SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN THE PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Meridian Bioscience, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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MERIDIAN BIOSCIENCE, INC.
3471 River Hills Drive
Cincinnati, Ohio 45244
Notice of Annual Meeting
and Proxy Statement
Dear Shareholder:
Our Annual Meeting of Shareholders will be held at 2:00 p.m. on January 21, 2003
at Ivy Hills Country Club, 7711 Ivy Hills Boulevard, Cincinnati, Ohio. We hope
you will attend. At the meeting, you will hear a report on our operations and
have a chance to meet your directors and executive officers.
This booklet includes the formal notice of the meeting and the proxy statement.
The proxy statement tells you more about the agenda and procedures for the
meeting. It also describes how the Board operates and gives personal information
about our director candidates.
Please complete, sign, date, and return your proxy card promptly in the enclosed
envelope.
Sincerely yours,
/s/ William J. Motto
William J. Motto
Chairman of the Board
December 23, 2002
NOTICE OF ANNUAL MEETING
OF
SHAREHOLDERS OF MERIDIAN BIOSCIENCE, INC.
Time:
2:00 p.m., Eastern Time
Date:
January 21, 2003
Place:
Ivy Hills Country Club
7711 Ivy Hills Boulevard
Cincinnati, Ohio 45244
Purpose:
o Elect directors
o Ratify appointment of PricewaterhouseCoopers LLP as Meridian's
independent public accountants for fiscal year 2003
o Conduct other business if properly raised
Only shareholders of record on December 2, 2002 may vote at the meeting.
The approximate mailing date of this Proxy Statement and accompanying Proxy Card
is December 23, 2002.
Your vote is important. Please complete, sign, date, and return your proxy
card promptly in the enclosed envelope.
/s/ Melissa Lueke
Melissa Lueke
Secretary
December 23, 2002
TABLE OF CONTENTS
Page
GENERAL INFORMATION............................................................1
ELECTION OF DIRECTORS..........................................................1
RATIFICATION OF APPOINTMENT OF ACCOUNTANTS.....................................4
DIRECTOR COMPENSATION..........................................................6
BOARD COMMITTEES...............................................................6
REPORT OF THE AUDIT COMMITTEE..................................................6
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION........................7
PRINCIPAL SHAREHOLDERS.........................................................9
DIRECTORS AND EXECUTIVE OFFICERS..............................................10
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..........................11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION...................11
SUMMARY COMPENSATION TABLE....................................................12
OPTION GRANTS IN LAST FISCAL YEAR.............................................13
FISCAL 2002 OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES...............13
PERFORMANCE GRAPH.............................................................14
SHAREHOLDER PROPOSALS FOR NEXT YEAR...........................................15
QUESTIONS?....................................................................15
GENERAL INFORMATION
Who may vote
Shareholders of Meridian, as recorded in our stock register on December 2, 2002,
may vote at the meeting. As of that date, Meridian had 14,633,733 shares of
Common Stock outstanding.
How to vote
You may vote in person at the meeting or by proxy. We recommend you vote by
proxy even if you plan to attend the meeting. You can always change your vote at
the meeting.
How proxies work
Meridian's Board of Directors is asking for your proxy. Giving us your proxy
means you authorize us to vote your shares at the meeting in the manner you
direct. You may vote for all, some or none of our director candidates. You may
also vote for or against the other proposals or abstain from voting.
If you sign and return the enclosed proxy card but do not specify how to vote,
we will vote your shares in favor of our director candidates and in favor of the
ratification of PricewaterhouseCoopers LLP as Meridian's independent public
accountants for fiscal year 2003.
If any other matters come before the meeting or any adjournment, each proxy will
be voted in the discretion of the individuals named as proxies on the card.
You may receive more than one proxy or voting card depending on how you hold
your shares. Shares registered in your name are covered by one card. If you hold
shares through someone else, such as a stockbroker, you may get material from
them asking how you want to vote.
Revoking a proxy
You may revoke your proxy before it is voted by submitting a new proxy with a
later date, by voting in person at the meeting, or by notifying Meridian's
Secretary in writing at the address under "Questions?" on page 15.
Quorum
In order to carry on the business of the meeting, we must have a quorum. This
means at least a majority of the outstanding shares eligible to vote must be
represented at the meeting, either by proxy or in person.
