UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

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 þ
Filed by a Party other than the Registrant o

Check the appropriate box:

o Preliminary Proxy Statement

o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þDefinitive Proxy Statement

o Definitive Additional Materials

o Soliciting Material Pursuant to sec. 240.14a-12

LIFE TECHNOLOGIES CORPORATION

Payment of Filing Fee (Check the appropriate box):

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
	(2)		Aggregate number of securities to which transaction applies:
	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)		Proposed maximum aggregate value of transaction:
	(5)		Total fee paid:

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

 

March 19, 2010

 

Dear Stockholder:

 

This year’s Annual Meeting of Stockholders will be held on April 29, 2010 at 8:00 a.m. local time, at the offices of the Company, 5781 Van Allen Way, Carlsbad, California 92008. You are cordially invited to attend.

 

We are pleased to furnish proxy materials to our stockholders over the Internet pursuant to rules of the U.S. Securities and Exchange Commission. On March 19, 2010, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our 2010 Proxy Statement and 2009 Annual Report to Stockholders. The Notice also provides instructions on how to vote online or by telephone, and includes instructions on how to receive a paper copy of the proxy materials by mail. If you received your annual meeting materials by mail, the Notice of Annual Meeting of Stockholders, Proxy Statement, Annual Report to Stockholders and proxy card were enclosed.

 

The Notice of Annual Meeting of Stockholders and the Proxy Statement, which describe the formal business to be conducted at the meeting, follow this letter.

 

Whether or not you plan to attend the meeting, your vote is very important and we encourage you to vote promptly. After reading the Proxy Statement, please make sure to vote your shares by promptly voting electronically or telephonically as described in the enclosed Proxy Statement, or if you received a paper copy of the proxy card, by dating, signing and returning your proxy card, or attending the annual meeting in person. Instructions regarding all three methods of voting are provided on the proxy card. If you hold shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to vote your shares. Regardless of the number of shares you own, your careful consideration of, and vote on, the matters before our stockholders are important.

 

A copy of our 2009 Annual Report is also enclosed, but we also encourage you to view our more in depth annual report online at www.lifetechnologies.com.

 

Your vote is very important to us. I urge you to vote “FOR” all proposals.

 

I look forward to seeing you at the annual meeting.

 

Very truly yours,

 

 

Gregory T. Lucier
Chairman and Chief Executive Officer

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

TO BE HELD APRIL 29, 2010

 

 

To our Stockholders:

 

The Annual Meeting of Stockholders of Life Technologies Corporation (the “Company”), will be held on April 29, 2010, at 8:00 a.m. local time, at the offices of the Company, 5781 Van Allen Way, Carlsbad, California 92008, for the following purposes:

 

 

Our Board recommends a vote “FOR” each of these proposals. Stockholders of record at the close of business on March 1, 2010, are entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. For ten days prior to the Annual Meeting, a complete list of the stockholders of record on March 1, 2010, will be available at our principal offices, located at 5791 Van Allen Way, Carlsbad, California 92008, for examination during ordinary business hours by any stockholder for any purpose relating to the meeting.

 

By Order of the Board of Directors,

 

 

John A. Cottingham
Chief Legal Officer & Secretary

 

Carlsbad, California

March 19, 2010

 

IMPORTANT: Please vote telephonically or electronically, as described in the accompanying materials, or promptly fill in, date, sign and return the enclosed proxy card in the accompanying pre-paid envelope to ensure that your shares are represented at the meeting. You may revoke your proxy before it is voted. If you attend the meeting, you may choose to vote in person even if you have previously sent in your proxy card.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 29, 2010: A complete set of proxy materials relating to our annual meeting is available on the Internet. These materials may be viewed at www.proxydocs.com/life.

 

Life Technologies Corporation
5791 Van Allen Way
Carlsbad, California 92008

 

 

The accompanying proxy is being solicited by the Board of Directors of Life Technologies Corporation (also referred to as Life Technologies, the Company or we) and contains information related to the Annual Meeting of Stockholders (the Annual Meeting) to be held April 29, 2010, at 8:00 a.m. local time, or any adjournment or postponement thereof, for the purposes described in the accompanying Notice of Annual Meeting. The Annual Meeting will be held at the offices of the Company, 5781 Van Allen Way, Carlsbad, California 92008. This Proxy Statement was filed with the Securities and Exchange Commission (the SEC) on March 19, 2010, and the approximate date on which the Proxy Statement and the accompanying proxy were first sent or made available to stockholders was March 19, 2010.

 

Life Technologies will bear the cost of soliciting proxies. In addition to soliciting proxies by mail, telephone or electronic means, we may request banks and brokers, and other custodians, nominees and fiduciaries, to solicit their customers who have Life Technologies stock registered in their names and will reimburse them for their reasonable, out-of-pocket costs. We may use the services of our officers, directors, and others to solicit proxies, personally or by telephone, without additional compensation. In addition, Life Technologies has retained The Altman Group, Inc. to solicit stockholder proxies at a cost of approximately $7,000, plus reimbursement of reasonable out-of-pocket expenses.

 

At the Annual Meeting, stockholders will act upon the matters presented in this Proxy Statement. These matters include the election of directors, the ratification of the reappointment of Ernst & Young LLP as our independent auditors, adoption of certain changes to the Restated Certificate of Incorporation of the Company (the Restated Certificate of Incorporation), adoption of certain changes to the Bylaws of the Company (the Bylaws), and adoption of the Company’s 2010 Incentive Compensation Plan (the 2010 ICP). In addition, management will report on Life Technologies’ performance during 2009 and will respond to questions from our stockholders. The Annual Report for the fiscal year ended December 31, 2009, is available online at www.lifetechnologies.com.

 

Stockholders of record as of the close of business on the record date, March 1, 2010, are entitled to vote the shares of Life Technologies stock they held on the record date at the Annual Meeting. As of the close of business on the record date, there were 181,230,766 shares of the Company’s common stock (the Common Stock) outstanding and entitled to vote.

 

Stockholders may vote in person or by proxy. Each holder of shares of Common Stock is entitled to one vote for each share of stock held on the proposals presented in this Proxy Statement.

 

The Bylaws provide that a majority of all the outstanding shares of stock entitled to vote, whether present in person or represented by proxy, constitutes a quorum for the transaction of business at the Annual Meeting.

Votes for and against, abstentions and “broker non-votes” will be counted for purposes of determining the presence or absence of a quorum. Broker non-votes are shares held by brokers or nominees who are present in person or represented by proxy, but which are not voted on a particular matter because the brokers or nominees do not have discretionary authority with respect to that proposal and they have not received voting instructions from the beneficial owner. Under the rules that govern brokers, brokers have the discretion to vote on routine matters, but not on non-routine matters. Routine matters include the ratification of the appointment of the Company’s independent registered public accountants. Non-routine matters include the election of directors and actions on stock plans and the Company’s charter documents.

 

The specific vote required for the election of directors and for the approval of each of the other proposals is set forth under each proposal. Abstentions and broker non-votes will have no effect on the election of directors, the ratification of the appointment of Ernst & Young LLP as the independent auditors for the Company and the adoption of the Company’s 2010 Incentive Compensation Plan. Abstentions and broker non-votes have the same effect as a vote against the proposals to amend the Restated Certificate of Incorporation and the Bylaws.

 

Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the Notice) to our stockholders of record and beneficial owners. All stockholders will have the ability to access the proxy materials on a website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.

