<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
[DIAGNOSTIC PRODUCTS CORPORATION LOGO]
5700 WEST 96TH STREET
LOS ANGELES, CA 90045
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 1999
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 25, 1999, 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 31, 1999, 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
April 5, 1999
<PAGE> 3
[DIAGNOSTIC PRODUCTS CORPORATION LOGO]
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 25, 1999
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 25, 1999, 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 April 8, 1999.
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 31, 1999, 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, 13,676,129 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. 71 Chairman of the Board, 1973
Chief Executive Officer
Sidney A. Aroesty 52 Senior Vice President, Operations 1981
Maxwell H. Salter 79 Chairman of the Board and Chief 1982
Executive Officer, Benos
James D. Watson, Ph.D. 70 President, Cold Spring Harbor Laboratory 1987
Michael Ziering 42 President and Chief Operating Officer 1994
Frederick Frank 66 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., and Physician Computer
Network. 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.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held four meetings in 1998. The members of the
Executive Committee are Sigi Ziering, Michael 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 1998. 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 1998. The
Stock Option Committee, comprised of Maxwell H. Salter and Sigi Ziering, is
responsible for administering the Company's Stock Option Plans and approving
option grants, except that the Compensation Committee has authority to take
action with respect to stock option grants to Sigi Ziering. The Board of
Directors has not designated a nominating committee.
COMPENSATION OF DIRECTORS
In 1998, non-employee directors of the Company received director's fees of
$24,000 in the case of each of Frederick Frank and James D. Watson and $12,000
in the case of Maxwell H. Salter. Non-employee directors were also reimbursed
their out-of-pocket expenses for attending Board and Committee meetings. In
1998, Messrs. Frank and Watson were each granted 10,000 options with an exercise
price of $26.75 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.
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. 71 Chairman of the Board and Chief Executive
Officer
Michael Ziering 42 President and Chief Operating Officer
Sidney A. Aroesty 52 Senior Vice President, Operations
Said El Shami 56 Senior Vice President, Research and
Development and Chief Scientific Officer
Marilyn Ziering 67 Vice President, Marketing Communications
and Secretary
Julian R. Bockserman 62 Vice President, Finance
Kathy J. Maugh 54 Vice President, Operations
Nico Arnold 47 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, 1998 (the "Named Officers") for services in
all capacities during fiscal years 1998, 1997 and 1996.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------------------------- ---------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) COMPENSATION(1) OPTIONS(#) COMPENSATION($)(2)
--------------------------- ---- ------------- --------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Sigi Ziering 1998 385,000 -- 0 16,000
Chief Executive Officer 1997 370,000 -- 0 16,000
1996 370,000 -- 0 11,327
Michael Ziering 1998 220,000 -- 20,000 16,000
President and Chief 1997 210,000 -- 20,000 16,000
Operating Officer 1996 200,000 -- 0 15,000
Sidney A. Aroesty 1998 200,000 26,800 10,000 16,000
Senior Vice President, 1997 131,000 -- 15,000 0
Operations(3)
Said El Shami 1998 266,000 -- 20,000 16,000
Senior Vice President, 1997 256,000 -- 0 16,000
Research and Development 1996 244,000 -- 0 15,000
Julian R. Bockserman 1998 180,000 -- 0 16,000
Vice President, Finance 1997 171,000 -- 10,000 16,000
1996 163,000 -- 0 15,000
</TABLE>
- ---------------
(1) The amount for Mr. Aroesty represents $19,800 for apartment rental expenses
and $7,000 for the approximate value of automobile-related compensation.
While the other Named Officers enjoy certain perquisites, the amounts did
not exceed 10% of any such person's salary in 1998 and, accordingly, such
amounts have been omitted from the table as permitted by SEC rules.
(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.
(3) Mr. Aroesty was elected an executive officer in September 1997. His 1997
salary amount includes consulting payments prior to September 1997.
