<PAGE>
LUTHER MEDICAL PRODUCTS, INC.
Notice of Annual Meeting of Shareholders
Friday, May 1, 1998
TO THE SHAREHOLDERS OF LUTHER MEDICAL PRODUCTS, INC.:
NOTICE IS HEREBY GIVEN and you are cordially invited to attend the Annual
Meeting of Shareholders of Luther Medical Products, Inc., a California
corporation (the "Company"), which will be held at the Irvine Marriott, 18000
Von Karman, Irvine, California 92620, at 9:00 A.M., local time, on Friday, May
1, 1998. The Annual Meeting will be held for the following purposes, as more
fully described in the attached Proxy Statement:
(1) Election of Directors. To elect a Board of five (5) Directors.
---------------------
The persons nominated, Messrs. Rollo, Payne, Hamilton, Dahlman, and Huck
are described in the attached Proxy Statement; and
(2) Other Business. To consider and act upon any other business
--------------
matters as may properly come before the meeting or any postponements or
adjournments thereof.
In accordance with the provisions of the Company's Bylaws, the Board of
Directors has fixed the close of business on March 23, 1998, as the record date
for the determination of the holders of Common Stock entitled to notice of and
to vote at the Annual Meeting.
Your attention is directed to the accompanying Proxy Statement.
Shareholders who do not expect to attend the meeting in person are requested to
sign, date, and mail the enclosed Proxy as promptly as possible in the enclosed
envelope.
BY ORDER OF THE BOARD OF DIRECTORS,
-----------------------------------
Petra Darling, Secretary
March 27, 1998
YOU ARE URGED TO VOTE UPON THE MATTERS PRESENTED AND TO SIGN, DATE, AND
RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IT IS IMPORTANT
FOR YOU TO BE REPRESENTED AT THE MEETING. THE EXECUTION OF YOUR PROXY WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
Requests for additional copies of proxy materials should be addressed to
Petra Darling, Corporate Secretary, at the offices of the Company, 14332
Chambers Road, Tustin, California 92780-6912.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Proxies................................................................ 1
Voting Securities...................................................... 1
Security Ownership of Certain Beneficial Owners and Management......... 2
Election of Directors.................................................. 3
Directors and Executive Officers....................................... 5
Executive Compensation................................................. 6
Summary of Transactions In All Company Benefit Plans................... 8
Certain Transactions................................................... 8
Proxy Expenses......................................................... 8
1997 Annual Report to Shareholders..................................... 9
Shareholder Proposals.................................................. 9
Independent Public Accountants......................................... 9
Other Business......................................................... 9
</TABLE>
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<PAGE>
LUTHER MEDICAL PRODUCTS, INC.
14332 Chambers Road
Tustin, California 92780-6912
(714) 544-3002
---------------------------------
PROXY STATEMENT
---------------------------------
Annual Meeting of Shareholders
Friday, May 1, 1998
-------------------
PROXIES
The enclosed Proxy is solicited by and on behalf of the management and
Board of Directors of LUTHER MEDICAL PRODUCTS, INC., a California corporation
(the "Company"), for use at the Company's Annual Meeting of Shareholders and at
any and all adjournments thereof (the "Annual Meeting") to be held at the Irvine
Marriott, 18000 Von Karman, Irvine, California 92620, at 9:00 a.m., local time.
Any shareholder has the power to revoke his or her proxy at any time before it
is voted. A proxy may be revoked by delivering written notice of revocation to
the Secretary of the Company at its principal office address listed above, by a
subsequent proxy executed by the person executing the prior proxy and presented
to the meeting, or by attendance at the meeting and voting in person by the
person executing the proxy. The solicitation is being made only by use of the
mails and the cost thereof will be borne by the Company.
A complete copy of the Company's 1997 Annual Report on Form 10-KSB to
the Securities and Exchange Commission, including the financial statements and
schedules thereto, may be obtained without charge by shareholders (including
beneficial owners of the Company's common stock) by sending a written request to
the Secretary of the Company, Luther Medical Products, Inc., 14332 Chambers
Road, Tustin, California 92780-6912.
