<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
DIAGNOSTIC PRODUCTS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
DIAGNOSTIC PRODUCTS CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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:
----------------------------------------------------------------------
<PAGE> 2
[LOGO]
DIAGNOSTIC PRODUCTS CORPORATION
5700 WEST 96TH STREET
LOS ANGELES, CA 90045
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 1996
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Diagnostic Products Corporation will be held at the Company's offices at 5700
West 96th Street, Los Angeles, California, on May 8, 1996, at 2:30 p.m. local
time, for the following purposes:
1. To elect a Board of Directors to serve until the next Annual Meeting of
Shareholders and until their respective successors are elected and
qualified. The nominees for election to the Board of Directors are: Dr.
Sigi Ziering, Sidney A. Aroesty, Marilyn Ziering, Maxwell H. Salter, Dr.
James D. Watson, Michael Ziering and Frederick Frank.
2. To transact such other business and to consider and take action upon any
and all matters that may properly come before the Meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business, March 15, 1996, as
the record date for the determination of the shareholders entitled to notice of
and to vote at the Meeting.
SHAREHOLDERS WHO ARE UNABLE TO ATTEND THE MEETING PERSONALLY ARE REQUESTED
BY MANAGEMENT TO MARK, SIGN AND RETURN THE ENCLOSED PROXY IMMEDIATELY.
By Order of the Board of Directors
MARILYN ZIERING
Secretary
March 28, 1996
<PAGE> 3
[LOGO]
DIAGNOSTICS PRODUCTS CORPORATION
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 8, 1996
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Diagnostic Products Corporation (the "Company") in connection with the Annual
Meeting of Shareholders to be held at the Company's executive offices located at
5700 West 96th Street, Los Angeles, California, on May 8, 1996, at 2:30 p.m.
local time, and any adjournments thereof. It is expected that this Proxy
Statement and accompanying proxy will first be mailed to shareholders on or
about March 28, 1996.
The expenses for soliciting proxies for the Annual Meeting are to be paid
by the Company. Solicitation of proxies may be made by means of personal calls
upon, or telephonic or telegraphic communications with, shareholders or their
personal representatives by directors, officers and employees of the Company who
will not be specially compensated for such services.
VOTING PROCEDURES
Only shareholders of record of the Company's Common Stock at the close of
business on March 15, 1996, the record date fixed by the Board of Directors, are
entitled to notice of and to vote at the Meeting. On that date, there were
outstanding and entitled to vote at the Meeting, 13,533,156 shares of Common
Stock, each of which is entitled to one vote. A majority of the shares entitled
to vote, represented in person or by proxy, constitutes a quorum at the Meeting.
Abstentions and broker non-votes are counted as present for purposes of
determining the existence of a quorum.
All shares represented by the accompanying proxy, if the proxy is properly
executed and returned, will be voted as specified by the shareholder or, if no
vote is indicated, the proxy will be voted FOR the nominees for director. As to
any other matter of business which may properly be brought before the Meeting, a
vote may be cast pursuant to the accompanying proxy in accordance with the
judgment and discretion of the person or persons voting the same, although
management does not presently know of any such other matter of business. A
shareholder has the power to revoke his proxy at any time before it has been
voted by notifying the Company in writing, by submitting a substitute proxy
having a later date or by voting in person at the Meeting.
If, prior to the election of directors, any shareholder has given notice
that he intends to cumulate his votes, then, for the election of directors only,
each shareholder may cumulate votes for any nominee, if the nominee's name was
placed in nomination prior to the voting. In cumulative voting, each shareholder
is entitled in the election of directors to one vote for each voting share held
by him multiplied by the number of directors to be elected and may cast all such
votes for a single nominee for director or may distribute them among any two or
more nominees as he sees fit. See "Election of Directors."
1
<PAGE> 4
ELECTION OF DIRECTORS
The shareholders are being asked to elect seven directors to serve until
the next Annual Meeting of Shareholders and until their successors are duly
elected and qualified. The proxies will be voted in favor of the nominees, all
of whom are currently serving as directors, unless otherwise specifically
instructed. Although the Board of Directors does not anticipate that any nominee
will be unavailable for election, in the event of such occurrence the proxies
will be voted for such substitute, if any, as the Board of Directors may
designate.