Votes needed
The six director candidates receiving the most votes will be elected to fill the
seats on the Board. Ratification of appointment of accountants requires the
favorable vote of a majority of the votes cast. Only votes for or against these
proposals count. Abstentions and broker non-votes count for quorum purposes but
not for voting purposes. Broker non-votes occur when a broker returns a proxy
card but does not have authority to vote on a particular proposal
Other Matters
Any other matters considered at the meeting, including adjournment, will require
the affirmative vote of a majority of the votes cast.
ELECTION OF DIRECTORS
(Item 1 on the Proxy Card)
The Board has nominated the director candidates named below.
The Board of Directors oversees the management of Meridian on your behalf. The
Board reviews Meridian's long-term strategic plans and exercises direct
decision-making authority in key areas, such as
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choosing the Chief Executive Officer, setting the scope of his authority to
manage Meridian's business day to day and evaluating management's performance.
The Board is nominating for election all of the following current directors:
James A. Buzard, John A. Kraeutler, Gary P. Kreider, William J. Motto, David C.
Phillips and Robert J. Ready.
Proxies solicited by the Board will be voted for the election of these nominees.
All directors elected at the Annual Meeting will be elected to hold office until
the next annual meeting. In voting to elect directors, shareholders are entitled
to cumulate their votes and to give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares held by the
shareholder, or to distribute their votes on the same principle among as many
candidates as the shareholder sees fit. In order to invoke cumulative voting,
notice of cumulative voting must be given in writing by a shareholder to the
President, a Vice President or the Secretary of Meridian not less than 48 hours
prior to the Annual Meeting. The proxies solicited include discretionary
authority to cumulate votes.
Four of our six nominees are not Meridian employees. Only non-employee directors
serve on Meridian's Audit and Compensation committees. All Meridian directors
are elected for one-year terms. Personal information on each of our nominees is
given below.
Board meetings last year: 7
Actions in writing last year: None
If a director nominee becomes unavailable before the election, your proxy card
authorizes us to vote for a replacement nominee if the Board names one.
The Board recommends you vote FOR each of the following candidates:
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James A. Buzard, Ph.D. James A. Buzard, Ph.D. was Executive Vice
Director since 1990 President of Merrell Dow Pharmaceuticals Inc. from
Age:75 March 1981 until December 1989. From December 1989
until his retirement in February 1990, he was Vice
President of Marion Merrell Dow, Inc. He has been
a business consultant since February 1990.
Dow, Inc. He has been a business
consultant since February 1990.
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John A. Kraeutler John A. Kraeutler has more than 25 years of
Director since 1997 experience in the medical diagnostics industry and
Age:54 joined Meridian as Executive Vice President and
Chief Operating Officer in January 1992. In July
1992, Mr. Kraeutler was named President of
Meridian. Before joining Meridian, Mr. Kraeutler
served as Vice President, General Manager for a
division of Carter-Wallace, Inc. Prior to that, he
held key marketing and technical positions with
Becton, Dickinson and Company and Organon, Inc.
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Gary P. Kreider, Esq. Gary P. Kreider serves as Chairman of the
Director since 1991 Compensation Committee. Mr. Kreider has been a
Age:64 Senior Partner of the Cincinnati law firm of
Keating, Muething & Klekamp, P.L.L., counsel to
Meridian, since 1975. He is also an Adjunct
Professor of Law in securities at the University
of Cincinnati College of Law and a director of LSI
Industries, Inc.
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William J. Motto William J. Motto has more than 35 years of
Director since 1977 experience in the pharmaceutical and diagnostics
Age:61 products industries, is a founder of Meridian and
has been Chairman of the Board since 1977. Before
forming Meridian, Mr. Motto served in various
capacities for Wampole Laboratories, Inc., Marion
Laboratories, Inc. and Analytab Products, Inc., a
division of American Home Products Corp.
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David C. Phillips David C. Phillips serves as Chairman of the Audit
Director since 2000 Committee. Mr. Phillips spent 32 years with Arthur
Age:64 Andersen LLP. His service with this firm included
several managing partner leadership positions.
After retiring from Arthur Andersen in 1994, Mr.
Phillips became Chief Executive Officer of
Downtown Cincinnati, Inc., which is responsible
for economic revitalization of Downtown
Cincinnati. Mr. Phillips retired from DCI in 1999
to devote full time to Cincinnati Works, Inc., an
organization dedicated to reducing the number of
people living below the poverty level by assisting
them to strive towards self-sufficiency through
work, and his financial consulting services.
