<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 section 240.14a-11(c) or section 240.14a-12
</TABLE>
DIAGNOSTIC PRODUCTS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $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
[DPC LOGO]
DIAGNOSTIC PRODUCTS CORPORATION
5700 WEST 96TH STREET
LOS ANGELES, CA 90045
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1998
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 6, 1998, 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, 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 13, 1998, 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 24, 1998
<PAGE> 3
[DPC LOGO]
DIAGNOSTIC PRODUCTS CORPORATION
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1998
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 6, 1998, 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 27, 1998.
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 13, 1998, 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, 13,768,237 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 Board of Directors' 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 six 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 Board of Directors'
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 six 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. 70 Chairman of the Board, 1973
Chief Executive Officer
Sidney A. Aroesty 51 Senior Vice President, Operations 1981
Maxwell H. Salter 78 Chairman of the Board and Chief 1982
Executive Officer, Benos
James D. Watson, Ph.D. 69 President, Cold Spring Harbor Laboratory 1987
Michael Ziering 41 President and Chief Operating Officer 1994
Frederick Frank 65 Vice Chairman, Lehman Brothers Inc. 1996
</TABLE>
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 1994. He served as a consultant to the
Company from 1994 until his election as Senior Vice President, Operations in
September 1997.
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.
Dr. Watson was the Director of Cold Spring Harbor Laboratory of New York, a
genetics and biotechnology research center, from 1968 until he became President
in 1994. Dr. Watson received the Nobel prize in 1962 for his part in the
discovery of the double helix structure of the DNA molecule. Dr. Watson is also
a director of Pall Corporation and SIBIA Neurosciences, Inc.
Mr. Michael Ziering, an attorney, joined the Company in 1986 as legal
counsel. He served as Vice President-Administration from 1988 until his election
as President and Chief Operating Officer in September 1994.
Mr. Frank is Vice Chairman of Lehman Brothers Inc., an investment banking
firm which he joined as a partner in 1969. He is a Chartered Financial Analyst,
a member of The New York Society of Security
2
<PAGE> 5
Analysts and a past president of the Chemical Processing Industry Analysts. Mr.
Frank serves as a director of Pharmaceutical Product Development Corporation,
Automated Call Processing, Digital Arts & Sciences, 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.
Sigi Ziering and Marilyn Ziering, an executive officer, are husband and
wife, and Michael Ziering is their son. See "Ownership of Common Stock" for
information concerning the beneficial ownership of the Company's Common Stock by
nominees for director.
The Company's Bylaws authorize the Board of Directors to fix the number of
directors between a range of five to seven and to fill any vacancy occurring as
a result of an increase in the size of the Board. Currently, the number of
directors is fixed at six. After the Annual Meeting of Shareholders, the Board
of Directors intends to recruit an individual who would be considered
"independent" to serve as the seventh member of the Board of Directors.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held four meetings in 1997. During 1997 the members
of the Executive Committee were 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, 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
1997. The Compensation Committee, 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 1997. The
Stock Option Committee, comprised of Maxwell H. Salter and Marilyn Ziering
during 1997, is responsible for administering the Company's Stock Option Plans
and approving option grants. The Board of Directors has not designated a
nominating committee.
COMPENSATION OF DIRECTORS
In 1997, non-employee directors of the Company received $1,000 per month as
a director's fee. Non-employee directors were also reimbursed their
out-of-pocket expenses for attending Board and Committee meetings. In August
1997, Frederick Frank, Maxwell H. Salter and James D. Watson were each granted
10,000 options with an exercise price of $29.25 per share (the fair market value
on the date of grant) and a term of 10 years, which vest at the rate of 33 1/3%
per year beginning one year after the date of grant.
During 1997, Messrs. Aroesty, Frank and Watson provided consulting services
to the Company for which they were paid $56,000 (for eight months), $12,000, and
$12,000, respectively. Mr. Aroesty consulted with respect to manufacturing,
international marketing, strategic planning and customer relations. Mr. Frank
consulted in the areas of technology, product development and corporate matters.
Dr. Watson consulted with respect to technology, research and product
development. These consulting arrangements were terminated at the end of 1997.
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. 70 Chairman of the Board and Chief Executive
Officer
Michael Ziering 41 President and Chief Operating Officer
Sidney A. Aroesty 51 Senior Vice President, Operations
Said El Shami 55 Senior Vice President, Research and
Development and Chief Scientific Officer
Marilyn Ziering 66 Vice President, Marketing Communications
and Secretary
Julian R. Bockserman 61 Vice President, Finance
Kathy J. Maugh 53 Vice President, Operations
Nico Arnold 46 Vice President, Sales and Marketing
</TABLE>
For information concerning the business experience of Sigi Ziering, Michael
Ziering and Sidney A. Aroesty, 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 1995.
Mrs. Ziering joined the Company in 1973 as Secretary and served as Vice
President, Marketing from 1979 until 1993 when she was elected Vice President,
Marketing Communications. She served as a director of the Company from 1974
until 1998. Mrs. Ziering holds a masters degree from Syracuse University.
Mr. Bockserman, a Certified Public Accountant, joined the Company in 1982
as Controller and was elected Chief Financial Officer in 1982 and 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 1992.
Mr. Arnold was elected Vice President, Sales and Marketing, effective
February 1, 1998. Mr. Arnold joined the Company's Dutch distributor in 1982 as a
sales manager and he was appointed General Manager of the Company's affiliated
distributors in The Netherlands and Belgium in 1989. He previously managed the
Chemistry Laboratory for RIA testing at the Leyenburg Hospital in The
Netherlands. Mr. Arnold has a degree in biochemistry from the Van't Hoff
Institute, Rotterdam, The Netherlands.
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, 1997 (the "Named Officers") for services in
all capacities during fiscal years 1997, 1996 and 1995.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ---------------
COMPENSATION SECURITIES
------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(2)
--------------------------- ---- ------------- --------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Sigi Ziering 1997 370,000 0 0 16,000
Chief Executive Officer 1996 370,000 0 0 11,327
1995 370,000 0 0 14,000
Michael Ziering 1997 210,000 0 20,000 16,000
President and Chief 1996 200,000 0 0 15,000
Operating Officer 1995 175,000 0 20,000 18,000
Said El Shami 1997 256,000 0 0 16,000
Senior Vice President, 1996 244,000 0 0 15,000
Research and Development 1995 228,000 0 0 18,000
Julian R. Bockserman 1997 171,000 0 10,000 16,000
Vice President, Finance 1996 163,000 0 0 15,000
1995 152,000 0 0 18,000
John G. McLaughlin 1997 166,000 16,000(1) 0 16,000
Vice President, 1996 160,000 7,500(1) 0 15,000
Sales and Marketing(1) 1995 150,000 24,000(1) 0 18,000
</TABLE>
- ---------------
(1) Mr. McLaughlin terminated his employment with the Company on January 23,
1998. Represents amounts earned in accordance with a formula related to
annual domestic sales performance.
(2) 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.
RETIREMENT AGREEMENT
Upon his retirement, the Company has agreed to pay Dr. Ziering, or his
surviving relatives, $3,000 per month for 120 months. Dr. Ziering has agreed not
to compete with the Company while he receives such monthly payments, and he has
also agreed to provide consulting services after his retirement. Discharge for
cause will void the retirement payments to Dr. Ziering.
5
<PAGE> 8
FISCAL YEAR 1997 OPTION GRANTS
Shown below is information regarding options granted to the Named Officers
in 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM
OPTIONS EMPLOYEES PER EXPIRATION ---------------------
NAME GRANTED(#) IN FISCAL YEAR SHARE($) DATE 5%($) 10%($)
- ------------------------------- ---------- -------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sigi Ziering 0 -- -- -- -- --
Michael Ziering 20,000 5.6% 29.25 8/26/07 367,903 932,339
Said El Shami 0 -- -- -- -- --
Julian R. Bockserman 10,000 2.8% 29.25 8/26/07 183,952 466,170
John G. McLaughlin 0 -- -- -- -- --
</TABLE>
Michael Ziering's options vest at the rate of 10% per year, and Julian
Bockserman's options vest at the rate of 20% per year, in each case beginning
one year after the date of grant. The options are subject to earlier termination
in the event of termination of employment, death and certain corporate events.
Under the terms of the Company's stock option plans, the Stock Option Committee
has the authority to modify the terms of outstanding options, including the
exercise price and vesting schedule. Non-qualified options granted under the
1997 Stock Option Plan may, if so provided in the option agreement, be
transferred pursuant to a domestic relations order or to members of the
optionee's immediate family, charitable institutions or certain related trusts
or other entities.