The Annual Report to Shareholders of the Company, which report
includes financial statements of the Company for the fiscal years ended June 30,
1996, and 1997, was mailed with this Proxy Statement and the accompanying Proxy,
commencing March 30, 1998, to each person who was a shareholder as of the record
date.
VOTING SECURITIES
March 23, 1998, has been fixed as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof. As of that date, the Company had
outstanding 3,237,629 shares of common stock, no par value per share (the
"Common Stock"), the only outstanding voting securities of the Company.
Shareholders of record of Common Stock at the close of business on March 23,
1998, will be entitled to one vote for each share held upon all matters to be
considered at the Annual Meeting, except that in the election of directors, all
shareholders shall be entitled to cumulate votes for a candidate or candidates
whose names have been placed in nomination, if one or more shareholders have
given notice at the meeting, prior to the voting, of an intention to cumulate
votes. If the shareholders are entitled to cumulate their votes, they may give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which his or her shares are entitled or may
distribute his or her votes on the same principle among as many candidates as
the shareholder sees fit. Discretionary authority by the Board of Directors to
cumulate their votes is solicited by the Board of Directors because, in the
event nominations are made in opposition to the nominees of the Board of
Directors, it is the intention of the Board of Directors' proxies to cumulate
their votes for individual nominees in accordance with their best judgment in
order to assure the election of as many of the nominees of the Board of
Directors as possible.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Common Stock at March 23, 1998, (except as otherwise
indicated by footnote) by (i) each person (including any "group" as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
("Exchange Act")) known by management to own beneficially more than 5% of the
Company's outstanding Common Stock, (ii) each of the nominees for directors, and
(iii) all executive officers and nominees for directors of the Company as a
group:
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned (2)
Name of Individual Amount (1) %
------------------ ---------------------- -----
<S> <C> <C>
David Rollo 153,175(3) 4.12
Jack W. Payne 60,000(4) 1.61
D. Ross Hamilton 151,500(5) 4.08
William R. Dahlman 12,000(6) *
William C. Huck 230,000(7) 6.19
Ronald B. Luther 290,590(8) 7.82
All executive officers
and directors as a
group (7 persons) 918,908(9) 24.73
</TABLE>
- -------------
* Represents less than one percent.
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Company Common Stock shown to be beneficially
owned by them, subject to community property laws where applicable and the
information contained in the footnotes to this table.
(2) Assumes the exercise of options and warrants to purchase 477,858 shares
held by executive officers and directors of the Company, which options and
warrants are, or become, exercisable within the 60 days of the record date.
(3) Includes 3,175 shares beneficially owned by Mr. Rollo, plus warrants to
purchase 150,000 shares at an exercise price of $2.94 per share, expiring
at various dates from December 5, 1999, to December 5, 2001. Mr. Rollo's
address is 14332 Chambers Road, Tustin, California 92780-6912.
(4) Includes warrants to purchase 25,000 shares at an exercise price of $2.75
per share, expiring on July 23, 1998; warrants to purchase 5,000 shares at
an exercise price of $2.50 per share, expiring on January 21, 1999;
warrants to purchase 9,000 shares at an exercise price of $2.55 per share,
expiring on January 27, 2000; warrants to purchase 9,000 shares at an
exercise price of $3.85 per share, expiring on December 8, 2000; warrants
to purchase 6,000 shares at an exercise price of $4.81 per share, expiring
on December 8, 2001; and warrants to purchase 6,000 shares at an exercise
price of $4.81 per share, expiring on December 8, 2002. Mr. Payne's
address is 4515 S. Meadow Drive, Boulder, Colorado 80301.