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Robert J. Ready Robert J. Ready founded LSI Industries, Inc.,
Director since 1986 Cincinnati, Ohio in 1976, which engineers,
Age:62 manufactures and markets commercial/industrial
lighting and graphics products, and has served as
its President and Chairman of its Board of
Directors since that time.
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RATIFICATION OF
APPOINTMENT OF ACCOUNTANTS
(Item 2 on the Proxy Card)
Although not required, the Board is seeking shareholder ratification of the
Audit Committee's selection of PricewaterhouseCoopers LLP as Meridian's
independent public accountants for fiscal 2003. The affirmative vote of a
majority of shares voting at the meeting is required for ratification. If
ratification is not obtained, the Board intends to continue the employment of
PricewaterhouseCoopers LLP at least through fiscal 2003. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Shareholders'
Meeting and will be given an opportunity to make a statement, if they so desire,
and to respond to appropriate questions that may be asked by shareholders.
Changes in the Company's Certifying Accountant
On May 13, 2002, Meridian dismissed Arthur Andersen LLP as the independent
public accountant to audit Meridian's consolidated financial statements.
Following a review of Meridian's accounting services in recent years, the Board
of Directors initiated a process to solicit bids from Deloitte & Touche LLP,
Ernst & Young LLP, Grant Thornton LLP, and PricewaterhouseCoopers LLP. The Audit
Committee of the Board of Directors, after reviewing audit proposals from all
four firms selected PricewaterhouseCoopers as Meridian's independent accountants
to replace Arthur Andersen, effective May 13, 2002. The Company reported this
change of accountant in a Current Report on Form 8-K filed with the SEC on May
13, 2002.
Arthur Andersen's report on Meridian's financial statements for each of the last
two fiscal years did not contain an adverse opinion or a disclaimer of opinion,
nor was it qualified or modified as to uncertainty, audit scope, or accounting
principles. During Meridian's two most recent fiscal years and the subsequent
interim periods preceding the replacement of Arthur Andersen, there were no
disagreements with Arthur Andersen on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement(s), if not resolved to the satisfaction of Arthur Andersen, would
have caused them to make a reference to the subject matter of the
disagreement(s) in connection with its report. Meridian has authorized Arthur
Andersen to respond fully to any inquiries by PricewaterhouseCoopers.
Arthur Andersen did not advise Meridian either during its two most recent fiscal
years or during the subsequent interim periods preceding Arthur Andersen's
dismissal:
> that the internal controls necessary for Meridian to develop
reliable financial statements did not exist;
> that information had come to its attention that had led it to no
longer be able to rely on management's representations, or that had
made it unwilling to be associated with the financial statements
prepared by management;
> of the need to expand significantly the scope of its audit, or that
information had come to its attention during the two most recent
fiscal years or any subsequent interim periods that if further
investigated might materially have impacted the fairness or
reliability of either: (i) a previously issued audit report or the
underlying financial statements, or
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(ii) the financial statements issued or to be issued covering the
fiscal period(s) subsequent to the date of the most recent financial
statements covered by an audit report, or have caused it to be
unwilling to rely on management's representations or be associated
with Meridian's financial statements; or
> that information had come to its attention that it had concluded
materially impacts the fairness or reliability of either (i) a
previously issued audit report or the underlying financial
statements, or (ii) the financial statements issued or to be issued
covering the fiscal period(s) subsequent to the date of the most
recent financial statements covered by an audit report, including
information that, unless resolved to the accountant's satisfaction,
would prevent it from rendering an unqualified audit report on those
financial statements.
During the two most recent fiscal years and during the interim period prior to
engaging PricewaterhouseCoopers, neither Meridian nor anyone on its behalf
consulted PricewaterhouseCoopers regarding either: (i) the application of
accounting principles to a specified transaction (either completed or proposed)
or the type of audit opinion that might be rendered on Meridian's financial
statements, and no written report or oral advice was provided to Meridian that
PricewaterhouseCoopers concluded was an important factor considered by Meridian
in reaching a decision as to an accounting, auditing or financial reporting
issue; or (ii) any matter that was the subject of either a disagreement or a
reportable event.
Meridian provided Arthur Andersen LLP with a copy of the foregoing disclosures
and received from Arthur Andersen LLP a letter addressed to the Securities and
Exchange Commission stating its agreement with such disclosures. A copy of the
letter from Arthur Andersen was filed with the SEC as Exhibit 16 to the Form
8-K.