The seven nominees receiving the highest number of affirmative votes of the
shares entitled to be voted will be elected directors; votes withheld and broker
non-votes have no legal effect. If voting for directors is conducted by
cumulative voting, the persons named on the enclosed proxy will have
discretionary authority to distribute votes among the nominees in such
proportions as they may see fit, unless otherwise specifically instructed. In
any case, the proxies may be voted for less than the entire number of nominees
if any situation arises which, in the opinion of the proxy holders, makes such
action necessary or desirable.
The following information is supplied with respect to the nominees:
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR
NAME AGE OCCUPATION SINCE
- ------------------------ --- ------------------------------------------ --------
<S> <C> <C> <C>
Sigi Ziering, Ph.D. 68 Chairman of the Board, 1973
Chief Executive Officer
Sidney A. Aroesty 49 Consultant 1981
Marilyn Ziering 64 Vice President -- Marketing Communications 1974
Maxwell H. Salter 76 Chairman of the Board and Chief 1982
Executive Officer, Benos
James D. Watson, Ph.D. 67 President, Cold Spring Harbor Laboratory 1987
Michael Ziering 39 President and Chief Operating Officer 1994
Frederick Frank 63 Vice Chairman, Lehman Brothers Inc. 1996
</TABLE>
Sigi Ziering and Marilyn Ziering are husband and wife. Michael Ziering is
the son of Dr. and Mrs. Ziering. See "Ownership of Common Stock" for information
concerning the beneficial ownership of the Company's Common Stock by nominees
for director.
Dr. Sigi Ziering joined the Company as treasurer and director in 1973 and
has served as Chief Executive Officer since 1974. Dr. Ziering holds a Ph.D. in
Theoretical Physics from Syracuse University.
Mr. Aroesty joined the Company in 1978. He served as Executive Vice
President and Chief Operating Officer from 1982 through 1988 and as President
and Chief Operating Officer from 1989 to September 1994. He currently serves as
a consultant to the Company. Mr. Aroesty holds a B.S. degree in biochemistry
from the University of Rochester.
Mrs. Ziering joined the Company in 1973 as Secretary and served as Vice
President -- Marketing from 1979 until February 1993 when she was elected Vice
President -- Marketing Communications. Mrs. Ziering holds a Masters Degree from
Syracuse University.
Mr. Salter is Chairman of the Board and Chief Executive Officer of Benos, a
chain of family clothing stores in which Mr. Salter has been a principal since
1946.
2
<PAGE> 5
Dr. Watson was the Director of Cold Spring Harbor Laboratory of New York, a
biotechnology research center, from 1968 until he became President in January
1994. Dr. Watson received the Nobel prize in 1962 for his discovery of the
double helix structure of the DNA molecule. Dr. Watson is also a director of
Pall Corporation.
Mr. Michael Ziering, an attorney, joined the Company in 1986 as legal
counsel. He served as Vice President-Administration from December 1988 until his
election as President and Chief Operating Officer in September 1994.
Mr. Frank, who was elected a director of the Company on January 25, 1996,
is Vice Chairman of Lehman Brothers Inc., an investment banking firm which he
joined as a partner in October 1969. He is a Chartered Financial Analyst, a
member of The New York Society of Security Analysts and a past president of the
Chemical Processing Industry Analysts. Mr. Frank serves as a director of Applied
Bioscience International Inc., Automated Call Processing, Digital Collections,
Inc., Physician Computer Network and R.P. Scherer Corporation. He is Chairman of
the National Genetics Foundation, a Member of the Salk Institute National
Council, a Director of the Salk Institute, a Trustee of the Hotchkiss School, a
Member of the Yale School of Organization and Management Advisory Board, and a
Member of the Board of Governors of the National Center for Genome Resources.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held five meetings in 1995. The Board of Directors
has appointed an Executive Committee consisting of Sigi Ziering, Marilyn Ziering
and Maxwell H. Salter. The Executive Committee may exercise the full authority
of the Board, subject to certain statutory limitations. The Audit Committee,
currently comprised of Frederick Frank and Maxwell H. Salter, is responsible for
periodically reviewing the financial condition and the results of audit
examinations of the Company with its independent public accountants. The Audit
Committee met twice during 1995. The Compensation Committee, currently comprised
of Frederick Frank, Maxwell Salter and Louis Colen (a shareholder of the
Company), is responsible for reviewing and recommending the approval to the
Board of Directors of compensation of the officers of the Company. The
Compensation Committee met once during 1995. Mr. Frank was appointed to the
Compensation Committee in February 1996 and did not take part in the
consideration of executive compensation for 1995 as discussed in the Report of
the Compensation and Stock Option Committees appearing elsewhere in this Proxy
Statement. The Stock Option Committee, comprised of Maxwell H. Salter and
Marilyn Ziering, is responsible for administering the Company's Stock Option
Plans and approving option grants. The Stock Option Committee took action by
written consent on numerous occasions in 1995. The Board of Directors has not
designated a nominating committee.
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive $1,000 per month as a
director's fee. Non-employee directors are also reimbursed their out-of-pocket
expenses for attending Board and Committee meetings.
Messrs. Aroesty and Watson provide consulting services to the Company for
which they were paid $84,000 and $12,000, respectively, in 1995. Mr. Aroesty
consults with respect to manufacturing, international marketing, strategic
planning and customer relations, and Dr. Watson consults with respect to
technology, research and product development.
3
<PAGE> 6
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------- --- ----------------------------------------------
<S> <C> <C>
Sigi Ziering, Ph.D. 68 Chairman of the Board and Chief Executive
Officer
Michael Ziering 39 President and Chief Operating Officer
Said El Shami 53 Senior Vice President -- Research and
Development and Chief Scientific Officer
Marilyn Ziering 64 Vice President -- Marketing Communications
and Secretary
Julian R. Bockserman 59 Vice President -- Finance
Kathy J. Maugh 51 Vice President -- Operations
John G. McLaughlin 47 Vice President -- Sales and Marketing
</TABLE>
For information concerning the business experience of Sigi Ziering, Michael
Ziering and Marilyn Ziering, see "Election of Directors."
Mr. El Shami joined the Company in 1978 as Assistant Director of Research,
was elected Director of Research in 1980 and was elected Vice
President -- Research in 1982. Mr. El Shami was elected Senior Vice
President -- Research and Development in 1992 and Chief Scientific Officer in
December 1995.
Mr. Bockserman, a Certified Public Accountant, joined the Company in 1982
as Controller, was elected Chief Financial Officer in 1982 and was elected Vice
President -- Finance in 1983.
Ms. Maugh joined the Company in 1986 as a Product Manager. In 1988 she
became a Technical Manager for the Company's product support group. She was
promoted to Director of Product Support in 1990 and elected Vice
President -- Operations in May 1992.
Mr. McLaughlin joined the Company in February 1993 as Vice
President -- Sales and Marketing. From May 1992 until joining the Company, Mr.
McLaughlin served as an independent marketing consultant to diagnostic
companies, and he provided consulting services to the Company beginning in
December 1992. Mr. McLaughlin was President of Biometric Imaging, a
biotechnology start-up company developing high-sensitivity instrument systems,
from September 1991 until May 1992. He served as Vice President, Marketing with
Unipath Company, a manufacturer of hematology instruments and immunodiagnostics,
from March 1989 through September 1991.
Officers of the Company serve at the discretion of the Board of Directors.
4
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides compensation information with respect to the
Chief Executive Officer and the four other most highly paid persons who were
executive officers at December 31, 1995 (the "Named Officers") for services in
all capacities during fiscal years 1995, 1994 and 1993.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ---------------
COMPENSATION SECURITIES
------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(4)
- ----------------------------- ---- ------------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Sigi Ziering 1995 370,000 0 0 14,000
Chief Executive Officer 1994 340,000 0 0 14,000
1993 340,000 0 0 12,000
Michael Ziering 1995 175,000 0 20,000 18,000
President and Chief 1994 138,000 0 30,000 18,000
Operating Officer 1993 115,000 0 0 12,000
Said El Shami 1995 228,000 0 0 18,000
Senior Vice President -- 1994 210,000 0 0 20,000
Research and Development 1993 200,000 0 32,000(3) 20,000
Julian R. Bockserman 1995 152,000 0 0 18,000
Vice President -- Finance 1994 142,000 0 0 18,000
1993 132,000 0 16,000(3) 13,000
John G. McLaughlin 1995 150,000 24,000(2) 0 18,000
Vice President -- 1994 140,000 39,000(2) 0 18,000
Sales and Marketing 1993 125,000(1) 0 93,800(3) 14,000
</TABLE>
- ---------------
(1) Includes $14,000 for consulting services rendered prior to Mr. McLaughlin's
employment by the Company in February 1993.
(2) Represents amounts earned in accordance with a formula related to annual
domestic sales performance.
(3) 50,000 stock options were granted to Mr. McLaughlin as an incentive for his
joining the Company in February 1993. These stock options were cancelled in
November 1993 in exchange for 43,800 lower-priced stock options. All stock
options granted to other Named Officers in 1993 were also granted in
connection with the cancellation of a greater number of outstanding stock
options.
(4) The amounts in this column represent Company contributions to the Pension
and/or Profit Sharing Plans in which all of the Company's employees are
eligible to participate, except that the 1993 amount for Mr. McLaughlin
represents moving costs and temporary living and transportation expenses in
connection with his relocation to Los Angeles.
5
<PAGE> 8
RETIREMENT AGREEMENT
Upon his retirement, the Company has agreed to pay Dr. Ziering, or his
surviving relatives, $3,000 per month for 120 months. Dr. Ziering has agreed not
to compete with the Company while he receives such monthly payments, and he has
also agreed to provide consulting services after his retirement. Discharge for
cause will void the retirement payments to Dr. Ziering.
1995 STOCK OPTION GRANTS
Shown below is information concerning stock option grants under the
Company's 1990 Stock Option Plan during fiscal year 1995 to the Named Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF RATES OF STOCK PRICE
SECURITIES PERCENT OF APPRECIATION FOR
UNDERLYING TOTAL OPTIONS EXERCISE OPTION TERM(2)
OPTIONS GRANTED TO PRICE EXPIRATION ---------------------
NAME GRANTED(#)(1) EMPLOYEES IN 1995 ($/SH) DATE 5%($) 10%($)
- ----------------------- ------------- ----------------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sigi Ziering 0 0 0 0 0 0
Michael Ziering 20,000 13% 36.125 12/5/05 454,300 1,151,500
Said El Shami 0 0 0 0 0 0
Julian R. Bockserman 0 0 0 0 0 0
John G. McLaughlin 0 0 0 0 0 0
</TABLE>
- ---------------
(1) The stock options are exercisable beginning one year after the grant date at
the rate of 10% per year and are subject to termination before the
expiration date in the case of termination of employment, death and certain
corporate events. Under the terms of the 1990 Stock Option Plan, the Stock
Option Committee retains the discretion to modify the terms of outstanding
stock options, including the exercise price and vesting schedule.
(2) These amounts are net of the exercise price and are based on certain assumed
rates of annual appreciation of the Common Stock during the term of the
option. Actual gains, if any, are dependent on the future performance of
the Common Stock and overall market conditions. The amounts reflected in
this table may not necessarily be achieved, or may be exceeded.
6
<PAGE> 9
1995 OPTION EXERCISES AND YEAR-END OPTION VALUES
Shown below is information regarding options exercised during 1995 and
holdings of unexercised stock options at December 31, 1995 by the Named
Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT DECEMBER IN-THE-MONEY OPTIONS AT
SHARES 31, 1995(#) DECEMBER 31, 1995($)(1)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sigi Ziering 500,000 15,206,250 0 0 0 0
Michael Ziering 4,800 133,800 19,200 52,000 426,450 541,500
Said El Shami 14,000 406,000 60,000 26,000 1,315,750 509,250
Julian R. Bockserman 0 0 23,000 13,000 495,125 254,625
John G. McLaughlin 0 0 8,760 35,040 156,585 626,340
</TABLE>
- ---------------
(1) Represents the difference between the aggregate market value on December 31,
1995 ($37.875 per share) and the aggregate exercise price.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
ON EXECUTIVE COMPENSATION
The Company's executive compensation policies are administered by the
Compensation Committee and the Stock Option Committee. The Compensation
Committee reviews and determines the compensation of the Company's officers and
evaluates management performance, management succession and related matters. The
Compensation Committee's decisions are subject to ratification by the Board of
Directors. The Stock Option Committee administers the Company's stock option
plans and is responsible for decisions concerning stock option recipients and
the timing, pricing and amount of stock options which are granted.
The compensation policy of the Company is to provide competitive levels of
compensation that are influenced by corporate performance, that reward
individual achievements, and that enable the Company to attract and retain
qualified executives. Compensation consists primarily of annual salary and
long-term incentive compensation in the form of stock options. Bonuses are
usually awarded only in extraordinary circumstances when, in the Compensation
Committee's subjective judgment, the Company or a particular executive had
exceptional performance during the prior year. Consistent with industry
practices with respect to sales and marketing personnel, the Company has an
arrangement with the Vice President-Sales and Marketing whereby such officer is
paid an annual bonus based on domestic sales performance. The principal
responsibility of the Compensation Committee is to determine the salary and
bonus components of executive compensation, while the Stock Option Committee
determines the stock option component.
For 1995, the Compensation Committee recommended an 8.8% increase in the
salary of Dr. Sigi Ziering, Chief Executive Officer, from $340,000 to $370,000.
This increase was based on the Company's overall financial performance in 1994
and the Committee's subjective assessment of Dr. Ziering's performance over a
three year period during which he successfully guided the Company through a
transition from a reagent manufacturer to a fully integrated systems company.
During this transition period, Dr. Ziering, at his request, did not receive any
salary increases.
7
<PAGE> 10
The 1995 salaries of the Company's other executive officers were
principally based on Dr. Ziering's recommendations, which reflected his
subjective assessment of the nature of each officer's position, contribution to
the Company's overall performance, experience and tenure with the Company. The
Committee evaluated such recommendations in light of the Company's overall
financial performance in 1994, but the Company does not establish targets or
financial performance standards. The Committee also compared the recommended
salary increases with Company-wide employee compensation increases for 1995 and
compensation surveys of companies in the health industry (including companies in
the S&P Midcap Medical Products Index) with which the Company competes for
executive talent. The President's salary was not increased for 1995 since he had
received an increase effective October 1, 1994 upon his promotion to that
office.
The objective of the Stock Option Committee in granting stock options is to
provide long-term incentives through the opportunity to participate in the
long-term increase in the market value of the Common Stock. Stock options
typically have a term of ten years and become exercisable after one year in
cumulative installments which have ranged from 10% to 25% for executive
officers. Stock options are not awarded annually, but are awarded in recognition
of outstanding performance, based on the Committee's and management's subjective
evaluations, and as an incentive to attract new executives. When the Stock
Option Committee decides to grant options, it also takes into account the amount
and value of outstanding options held by the executive.
During 1995, Dr. Ziering exercised stock options for 500,000 shares with a
net value realized (excess of market value on the date of exercise over the
exercise price) of $15,206,250. The options had been granted in November 1985 at
an exercise price of $7.50 per share, the market value on the date of grant. The
net value realized by Dr. Ziering reflects the long term appreciation in the
Company's stock price which, the Stock Option and Compensation Committees
believe, was due, in large part, to Dr. Ziering's stewardship of the Company
during such period.
Section 162 of the Internal Revenue Code eliminates the deductibility of
most compensation over $1 million per year paid to certain top executives of
publicly-held corporations unless certain criteria are satisfied. The
compensation realized by Dr. Ziering from the exercise of stock options in 1995
was exempt from the deductibility limit because the options were granted prior
to the enactment of Section 162. The current level of executive compensation,
including the value of exercisable options which are not exempt from the
deductibility limits, does not exceed the deductibility limit. The Compensation
Committee will, however, continue to evaluate whether compliance with the
deductibility requirements of Section 162 is appropriate.
The Company also maintains broad-based employee benefit plans in which
executive officers participate on the same terms as other employees. For fiscal
year 1995, the Company contributed 10% of participants' compensation to its
Pension Plan and 2% of participants' compensation to the Profit Sharing Plan.
Certain executive officers received reduced amounts due to limitations imposed
by the Internal Revenue Code.
The Compensation Committee The Stock Option Committee
Louis Colen Maxwell H. Salter
Maxwell H. Salter Marilyn Zierling
8
<PAGE> 11
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During 1995, the members of the Compensation Committee were Joseph Kleiman
and Maxwell H. Salter, both of whom were non-employee directors of the Company,
and Louis Colen, a shareholder of the Company. Mr. Kleiman, who passed away in
January 1996, received $24,000 for consulting services rendered to the Company
during 1995. The members of the Stock Option Committee are Maxwell H. Salter, a
non-employee director of the Company, and Marilyn Ziering, a director and Vice
President -- Marketing Communications for the Company. Mrs. Ziering and Mr.
Salter are "disinterested" persons for purposes of Rule 16b-3 under the
Securities Exchange Act of 1934.
Since 1981, the Company has leased its principal offices from a partnership
comprised of Dr. Sigi Ziering, Marilyn Ziering and Michael Ziering, officers and
directors of the Company, and other children of Sigi and Marilyn Ziering who are
shareholders of the Company. In February 1991, the Company executed a new lease
with the Ziering partnership for a term expiring on December 31, 1997, with a
five-year renewal option. The monthly rent is subject to periodic cost of living
adjustments. The terms of the lease were approved by a committee consisting of
disinterested directors of the Company and a shareholder of the Company. During
1995, the Company paid $849,000 in rent to the Ziering partnership.
9
<PAGE> 12
DPC STOCK PRICE PERFORMANCE
Set forth below is a line graph which compares the cumulative total
shareholder return, assuming dividend reinvestment, on the Company's Common
Stock for the five years ended December 31, 1995, with the S&P Composite-500
Stock Index and the S&P Midcap Medical Products Index.
<TABLE>
<CAPTION>
S&P Midcap
Diagnostic Medical
Measurement Period Products S&P 500 Products
(Fiscal Year Covered) Corporation Index Index
<S> <C> <C> <C>
1990 100 100 100
1991 110.60 130.47 216.97
1992 90.98 140.41 209.51
1993 57.80 154.56 168.92
1994 83.05 156.60 190.34
1995 121.38 215.45 270.10
</TABLE>
The amounts in the foregoing table assume that the value of an investment
in Diagnostic Products Corporation and each index was $100 on December 31, 1990.
The annual amounts are based on monthly compounding with dividends reinvested.
10
<PAGE> 13
OWNERSHIP OF COMMON STOCK
The following table sets forth information as of March 15, 1996, with
respect to Common Stock of the Company owned by each person who is known by the
Company to own beneficially 5% or more of the outstanding Common Stock, by each
director and Named Officer of the Company and by all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NUMBER PERCENTAGE
NAME* OF SHARES OWNERSHIP
------- --------- ----------
<S> <C> <C>
Sigi and Marilyn Ziering 2,486,806(1)(2) 18.4%
5700 West 96th Street
Los Angeles, California 90045
Louis Colen 908,000 6.7%
2727 Krim Drive
Los Angeles, California 90064
Maxwell H. Salter 345,600 2.6%
Sidney A. Aroesty 107,400(2) **
Dr. James D. Watson 36,166(3) **
Michael Ziering 260,163(4) 1.9%
Frederick Frank 0 --
Julian R. Bockserman 72,000(2)(5) **
Said El Shami 60,000(6) **
John G. McLaughlin 8,760(7) **
All directors and executive officers
as a group (11 persons) 3,321,235(8) 24.3%
</TABLE>
- ------------
* Includes addresses of 5% or more shareholders.
** Less than 1%.
(1) Dr. and Mrs. Ziering, husband and wife, hold their shares in a revocable
family trust of which they are co-trustees; excludes 19,150 shares owned by
Dr. Ziering's mother who resides with Dr. and Mrs. Ziering and as to which
beneficial ownership is disclaimed.
(2) Includes 30,000 shares owned by the Company's Profit Sharing Plan over
which Sigi Ziering, Sidney A. Aroesty and Julian R. Bockserman, as
trustees, have shared voting and investment power. Beneficial ownership is
disclaimed except as to each person's proportionate interest in such plan.
These shares are counted once in the total number of shares held by all
directors and executive officers as a group.
(3) Includes 19,766 shares subject to options which are exercisable within 60
days.
(4) Includes 19,200 shares subject to options which are exercisable within 60
days, and 1,000 shares held by Mr. Ziering's wife, as to which beneficial
ownership is disclaimed.
(5) Includes 23,000 shares subject to options which are exercisable within 60
days.
(6) Includes 60,000 shares subject to options which are exercisable within 60
days.
(7) Includes 8,760 shares subject to options which are exercisable within 60
days.
(8) See Notes above. Also includes 4,340 shares subject to options which are
exercisable within 60 days held by an executive officer not named in the
foregoing table.
11
<PAGE> 14
THE COMPANY'S AUDITORS
It is the current intention of the Company's Board of Directors to select
and retain Deloitte & Touche LLP as independent auditors of the Company for the
current year. Deloitte & Touche LLP conducted the audit for the year ended
December 31, 1995. A representative of Deloitte & Touche LLP will be present at
the Meeting and will have an opportunity to make statements if he so desires and
will be available to respond to appropriate questions.
FORM 10-K
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 as filed with the Securities and Exchange Commission
accompanies this Proxy Statement.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
In order for a shareholder proposal to be included in the Board of
Directors' Proxy Statement for the Annual Meeting of Shareholders to be held in
1997, such proposal must be received no later than the close of business on
November 30, 1996, at 5700 West 96th Street, Los Angeles, California 90045,
Attention: Corporate Secretary.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matter which will be brought before the Annual Meeting.
However, if any other matter properly comes before the Meeting, or any
adjournment thereof, the person or persons voting the proxies have authority to
vote on such matters in accordance with their judgment and discretion.
By Order of the Board of Directors
MARILYN ZIERING
Secretary
Los Angeles, California
March 28, 1996
12
<PAGE> 15
PROXY
DIAGNOSTIC PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 8, 1996
The undersigned hereby appoints DR. SIGI ZIERING and MICHAEL ZIERING, and each
of them, the attorneys and proxies of the undersigned with full power of
substitution to appear and to vote all of the common shares of DIAGNOSTIC
PRODUCTS CORPORATION held of record by the undersigned on March 15, 1996, at
the Annual Meeting of Shareholders of said Company to be held on May 8, 1996,
or any adjournment thereof, as designated herein.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
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____
Please mark
your vote as X
indicated in ____
this example
FOR all WITHHOLD
nominees listed AUTHORITY
below (except to vote for all
as marked to the nominees
contrary below) listed below
1. ELECTION OF DIRECTORS ____ ____
(Instruction: To withhold authority
to vote for any individual nominee, ____ ____
write that nominee's name on the
space provided below.)
Nominees: Dr. Sigi Ziering, Sidney A. Aroesty,
Marilyn Ziering, Maxwell H. Salter,
Dr. James D. Watson, Michael Ziering,
Frederick Frank
_____________________________________________
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DIAGNOSTIC
PRODUCTS CORPORATION. IF NO VOTE IS INDICATED, THIS PROXY WILL BE VOTED WITH
AUTHORITY FOR THE ELECTION OF DIRECTORS.
YOUR ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THIS 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.
Signature(s)__________________________________________ Date ___________________
IMPORTANT: Please sign as name appears herein. When signing as an attorney,
executor, administrator, trustee or guardian, give full title as such. If the
signatory is a corporation, sign the full corporate name by duly authorized
officer, or if a partnership, sign in partnership name by authorized person.
Joint owners should each sign.
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