(5) Includes 7,500 shares beneficially owned by Mr. Hamilton and 74,000 shares
owned by a partnership, of which Mr. Hamilton and two unaffiliated third
parties each own 33.3%; warrants to purchase 35,000 shares at an exercise
price of $2.75 per share, expiring on July 23, 1998; warrants to purchase
5,000 shares at an exercise price of $2.50 per share, expiring on January
21, 1999; warrants to purchase 9,000 shares at an exercise price of $2.55
per share, expiring on January 27, 2000; warrants to purchase 9,000 shares
at an exercise price of $3.85 per share, expiring on December 8, 2000;
warrants to purchase 6,000 shares at an exercise price of $4.81 per share,
expiring on December 8, 2001; and warrants to
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<PAGE>
purchase 6,000 shares at an exercise price of $4.81 per share, expiring on
December 8, 2002. Mr. Hamilton's address is 9440 Gregory Road, Easton,
Maryland 21601.
(6) Includes warrants to purchase 6,000 shares at an exercise price of $4.81
per share, expiring on December 8, 2001; and warrants to purchase 6,000
shares at an exercise price of $4.81 per share, expiring on December 8,
2002. Mr. Dahlman's address is 215 N. Marengo Avenue, Pasadena, California
91101.
(7) Includes 230,000 shares beneficially owned by Mr. Huck. Mr. Huck's address
is C/O Columbia Vital Systems, Inc., 100 E. Chestnut Avenue, Westmont,
Illinois 60559.
(8) Includes 100,896 shares beneficially owned by Mr. Luther, 23,265 shares
owned by Mr. Luther's spouse, as to which shares Mr. Luther disclaims
beneficial ownership, warrants to purchase 15,000 shares at an exercise
price of $3.50 per share, expiring April 23, 1998; warrants to purchase
7,143 shares at an exercise price of $3.50 per share, expiring on June 24,
1998; warrants to purchase 4,286 shares at an exercise price of $3.25 per
share, expiring on April 22, 1999; warrants to purchase 80,000 shares at an
exercise price of $2.63 per share, expiring at various dates from November
19, 1998, to November 19, 2001, and warrants to purchase 100,000 shares at
an exercise price of $3.63 per share, expiring September 18, 2000, of which
60,000 warrants are exercisable as of, or within 60 days of, the record
date. Mr. Luther's address is 530 Kings Road, Newport Beach, California
92663.
(9) Includes all shares, options, and warrants described in notes (3) through
(7), inclusive; 2,214 shares beneficially owned by an executive officer who
is not a director, plus options to purchase 6,000 shares at an exercise
price of $3.07 per share, expiring on April 23, 1998; options to purchase
2,143 shares at an exercise price of $3.25 per share, expiring on April 22,
1999; options to purchase 2,000 shares at an exercise price of $2.82 per
share, expiring on July 22, 1999; and options to purchase 9,286 shares at
an exercise price of $3.19 per share, expiring on January 27, 2000.
ELECTION OF DIRECTORS
The five (5) persons named below have been nominated by the nominating
committee for election as directors to serve until the Annual Meeting to be held
in 1998 and until their respective successors are elected and shall qualify.
Four of the nominees have previously served as a director of the Company.
Unless otherwise instructed, the enclosed Proxy will be voted for election
of the nominees listed below, except that the persons designated as proxies
reserve full discretion to cast their votes for another person recommended by
management in the unanticipated event that any nominee is unable or declines to
serve.
<TABLE>
<CAPTION>
Name of Nominee Age Director Since
- --------------- --- --------------
<S> <C> <C>
David Rollo 57 1993
Jack W. Payne 67 1992
D. Ross Hamilton 59 1993
William R. Dahlman 55 1995
William C. Huck 59 -
</TABLE>
Each of the Company's directors has been elected to serve until the next
meeting of shareholders. Except as described below, there are no arrangements
or understandings between any director and any other person pursuant to which
any person was elected or nominated as a director. The Company's executive
officers serve at the discretion of the Board of Directors.
Mr. Rollo has served as President, Chief Executive Officer, and as a
director of the Company since December of 1993, as its Chief Financial Officer
since January of 1994, and as its Chairman of the Board since June of 1995.
From 1976 to 1993, he was employed by Telectronics Inc. (or by certain of its
affiliates), a Den-
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<PAGE>
ver, Colorado, based heart pacemaker manufacturer, in various positions,
including President and Chief Executive Officer.
Mr. Payne has served as a director of the Company since March of 1992.
From January of 1993 to the present, he has served as the Executive Vice
President and a director of Sequin Hospital Bed Corporation, a Denver, Colorado,
durable medical equipment company of which he is a co-founder. From June of
1992 to the present, Mr. Payne has also served as President and Chief Executive
Officer of FerroMagnetic Therapeutics Corp., a Denver, Colorado, biotechnology
company. Mr. Payne was with Baxter International from 1958 until 1977 where he
was employed in various sales and executive positions. Thereafter, he continued
his career in that industry with executive positions at R.P. Scherer Corporation
and Terumo Medical Products, Inc.
Mr. Hamilton has served as a director of the Company since March of 1993.
For not less than the previous five years through the present, he has served as
President of Hamilton Research, Inc., a Maryland-based financial consulting
firm. Mr. Hamilton is a director of Altris Software, Inc., an electronic
document management software company; from January through July of 1997, he
served as its Chairman of the Board. Since December of 1989 through June of
1997, Mr. Hamilton served as a director of Incstar Corporation, a medical
diagnostics company (52% of which was owned by Fiat S.p.A. until the sale of the
company to American Standard in June of 1997), and between January of 1993 and
June of 1996, he served as a director of Belcor Inc. Between 1968 and 1980, Mr.
Hamilton served as a Vice President of Dean Witter Reynolds and, for the six
previous years, an officer of Chemical Bank.
Mr. Dahlman has served as a director of the Company since December of 1995.
From November of 1996 to the present, he has served as the president and chief
executive officer of the Employers Group, a non-profit association providing
human resource support to 5,000 California companies. From 1991 to the present,
Mr. Dahlmann has served as a director, and from 1997 to the present, Mr. Dahlman
has served as the Chairman of the Board, of Palomar Mountain Spring Water
Company, a San Diego, California, a bottled water packaging company, and from
1996 to the present, as a director of California Casualty Insurance Company, a
San Mateo, California, insurance company. From January of 1991 to November of
1996, he served as a principal of WRD & Associates, a Los Angeles, California,
contract management and consulting group. From 1987 until forming WRD &
Associates, Mr. Dahlman was the President and Chief Executive Officer of Suntory
Water Group in Atlanta, Georgia.
Mr. Huck is a nominee to serve as a director of the Company. From 1989 to
the present, he has served as Chairman of the Board and Chief Executive Officer
of Columbia Vital Systems, Inc., a Westmont, Illinois, specialty medical device
distribution company, having previously served as its president from 1975 to
1989. From October 1997 to the present, Mr. Huck has served as president of
Applied Fiberoptics, a manufacturer of fiber optic surgical illumination
systems. From January of 1990 to July of 1997, Mr. Huck served as president of
Interstat Biomedical, Inc., a specifications developer and distributor of custom
anesthesia kits. From 1984 to July 1997, Mr. Huck served as President of
Vitalcor, Inc., an initial importer and U.S. distributor of open heart surgery
equipment and devices. In May of 1992, Mr. Huck formed the Specialty Medical
Marketing Association and served as the Chairman of the Board until October
1995.
Committees; Meetings.
The Company has a standing audit committee, the members of which during the
Company's previous fiscal year were Messrs. Hamilton, Mark S. Isaacs, and Barry
W. Hall; a standing compensation committee, the members of which were Messrs.
Payne and Hamilton; and a standing nominating committee, the members of which
were Rollo, Isaacs, and Dahlman.
The Company's Board of Directors met a total of six times during the fiscal
year ended June 30, 1997.