Principal Accounting Firm Fees:
Aggregate fees billed to Meridian by Arthur Andersen LLP for fiscal 2002 were:
Audit Fees $ 12,000
---------
Financial Information System Design and
Implementation Fees
$ --
All other Fees $ 101,034
=========
(a)
$ 113,034
=========
Aggregate fees billed to Meridian for fiscal 2002 by Meridian's principal
accounting firm, PricewaterhouseCoopers LLP, are as follows:
Audit Fees $ 164,000
---------
Financial Information
System Design and Implementation Fees $ --
---------
(b)
All other Fees $ 258,989
---------
(a)(b)
$ 422,989
=========
(a) Includes fees for tax and other non- audit services, including Biotrin due
diligence fees of $247,089 for PricewaterhouseCoopers LLP.
(b) The Audit Committee has determined that the provision of these services is
compatible with
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maintaining the principal accountant's independence.
DIRECTOR COMPENSATION
Non-employee directors of Meridian receive $12,000 per year for serving as a
director and as members of committees of the Board. They also receive $1,000 for
each director or committee meeting attended, except if a committee meeting
occurs on the same day as a directors' meeting the committee meeting fee is
$800. They receive $500 for each director or committee meeting held by
telephone. The Audit Committee Chairman and Compensation Committee Chairman
receive an additional $1,000 and $500, respectively, for each committee meeting
held. Each non-employee director is also granted a non-qualified option to
purchase 2,317 shares of Common Stock at the time of election or re-election to
the Board of Directors, with the exercise price being the closing sale price on
Nasdaq reported immediately prior to the date of grant. If a change in control
occurs, non-employee directors will receive lump-sum payments equal to ten times
their annual compensation received in the prior fiscal year. Directors who are
employees of Meridian are not separately compensated for serving as directors.
BOARD COMMITTEES
The Board appoints committees to help carry out its duties. In particular, Board
committees work on key issues in greater detail than would be possible at full
Board meetings. Each committee reviews the results of its meetings with the full
Board. The Board of Directors does not have a nominating committee or executive
committee.
The Audit Committee is responsible for reviewing Meridian's internal accounting
operations. It also recommends the employment of independent accountants and
reviews the relationship between Meridian and its outside accountants.
Meetings last year: 7
Actions in writing last year: None
REPORT OF THE AUDIT COMMITTEE
Meridian's Audit Committee is composed of Messrs. Phillips (Chairman), Ready,
Buzard and Kreider. All of the members of the Committee met the NASD standards
for independence and financial literacy in fiscal 2002.
In April 2000, the Board adopted the Audit Committee Charter, which was attached
to the 2001 Proxy Statement as Appendix I. The Charter outlines the activities
and responsibilities of the Committee.
On May 6, 2002 the Committee selected the accounting firm of
PricewaterhouseCoopers as their new independent public accountants. The
selection was made after considering offers from Deloitte & Touche LLP, Ernst &
Young LLP, Grant Thornton LLP, and PricewaterhouseCoopers LLP.
On August 20, 2002, the Committee met with representatives of
PricewaterhouseCoopers and Meridian's internal accountants and reviewed with
them the proposed 2002 Audit Plan, areas warranting particular concentration on
the audit and the effects of new accounting pronouncements. The
PricewaterhouseCoopers representatives reviewed with the Committee written
disclosures required by the Independence Standards Board Standard No. 1
regarding independence of the public accountants and presented a letter
regarding that matter to the Committee.
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At its meeting on November 19, 2002, the Committee reviewed with management,
PricewaterhouseCoopers and Meridian's accounting officers the results of the
audit for fiscal 2002, including the audited financial statements. The Committee
reviewed the requirements of its Charter previously adopted and the reports that
were required to be disclosed to the Committee. The Committee discussed with
PricewaterhouseCoopers the matters required to be discussed by Statement on
Auditing Standards No. 61.
The Committee met on December 13, 2002 to review a draft of the Form 10-K. Based
on their review the Committee recommended to the Board of Directors that the
audited financial statements of Meridian be included in its Annual Report on
Form 10-K for the year ended September 30, 2002 for filing with the Securities
and Exchange Commission.
Respectfully submitted,
Audit Committee
David C. Phillips (Chairman)
Robert J. Ready
James A. Buzard
Gary P. Kreider
The Compensation Committee is responsible for establishing compensation for
management and administering Meridian's stock option plans.