1997 OPTION EXERCISES AND YEAR-END OPTION VALUES
Shown below is information regarding options exercised during 1997 and
holdings of unexercised stock options at December 31, 1997 by the Named
Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1997(#) DECEMBER 31, 1997($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sigi Ziering 0 0 0 0 0 0
Michael Ziering 10,000 199,050 23,000 57,000 128,000 94,500
Said El Shami 6,000 119,070 52,000 0 423,000 0
Julian R. Bockserman 10,000 198,450 26,000 10,000 211,500 0
John G. McLaughlin 0 0 17,520 26,280 135,780 203,671
</TABLE>
- ---------------
(1) Represents the difference between the aggregate market value on December 31,
1997 ($27.75 per share) and the aggregate exercise price of options that had
an exercise price of less than $27.75.
6
<PAGE> 9
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 judgment, the Company or a particular executive had meritorious
performance during the prior year. Consistent with industry practices with
respect to sales and marketing personnel, the Company had an arrangement with
its former Vice President-Sales and Marketing whereby such officer was 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.
The Compensation Committee believed that the Company's financial
performance in 1996 and the Chief Executive Officer's contribution to such
performance would have justified an increase in his salary. But at Dr. Ziering's
request, the Compensation Committee did not increase his salary for 1997.
The 1997 salaries of the Company's other executive officers were
principally based on the Chief Executive Officer'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 1996, but the Company does not
establish targets or financial performance standards. The recommended salary
increases for executive officers were generally in line with Company-wide
employee compensation increases for 1997.
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 values of outstanding options held by the executive. Based on their
performance and the Chief Executive Officer's recommendations, the Committee
awarded stock options to three executive officers in 1997. In addition, the
Senior Vice President, Operations was granted stock options in connection with
his election to that office.
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 Company's
Stock Option Plans are not exempt from the deduction limits of Section 162. The
current level of executive compensation, including the current value of
exercisable options which are not exempt from the deductibility limits, does not
exceed the deductibility limit. The Compensation Committee will, however,
7
<PAGE> 10
continue to evaluate whether future compliance with the deductibility
requirements of Section 162 would be 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 1997, the Company contributed the required 10% of participants'
compensation to its Pension Plan, but made no contribution to the Profit Sharing
Plan. Certain executive officers, including the Chief Executive Officer,
received reduced amounts due to limitations imposed by the Internal Revenue
Code.
The Compensation Committee
Louis Colen
Maxwell H. Salter
Frederick Frank
The Stock Option Committee
Maxwell H. Salter
Marilyn Ziering
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During 1997, the members of the Compensation Committee were Frederick Frank
and Maxwell H. Salter, both of whom are non-employee directors of the Company,
and Louis Colen, a shareholder of the Company. During 1997, Mr. Frank provided
consulting services to the Company. See "Election of Directors -- Compensation
of Directors." See also "Certain Transactions." During 1997, the members of the
Stock Option Committee were Maxwell H. Salter, a non-employee director of the
Company, and Marilyn Ziering, Vice President, Marketing Communications of the
Company who was also a director of the Company during 1997.
Since 1981, the Company has leased its principal offices from a partnership
comprised of Dr. Sigi Ziering, Marilyn Ziering and Michael Ziering, officers
and/or directors of the Company, and other children of Sigi and Marilyn Ziering
who are shareholders of the Company. During 1997, the Company paid $879,000 in
rent to the Ziering partnership. In 1997, the Company exercised an option to
extend the term of the lease from December 31, 1997 to December 31, 2002. In
accordance with terms of the lease, the rental rate for the five year extension
period was to be the current market rate. Based on an independent valuation
obtained by the Company, the rental rate for the five year extension period was
fixed at $80,500 per month, without future adjustments, compared to a 1997
rental rate of $73,252 per month.
CERTAIN TRANSACTIONS
Frederick Frank, a director of the Company, is Vice Chairman of Lehman
Brothers, Inc., an investment banking firm which performed services for the
Company in 1997 and which may, from time to time, provide services to the
Company in the future.
See also "Compensation and Stock Option Committee Interlocks and Insider
Participation."
8
<PAGE> 11
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, 1997, with the S&P Composite-500
Stock Index and the S&P Midcap Medical Products Index.
<TABLE>
<CAPTION>
Health Care
Diagnostic (Medical
Measurement Period Products Prods & S&P 500
(Fiscal Year Covered) Corporation Supp)-Mid Index
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 65.53 80.63 110.08
1994 91.28 90.65 111.53
1995 133.41 128.92 153.45
1996 92.42 136.22 188.66
1997 100.76 169.78 251.63
</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, 1992.
The annual amounts are based on monthly compounding with dividends reinvested.
9
<PAGE> 12
OWNERSHIP OF COMMON STOCK
The following table sets forth information as of February 27, 1998, 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 current directors and
executive officers as a group.
<TABLE>
<CAPTION>
NUMBER PERCENTAGE
NAME* OF SHARES OWNERSHIP
----- --------- ----------
<S> <C> <C>
Sigi and Marilyn Ziering 2,465,856(1)(2) 17.9%
5700 West 96th Street
Los Angeles, California 90045
Maxwell H. Salter 336,900 2.4%
Sidney A. Aroesty 104,900(2) **
Dr. James D. Watson 46,050(3) **
Michael Ziering 275,728(4) 2.0%
Frederick Frank 20,000(5) **
Julian R. Bockserman 75,000(2)(6) **
Said El Shami 58,000(7) **
John G. McLaughlin 0 **
All directors and executive officers
as a group (11 persons) 3,331,504(8) 23.9%
Louis Colen 901,400 6.5%
2727 Krim Drive
Los Angeles, California 90064
The Kaufmann Fund, Inc. 768,400(9) 5.6%
140 E. 45th Street
New York, New York 10017
</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 18,500 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 29,650 shares subject to options which are exercisable within 60
days.
(4) Includes 23,000 shares subject to options which are exercisable within 60
days, and 2,025 shares held by Mr. Ziering's wife, as to which beneficial
ownership is disclaimed.
(5) Includes 20,000 shares subject to options which are exercisable within 60
days.
(6) Includes 26,000 shares subject to options which are exercisable within 60
days.
(7) Includes 52,000 shares subject to options which are exercisable within 60
days.
10
<PAGE> 13
(8) See Notes above. Also includes 9,070 shares subject to options which are
exercisable within 60 days held by executive officers not named in the
foregoing table.
(9) Holdings at December 31, 1997 as reported in a Schedule 13G filed with the
Securities and Exchange Commission.
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, 1997. 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, 1997 as filed with the Securities and Exchange Commission
accompanies this Proxy Statement.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
In order for a shareholder proposal to be included in the Board of
Directors' Proxy Statement and proxy for the Annual Meeting of Shareholders to
be held in 1999, such proposal must be received no later than the close of
business on November 30, 1998, at 5700 West 96th Street, Los Angeles, California
90045, Attention: Corporate Secretary, and such proposal must otherwise comply
with Rule 14a-8 under the Securities Exchange Act of 1934, as amended.
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 24, 1998
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PROXY
DIAGNOSTIC PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS MAY 6, 1998
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 13, 1998, at
the Annual Meeting of Shareholders of said Company to be held on May 6, 1998,
or any adjournment thereof, as designated herein.
(CONTINUED AND TO BE MARKED, DATED AND SIGNED ON THE OTHER SIDE)
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PLEASE MARK
YOUR VOTE AS
INDICATED IN
THE EXAMPLE. [X]
FOR ALL WITHHOLD
NOMINEES LISTED AUTHORITY
BELOW (EXCEPT TO VOTE FOR ALL
AS MARKED TO THE NOMINEES
1. ELECTION OF DIRECTORS CONTRARY BELOW) LISTED BELOW
<S> <C> <C> <C>
Nominees: Dr. Sigi Ziering, Sidney A. Aroesty, [ ] [ ] 2. IN THEIR DISCRETION, THE PROXIES ARE
Maxwell H. Salter, Dr. James D. Watson, AUTHORIZED TO VOTE ON SUCH OTHER
Michael Ziering, Frederick Frank MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT
To withhold authority to vote for any individual nominee, THEREOF.
write that nominee's name on the space provided below.
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 THE
DIRECTORS NAMED ABOVE.
YOU ARE URGED TO DATE, SIGN AND PROMPTLY
RETURN THIS PROXY IN THE ENVELOPE
PROVIDED. IT IS IMPORTANT FOR YOU TO BE
REPRESENTED AT THIS 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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