 

All shares represented by a proxy will be voted, and where a stockholder specifies a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the specification so made. If you do not indicate a choice on the proxy card, the shares will be voted in favor of the election of the nominees for director contained in this Proxy Statement, in favor of ratifying Ernst & Young LLP as independent auditors for the Company for 2010, in favor of adopting certain changes to the Restated Certificate of Incorporation, in favor of adopting certain changes to the Bylaws, in favor of adopting the 2010 ICP and, in the discretion of the proxy holders, on any other matter that comes before the meeting.

 

If you are a stockholder with shares registered in your name, you may vote by one of the following three methods:

 

 

The Internet and telephone voting procedures are designed to authenticate your identity and to allow you to vote your shares and confirm that your voting instructions have been properly recorded.

If your shares are held by a broker, bank or other stockholder of record, in nominee name or otherwise, exercising fiduciary powers (typically referred to as being held in “street name”), you may receive a separate voting instruction form with this Proxy Statement, or you may need to contact your broker, bank or other stockholder of record to determine whether you will be able to vote electronically via the Internet or by telephone. Your broker may vote your shares on the proposal to ratify our independent auditors, but will not be permitted to vote your shares with respect to the other proposals unless you provide instructions as to how to vote your shares.

 

Once you have given your proxy, you may revoke it at any time prior to the time it is voted, by delivering to the Secretary of the Company at the Company’s principal offices either a written document revoking the proxy or a duly executed proxy with a later date, or by attending the Annual Meeting and voting in person. Merely attending the Annual Meeting will not, by itself, revoke a proxy. Please note, however, that your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain and bring to the Annual Meeting a proxy card issued in your name from the broker, bank or other nominee. Otherwise, you will not be permitted to vote at the Annual Meeting.

 

If you participate in the Life Technologies Corporation 401(k) Savings and Investment Plan, you may vote the shares of Common Stock in your account as of the record date. If you wish to vote those shares, you must complete your proxy card and return it in the envelope provided by April 26, 2010. Fidelity Management Trust Company (Fidelity), the plan trustee, will then vote the shares in your account as you indicated.

 

If you do not complete and return your proxy card prior to April 26, 2010, Fidelity will not vote the shares in your account. You may revoke instructions to the trustee by giving it written notice of revocation or a later dated written voting instruction by April 26, 2010.

 

The Company has a classified Board of Directors currently consisting of five Class II directors (George F. Adam, Jr., Raymond V. Dittamore, Arnold J. Levine, Ph.D., Bradley G. Lorimier and David C. U’Prichard, Ph.D.) who will serve until the 2010 Annual Meeting of Stockholders, four Class III directors (Balakrishnan S. Iyer, William H. Longfield, Ronald A. Matricaria and W. Ann Reynolds, Ph.D.) who will serve until the 2011 Annual Meeting of Stockholders, and four Class I directors (Donald W. Grimm, Gregory T. Lucier, Per A. Peterson, Ph.D. and William S. Shanahan) who will serve until the 2012 Annual Meeting of stockholders, and in each case until their respective successors are duly elected and qualified. Directors in a class are elected for a term of three years to succeed the directors in such class whose terms expire at such annual meeting, or a shorter term to fill a vacancy in another class of directors.

 

The nominees for election at the 2010 Annual Meeting of Stockholders to fill four Class II positions on the Board of Directors are George F. Adam, Jr., Raymond V. Dittamore, Arnold J. Levine, Ph.D. and Bradley G. Lorimier. The nominee for election at the 2010 Annual Meeting of Stockholders to fill one additional Class III position on the Board of Directors is David C. U’Prichard, Ph.D. If elected, the nominees for the Class II positions will serve as directors until the annual meeting of stockholders in 2013, and in each case until their successors are elected and qualified. If elected, the nominee for the Class III position will serve as a director until the annual meeting of stockholders in 2011, and until his successor is elected and qualified. If any of the nominees declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), your proxy may be voted for such substitute nominees as the Company may designate.

 

The following information relates to the nominees listed above and to the Company’s other directors whose terms of office will extend beyond the Annual Meeting, and sets forth the specific experience, qualifications, attributes and skills that led our Board to the conclusion that he or she should serve as a director. In addition to this information, we also believe that each of our director nominees and serving directors posses the highest personal and professional ethics, integrity and values, and are committed to

representing the long-term interests of our stockholders. They each have demonstrated an inquisitive and objective perspective, business acumen and an ability to exercise sound judgment, as well as a commitment of service to Life Technologies and our Board. Finally, we value their significant experience on other public company boards of directors and board committees.

 

Class II

 

(Term Ends 2013)

 

 

Class III

 

(Term Ends 2011)

 

 

The Board of Directors recommends a vote “For” the nominees named above.

 

Class III

 

(Term Ends 2011)

 

 

Class I

 

(Term Ends 2012)

 

 

During the fiscal year ended December 31, 2009, the Board of Directors held seven meetings. Each director serving on the Board of Directors in fiscal year 2009 attended at least 75% of the meetings of the Board of Directors and the committees on which he or she served. The Board of Directors meets in Executive Session, without any members of management present, at each regularly scheduled meeting. The independent directors elect a Presiding Director annually. W. Ann Reynolds, Ph.D. has served as the Presiding Director since April 2008. The Presiding Director presided at each Executive Session in 2009.

 

The Board of Directors has determined that, other than Gregory T. Lucier, our CEO, each of the members of the Board of Directors is an independent director in accordance with NASDAQ listing standards.

 

Members of the Board of Directors are strongly encouraged to attend the 2010 Annual Meeting of Stockholders. At the 2009 Annual Meeting of Stockholders, all thirteen of the incumbent directors were present.

 

Our Bylaws and governance principles provide our Board of Directors with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure is in the best interests of our company. Currently, Mr. Lucier serves as both Chairman of the Board and Chief Executive Officer. Our Board has determined that this structure is the most effective leadership structure for our company at this time. The Board believes that Mr. Lucier is the director best situated to identify strategic opportunities and focus the activities of the Board due to his full-time commitment to the business and his company-specific experience. The Board also believes

that the combined role of Chairman/Chief Executive Officer promotes effective execution of strategic imperatives and facilitates information flow between management and the Board.

 

Our Board has determined that maintaining the independence of the Company’s directors other than Mr. Lucier, managing the composition and function of its committees, and appointing an independent Presiding Director having the duties described below help maintain the Board’s strong, independent oversight of management. In accordance with our governance principles, our Board consists of a supermajority of independent directors. These independent directors meet regularly in executive session without the presence of management or non-independent directors. In addition, our Audit, Compensation and Organizational Development, and Governance and Nominating Committees, which oversee critical matters such as the integrity of our financial statements, the compensation of executive management, the selection and evaluation of directors, and the development and implementation of corporate governance policies, each consist entirely of independent directors. Furthermore, our Board annually appoints an independent director to serve as Presiding Director. The Presiding Director has the responsibility of providing input to the Chairman/Chief Executive Officer on agenda items for meetings of the Board and the Board committees and of serving as a point person for stockholder communications with the Board. The Presiding Director presides over all executive sessions and meetings of the independent directors, defines the agenda for the executive sessions, gives feedback to the Chief Executive Officer following such executive sessions, serves as a point of leadership during special situations, ensures that all directors have an equal voice, and assists the Chairman or members of management in managing corporate crises, to the extent they arise, making related communications to the other directors. In addition to the President Director, our other directors are encouraged to make suggestions for Board agenda items or pre-meeting materials.