Meetings last year: 4
Actions in writing last year: None
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Report of the Compensation Committee
Meridian's Compensation Committee is composed of Messrs. Kreider (Chairman),
Buzard, Phillips and Ready. The Compensation Committee is responsible for
establishing compensation for executive officers, establishing salary levels and
bonus plans, making bonus awards and otherwise dealing in all matters concerning
compensation of the executive officers and awarding stock options for all
employees.
At its meeting on November 14, 2001, the Committee maintained salary levels for
Messrs. Motto, Kraeutler, Eberly and Interno for fiscal 2002 at fiscal 2001
levels, as shown in the Summary Compensation Table, granted increases to
operating officers and established a fiscal 2002 bonus award based on targeted
net earnings levels which the Company did not achieve. The Committee had
available to it in establishing executive salaries the recommendations of
management with respect to overall staff level compensation for the coming
fiscal year for Meridian. The Committee took into account these considerations
plus the financial performance of Meridian during fiscal 2001 in establishing
salary levels. It determined the compensation for the Chief Executive Officer in
the same manner it did for its other executive officers. The Committee met
without Meridian's management in making its decisions. At its meeting on
November 14, 2001 and at other meetings throughout the year, the Committee also
awarded stock options pursuant to Meridian's Stock Option Plan to various
employees including the stock options to executive officers listed elsewhere in
this Proxy Statement.
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At its meeting on November 19, 2002, the Committee increased salary levels for
Messrs. Motto, Kraeutler, Eberly and Interno for fiscal 2003, granted increases
to operating officers and established a fiscal 2003 bonus award based on
targeted net earnings levels from $6,350,000 - $7,350,000. They also awarded
options to purchase 130,000 Common Shares which will vest immediately if
Meridian's net earnings for fiscal 2003 are at least $6,800,000. If this target
is not reached, the options will not vest until nine years after the date of
grant.
Respectfully submitted,
Compensation Committee
Gary P. Kreider (Chairman)
Robert J. Ready
James A. Buzard
David C. Phillips
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PRINCIPAL SHAREHOLDERS
William J. Motto, Chairman of the Board, and Putnam Investment Management, LLC
are the only shareholders known by Meridian to own beneficially 5% or more of
its outstanding Common Stock as of December 2, 2002. Information has been
furnished by the persons listed and/or has been obtained from reports filed by
the persons listed with the Securities and Exchange Commission:
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership Percent of Class
------------------------ -------------------- ----------------
William J. Motto(1) 4,136,646 28.2%
Putnam Investments, LLC(2) 2,022,980 13.8%
(1) The business address of Mr. Motto is 3471 River Hills Drive, Cincinnati,
Ohio 45244. The shares of Common Stock reported as beneficially owned by Mr.
Motto include 25,000 shares subject to options exercisable within 60 days.
(2) The business address of Putnam Investment Management, LLC is One Post Office
Square, Boston, Massachusetts 02109. The shares of Common Stock reported as
beneficially owned by Putnam Investment Management, LLC are as of September 30,
2002, the latest date such information is available to Meridian.
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DIRECTORS AND EXECUTIVE OFFICERS
This table lists the executive officers and directors of Meridian and shows how
much common stock each owned on December 2, 2002.
Common Stock
Beneficially Owned
Name Position Amount(1) Percentage(2)
---- -------- ------ ----------
William J. Motto Chairman of the Board of 4,136,646(2) 28.2%
Directors, Chief Executive
Officer
John A. Kraeutler President, Chief Operating 279,703 1.9%
Officer and Director
Antonio A. Interno(3) Senior Vice President 370,626 2.5%
Richard L. Eberly(4) Executive Vice President 46,750 *
Kenneth J. Kozak(5) Vice President, Research and 16,009 *
Development
Melissa A. Lueke(6) Vice President, Chief Financial 18,600 *
Officer and Secretary
Susan A. Rolih(7) Vice President of Regulatory 2,500 *
Affairs & Quality Systems
Lawrence J. Baldini(8) Vice President of Operations 5,500 *
James A. Buzard, Ph.D.(9) Director 27,204 *
Gary P. Kreider(9) Director 46,177(10) *
Robert J. Ready(9) Director 28,909 *
David C. Phillips(9) Director 10,634 *
All Executive Officers and Directors 4,989,258 33.0%
as a Group
(1) Includes options exercisable within 60 days from Mr. Motto of 25,000 shares,
Mr. Kraeutler of 264,445 shares, Mr. Interno of 56,657 shares, Mr. Eberly of
46,650 shares, Mr. Kozak of 15,600 shares, Mr. Buzard of 22,446 shares, Mr.