RETIREMENT AGREEMENT
Upon his retirement, the Company has agreed to pay Dr. Ziering, or his
surviving relatives, $3,000 per month for 120 months. Dr. Ziering has agreed not
to compete with the Company while he receives such monthly payments, and he has
also agreed to provide consulting services after his retirement. Discharge for
cause will void the retirement payments to Dr. Ziering.
5
<PAGE> 8
FISCAL YEAR 1998 OPTION GRANTS
Shown below is information regarding options granted to the Named Officers
in 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES PRICE PER EXPIRATION ---------------------
NAME GRANTED(#)(1) IN FISCAL YEAR SHARE($)(2) DATE 5%($) 10%($)
- ------------------------- ------------- -------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sigi Ziering 0 -- -- -- -- --
Michael Ziering 20,000 9.0% 26.75 12/07/08 336,460 852,650
Sidney A. Aroesty 10,000 4.5 26.75 12/07/08 168,230 426,325
Said El Shami 20,000 9.0 28.94 05/05/08 364,004 922.458
Julian R. Bockserman 0 -- -- -- -- --
</TABLE>
- ---------------
(1) The options vest at the rate of 10% per year beginning one year after the
date of grant. The options are subject to termination before the expiration
date 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.
(2) Market value on the date of grant.
(3) These values were determined in accordance with rules suggested by the SEC
and are not intended to forecast the prices at which the Company's Common
Stock could trade in the future. The actual realized value will depend on
the amount by which the sales price of the shares exceeds the exercise
price.
1998 OPTION EXERCISES AND YEAR-END OPTION VALUES
Shown below is information regarding options exercised during 1998 and
holdings of unexercised stock options at December 31, 1998 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, 1998(#) DECEMBER 31, 1998($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sigi Ziering 0 0 0 0 0 0
Michael Ziering 10,000 70,600 20,000 70,000 98,250 263,000
Sidney A. Aroesty 0 0 4,999 20,001 13,540 70,835
Said El Shami 10,000 70,600 32,000 20,000 356,000 43,760
Julian R. Bockserman 10,000 95,940 18,000 8,000 181,750 15,000
</TABLE>
- ---------------
(1) Represents the difference between the aggregate market value on December 31,
1998 ($31.125 per share) and the aggregate exercise price of options that
had an exercise price of less than $31.125.
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, except that
the Compensation Committee has the authority to take action with respect to
option grants to Sigi Ziering, Chief Executive Officer.
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. 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 increased Dr. Ziering's salary for 1998 from
$370,000 to $385,000 based on the Company's financial performance in 1997 and
his contribution to such performance. At Dr. Ziering's request, the Compensation
Committee had not increased his salary for the years 1995 through 1997.
The 1998 salaries of the Company's other executive officers were
principally based on the Chief Executive Officer's recommendations, which
reflected his 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 1997. 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 1998.
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 and the amount of Common Stock held by the
executive. Based on their performance and the Chief Executive Officer's
recommendations, the Committee awarded stock options to four executive officers
in 1998.
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
7
<PAGE> 10
will, however, 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 1998, 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
Sigi Ziering
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION AND RELATED TRANSACTIONS
During 1998, 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. Frederick Frank, a director of
the Company, is Vice Chairman of Lehman Brothers, Inc., an investment banking
firm which has performed services for the Company in the past and which may,
from time to time, provide services to the Company in the future. See also
"Election of Directors -- Compensation of Directors."
During 1998, the members of the Stock Option Committee were Maxwell H.
Salter, a non-employee director of the Company, and Sigi Ziering, Chief
Executive Officer of the Company. Dr. Ziering is the husband of Marilyn Ziering
and the father of Michael Ziering, both of whom are executive officers of the
Company. As Vice President, Marketing Communications, Marilyn Ziering receives
an annual salary of $125,000. Ira Ziering, son of Dr. and Mrs. Ziering and
brother of Michael Ziering, is employed as President of the Company's wholly
owned distributor in France, at an annual salary of approximately $120,000.
Since 1981, the Company has leased its principal offices from a partnership
comprised of Dr. Sigi Ziering, Marilyn Ziering, Michael Ziering, Ira Ziering,
and other children of Dr. and Mrs. Ziering who are shareholders of the Company.
During 1998, the Company paid $966,000 in rent to the Ziering partnership. The
lease expires on December 31, 2002.
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, 1998, with the S&P Composite-500
Stock Index, the S&P Midcap Medical Products Index and the S&P Small Cap Medical
Products Index.
<TABLE>
<CAPTION>
HEALTH CARE (MEDICAL
DIAGNOSTICI PRODUCTS PRODUCTS & SUPPLY)- HEALTH CARE (MEDICAL
CORPORATION MID PRODS & SUPP)-SMALL S&P 500 INDEX
-------------------- -------------------- -------------------- -------------
<S> <C> <C> <C> <C>
'1993' 100.00 100.00 100.00 100.00
'1994' 143.67 128.87 94.93 101.32
'1995' 209.99 178.71 139.87 139.40
'1996' 145.46 189.13 142.70 171.40
'1997' 158.60 235.73 166.84 228.59
'1998' 181.00 333.46 178.43 293.91
</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, 1993.
The annual amounts are based on monthly compounding with dividends reinvested.
The Company was advised by Standard & Poor's that it was moved from the
Midcap to the Small Cap Medical Products Index effective March 26, 1998.
9
<PAGE> 12
OWNERSHIP OF COMMON STOCK
The following table sets forth information as of February 26, 1999, 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 2,462,456(1)(2) 18.0%
5700 West 96th Street
Los Angeles, California 90045
Maxwell H. Salter 340,233(3) 2.5%
Sidney A. Aroesty 99,999(2)(4) **
Dr. James D. Watson 49,383(5) **
Michael Ziering 281,028(6) 2.1%
Frederick Frank 33,333(7) **
Julian R. Bockserman 67,000(2)(8) **
Said El Shami 44,000(9) **
All directors and executive officers
as a group (11 persons) 3,331,172(10) 24.1%
Louis Colen 901,400 6.6%
2727 Krim Drive
Los Angeles, California 90064
The Kaufmann Fund, Inc. 768,400(11) 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 18,200 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 3,333 shares subject to options which are exercisable within 60
days.
(4) Includes 9,999 shares subject to options which are exercisable within 60
days.
(5) Includes 32,983 shares subject to options which are exercisable within 60
days.
(6) Includes 20,000 shares subject to options which are exercisable within 60
days, and 325 shares held by Mr. Ziering's wife, as to which beneficial
ownership is disclaimed.
(7) Includes 33,333 shares subject to options which are exercisable within 60
days.
(8) Includes 18,000 shares subject to options which are exercisable within 60
days.
(9) Includes 32,000 shares subject to options which are exercisable within 60
days.
(10) See Notes above. Also includes 13,740 shares subject to options which are
exercisable within 60 days held by executive officers not named in the
foregoing table.
(11) Holdings at December 31, 1997 as reported in a Schedule 13G filed with the
Securities and Exchange Commission.
10
<PAGE> 13
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, 1998. 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, 1998 as filed with the Securities and Exchange Commission
accompanies this Proxy Statement.
SHAREHOLDER PROPOSALS FOR 2000 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 2000, such proposal must be received no later than the close of
business on December 10, 1999, 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.
If a shareholder submits a proposal at the Company's Annual Meeting of
Shareholders to be held in 2000 other than in accordance with Rule 14a-8 and
does not provide notice of such proposal to the Company by February 24, 2000,
the holders of any proxy solicited by the Company's Board of Directors for use
at such meeting will have discretionary authority to vote with respect to any
proposal as to which timely notice is not given.
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
April 5, 1999
11
<PAGE> 14
PROXY
DIAGNOSTIC PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS MAY 25, 1999
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 31, 1999, at
the Annual Meeting of Shareholders of said Company to be held on May 25, 1999,
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 VOTES AS
INDICATED IN
THIS 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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