 

The Board of Directors has established an Audit Committee, a Compensation and Organizational Development Committee, a Governance and Nominating Committee, and a Science and Technology Committee. Each committee operates under a written charter approved by the Board of Directors. The charters of each committee are available on the Company’s website at www.lifetechnologies.com. The Audit Committee consists of Mr. Dittamore, Mr. Adam, Mr. Grimm, Mr. Iyer and Mr. Lorimier, and Mr. Dittamore serves as the Chairman. The Compensation and Organizational Development Committee consists of Mr. Matricaria, Mr. Longfield, Dr. Reynolds, Mr. Shanahan and Dr. U’Prichard, and Mr. Matricaria serves as the Chairman. The Governance and Nominating Committee consists of Mr. Iyer, Mr. Dittamore, Mr. Matricaria and Dr. Peterson, and Mr. Iyer serves as the Chairman. The Science and Technology Committee consists of Dr. Peterson, Mr. Grimm, Dr. Levine, Mr. Lorimier and Dr. U’Prichard, and Dr. Peterson serves as the Chairman.

 

Audit Committee.  The Audit Committee’s function is to review with our independent registered public accounting firm and management the annual financial statements and independent registered public accounting firm opinion, review and maintain direct oversight of the plan, scope and results of the audit by the independent registered public accounting firm, review and approve all professional services performed and related fees charged by the independent auditors, be solely responsible for the retention or replacement of the independent registered public accounting firm, and monitor the adequacy of the Company’s accounting and financial policies, controls, and reporting systems. During 2009, the Audit Committee held seven meetings.

 

The Board of Directors and the Audit Committee believe that the Audit Committee’s current member composition satisfies the rule of the NASDAQ listing standards that governs audit committee composition, including the requirement that audit committee members all be “independent directors” as that term is defined by NASDAQ Rule 5605(a)(2) and the definition of “independent” under the Sarbanes-Oxley Act of 2002. Additionally, the Company certifies that it has, and will continue to have, at least one member of the Audit Committee that is defined as an “audit committee financial expert” in accordance with Section 407 of the Sarbanes-Oxley Act with past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. Currently, the Board of Directors has determined

that Raymond V. Dittamore and Balakrishnan S. Iyer are “audit committee financial experts.” Additional information regarding the Audit Committee is set forth in the Report of the Audit Committee below.

 

Compensation and Organizational Development Committee.  The functions of the Compensation and Organizational Development Committee in 2009 included providing guidance to management and assisting the Board of Directors in matters relating to the compensation of the CEO and senior executives, the organizational structure of the Company, the Company’s compensation and benefits programs, the Company’s succession, retention and training programs, and such other matters that have a direct impact on the success of our human resources. During 2009, the Compensation and Organizational Development Committee held seven meetings.

 

The Board of Directors and the Compensation and Organizational Development Committee believe that the Compensation and Organizational Development Committee’s current member composition satisfies the rule of the NASDAQ listing standards that governs committee composition, including the requirement that committee members all be “independent directors” as that term is defined by NASDAQ Rule 5605(a)(2) and the definition of “independent” under the Sarbanes-Oxley Act of 2002.

 

The Board’s role in the Company’s risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic and reputational risks. The full Board (or the appropriate Committee in the case of risks that are under the purview of a particular Committee) receives these reports from the appropriate “risk owner” within the organization to enable it to understand our risk identification, management and mitigation strategies. The Board has developed an agenda of risk topics that are presented to the Board or one of its Committees on an annual basis. When a Committee receives such a report, the Chairman of the Committee discusses the report with the full Board during the next Board meeting. This practice enables the Board and its Committees to coordinate risk oversight for the Company, particularly regarding the interrelationship among various risks. Consistent with its charter, the Audit Committee discusses our policies with respect to risk assessment and risk management. The Compensation and Organizational Development Committee and the Board each discuss the relationship between our compensation policies and corporate risk to assess whether these policies encourage excessive risk-taking by executives and other employees.

 

The Governance and Nominating Committee.  The functions of the Governance and Nominating Committee include leading any searches for new Board of Director candidates, reviewing and making recommendations to the Board of Directors regarding director compensation, and making recommendations to the Board of Directors regarding director nominees to be put forth by the Board of Directors at each annual meeting of stockholders. In addition, the area of corporate governance has taken on increasing importance in the creation and preservation of stockholder value. Therefore, the Governance and Nominating Committee focuses on core processes that the Board of Directors and its committees utilize to carry out their responsibilities, including fundamental issues such as how decisions are made. During the year ended December 31, 2009, the Governance and Nominating Committee held four meetings.

 

The Board of Directors and the Governance and Nominating Committee believe that the Governance and Nominating Committee’s current member composition satisfies the rule of the NASDAQ listing standards that governs committee composition, including the requirement that committee members all be “independent directors” as that term is defined by NASDAQ Rule 5605(a)(2) and the definition of “independent” under the Sarbanes-Oxley Act of 2002.

 

The Science and Technology Committee.  The Science and Technology Committee examines management’s direction and investment in the Company’s research and development and technology initiatives. The Science and Technology Committee functions as a broadly knowledgeable and objective group of scientists and non-scientists to consider and report periodically to the Board of Directors on matters relating to the investment in the Company’s research and development and technology initiatives. The Science and Technology Committee’s actions are generally related to high-level policy and strategy. The administration of

the research and development function remains the responsibility of management. During the year ended December 31, 2009, the Science and Technology Committee held four meetings.

 

The Governance and Nominating Committee will consider for inclusion in its nominations of new directors those nominees recommended by stockholders who have held at least 1% of the outstanding voting securities of the Company for at least one year. Board of Directors candidates referred by such stockholders will be considered on the same basis as Board of Directors candidates referred from other sources. Any stockholder who wishes to recommend for the Governance and Nominating Committee’s consideration a prospective nominee to serve on the Board of Directors may do so by giving the candidate’s name and qualifications in writing to the Company’s Secretary at the following address: 5791 Van Allen Way, Carlsbad, CA 92008.

 

The Governance and Nominating Committee recommended George F. Adam, Jr., Raymond V. Dittamore, Arnold J. Levine, Ph.D. and Bradley G. Lorimier to be nominated by the Board of Directors for election to Class II of the Board of Directors at the Annual Meeting of Stockholders. In addition, the Governance and Nominating Committee recommended David C. U’Prichard, Ph.D. to be nominated by the Board of Directors for election to Class III of the Board of Directors at the Annual Meeting of Stockholders.

 

In selecting non-incumbent candidates and reviewing the qualifications of incumbent candidates for the Board of Directors, the Governance and Nominating Committee considers the Company’s corporate governance principles, which include the following:

 

 

Our governance principals also specify that our Board should represent a diverse experience at policy-making levels in business and technology in areas that are relevant to our global activities. The Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law.

 

A supermajority of at least 2/3 of the directors will be independent directors as defined in the National Association of Securities Dealers, Inc. (NASD) rules for companies listed on the NASDAQ National Market. Directors who do not meet the NASD Manual’s independence standards also make valuable contributions to the Board of Directors and to the Company through their experience and wisdom.

 

In general, to be considered independent under the NASD Manual’s rules, the Board of Directors must determine, among other things, that a director does not have any relationships that, in the Board of Directors’ opinion, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board of Directors will make an affirmative finding with respect to the independence of directors not less frequently than annually. The Board of Directors has determined that other than Mr. Lucier, the Company’s CEO, each of the current members of the Board of Directors, including the nominees for Class II director, are independent directors.

 

In addition to the policy that a supermajority of the Board of Directors members satisfy the independence standards discussed in the section above, members of the Audit Committee must also satisfy additional NASD

independence requirements. Specifically, they may not directly or indirectly receive any compensation from the Company other than their directors’ compensation, must not have participated in preparing the financial statements of the Company or any of its subsidiaries during the past three years, and must not be affiliated with the Company except through their membership on the Board of Directors and its committees.

 

The purpose of the Audit Committee is to assist the Board of Directors in its general oversight of Life Technologies’ financial reporting, internal controls and audit functions. As described in the Audit Committee Charter, which is available at our website at www.lifetechnologies.com, the Audit Committee has oversight responsibilities to stockholders, potential stockholders, the investment community, and other stakeholders related to the:

 

 

The Audit Committee is composed solely of independent directors as defined by the listing standards of the NASD.

 

The Audit Committee has reviewed and discussed the consolidated financial statements with management and Ernst & Young LLP, the Company’s independent registered public accounting firm. Management is responsible for the preparation, presentation and integrity of Life Technologies’ financial statements; accounting and financial reporting principles; establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)); establishing and maintaining internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)); evaluating the effectiveness of disclosure controls and procedures; evaluating the effectiveness of internal control over financial reporting; and evaluating any change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting. Ernst & Young LLP is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America, as well as expressing an opinion on the effectiveness of internal control over financial reporting.

 

During 2009, the Audit Committee provided oversight and advice to management relating to management’s assessment of the adequacy of Life Technologies’ internal control over financial reporting in accordance with the requirements of the Sarbanes-Oxley Act of 2002. The Committee received periodic updates from management and Ernst & Young LLP relating to such assessment. The Audit Committee held regular private sessions with Ernst & Young LLP to discuss their audit plan for the year, the results of their quarterly reviews, and the annual audit. At the conclusion of the process, the Audit Committee reviewed a report from management on the effectiveness of the Company’s internal control over financial reporting. The Committee also reviewed the report of management contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC, as well as Ernst & Young LLP’s Report of Independent Registered Public Accounting Firm included in the Company’s Annual Report on Form 10-K related to its audit of (i) the consolidated financial statements and financial statement schedule, and (ii) the effectiveness of internal control over financial reporting.

 

The Audit Committee provided oversight and guidance to members of management, including the Chief Legal Officer, Director of Internal Audit (who reports to the Audit Committee), and Director of Compliance on the Company’s policies and procedures relating to risk assessment and risk management and on the legal

and regulatory compliance programs. The Committee received periodic reports on these matters throughout the year.

 

The Audit Committee met on seven occasions in 2009. The Audit Committee met privately with Ernst & Young LLP, the internal auditor, and the Chief Financial Officer (CFO) at each regular meeting.

 

Life Technologies has an internal audit department that reports directly to the Audit Committee. The Audit Committee reviews and approves the internal audit plan and receives regular updates on internal audit activity. Updates include discussion of results and findings by the internal audit team, follow up, staffing level of the internal audit function, and assessment of internal controls and risk of fraud.

 

The Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, “Communication with Audit Committees” and PCAOB Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting That Is Integrated with an Audit of Financial Statements.” In addition, Ernst & Young LLP has provided the Audit Committee with the written disclosures and the letter required by the PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence,” and the Audit Committee has discussed with Ernst & Young LLP their firm’s independence. In addressing the quality of management’s accounting judgments, the Audit Committee asked for management’s representations and reviewed certifications prepared by the CEO and CFO that the unaudited quarterly and audited consolidated financial statements of the Company fairly present, in all material respects, the financial condition and results of operations of the Company.

 

Based on the review of the consolidated financial statements and discussions with and representations from management and Ernst & Young LLP referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in Life Technologies’ Annual Report on Form 10-K for the year ended December 31, 2009, for filing with the SEC.

 

In accordance with Audit Committee policy and the requirements of law, the Audit Committee pre-approves all non-audit services to be provided by Life Technologies’ outside auditors, Ernst & Young LLP. In addition, the Audit Committee pre-approves all audit and audit related services provided by Ernst & Young LLP. The Audit Committee has delegated to its chairman the ability to pre-approve non-audit services. Such pre-approval is later reported to the Audit Committee. A further discussion of the fees paid to Ernst & Young LLP for audit and non-audit expenses is included below under the heading “PRINCIPAL ACCOUNTING FEES & SERVICES.” Although the Audit Committee has the sole authority to appoint independent auditors, the Audit Committee is continuing its long-standing practice of recommending that the Board of Directors ask the stockholders to ratify the appointment at the Annual Meeting.

 

AUDIT COMMITTEE

 

Raymond V. Dittamore, Chairman
George F. Adam
Donald W. Grimm
Balakrishnan S. Iyer
Bradley G. Lorimier

 

In connection with the audit of the 2009 financial statements, the Company entered into an engagement agreement with Ernst & Young LLP which set forth the terms by which Ernst & Young LLP has performed audit services for the Company. That agreement is subject to alternative dispute resolution procedures.

 

The following table sets forth the aggregate fees agreed to by the Company for the annual and statutory audits for the fiscal years ended December 31, 2009 and 2008, and all other fees paid by the Company during 2009 and 2008 to its independent registered public accounting firm, Ernst & Young LLP:

 

 

The Audit Committee has determined that the rendering of all non-audit services by Ernst & Young LLP is compatible with maintaining the auditor’s independence. The fees listed under “Audit Fees” above were incurred for service related to the annual audit of the Company’s consolidated financial statements, including the audit of internal control over financial reporting, reviews of the Company’s interim consolidated financial statements on Form 10-Q, SEC registration statements, accounting consultations and services that are normally provided in connection with statutory and regulatory filings and engagements. The fees listed under “Audit-Related Fees” above were incurred for services related to mergers and acquisitions, including accounting consultations, dispositions and benefit plan audits. The fees listed under “Tax Fees” above were incurred for service related to federal, state and international tax compliance, tax advice and tax planning. The Audit Committee approves non-audit services by Ernst & Young LLP on an ad hoc basis, and has vested authority with Raymond V. Dittamore, the chairman of the Audit Committee, to approve non-audit services as needed.

***************

 

Introduction

 

The Compensation and Organizational Development Committee of the Company’s Board of Directors (the “Committee”) is made up of the following five Board members: Ronald A. Matricaria, who serves as Chairperson, William H. Longfield, W. Ann Reynolds, Ph.D., William S. Shanahan, and David C. U’Prichard, Ph.D. The members of the Committee are independent directors and comply with the requirements of Rule 16b-3 of the Exchange Act, NASDAQ rules and Section 162(m) of the Internal Revenue Code.

 

The Committee’s primary responsibility is to develop high-level policies, strategy and guidance related to the Company’s executive compensation, benefits, and succession planning. As part of its duties and responsibilities, the Committee oversees and approves all aspects of the executive compensation program for the Company’s Section 16 officers (the “executive officers”). In this role, the Committee makes recommendations to the non-employee Directors on the compensation of the CEO and reviews and approves all compensation decisions relating to other executive officers to ensure those decisions are aligned with the short and long-term goals of the Company and stockholders. Additionally, the Committee is responsible for providing guidance on the organizational structure of senior management, as well as the succession, retention planning and leadership development of senior management.

 

For a more detailed description of the Committee’s duties and responsibilities, refer to the Compensation and Organizational Development Committee Charter which is located in the Investor Relations section of the Company’s website at www.lifetechologies.com.

 

Executive Compensation Philosophy and Objectives

 

The underlying premise of the Company’s executive compensation philosophy is to retain and reward leaders who create long-term value for stockholders. Consistent with that philosophy, the Committee has chosen compensation components designed to align executive interests with those of stockholders. The Committee views all components of pay together in making compensation decisions. The components include base salary, annual incentives, long-term incentives, fringe benefits and perquisites. The Committee utilizes various components of compensation to strike an appropriate balance between promoting sustainable and excellent performance and discouraging inappropriate short-sighted risk-taking behavior.

 

In July 2008, the Committee established an executive officer compensation philosophy for the primary components of pay (base salary, annual bonus target, and long-term incentives). The Committee targets each component above the 50th percentile of benchmark data (discussed below) in recognition of the company’s superior performance relative to its peer companies measured by total shareholder return, revenue growth, gross margin, and other financial/operational indicators. While the Committee reviews the Company’s performance relative to its peer companies across multiple metrics and time frames each year, it does not rely on any single metric to make compensation decisions. For 2009, the Company performed well above the median relative to its peer companies for an overwhelming majority of the metrics that the Committee considered. This philosophy also recognizes the need to attract the best talent in the industry in order to deliver on the long-term growth goals of the Company. The Committee reviews this philosophy regularly and may make adjustments in the future if the Company’s performance relative to peer companies or the business strategy dramatically changes.

 

The Committee employs the following core principles and objectives to guide its decisions regarding executive compensation. No specific weight is assigned to each particular principle but they are considered in a holistic manner.

 

Pay Competitively:  The Committee believes overall compensation should be set at a competitive level to attract and retain exceptional leadership talent that is capable of both effectively managing the Company today and through the course of its anticipated future growth. The Committee utilizes benchmarking data, which is explained in more detail below, as a reference point to establish competitive compensation packages.

Stock Ownership:  The Committee believes executive officers will make better decisions and align their interests with those of the Company’s stockholders if they are required to maintain a certain level of stock ownership. As a result, the Committee has established stock ownership guidelines for executive officers and provides a meaningful portion of an executive officer’s total compensation in the form of equity-based long-term incentives.

 

Pay-for-Performance:  The Committee structures its executive compensation program to reward executive officers who consistently perform at a high level, which enables the Company to meet its ultimate business goal of increasing stockholder value. The alignment of executive compensation to existing business dynamics may, on a year-to-year basis, result in different components of overall compensation being utilized to ensure executive officers are focused on executing the Company’s business strategy. With regard to each individual executive officer, the Committee, based on the Company’s short and long-term strategy, establishes performance goals. The Committee measures performance against these goals to determine compensatory rewards for past performance and to establish future performance goals with appropriate remuneration.

 

The Committee conducted its most recent compensation philosophy review in December 2009 at which time the Committee affirmed the appropriateness of its philosophy.

 

Design of Executive Compensation

 

The Committee is ultimately responsible for the decisions relating to executive officers’ compensation; however, the Committee considers recommendations from and discusses decisions with external consultants and the management team.

 

Role of the Committee

 

The Committee has responsibility for overseeing all forms of compensation for executive officers, including the named executive officers listed below in the 2009 Summary Compensation Table (collectively, the Company’s “NEOs”). For FY 2009, the NEOs and their respective titles were as follows:

 

 

Under new Securities and Exchange Commission rules, the calculation to determine named-executive officers (NEOs) changed for this proxy statement. Specifically, long-term incentive compensation must be valued based on the grant date fair value of all awards made during the year as opposed to the accounting expense for all awards that has been used in prior years. Since most executive officers did not receive a long-term incentive award during the 2009 fiscal year (see the Long-term Incentives section for additional details), the Committee included Mr. Bernd Brust and Peter M. Leddy, Ph.D. among the list of NEOs as a comparison relative to prior years. All of the above listed NEOs currently serve as executive officers.

 

In establishing executive compensation, the Committee:

 

 

 

During 2009, the Committee held seven meetings and frequently met in executive session. The Committee reviews the adequacy of its charter at least annually.

 

Role of Consultants

 

The Committee has retained its own independent compensation consultant, DolmatConnell & Partners, since September 2006 to advise it on matters related to executive compensation. DolmatConnell provides the Committee with executive compensation benchmarking data derived from surveys and public disclosures of peer companies.

 

DolmatConnell recommends to the Committee an industry peer group for purposes of comparison and benchmarking executive compensation. DolmatConnell is also available to the Committee to attend meetings, provide an independent perspective, and provide an environmental overview of executive compensation matters. DolmatConnell also provides the Committee with competitive analysis and recommendations regarding the annual use of stock compensation, bonus plan design, and executive benefits and perquisites. DolmatConnell does not provide any other services to the Company.

 

The Committee also retains an external advisor, Van Latham, Ph.D. to gather feedback from each Board member in January as to their perspectives regarding the CEOs performance during the prior year and goals for the future.

 

Role of Management

 

The Committee has full access to the management team when assessing and taking action related to executive compensation matters. The Chief Human Resources Officer and the Vice President for Global Compensation, Benefits & HR Systems work closely with the CEO to develop management’s recommendations and perspective on the alignment of executive compensation with the business strategy, which are presented at Committee meetings. The Chief Financial Officer, Chief Legal Officer, and their respective teams periodically attend Committee meetings and are also involved in providing input to material presented.

 

The CEO presents recommendations to the Committee for specific executive officer compensation actions, other than for himself, which include:

 

(i) an assessment of individual performances relative to previously approved performance goals and objectives, and

 

(ii) recommendations for base salary adjustments, bonus awards, and long-term incentive grants aligned to the CEO’s assessment of an individual executive officer’s past performance, comparison of internal equity, necessity of retention, if applicable, and the Company’s short and long-term strategy.

 

Management provides other information to the Committee to assist in its analysis and decision making process, including:

 

(i) recommendations for the design of short and long-term incentive plans,

 

(ii) tally sheets,

 

(iii) stock ownership and cash/equity retention levels,

 

(iv) current events and trends in executive compensation, and

 

(v) impact of compensation and benefit programs on the Company’s financial statements.

Benchmarking Executive Compensation

 

The Committee periodically reviews competitive market data as a reference point when considering compensation actions. Several other data points are used in addition to market data, including:

 

(i) individual performance and relative contribution to the Company’s performance,

 

(ii) overall Company and business unit performance,

 

(iii) financial impact on the Company’s income statement and balance sheet,

 

(iv) an executive officer’s role, responsibilities, and demonstrated leadership, and the Company’s need to retain the executive, and

 

(v) internal equity among the entire senior management team.

 

The Committee annually reviews benchmark compensation data provided by DolmatConnell. This data is developed from publicly-filed proxy statements (referred to as “Proxy Data”) of the companies listed below for Messrs. Lucier, Stevenson, and Hoffmeister. The Committee also annually reviews the companies used to develop the Proxy Data to ensure it reflects a balance between corporate revenue, market capitalization and competitive labor markets. In July 2009, three additional firms were added to the Proxy Data comparator group (Beckman Coulter, Inc., Cephalon, Inc., and Hologic, Inc.) to better balance these factors.

 

DolmatConnell uses a combination of the Proxy Data and two published surveys for all other executive officers. Specifically, DolmatConnell utilizes the Radford Executive Survey (224 companies over $1B in annual revenue) and the Towers Perrin Executive Compensation Survey (111 companies between $3B and $6B in annual revenue). For Mr. Brust, DolmatConnell uses only the Radford Executive Survey to produce benchmark data while using the Radford Executive Survey and the Towers Perrin Executive Compensation Survey results for the other NEOs (data from the two sources equally weighted). This methodology is consistent with past practice and provides the Committee with a perspective relative to prior years.

 

Proxy Data Comparator Companies

 

 

Determining 2009 Compensation for the Company’s Named Executive Officer’s (NEOs)

 

Effective upon the merger of Invitrogen and Applied Biosystems in November 2008 (into the combined company — Life Technologies) the Committee took several actions to retain and motivate the executive team to integrate successfully the two organizations and to realize quickly the synergies of the merger. Specifically, the Committee:

 

(i) re-aligned base salary levels to compensate executive officers based on his/her going forward roles and responsibilities

 

(ii) established annual bonus performance targets (the “2009 Incentive Compensation Plan” or the “2009 ICP”) that if achieved provide stockholders with an appropriate return in the first year following the merger,

(iii) approved a special one-time incentive to reward executive officers (excluding the CEO) for achieving specified financial and operational synergy goals during the 24-month period following the merger, or sooner, in addition to all other forms of compensation, and

 

(iv) provided executive officers with a long-term incentive grant in November of 2008 that ordinarily would have been granted in the first quarter of 2009 to ensure executives balance short-term goals and objectives associated with the merger with the Company’s long-term goal of increasing stockholder value through sustainable and superior performance.

 

The above actions and the ultimate awards were made after the Committee considered the competitive benchmark data, internal equity among executive officers, individual performance results relative to goals and objectives, payout and other award obligations resulting from contractual change-in-control agreements, and the importance of establishing a consistent executive compensation framework for the Company to build upon after the merger integration. The Committee did not assign any particular weight to these factors but each was important in analyzing and determining appropriate compensation packages for the executive officers. Additionally, the Committee made these decisions and took action in November 2008 in exchange for each NEO’s agreement (other than the CEO) to waive certain rights pursuant to the terms of their then existing change-in-control agreements. The Committee also considered the value of these change-in-control payouts assuming executive officers triggered their agreement for “good reason” and the retention value associated with taking these actions.

 

The Committee’s actions relating to short-term goals for 2009 were driven primarily by integration objectives related to the merger. The Board re-assessed the Company’s short and long-term strategy during its December 2009 and February 2010 meetings and subsequently designed the 2010 executive compensation packages to incentivize executives to execute the 2010 strategy. The approval of executive compensation packages in early 2010 also better aligns the timing of executive compensation actions with the annual performance management process and the timing of compensation actions for all other employees.

 

Determining 2009 Compensation for the CEO

 

The CEO developed his goals and objectives for 2009 in collaboration with the Board of Directors in December 2008. These goals and objectives were established primarily as a result of the Company’s operating plan for 2009, but also included non-financial metrics and goals the Board believed were critical to a successful integration of the merged companies. The CEO’s goals and objectives also became the basis for determining the goals and objectives of his direct reports and ultimately the entire organization, which ensured consistency across the business units and the support functions.

 

The CEO reviews his actual performance with the Board periodically during the year and formally at the December meeting. Subsequently, Van Latham, Ph.D. gathers feedback from each Board member in January and compiles a report based on the information gathered. The Committee meets to review and modify the report, as appropriate, and then the final report is provided to the full Board. This report, the CEO’s self assessment of his performance, actual financial performance results, and the external market competitive compensation data provided by DolmatConnell are utilized by the Committee in making its recommendations to the full Board, and are the primary factors considered by the full Board in determining the CEO’s compensation.

 

In 2009 the CEO achieved several significant milestones through his leadership in growing and integrating the business. Specifically, his primary accomplishments during the year were:

 

(i) significantly exceeded the profit synergy objectives of the acquisition model, with world class results when compared against Deloitte merger benchmarks;

 

(ii) achieved organic revenue growth of 7%, exceeding the 2009 estimated market growth rate of 2%, in the face of a difficult economic environment;

(iii) exceeded company financial expectations while becoming an industry leader in corporate citizenship; maintaining a position in the Dow Jones Sustainability Index for the second year in a row and earning a spot on FTSE4Good Index; and

 

(iv) provided extraordinary leadership integrating the Invitrogen and Applied Biosystems workforces while maintaining high retention rates and high employee morale.

 

The timing of CEO compensation actions in prior years has been different from the timing of compensation actions taken for other executive officers. However, beginning in 2010 the timing of payments and decisions related to the compensation of the CEO will be aligned with all other executive officers and the Company’s broader employee population.

 

Elements of the Company’s Executive Compensation Program

 

In addition to the benefit plans generally available to all employees, executive officers compensation consists of the following components:

 

Base Salary

 

Base salary ranges are established for each executive officer. The salary range midpoint is set at the 65th percentile of the comparator group market data. The midpoints are set at this level to ensure the Company can attract the best talent to deliver on shareholder goals in a very competitive environment. However, to be paid at the midpoint or higher an executive officer must have consistently performed at an exceptional level and displayed behaviors that have significantly impacted the Company’s growth and success. The Committee also believes the full breadth of the salary range should be utilized to recognize the difference in individual performance and contribution. As a result, individual base salaries may be higher or lower than the 65th percentile of the applicable comparator group market data, depending on various factors, including job performance, skill level, prior experience in his or her field of expertise, the executive’s experience with the Company, consistency regarding pay levels for similar positions or skill levels within the Company, the need to attract and retain talent, and external market conditions.

 

Base salaries were last adjusted for executive officers in November 2008 after the merger of Invitrogen and Applied Biosystems in recognition of the additional responsibilities executive officers took on in conjunction with integrating the merged companies. No base salary adjustments were made during 2009. The Committee reviewed executive base salaries at the beginning of 2010 and approved adjustments to occur on April 1, 2010. Scheduling executive officer base salary adjustments to occur on April 1, 2010 will ensure the Committee has the opportunity to evaluate fully each executive’s 2009 performance before determining an appropriate 2010 base salary.

 

The Committee reviewed Proxy Data showing the CEO’s 2009 base salary approximates the 60th percentile while base salary for other NEOs collectively approximates the 75th percentile relative to executives in similar roles.

 

Annual Bonus — Incentive Compensation Plan (ICP)

 

Executive officers participate in an annual cash bonus plan called the Incentive Compensation Plan (“ICP”). The Committee establishes an individual ICP target bonus opportunity for each executive officer expressed as a percentage of their base salary paid during the fiscal year. Target bonuses are established at the beginning of the fiscal year based on a review of:

 

(i) benchmark data for both target bonus opportunity and target total cash opportunity,

 

(ii) the role of each executive officer, including their ability to impact the Company’s overall performance, and

 

(iii) the Committee’s assessment of internal equity among the executive officers.

The Committee’s philosophy is to provide an ICP target bonus opportunity for the Company’s executive officers that approximates the 75th percentile of the applicable comparator group market data. The ICP target bonus of some executive officers may be higher or lower than the 75th percentile of the appropriate benchmark data.

 

For 2009, the following were the ICP target bonus amounts for each NEO:

 

 

After establishing targets, the Committee selects ICP performance metric(s) that are closely aligned with both the Company’s short-term strategy and its long term objective of creating sustainable stockholder value. For 2009, the Committee selected Operating Income as its sole funding metric under the ICP. The Company’s definition of Operating Income for ICP purposes is non-GAAP operating income recorded on the year-end financial statements, adjusted to include operating income from the Mass Spec JV Division, exclude the effect of currency fluctuations in revenue and costs, and exclude the effect of the Company’s stock option and restricted stock expense.

 

The Committee selected Operating Income as the short-term performance metric to focus the leadership team on a common goal the Committee believed was aligned closely with stockholder value creation, while at the same time aligning executive officer performance to measurable results. The Committee also believed the Operating Income metric would align the leadership team’s efforts on the critical twelve-month period for integrating the Invitrogen and Applied Biosystems organizations.

 

The Committee then established a fiscal year 2009 (FY2009) ICP Operating Income performance goal of $758 million for NEOs that would fund 200% of an executive officer’s ICP target bonus opportunity. ICP Operating Income below the goal would result in no bonus funding/payout for NEOs. Additionally, ICP Operating Income above the goal does not result in additional ICP bonus funding/payout. In the event the Company’s actual ICP Operating Income funded the 200% opportunity, the Committee retained the discretion to adjust the ICP bonus payout amount downward based on its assessment of the NEO’s individual performance in FY2009. The CEO provides the Committee with his perspective on individual NEO performance and makes recommendations for actual ICP payouts.

 

For FY2009, the Company achieved actual ICP Operating Income of $893 million, which resulted in an ICP bonus funding amount equal to 200% of each NEO’s target bonus opportunity. However, pursuant to its retained discretion, the Committee adjusted downward each NEO’s funded bonus amount (excluding the CEO), resulting in an aggregate payout relative to target ICP bonus opportunity of 160% (excluding the CEO) and 200% for the CEO. The specific ICP bonus paid to each NEO for FY2009 is included in the Summary Compensation Table.

 

Long-Term Incentives

 

Overview.  The Company’s long-term incentive plan is designed to align the financial interests of stockholders directly with executive officers by focusing them on the sustainable appreciation of stockholder value. The Committee has a policy of granting equity awards on an annual basis, generally in the first few months of the fiscal year. However, as a result of the Invitrogen and Applied Biosystems merger in 2008, the Committee granted long-term incentive (LTI) awards to most executive officers in November 2008 to provide an immediate post-close incentive to effectively integrate the two organizations. Absent extraordinary

circumstances, beginning in 2010, annual LTI awards to executive officers and other eligible employees will be made on March 1.

 

The Committee approved grants of non-qualified stock options and time-based vesting restricted stock units for most executive officers in November 2008 as a FY2009 LTI award. The FY2009 LTI design targeted an economic value of the total award to be evenly split between stock options and restricted stock units for employees at and above the Vice President level. The Committee believes the 50/50 split of stock options and restricted stock units strikes the right balance between upside potential and downside protection, rewarding overall Company performance and retaining a highly talented executive team.

 

Determining Award Levels.  The Committee’s philosophy is to target an economic value for LTI awards to executive officers that approximate the 65th percentile of the competitive market. DolmatConnell provides the Committee with grant ranges for executive officers with the midpoint of the range aligned to this strategy. The Committee then reviews the CEO’s recommendation for individual grants to executive officers based on his assessment of individual performance and potential contribution to the Company’s success. In addition to taking into account the CEO’s recommendations, the Committee decides the final award level for each executive officer based upon:

 

 

(ii) recommendations from its external consultant,

 

(iii) current retention value associated with each executive officer’s outstanding LTI awards,

 

(iv) the potential impact on stockholder dilution, and

 

(v) the impact on financial statements.

 

The Committee believes this approach balances the short and long-term goals and interests of stockholders and executives.

 

The Committee has delegated to management the ability to approve LTI awards to new hires and employees (excluding executive officers) within defined parameters. Management provides the Committee with quarterly reports regarding all equity awards made by management pursuant to this delegation of authority. The policy is to make these equity grants on the first trading day of the month following the receipt of appropriate approvals.

 

Stock Option Awards.  Stock options awarded to employees have an exercise price equal to the closing price of the Company’s common stock on the NASDAQ market on the date of grant. Stock options vest ratably over four years following the grant date and have a ten-year total exercise term, which term may be shorter under certain circumstances such as a termination of employment.

 

Restricted Stock Unit Awards.  Restricted stock units fully vest, which is also referred to as “cliff vesting,” on the third anniversary of the grant date.

 

2007 and 2008 LTI Performance Awards.  A grant of 800,000 performance shares was made to the CEO on March 1, 2007 and 560,000 shares vested on February 28, 2010 since the Company’s common stock met certain share price targets during the three-year performance period. Specifically, the Committee approved six share price targets in 2007 ranging from $40 to $52.50 per share. If the closing price of the Company’s common stock met or exceeded a share price target during the performance period, then a specific number of performance shares vest on February 28, 2010. During the performance period, five of the six stock price targets were achieved which resulted in 70% vesting of the 2007 Performance Award to the CEO.

 

On May 15, 2008, twelve executives (excluding the CEO) received a performance-based RSU grant under the 2008 annual LTI award. This grant had a single stock price target of $52.50 per share. Because the stock price target was not met, these shares were forfeited by executives on February 28, 2010.

 

Other Long-Term Incentive Awards.  In addition to the stock options and restricted stock unit awards, most executive officers (excluding the CEO) also became eligible for a one-time cash incentive for achieving

synergy goals related to the merger. Under this plan, which became effective upon the merger in November 2008, executive officers have the opportunity to receive a cash award payable in March 2010 and/or March 2011 if certain performance goals are achieved.

 

Specifically, eligible executive officers have synergy goals relating to their functional areas of responsibility. Every executive officer has both a FY2009 and FY2010 financial goal to achieve cost synergies related to the merger and other FY2009/2010 goals customized to their function and areas of responsibility.

 

In general, an executive officer’s total payout under this incentive was targeted at 150% of his or her FY2009 annual ICP target bonus opportunity. To focus executive officers on accelerating the achievement of synergies, the plan pays-out 60% of the target award opportunity in March 2010 for achieving FY2009 goals and 40% of the target award in March 2011 for achieving FY2010 goals. However, the final 40% can be accelerated should the FY2010 goals be achieved in FY2009. This design feature was added to incentivize accelerated achievement of the planned synergy objectives.

 

Following are the total target payouts for the NEOs who received a one-time synergy cash incentive award:

 

 

The CEO was excluded from this one-time synergy incentive plan because the Committee believes he already had adequate ICP and long-term incentive tied to the successful integration of Invitrogen and Applied Biosystems.

 

For 2009, Messrs. Stevenson, Hoffmeister, Beery, and Brust achieved their FY2009 goals while Messrs. Leddy and Grossman achieved their combined 2009/2010 goals. This resulted in an aggregate payout of $2,379,375 to the NEOs as a result of the overachievement against their collective 2009 synergy target of $90.8 million. The specific synergy bonus paid to each individual for FY09 is included in the Summary Compensation Table.

 

Employee Benefits and Perquisites

 

The Committee oversees the strategy, design, and administration of all broad-based and supplemental executive benefit/perquisite programs. The Company offers a limited number of supplemental benefits and perquisites to executive officers. Specifically, the Company provides supplemental long-term disability and life insurance (CEO only) to make-up for limits in the Company’s group insurance contracts, a financial counseling allowance, a non-qualified deferred compensation plan, and an annual executive physical benefit. The Committee has approved these benefits and perquisites because it believes they are market competitive, reasonable, and allow executive officers to focus their primary attention on the strategic objectives of the Company versus personal matters.

 

One executive officer, Mark Stevenson, also participates in a supplemental executive retirement plan that was implemented in August 2007 while Mr. Stevenson was an Applied Biosystems executive. Effective January 1, 2010, the Committee froze the supplemental executive retirement plan, and Mr. Stevenson ceased accruing any additional benefits under this arrangement.

 

The Company also owns an aircraft which is operated by a third party and made available for charter when not in use by the Company. Executive officer family members/guests may accompany an executive for

business related activities. However, if family members/guests accompany an executive on a business trip and their travel is not business related, the executive reimburses the cost of such family member/guest travel to the Company at the then prevailing Standard Industry Fare Level rates.

 

The Company does not provide an income tax gross-up for the executive officer’s cost associated with these benefits or perquisites. The amounts relating to benefits and perquisites are disclosed in the footnotes to the Summary Compensation Table.

 

Executive Severance Plan and Agreements

 

In February 2006, the Committee approved an executive officer severance plan to provide specific benefits to eligible executives whose employment is involuntarily terminated without Cause (as defined under the plan). The plan was subsequently amended in November 2008 to comply with Section 409A of the Internal Revenue Code. The following benefits are provided to executive officers who become eligible to participate in this severance plan:

 

(i) twelve (12) months of base salary continuation, payable over time in accordance with regular payroll practices, provided that all such payments are made by March 15 of the year following the year in which termination occurs.

 

(ii) a cash lump sum payment equal to the executive’s ICP target bonus for the year in which the termination occurred (prorated to the date of termination),

 

(iii) nine months of outplacement assistance, and

 

(iv) up to twelve months of health benefits continuation.

 

The Company has also entered into individual agreements with the CEO and CFO providing them with specific benefits if their employment is terminated involuntarily without cause or they voluntarily terminate employment for “good reason” (as defined in their agreements). Specifically, their agreements provide the following benefit upon termination:

 

(i) a cash lump-sum payment equal to 1.5 times the sum of the executive’s base salary and ICP target bonus for the year in which the termination occurred, and

 

(ii) eighteen months of group health benefits continuation.

 

The Committee believes these benefits are competitive and reasonable and that they avoid lengthy negotiations with executives when they leave the Company.

 

Executive Change-in-Control (CIC) Agreements

 

The Company has entered into change-in-control (“CIC”) agreements with the NEOs and a very small group of other executives because the Committee believes these individuals are the most likely to lose their jobs due to redundancy but not performance, and believe these agreements provide any potential buyer with the flexibility to retain the management team if so desired.

 

The CIC agreements are “double trigger” agreements, meaning no payouts are made to the executives unless there is a:

 

(i) change in ownership, and

 

(ii) termination or constructive termination of the executive’s employment within 24 months following the change in ownership.

 

If a double-trigger occurs the agreement provides for the executive to receive:

 

(i) a cash lump-sum payment equal to two times his or her existing base salary plus an amount equal to two times the higher of the last bonus paid or their target bonus;

(ii) up to twenty-four months of group health insurance continuation coverage (which ceases should the executive accept employment that allows the executive to participate in group health insurance coverage before the twenty-four month period ends);

 

(iii) outplacement assistance for nine months;

 

(iv) acceleration of vesting of all outstanding long-term incentive awards; and

 

(v) a tax gross-up if an Internal Revenue Code section 280G excise tax penalty is imposed for excess parachute payments.

 

In April 2009, the Committee agreed to remove the gross up of any excise tax in future CIC agreements, except in extraordinary circumstances. Additionally, any new CIC agreements must be approved by the Committee. Additional information regarding applicable payments under the CIC and executive severance arrangements for the NEOs is provided below under the heading “Potential Payments Upon Termination or Change-in-Control.”

 

Other Policies and Practices

 

Stock Ownership Guidelines

 

The Committee has determined each of the executive officers should own a significant amount of the Company’s common stock to more closely align the financial interests of the executive officers with those of stockholders. Executive officers are expected to attain these ownership levels within four years after their election or appointment to the specified officer position. The Committee expects the CEO to hold at least 90,000 shares of the Company’s common stock and senior vice presidents to hold at least 20,000 shares. In determining individual ownership levels, all shares held outright, as well as unvested restricted stock units or performance shares awarded to the executive are included. Stock option awards are not included for purposes of determining stock ownership.

 

As of March 1, 2010, all executive officers were in compliance with these stock ownership guidelines.

 

Equity Grant Practices

 

The Committee awards stock options at an exercise price equal to the closing price of the Company’s common stock reported on the date of the grant. In most situations, the date of grant is the first day of the month following the date the grants are approved. Under the terms of the Company’s equity plans, stock option re-pricing is not permitted without stockholder approval.

 

Deductibility of Named Executive Officer Compensation

 

In evaluating compensation program alternatives, the Committee considers the potential impact of Section 162(m) of the Internal Revenue Code. Section 162(m) eliminates the deductibility of compensation over $1 million paid to NEOs that is not “performance-based compensation” as defined under the specific rules.

 

The Committee endeavors to maximize deductibility of compensation under Section 162(m) to the extent practicable while maintaining competitive, performance-based compensation. However, the Committee believes it is important to retain maximum flexibility in designing compensation programs that meet its stated objectives and fit within the Committee’s compensation philosophy. Further, the actual impact of the loss of deduction for compensation paid to NEOs over the limitation would have a minimal impact on the Company’s financial position. Therefore, the Committee may choose not to limit compensation in order to preserve deductibility for certain payments under various compensation programs. The Committee will consider alternative forms of compensation that preserve deductibility, consistent with its compensation goals.

Clawback Policy

 

The Committee believes the strong financial controls in place for the Company provide a substantial safeguard against the risk of a material financial restatement. However, if an extraordinary event were to occur resulting in a restatement of the Company’s financial performance, the Committee would take all relevant factors into account when deciding subsequent compensation actions and exercise business judgment and discretion to determine amounts to recoup, if any.

 

Policy on Stock Hedging

 

Executive officers are prohibited from participating in short sales on the Company’s stock, or the purchase or sale of options, puts, calls, straddles, equity swaps or other derivative securities that are directly linked to Life Technologies securities.

 

The Compensation and Organizational Development Committee reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K with management. Based on such review and discussions, the Compensation and Organizational Development Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the registrant’s Proxy Statement on Schedule 14A.

 

Ronald A. Matricaria (Chairman)
William H. Longfield
W. Ann Reynolds, Ph.D.
William S. Shanahan
David C. U’Prichard, Ph.D.

 

The following table sets forth information for the fiscal year ended December 31, 2009, concerning the compensation of the CEO and CFO of the Company and each of the three other most highly compensated executive officers as of December 31, 2009. In order to provide continuity for prior year comparisons, Messer’s Bernd Brust and Peter M. Leddy, Ph.D. have been included.

 

 

 

 

The following table sets forth certain information with respect to stock and option awards and other plan-based awards granted to the named executive officers during the fiscal year ended December 31, 2009.

 

 

 

The following information sets forth the stock awards vested and stock options exercised by the named executive officers during the fiscal year ended December 31, 2009.

 

 

 

The following table sets forth certain information with respect to the value of all unexercised options and unvested stock awards previously awarded to the named executive officers as of December 31, 2009 (market value of shares is based on grant date fair value of the awards determined pursuant to Statement of Financial Accounting Standards 123(R), Share Based Payment).