Kreider of 21,855 shares, Ms. Lueke of 11,000 shares, Mr. Phillips of 4,634
shares, Mr. Ready of 22,446 shares and Ms. Rolih of 2,500 shares.
(2) See description of Common Stock ownership contained under "Principal
Shareholder."
(3) Antonio A. Interno was appointed as a Vice President in August 1991 and
appointed a Senior Vice President in September 1997. He has been Managing
Director of Meridian's European subsidiary, Meridian Diagnostics Europe since
February 1990.
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(4) Richard L. Eberly was appointed Vice President of Sales and Marketing on
January 10, 1997 and appointed an Executive Vice President in May 2000. He has
over 12 years of experience in the medical diagnostic industry and joined
Meridian in January 1995. Prior to his appointment to Vice President of Sales
and Marketing, Mr. Eberly served as the Director of Sales for Meridian. Before
joining Meridian, he held key sales and marketing positions at Abbott
Diagnostics.
(5) Kenneth J. Kozak joined Meridian in October 1987 and was appointed Vice
President, Research and Development, on May 17, 1999. Prior to this appointment,
Mr. Kozak served as Director of Product Development for Meridian. Before joining
Meridian, Mr. Kozak held a variety of positions at the University of Cincinnati
College of Medicine.
(6) Melissa A. Lueke was appointed Vice President, Chief Financial Officer and
Secretary on January 23, 2001. Prior to her appointment, Ms. Lueke served as
Meridian's Controller since March 2000 and Acting Secretary from July 20, 2000
to January 23, 2001. Before joining Meridian, Ms. Lueke was employed by Arthur
Andersen LLP from June 1985 to January 1999, most recently as a Senior Audit
Manager.
(7) Susan A. Rolih was appointed Vice President of Regulatory Affairs and
Quality Systems on May 29, 2001. Before joining Meridian, Ms. Rolih held various
regulatory and quality positions with Immucor, Inc.
(8) Lawrence J. Baldini was appointed Vice President of Operations on April 3,
2001. Before joining Meridian, Mr. Baldini held various operations management
positions with Instrumentation Laboratories and Fisher Scientific.
(9) Audit Committee Member and Compensation Committee Member.
(10) Includes 145 shares held by his wife, 1,000 shares held as custodian for
his minor child and 9,621 shares held by trusts of which Mr. Kreider is trustee
and a beneficiary. Also includes Meridian debentures convertible into 1,625
shares.
* Less than one percent.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 requires Meridian's
executive officers, directors and persons who own more than ten percent of a
registered class of Meridian's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission. Based on a
review of the copies of such forms received by it, Meridian believes that during
the last fiscal year, all of its executive officers, directors and ten percent
stockholders complied with the Section 16 reporting requirements.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Gary P. Kreider, who is Chairman of the Compensation Committee, is a
senior partner of Keating, Muething & Klekamp, P.L.L., Cincinnati, Ohio, a law
firm that provided legal services to Meridian in fiscal 2002.
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SUMMARY COMPENSATION TABLE
Annual Compensation
-----------------------------------------------------------------------------
Securities
Name and Principal Position Underlying All Other
Year Salary Bonus Options Compensation(1)
-----------------------------------------------------------------------------
William J. Motto(1) 2002 $387,700 $ -0- 55,000 $41,779
Chairman of the Board of Directors, 2001 387,700 -0- 20,000 50,298
Chief Executive Officer 2000 371,000 104,344 20,000 43,908
John A. Kraeutler(2) 2002 $280,700 $ -0- 55,000 $23,687
President, Chief Operating Officer 2001 280,700 -0- 50,000 32,165
2000 268,600 75,544 50,000 31,401
Antonio A. Interno(3) 2002 $198,200 $ -0- 10,000 $20,200
Senior Vice President, Managing 2001 192,100 -0- 10,000 16,200
Director MDE 2000 200,000 32,837 15,000 16,200
Richard L. Eberly(4) 2002 $177,700 $ -0- 10,000 $27,480
Executive Vice President, Sales, 2001 177,700 -0- 35,000 22,532
Marketing and Operations 2000 170,000 43,594 10,000 35,813
Melissa A. Lueke(5) 2002 $157,800 $ -0- 10,000 $13,686
Vice President, Chief Financial 2001 145,900 -0- 30,000 13,759
Officer and Secretary -- -- -- -- --
(1) "All Other Compensation" for Mr. Motto includes (a) car allowances of
$16,579, $14,297, and $17,044 in 2002, 2001 and 2000, respectively, (b)
professional allowances of $15,200, $15,000 and $7,000 in 2002, 2001 and 2000,
respectively, (c) premiums paid under Meridian's Split-Dollar Life Insurance
Program of $-0-, $11,697 and $11,182 in 2002, 2001 and 2000, respectively and
(d) amounts accrued under Meridian's Savings and Investment Plan. Todd Motto,
the adult son of William J. Motto, is Director International Marketing MBE at
Meridian. Todd Motto received $81,200 in compensation for fiscal 2002 and
options to purchase 5,000 shares of Meridian common stock at an exercise price
of $4.70 per share.