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<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
David Rollo 57 Chairman of the Board, President,
Chief Executive Officer,
Chief Financial Officer, Director
George C. Brdlik 44 Vice President of Quality
Assurance and Regulatory Affairs
Petra Darling 54 Secretary
Jack W. Payne 67 Director
D. Ross Hamilton 59 Director
William R. Dahlman 55 Director
William C. Huck 59 Director
</TABLE>
Each of the Company's directors has been elected to serve until the next
annual meeting of shareholders. There are no arrangements or understandings
between any director and any other person pursuant to which any person was
elected or nominated as a director. The Company's executive officers serve at
the discretion of the Board of Directors.
Set forth below are brief descriptions of the business experience of Mr.
Brdlik and Ms. Darling, who are not nominees to serve as directors of the
Company. For information concerning the business experience of Messrs. Rollo,
Payne, Hamilton, Dahlman, and Huck, see "Election of Directors," above.
Mr. Brdlik has served as Vice President of Quality Assurance and Regulatory
Affairs of the Company since January of 1997. From 1994 to 1996, he was
employed as the Regulatory Affairs Manager of the Perfusion Services of Baxter
Healthcare Corporation. From 1985 to 1994, Mr. Brdlik held several positions at
IVAC Corporation, ranging from Senior Quality Engineer to Regulatory/Clinical
Affairs Manager. From 1980 to 1985, he held several positions, including
Biomedical Engineer, at the FDA.
Ms. Darling has served as Secretary of the Company since November of 1992.
Since 1981, she has been employed by the Company in various administrative, non-
policy making capacities, including the Company's assistant secretary (between
1988 and 1992) and its controller (from 1981 to the present), reporting to the
Company's principal accounting officer.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------------------------------------------
Other
Name Annual Restricted All Other
and Compen- Stock LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs(#) ($) ($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Rollo 1997 $150,000 -- -- -- -0- -- --
(President, 1996 $150,000 -- -- -- -0- -- --
CEO, and CFO) 1995 $141,437 -- -- -- -0- -- --
All executive
officers as a group
(4 persons) 1997 $380,208 -- -- -- -0- -- --
(3 persons) 1996 $326,870 -- -- -- 100,000 -- --
(3 persons) 1995 $308,383 -- -- -- 9,286 -- --
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
- ---------------------------------------------------------------------------------------------
Percent of Total
Options/SARs
Options/ Granted to Market Price
SARs Employees in Exercise or Base on Date Expiration
Name Granted(#) Fiscal Year Price($/Sh) of Grant($/Sh) Date
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
David Rollo -0- N/A N/A N/A N/A
</TABLE>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise(#) Value Realized($) Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David Rollo -0- -- 150,000/0 27,000/0
</TABLE>
Effective in December of 1995, Directors who are not officers of the Company
receive a fee of $900 per meeting attended in person, or $500 per meeting
attended by telephone, as compensation for their services, an increase from $600
and $400, respectively.
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<PAGE>
Employment Agreements.
David Rollo.
The Company employs Mr. Rollo as its Chief Executive Officer and President
pursuant to a series of employment agreements, the most current of which is
effective as of January of 1998. Mr. Rollo's annual base compensation
thereunder currently is $157,646, subject to cost of living increases and
periodic review and increase upon the recommendation of the Company's
compensation committee. Mr. Rollo is also entitled to receive bonus payments in
their discretion.
Upon execution of the initial employment agreement in December of 1993, the
Company granted to Mr. Rollo warrants to purchase 150,000 shares of the
Company's common stock, of which 50,000 warrants vested in December of 1994,
50,000 vested in December of 1995, and 50,000 vested in December of 1996. The
exercise price of the warrants (the average of the closing bid and asked prices
as quoted on the Nasdaq Stock Market (SmallCap) on December 6, 1993) is $2.94.
Under certain circumstances, a termination of Mr. Rollo's employment agreement
will cause the Company to pay to Mr. Rollo (i) his full base compensation
through the date of termination at the rate in effect at the time of such
termination and (ii) a lump sum equal to 100% of his annual base compensation at
the highest rate in effect during the 12 months immediately preceding the date
of termination.
George C. Brdlik.
The Company has employed Mr. Brdlik as its Vice President of Quality Assurance
and Regulatory Affairs since January of 1997, pursuant to an employment
agreement that provides for the "at will" employment of Mr. Brdlik, subject to
the occurrence of two specified events. Mr. Brdlik reports directly to Mr.
Rollo, as the Company's president, and his duties emphasize daily review and
analysis of the Company's operations in respect of quality assurance and
regulatory affairs compliance in connection with the quality systems
requirements of the FDA and analogous international regulatory agencies.
Mr. Brdlik's annual base compensation currently is $100,000. Notwithstanding
the at-will status of Mr. Brdlik's employment, if the Company sells all or
substantially all of its assets or a change of control of the Company occurs,
the Company may become obligated to pay to him (i) his full base compensation
through the date of termination at the rate in effect at the time of such
termination and (ii) a lump sum equal to 100% of his annual base compensation at
the highest rate in effect during the 12 months immediately preceding the date
of termination.
A "change in control of the Company" means a change in control of a nature
that would be required to be reported in response to Item 5(f) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); provided, however, that such "person" (as such
term is used in Section 13(d) and 14(d) of the Exchange Act), other than the
Company or any "person" who on the date hereof is a director or officer of the
Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
80% or more of the combined voting power of the Company's then outstanding
securities.
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<PAGE>
SUMMARY OF TRANSACTIONS IN ALL COMPANY BENEFIT PLANS
The following table sets forth the options and warrants including options
under all Company plans granted to the persons set forth in the table for the
three years commencing July 1, 1994, and ending June 30, 1997.
<TABLE>
<CAPTION>
GRANTED EXERCISED
--------------------- -----------------------
Average
Per Share
Number of Exercise Number of Net Value
Shares Price Shares Realized/1/
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
David Rollo........................... 0 -0- -0- -0-
Jack W. Payne......................... 48,000 $4.21 -0- -0-
D. Ross Hamilton...................... 48,000 $4.21 -0- -0-
Ronald B. Luther...................... 100,000 $3.63 55,715 $14,072
Petra Darling......................... 15,086 $3.72 4,571 $ 8,547
William R. Dahlman.................... 30,000 $4.81 -0- -0-
All current executive officers
(as a group)/2/.................... 115,086 $3.02 60,286 $22,619
All directors who are not executive
officers (as a group)/3/........... 213,000 $3.80 7,143 4,500
All employees (as a group)/4/......... 137,642 $3.62 56,434 $ 7,602
</TABLE>
1 Market value on the date of exercise, less exercise price.
2 3 persons were eligible in the group.
3 5 persons were eligible in the group (includes information in respect of
two then-current directors).
4 41, 48, and 58 persons were eligible in the group for fiscal years ended
June 30, 1995, 1996, and 1997, respectively.
CERTAIN TRANSACTIONS
As of June 30, 1997, two then-current officers or directors were indebted
to the Company in the aggregate amount of $235,409. Each such indebtedness was
incurred in connection with the exercise of warrants previously granted to such
individuals. During the 1997 fiscal year, Mr. Luther's maximum obligation to
the Company was $262,500, of which $75,000 was repaid to the Company and an
additional $187,500 was offset against such obligation (at a price equivalent to
the warrant exercise price) through the return by Mr. Luther in the current
fiscal year of 50,000 of the shares that had served as security for such
obligation. Mr. Isaacs' maximum obligation to the Company, during such year,
was $25,000, which has been repaid.
PROXY EXPENSES
The entire cost of preparing, assembling, printing, and mailing this Proxy
Statement and the enclosed form of Proxy, and the cost of soliciting Proxies
with respect to the Annual Meeting, will be borne by the Company. The Company
will request banks and brokers to solicit their customers who beneficially own
shares listed of record in names of nominees, and will reimburse those banks and
brokers for their reasonable out-of-pocket expenses of such solicitations. The
original solicitation of Proxies by mail may be supplemented by telephone,
telegram, and personal solicitation by officers and other regular employees of
the Company, but no additional compensation will be paid to such individuals.
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<PAGE>
1997 ANNUAL REPORT TO SHAREHOLDERS
The 1997 Annual Report to Shareholders of the Company, which report
includes financial statements for the fiscal years ended June 30, 1996, and
1997, is being sent to the shareholders concurrently with the mailing of this
Proxy Statement. The Annual Report to Shareholders is not to be considered as
part of the soliciting material.
SHAREHOLDER PROPOSALS
It is presently anticipated that the 1998 Annual Meeting of Shareholders
will be held in December of 1998. Shareholders desiring to exercise their
rights under the proxy rules of the Securities and Exchange Commission to
submit proposals for consideration by the shareholders at the 1998 Annual
Meeting are advised that their proposals must be received by the Company no
later than one hundred twenty (120) calendar days in advance of the date of the
Company's proxy statement for its 1998 Annual Meeting in order to be eligible
for inclusion in the Company's proxy statement and form of proxy relating to
that meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Ernst & Young, LLP, Irvine, California,
to act as the Company's independent public accountants for the fiscal year
ending June 30, 1998. The Company expects that a representative of Ernst &
Young, LLP, will be present at the Annual Meeting and will have the opportunity
to make a statement, if he so desires, and that such representative will be
available to respond to appropriate questions.
Ernst & Young, LLP, has acted as the Company's independent public
accountants commencing with the Company's 1997 fiscal year, and has advised the
Company that it has no direct or indirect interest in the Company during the
time it has acted as independent auditor for the Company.
OTHER BUSINESS
The Board of directors is not aware of any business to be presented at the
Annual Meeting except the matters set forth in the Notice and described in this
Proxy Statement. Unless otherwise directed, all shares represented by Board of
Directors' Proxies will be voted in favor of the proposals of the Board of
Directors described in this Proxy Statement. If any other matters come before
the Annual Meeting, the persons named in the accompanying Proxy will vote on
those matters according to their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Tustin, California Petra Darling
March 27, 1998 Secretary
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<PAGE>
P The undersigned hereby appoints David Rollo as Proxy, with the power to
appoint his substitute, and hereby authorizes him to represent and to
vote, as designated below, all of the shares of Common Stock, no par value
per share, of Luther Medical Products, Inc., held of record by the
undersigned on March 23, 1998 at the Annual Meeting of shareholders to be
R held on May 1, 1998 or at any postponement or adjournment thereof.
1. Election of Directors:
For all nominees listed below [_]
O
Withheld from all nominees [_]
For, except vote withheld from the following nominee(s)_______________
X William R. Dahlman Jack W. Payne David Rollo
D. Ross Hamilton William C. Huck
2. Upon such other matters as may properly come before the Meeting or at
Y any postponement or adjournment thereof.
P This Proxy will be voted in accordance with the instructions set forth on
the reverse side of this Proxy Card. This Proxy will be treated as a "Grant
of Authority to vote for" (1) the election of the five Directors nominated;
and (2) as said Proxy shall deem advisable on such other business as may
come before the meeting, unless otherwise directed.
Please Mark, Sign, Date and When shares are held by joint tenants,
R Return the Proxy Card Promptly both should sign. When signing as
using the Enclosed Envelope. attorney, as executor, administrator,
trustee, or guardian, please give full
title as such. If a corporation,
Please sign exactly as name please sign in full corporate name by
appears below. President or other authorized officer.
If a partnership, please sign in
O partnership name by authorized person.
______________________________________
Signature
______________________________________
X Signature if held jointly
______________________, 199___________
Dated
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF LUTHER MEDICAL
Y PRODUCTS, INC.
