. 3 Exhibit 10L, continued 7. Number of Shares of Common Stock Issuable Under the Plan. The maximum number of shares of Common Stock that may be issued under the Plan shall be 50,000. Either authorized and unissued shares of Common Stock or treasury shares may be delivered pursuant to the Plan. In the event of any merger, consolidation, recapitalization, reclassification, stock dividend, distribution of property, special cash dividend or other change in corporate structure affecting the shares of Common Stock, adjustments shall be made by the Committee to prevent dilution or enlargement of rights in the number and class of shares granted or authorized to be granted hereunder. 8. Amendment. The Board may at any time amend the Plan, or any provision thereof, except that approval of the shareholders of the Company shall be required for any amendment for which such approval is necessary to comply with Rule 16b-3 under the Exchange Act or any other applicable law, regulation, or listing requirement, or to qualify for an exemption or characterization that is deemed desirable by the Committee. No amendment of the Plan shall materially and adversely affect any right of any Non-Employee Director with respect to any shares of Common Stock theretofore issued without such Non-Employee Director's written consent. 9. Termination. The Plan shall terminate upon the earlier of the following dates or events to occur: (a) upon the adoption of a resolution of the Board terminating the Plan; or (b) ten years from the date the Plan is initially approved and adopted by the stockholders of the Company in accordance with Section 11 hereof. No termination of the Plan shall materially and adversely affect any right of any Non-Employee Director with respect to any shares of Common Stock theretofore issued without such Non-Employee Director's written consent. 10. Miscellaneous Provisions. (a) Neither the Plan nor any action taken hereunder shall be construed as giving any Non-Employee Director any right to be retained in the service of the Company. (b) A Non-Employee Director's rights and interest under the Plan may not be assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise (except in the event of a Non-Employee Director's death, by will or the laws of descent and distribution). (c) As a condition to issuing the shares of Common Stock hereunder, the Committee may require a Non-Employee Director to pay to the Company such sum as may be necessary to discharge any obligation of the Company with respect to taxes, assessments or other governmental charges imposed on property or income received by such Non-Employee Director pursuant to the Plan. In accordance with rules and procedures established by the Committee and in the discretion of the Committee, such payment may be in the form of cash or property, or may be effected by delivery of a lesser number of shares. (d) The expenses of the Plan shall be borne by the Company. (e) The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares hereunder. (f) The Company shall not be required to issue fractions of shares. Whenever under the terms of the Plan a fractional share would be required to be issued, the Non-Employee Director shall be paid in cash for such fractional share based upon the same Fair Market Value which was used to determine the number of shares to be issued on the relevant payment date. (g) The provisions of the Plan shall be governed by and construed in 4 Exhibit 10L, continued accordance with the laws of the State of Connecticut. 11. Stockholder Approval. This Plan shall be subject to approval by a vote of the stockholders of the Company at the 1996 annual meeting of shareholders. 12. Effective Date. This Plan shall be effective as of the date that it is approved by the Board. EX-10.M 3 SENIOR MANAGEMENT EXECUTIVE INCENTIVE PLAN 1 Exhibit 10M THE DEXTER CORPORATION SENIOR MANAGEMENT EXECUTIVE INCENTIVE PLAN 1. Purpose. The purpose of The Dexter Corporation Senior Management Executive Incentive Plan is to enhance the ability of the Company to attract, motivate, reward and retain executive officers and to align their interests with those of the Company's stockholders by providing additional cash compensation to designated executive officers of the Company based on the achievement of objective performance targets. 2. Definitions. (a) "Award" shall mean an incentive award earned by a Participant under the Plan for a Performance Period. (b) "Base Salary" for a Performance Period shall mean the Participant's base salary during such Performance Period. Base salary does not include Awards under the Plan, long-term incentive awards, imputed income from such programs as executive life insurance, or nonrecurring items such as moving expenses, and is based on salary earnings before reductions for such items as contributions under Section 401(k) of the Internal Revenue Code of 1986, as amended. (c) "Board" shall mean the Board of Directors of the Company. (d) "Committee" shall mean the Compensation and Organization Committee of the Board. (e) "Company" shall mean The Dexter Corporation, its successors and assigns. (f) "Disability" shall mean permanent disability, as provided in the Company's long-term disability plan. (g) "Division" shall mean a division of the Company as may be designated by the Committee. (h) "Division Contribution" for any Performance Period shall mean net income for such period, before acquisition charges, interest expense, LIFO gain or loss, other nonoperating charges, taxes on income and minority interest income, all as reflected in the Company's internal financial statements for such Performance Period. 2 Exhibit 10M, continued (i) "Earnings Per Share" for any Performance Period shall mean the consolidated net income of the Company for such period, before extraordinary or unusual items (e.g. charges for divestiture and restructuring activities) and the cumulative effect of any change in accounting principles, divided by the weighted average number of shares of the Company's common stock. (j) "Participant", for any Performance Period, shall mean an executive officer selected by the Committee to participate in the Plan for such Performance Period. (k) "Performance Criteria" shall mean (i) Earnings Per Share, (ii) Return on Equity, (iii) Revenues, (iv) Division Contribution, or (v) any combination of the foregoing. (l) "Performance Period" shall mean the fiscal year of the Company or any other period designated by the Committee with respect to which an Award is earned. (m) "Performance Target" shall mean a financial target for a Performance Period which is expressed in one or more Performance Criteria and upon the attainment of which a Participant earns an Award. Performance Targets may be in respect of the performance of the Company and its Subsidiaries (which may be on a consolidated basis), a Division, a region or any combination of the foregoing. Performance Targets may be absolute or relative and may be expressed in terms of a progression within a specified range. (n) "Plan" shall mean this Senior Management Executive Incentive Plan, as from time to time amended and in effect. (o) "Retirement" shall mean retirement at age 65 or early retirement with the prior written approval of the Company. (p) "Return on Equity" for any Performance Period shall mean consolidated net income of the Company for such period, before extraordinary or unusual items (e.g. charges for divestiture and restructuring activities) and the cumulative effect of any change in accounting principles, divided by average shareholder equity. (q) "Revenues" for any Performance Period shall mean (i) in respect of the Company, the consolidated net sales of the Company for such period, and (ii) in respect of a Division, the net sales of said Division for such period. (r) "Subsidiary" shall mean a corporation defined in Section 424(f) of the Internal Revenue Code of 1986, as amended, with the Company being treated as the employer corporation for purposes of this definition. (s) "Target Award Percentage" for a Participant with respect to any Performance Period shall mean the percentage of the Participant's Base Salary that the Participant -2- 3 Exhibit 10M, continued would earn as an Award for that Performance Period determined based upon the attainment of a Performance Target applicable to such Participant. 3. Eligibility. Participation in the Plan for a Performance Period shall be limited to those executive officers who, because of their significant impact on the current and future success of the Company, the Committee selects, in accordance with Section 5 of this Plan, to participate in the Plan for that Performance Period. To be eligible to receive an Award for any Performance Period a Participant must be actively employed by the Company on each day of the Performance Period. 4. Administration. The administration of the Plan shall be consistent with the purpose and the terms of the Plan. The Plan shall be administered by the Committee. Each member of the Committee shall be an "outside director" within the meaning of Section 162(m) of the Internal Revenue Code and the regulations promulgated thereunder. The Committee shall have full authority to establish the rules and regulations relating to the Plan, to interpret the Plan and those rules and regulations, to select Participants in the Plan, to determine the Performance Periods, Performance Targets and Target Award Percentages applicable to each Participant and the amount of compensation payable to each Participant upon the achievement of such targets, to approve all the Awards, to decide the facts in any case arising under the Plan and to make all other determinations and to take all other actions necessary or appropriate for the proper administration of the Plan, including the delegation of such authority or power, where appropriate; provided, however, that the Committee shall not be authorized to increase the amount of the Award that would otherwise be payable pursuant to the terms of the Plan. The Committee's administration of the Plan, including all such rules and regulations, interpretations, selections, determinations, approvals, decisions, delegations, amendments, terminations and other actions, shall be final and binding on the Company and the Subsidiaries, and the Participants and their respective beneficiaries. 5. Determination of Awards. For each Performance Period, the Committee shall designate and establish the executive officers, if any, who shall be Participants during that Performance Period and the Performance Targets and Target Award Percentages for each Participant, in each case, before the expiration of 25% of the relevant Performance Period, but no later than 90 days after the commencement of such Performance Period. The Performance Targets shall be based on one or more Performance Criteria. The Committee shall prepare schedules with respect to each Performance Period, which will be treated as part of the Plan for that Performance Period, setting forth (a) the Participants, (b) Participant Target Award -3- 4 Exhibit 10M, continued Percentage and (c) Participant Performance Targets, in each case, for that Performance Period. The Committee shall notify each Participant of his or her Target Award Percentage and Performance Target for the Performance Period. The amount of a Participant Award is equal to the product of his or her Target Award Percentage and his or her Base Salary. Notwithstanding anything contained in this Plan to the contrary, the Committee in its sole discretion may reduce any Award to any Participant to any amount, including zero, prior to the written certification of the Committee of the amount of such Award. As a condition to the right of a Participant to receive an Award, the Committee shall first certify, in writing, that the Award has been determined in accordance with the provisions of the Plan. The maximum amount of Awards that any participant may receive with respect to any fiscal year of the Company during which the Plan is in effect is $1 million. 6. Changes to the Target. The Committee may change the Performance Targets to reflect a change in corporate capitalization, a corporate transaction, such as a merger, consolidation, separation, reorganization or partial or complete liquidation, or the occurrence of unexpected events, such as an acquisition or disposition, product liability judgment or such others as the Committee may determine prior to the expiration of 25% of the relevant Performance Period, but no later than 90 days after the commencement of such Performance Period. 7. Payment of Awards. As soon as practicable after the close of a Performance Period, the Committee shall review and approve each Participant Award. Subject to the provisions of Section 8 of the Plan, each Award shall be paid in a single lump sum cash payment as soon as practicable after the close of the Performance Period, but no later than 120 days after the close of the Performance Period. The Committee shall certify in writing prior to payment of any Award that the relevant Performance Targets were satisfied. 8. Designation of Beneficiary. A Participant may designate a beneficiary or beneficiaries who, in the event of the Participant's death prior to full payment of any Award hereunder, shall receive payment of any Award due under the Plan. Such designation shall be made by the Participant on a form prescribed by the Committee. The Participant may, at any time, change or revoke -4- 5 Exhibit 10M, continued such designation. A beneficiary designation, or revocation of a prior beneficiary will be effective only if it is made in writing on a form provided by the Company, signed by the Participant and received by the Secretary of the Company. If the Participant does not designate a beneficiary or the beneficiary dies prior to receiving any payment of an Award, Awards payable under the Plan shall be paid to the Participant's estate. 9. Amendments. The Committee may at any time amend (in whole or in part) this Plan. No such amendment which adversely affects any Participant rights to or interest in an Award earned prior to the date of the amendment shall be effective unless the Participant shall have agreed thereto. All Awards are intended not to be subject to the deduction limitation of Section 162(m) of the Internal Revenue Code of 1986 and the regulations promulgated thereunder. The Committee shall not be entitled to exercise any discretion otherwise authorized hereunder with respect to Awards if the ability to exercise such discretion or the exercise of such discretion itself would cause the compensation attributable to such Awards to be subject to such deduction limitation. 10. Termination. The Committee may terminate this Plan (in whole or in part) at any time. In the case of such termination, the following provisions of this Section 10 shall apply notwithstanding any other provisions of the Plan to the contrary: (a) The Committee shall promulgate administrative rules applicable to Plan termination, pursuant to which each affected Participant shall receive, with respect to each Performance Period which has commenced on or prior to the effective date of the Plan termination (the "Termination Date") and for which the Award has not yet been paid, an amount equal to the amount his or her Award would have been had the Plan not been terminated (prorated for the Performance Period in which the Termination Date occurred), subject to reduction in the discretion of the Committee. (b) Each Award payable under this Section 10 shall be paid at such time as the Committee shall determine. 11. Miscellaneous Provisions. (a) This Plan is not a contract between the Company and the executive officers or the Participants. Neither the establishment of this Plan, nor any action taken hereunder, shall be construed as giving any individual any right to be a Participant, receive an Award or be retained in the employ of the Company. The Company is under no obligation to continue the Plan. -5- 6 Exhibit 10M, continued (b) A Participant's right and interest under the Plan may not be assigned or transferred, except as provided in Section 8 of the Plan, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company's sole discretion, the Company's obligation under the Plan to pay Awards with respect to the Participant. (c) The Plan shall be unfunded. The Plan shall not be required to establish any special or separate fund, or to make any other segregation of assets, to assure payment of Awards. (d) The Company shall have the right to deduct from Awards paid any taxes or other amounts required by law to be withheld. (e) Nothing contained in the Plan shall limit or affect in any manner or degree the normal and usual powers of management exercised by the officers and the Board or committees thereof to change the duties or the character of employment of any employee (including any executive officer) of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved. (f) The Plan and all rights hereunder shall be construed in accordance with and governed by the laws of the State of Connecticut. 12. Stockholder Approval. This Plan shall be subject to approval by a vote of the stockholders of the Company at the 1996 Annual Meeting, and such stockholder approval shall be a condition to the right of a Participant to receive any benefits hereunder. 13. Effective Date. This Plan shall be effective as of the date that it is approved by the Board. -6- EX-15 4 LETTER RE: INCORPORATION OF ACCOUNTANTS' REPORT 1 Exhibit 15 Securities and Exchange Commission 450 5th Street, N.W. Judiciary Plaza Washington, D.C. 20549 We are aware that our report dated April 11, 1996, on our review of the interim financial information of The Dexter Corporation as of March 31, 1996 and 1995, and for the three month periods then ended, and included in this Form 10-Q is incorporated by reference in the company's registration statements on Form S-8, Registration Nos. 2-63959, 33-27597, 33-53307, 33-53309, and 333-02985. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Springfield, Massachusetts May 8, 1996 EX-27 5 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Condensed Statement of Financial Position and Condensed Statement of Income and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1996 MAR-31-1996 57,222 0 189,535 5,612 162,323 464,005 649,626 325,148 944,980 225,434 214,874 0 0 24,984 336,820 944,980 277,227 279,402 182,525 182,525 0 0 5,366 22,431 7,963 11,148 0 0 0 11,148 .46 0
EX-99 6 FINANCIAL STATEMENTS AND NOTES 1 EXHIBIT 99a THE DEXTER CORPORATION CONDENSED STATEMENT OF INCOME
------------------------------------------------------------------------------------------------------------------------------ In thousands of dollars Three Months Ended March 31 ------------------------------------------------------------- (except per share amounts) 1996 1995 Change ------------------------------------------------------------------------------------------------------------------------------ REVENUES Net sales $ 277,227 $ 266,793 + 4% Other income 2,175 3,039 - 28% ------------- --------------- 279,402 269,832 + 4% EXPENSES Cost of sales 182,525 181,129 + 1% Marketing and administrative 56,237 50,418 + 12% Research and development 12,843 12,530 + 2% Interest 5,366 5,163 + 4% ------------- --------------- INCOME BEFORE TAXES 22,431 20,592 + 9% Income taxes 7,963 7,413 + 7% ------------- --------------- INCOME BEFORE MINORITY INTERESTS 14,468 13,179 + 10% Minority interests 3,320 2,717 + 22% ------------- --------------- NET INCOME $ 11,148 $ 10,462 + 7% ============= =============== NET INCOME PER SHARE $0.46 $0.43 + 7% DIVIDENDS DECLARED PER SHARE $0.22 $0.22 AVERAGE SHARES OUTSTANDING (000) 23,999 24,352 - 1% ------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements. 2 EXHIBIT 99b THE DEXTER CORPORATION CONDENSED STATEMENT OF FINANCIAL POSITION
- ----------------------------------------------------------------------------------------------- In thousands of dollars March 31 December 31 March 31 ---------------------------------------------- (except per share amounts) 1996 1995 1995 - ----------------------------------------------------------------------------------------------- ASSETS Cash and short-term securities $ 57,222 $ 65,542 $ 46,320 Accounts receivable, net 209,415 201,389 189,276 Inventories Materials and supplies 58,057 60,099 60,971 In process and finished 128,152 121,644 117,505 LIFO reserve (23,886) (24,709) (23,114) --------- --------- --------- 162,323 157,034 155,362 Prepaid and deferred expenses 35,045 32,756 28,730 --------- --------- --------- Total current assets 464,005 456,721 419,688 Property, plant and equipment, at cost, net 324,478 325,203 331,753 Excess of cost over net assets of businesses acquired 79,744 74,102 75,822 Other assets 76,753 78,135 85,406 --------- --------- --------- $ 944,980 $ 934,161 $ 912,669 ========= ========= ========= LIABILITIES & SHAREHOLDERS' EQUITY Short-term debt $ 25,119 $ 13,598 $ 6,678 Current installments of long-term debt 13,053 13,648 4,266 Accounts payable 90,792 92,447 89,940 Accrued liabilities and taxes 89,850 81,659 87,742 Current environmental reserves 1,364 1,395 2,354 Dividends payable 5,256 5,351 5,358 --------- --------- --------- Total current liabilities 225,434 208,098 196,338 Long-term debt 214,874 215,839 226,925 Deferred items 48,184 48,492 48,013 Long-term environmental reserves 15,480 15,745 17,484 Minority interests 79,204 76,372 65,689 Shareholders' equity Common stock and paid-in capital 35,172 35,116 35,239 Retained earnings 353,436 347,544 333,505 Currency translation effects (2,222) 1,614 1,092 Treasury stock (24,582) (14,659) (11,616) --------- --------- --------- Total shareholders' equity 361,804 369,615 358,220 --------- --------- --------- $ 944,980 $ 934,161 $ 912,669 ========= ========= ========= EQUITY PER SHARE $ 15.19 $ 15.26 $ 14.70 - -----------------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements. 3 EXHIBIT 99c THE DEXTER CORPORATION CONDENSED STATEMENT OF CASH FLOWS - -------------------------------------------------------------------------------
Three Months Ended March 31 --------------------------- 1996 1995 In thousands of dollars - ------------------------------------------------------------------------------- OPERATIONS Net income $ 11,148 $ 10,462 Noncash items Depreciation and amortization 11,438 11,065 Income taxes not due 7,620 4,288 Minority interests 3,320 2,717 LIFO inventory (credit) charge (823) 286 Equity in net income of affiliates (638) (764) Other 1,344 147 Operating working capital increase (18,849) (27,454) -------- -------- 14,560 747 -------- -------- INVESTMENTS Property, plant and equipment (10,116) (8,372) Acquisitions (7,203) Joint ventures 227 (1,597) Notes receivable 3,000 Proceeds from exercise of LTI stock options 679 382 Other (503) (48) -------- -------- (16,916) (6,635) -------- -------- FINANCING Long-term debt (914) (450) Short-term debt, net 11,546 2,872 Dividends paid (5,351) (5,357) LTI dividends paid to minority interest shareholders (351) (341) Purchase of treasury stock (10,279) Other (256) (371) -------- -------- (5,605) (3,647) -------- -------- DECREASE IN CASH AND SHORT-TERM SECURITIES $ (7,961) $ (9,535) ======== ======== RECONCILIATION OF DECREASE IN CASH AND SHORT-TERM SECURITIES Cash and short-term securities at beginning of period $ 65,542 $ 55,012 Cash and short-term securities at end of period 57,222 46,320 -------- -------- Decrease in cash and short-term securities per Statement of Financial Position (8,320) (8,692) Currency translation effects 359 (843) -------- -------- $ (7,961) $ (9,535) ======== ======== INTEREST PAID $ 4,216 $ 3,980 ======== ======== TAXES PAID $ 343 $ 3,125 ======== ======== - -------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements. 4 EXHIBIT 99d THE DEXTER CORPORATION NET SALES BY MARKET
- ------------------------------------------------------------------------------------------------------------------------- Three Months Ended March 31 ------------------------------------------------------- In thousands of dollars 1996 1995 Change - ------------------------------------------------------------------------------------------------------------------------- AEROSPACE $ 12,348 $ 11,904 + 4% ELECTRONICS 49,456 45,031 + 10% FOOD PACKAGING 67,381 69,866 - 4% MEDICAL (1) 98,750 87,270 + 13% OTHER (2) (3) 49,292 52,722 - 7% ------------ ------------ CONSOLIDATED $ 277,227 $ 266,793 + 4% ============ ============ - -------------------------------------------------------------------------------------------------------------------------
(1) The effect of businesses acquired increased net sales to the Medical market by $3.7 million, or 4%. (2) The effect of businesses divested decreased net sales in the "Other" category by $3 million, or 6%. (3) Sales previously classified in the Automotive market are now included in the "Other" category. 5 Exhibit 99e The Dexter Corporation Notes to Consolidated Financial Statements Note 1 -- In the opinion of company's management, the unaudited financial statements reflect adjustments of a normal recurring nature which are necessary to present a fair statement of the results for the interim periods. The notes to the consolidated financial statements including management's discussion in Part 1, Item 2 of this Form 10-Q are incorporated as part of these consolidated financial statements. The year-end condensed balance sheet data was derived from audited financial statements. Note 2 -- Net income per share figures in the consolidated Condensed Statement of Income are based on the weighted average number of shares outstanding as indicated for each period. No effect has been given to stock options or restricted stock awards outstanding as no dilutive effect would result from the inclusion of these items. Note 3 -- The following are included as components of Common Stock and Paid-In Capital.
COMMON STOCK & PAID-IN CAPITAL MARCH 31, DECEMBER 31, MARCH 31, (IN THOUSANDS OF DOLLARS) 1996 1995 1995 - ------------------------------ --------- ------------ --------- Common stock $24,984 $24,984 $24,984 Paid-in capital 12,510 12,316 12,061 Unrealized losses on investments (300) (128) (910) Unearned compensation on restricted stock (1,549) (1,583) (896) Pension liability adjustment (473) (473) -------- ---------- --------- $35,172 $35,116 $35,239 ======== ========= =========
6 REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of The Dexter Corporation We have reviewed the accompanying condensed statement of financial position of The Dexter Corporation as of March 31, 1996 and 1995, and the related condensed statements of income and cash flows for the three month periods then ended. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted audited standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated statement of financial position of The Dexter Corporation as of December 31, 1995, and the related consolidated statements of income, cash flows, and changes in shareholders' equity for the year then ended (not presented herein); and in our report dated February 1, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed statement of financial position as of December 31, 1995, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Springfield, Massachusetts April 11, 1996 -----END PRIVACY-ENHANCED MESSAGE-----