(2) "All Other Compensation" for Mr. Kraeutler includes (a) car allowances of
$12,595, $10,280, and $14,608 in 2002, 2001 and 2000, respectively, (b)
professional allowances, (c) premiums paid under Meridian's Split-Dollar Life
Insurance Program of $-0-, $8,948 and $7,422 in 2002, 2001 and 2000,
respectively and (d) amounts accrued under Meridian's Savings and Investment
Plan of $9,986, $11,247 and $6,371 in 2002, 2001 and 2000, respectively. Mr.
Kraeutler and Meridian are parties to an employment agreement dated February 15,
2001 which sets forth compensation, non-competition, benefit and severance
provisions and provides for a payment equal to three times Mr. Kraeutler's base
salary (plus any salary earned but not paid) upon the occurrence of certain
events, including a change in control of Meridian. The agreement is effective
for a period of 36 months commencing February 15, 2001, automatically extending
until either party terminates the agreement.
(3) "All Other Compensation" for Mr. Interno includes (a) car allowances of
$16,200, $16,200, and $16,200 in 2002, 2001 and 2000, respectively and (b)
amounts accrued under Meridian's Savings and Investment Plan. The increase in
Mr. Interno's salary during fiscal 2002 reflects changes in exchange rates.
There was no change to the amount of salary in local currency during fiscal
2002.
(4) "All Other Compensation" for Mr. Eberly includes (a) car allowances of
$13,650, $6,966, and $6,394 in 2002, 2001 and 2000, respectively, (b) premiums
paid under Meridian's Split-Dollar Life Insurance Program of
- 12 -
$4,190, $-0- and $2,487 in 2002, 2001 and 2000, respectively, (c) amounts
accrued under Meridian's Savings and Investment Plan of $9,640, $9,706 and
$9,805 in 2002, 2001 and 2000, respectively and (d) reimbursement for education
related expenses of $-0-, $5,860 and $14,775 in 2002, 2001 and 2000,
respectively.
(5) "All Other Compensation" for Ms. Lueke includes (a) car allowances of $5,000
and $3,000 in 2002 and 2001, respectively, (b) premiums paid under Meridian's
Split-Dollar Life Insurance Program and (c) amounts accrued under Meridian's
Savings and Investment Plan of $8,686 and $8,030 in 2002 and 2001, respectively.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realized Value
Number of % of Total Options at Assumed Annual Rates
Securities Granted to Exercise of Price Appreciation for
Underlying Employees in Price Option Term
Options Fiscal ($/Per Expiration
Names Granted 2002 Share) Date 5% 10%
----- ------- ---- ------ ---- --- ---
William J. Motto 50,250 21% 4.70 9/30/11 $384,704 $612,577
4,750 1% 5.17 9/30/11 40,002 63,696
John A. Kraeutler 55,000 22% 4.70 9/30/11 421,069 670,482
Antonio A. Interno 10,000 4% 4.70 9/30/11 76,558 121,906
Richard L. Eberly 10,000 4% 4.70 9/30/11 76,558 121,906
Melissa A. Lueke 10,000 4% 4.70 9/30/11 76,558 121,906
FISCAL 2002 OPTION EXERCISES
AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Acquired Options at FY-End FY-End
Name on Exercise Value Realized Exercisable/Unexercisable Exercisable/Unexerciable
---- ----------- -------------- ------------------------- ------------------------
William J. Motto -- -- 25,000/70,000 $ --/$59,368
John A. Kraeutler 25,064 $38,348 264,445/92,500 38,640/61,600
Antonio A. Interno -- -- 56,657/18,750 11,227/11,200
Richard L. Eberly -- -- 46,650/36,875 16,600/61,000
Melissa A. Lueke 5,000 25,000 11,000/32,000 --/61,000
- 13 -
PERFORMANCE GRAPH
The following graph shows the yearly percentage change in Meridian's
cumulative total shareholder return on its Common Stock as measured by dividing
the sum of (A) the cumulative amount of dividends, assuming dividend
reinvestment during the periods presented and (B) the difference between
Meridian's share price at the end and the beginning of the periods presented; by
the share price at the beginning of the periods presented with the Wilshire 5000
Equity Index and a Peer Group Index. The Peer Group consists of Apogent
Technologies, Inc., Biomerica, Inc., Biosite, Inc., Diagnostic Products Corp.,
Hemagen Diagnostics, Inc., Hycor Biomedical, Inc., Idexx Laboratories Corp.,
Neogen Corp., Quidel Corp. and Trinity Biotech Plc.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG MERIDIAN BIOSCIENCE, INC., THE WILSHIRE 5000 INDEX
AND A PEER GROUP
[PERFORMANCE GRAPH DATA]
9/97 9/98 9/99 9/00 9/01 9/02
--------------------------------------------------------------------
MERIDIAN BIOSCIENCE, INC. 100.00 65.41 70.53 71.79 45.13 58.34
WILSHIRE 5000 100.00 103.28 131.12 154.13 109.51 90.32
PEER GROUP 100.00 94.77 112.37 137.26 139.33 134.69
* $100 invested on 9/30/97 in stock or index-including reinvestment of
dividends. Fiscal year ending September 30.
- 14 -
SHAREHOLDER PROPOSALS FOR NEXT YEAR
The deadline for shareholder proposals to be included in the Proxy
Statement for next year's meeting is August 23, 2003.
The form of Proxy for this meeting grants authority to the designated
proxies to vote in their discretion on any matters that come before the meeting
except those set forth in Meridian's Proxy Statement and except for matters as
to which adequate notice is received. In order for a notice to be deemed
adequate for the 2003 Annual Shareholders' Meeting, it must be received prior to
November 5, 2003. If there is a change in the anticipated date of next year's
annual meeting or these deadlines by more than 30 days, we will notify you of
this change through our Form 10-Q filings.
Meridian's Code of Regulations provides that only persons nominated by an
officer, director or in writing by a shareholder at least five days prior to the
meeting at which directors are to be selected shall be eligible for election.
QUESTIONS?
If you have questions or need more information about the annual meeting,
write to:
Melissa Lueke, Vice President, Chief Financial Officer and Secretary
Meridian Bioscience, Inc.
3471 River Hills Drive
Cincinnati, Ohio 45244
or call us at (513) 271-3700.
For information about your record holdings call the Fifth Third Bank Shareholder
Services at 1-800-837-2755.
- 15 -
MERIDIAN BIOSCIENCE, INC.
PROXY The undersigned hereby appoints WILLIAM J. MOTTO and MELISSA A. LUEKE,
FOR or either of them, proxies of the undersigned, each with the
ANNUAL substitution, to vote cumulatively or otherwise all shares of Common
MEETING Stock which the undersigned would be entitled to vote on the ma
specified below and in their discretion with respect to such other
business as may properly come before the Annual Meeting of Shareh of
Meridian Bioscience, Inc. to be held on January 21, 2003 at 2:00 P.M.
Eastern Time at Ivy Hills Country Club, 7711 Ivy Hills Boul
Cincinnati, Ohio and any adjournment of such Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS:
1. Authority to elect as directors the six nominees listed below.
FOR ____ WITHHOLD AUTHORITY ____
JAMES A. BUZARD, JOHN A. KRAEUTLER, GARY P. KREIDER, WILLIAM J. MOTTO,
DAVID C. PHILLIPS AND ROBERT J. READY
WRITE THE NAME OF ANY NOMINEE(S) FOR WHOM AUTHORITY
TO VOTE IS WITHHELD ____________________________________________
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
public accountants for fiscal 2003.
FOR ____ AGAINST ____ ABSTAIN ____
THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS UNLESS A
CONTRARY CHOICE IS SPECIFIED.
(This proxy is continued and is to be signed on the reverse side)
Date __________________________, ______
_______________________________________
_______________________________________
Important: Please sign exactly as name appears hereon indicating, where proper,
official position or representative capacity. In the case of joint holders, all
should sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS