<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)
- --------------------------------------------------------------------------------
(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 9, 2000
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 9, 2000, 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 17, 2000, 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 29, 2000
<PAGE> 3
[DIAGNOSTIC PRODUCTS CORPORATION LOGO]
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 9, 2000
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 9, 2000, 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 29, 2000.
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 17, 2000, 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, 13,688,754 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. 72 Chairman of the Board 1973
Sidney A. Aroesty 53 Senior Vice President and Chief Operating 1981
Officer
Maxwell H. Salter 80 Chairman of the Board and Chief 1982
Executive Officer, Benos
James D. Watson, Ph.D. 71 President, Cold Spring Harbor Laboratory 1987
Michael Ziering 43 Chief Executive Officer and President 1994
Frederick Frank 67 Vice Chairman, Lehman Brothers Inc. 1996
</TABLE>
Dr. Sigi Ziering, Chairman of the Board since 1974, served as Chief
Executive Officer of the Company from 1974 until December 1999. Dr. Ziering
holds a Ph.D. in Theoretical Physics from Syracuse University.
Mr. Aroesty was elected Chief Operating Officer in February 2000. He has
held various positions at the Company since 1978, including Senior Vice
President, Operations from 1997 to 2000, consultant from 1994 to 1997, and
executive officer from 1982 to 1994.
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 was elected Chief Executive Officer in December 1999.
He joined the Company in 1986 as legal counsel, and served as Vice
President-Administration from 1988 until 1994 and as President and Chief
Operating Officer from 1994 to December 1999.
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 Analysts and a past president of
the Chemical Processing Industry Analysts. Mr. Frank serves as a director of
2
<PAGE> 5
Pharmaceutical Product Development Corporation, Digital Arts & Sciences, Inc.,
eSoft, Incorporated and Landec 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, Chairman of the Board, and Marilyn Ziering, an executive
officer, are husband and wife. Michael Ziering, a director and executive
officer, and Ira Ziering, an executive officer, are their sons. 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 1999. 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 during 1999, 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 1999.
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 1999. 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 1999, 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
1999, Messrs. Frank and Watson were each granted 10,000 options with an exercise
price of $24.125 per share (the fair market value on the date of grant) and a
term of 10 years, which vest at the rate of one-third 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. 72 Chairman of the Board
Michael Ziering 43 Chief Executive Officer and President
Sidney A. Aroesty 53 Senior Vice President and Chief Operating
Officer
Said El Shami 57 Senior Vice President, Research and
Development and Chief Scientific Officer
Marilyn Ziering 68 Vice President, Marketing Communications
and Secretary
James L. Brill 48 Vice President, Finance
Kathy J. Maugh 55 Vice President, Operations
Nicholaas Arnold 48 Vice President, Sales and Marketing
Ira Ziering 41 Vice President, International
</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. Brill joined the Company in 1999 as Vice President, Finance and Chief
Financial Officer. Prior to joining the Company, Mr. Brill was Chief Financial
Officer of Jaffra Cosmetics International from 1998 to 1999; Vice President,
Finance and Administration and Chief Financial Officer of Vertel Corporation
from 1996 to 1998; and Senior Vice President, Finance, Chief Financial Officer
and a director of Merisel, Inc. from 1988 to 1996.
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, in 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.
Mr. Ira Ziering joined the Company in 1996 as Manager of International
Business. In 1997 he moved to France to establish the Company's subsidiary, DPC
France, where he served as President. In 1999 he was elected Vice President,
International. Mr. Ziering is a graduate of Boston University Law School and
Harvard Divinity School. Prior to joining the Company he practiced civil law in
Los Angeles, California.
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 each
person who served as Chief Executive Officer during 1999 and certain other
persons who were executive officers during 1999 (the "Named Officers") for
services in all capacities during fiscal years 1999, 1998 and 1997.
<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 1999 385,000 -- 0 16,000
Chief Executive Officer 1998 385,000 -- 0 16,000
(until 12/17/99); Chairman 1997 370,000 -- 0 16,000
Michael Ziering 1999 240,000 -- 0 16,000
Chief Executive Officer 1998 220,000 -- 20,000 16,000
(from 12/17/99); 1997 210,000 -- 20,000 16,000
President and Chief
Operating Officer
Sidney A. Aroesty 1999 215,000 30,500 0 16,000
Senior Vice President, 1998 200,000 26,800 10,000 16,000
Operations 1997 131,000 -- 15,000 0
Said El Shami 1999 282,000 -- 0 16,000
Senior Vice President, 1998 266,000 -- 20,000 16,000
Research and Development 1997 256,000 -- 0 16,000
Nicholaas Arnold 1999 180,000 22,300 0 32,600
Vice President, Sales and 1998 189,000 19,300 20,000 40,000
Marketing (since 2/1/98) 1997 142,000 -- 0 21,000
Kathy J. Maugh 1999 170,000 -- 0 16,000
Vice President, Operations 1998 163,000 21,400 0 16,000
1997 155,000 -- 10,000 15,500
Julian R. Bockserman 1999 190,000 -- 0 16,000
Vice President, Finance 1998 180,000 -- 0 16,000
(until 9/8/99) 1997 171,000 -- 10,000 16,000
</TABLE>
- ---------------
(1) The amounts for Mr. Aroesty represent $20,800 in 1999 and $19,800 in 1998
for apartment rental expenses and $9,700 in 1999 and $7,000 in 1998 as the
approximate value of automobile-related compensation. The amounts for Mr.
Arnold represent $19,200 in 1999 and $14,400 in 1998 for apartment rental
expenses and $3,100 in 1999 and $4,900 in 1998 as the approximate value of
automobile-related compensation. The 1998 amount for Ms. Maugh represents
$16,600 paid in lieu of vacation and $4,800 as 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 1999 and, accordingly, such amounts have been omitted from the
table as permitted by SEC rules.
5
<PAGE> 8
(2) These amounts represent Company pension plan contributions and, as to Mr.
Arnold, also include employer contributions to pension and disability plans
in The Netherlands.
RETIREMENT AGREEMENT
Upon his retirement, the Company has agreed to pay Dr. Ziering, or his
surviving relatives, $3,000 per month for 120 months. Dr. Ziering has agreed not
to compete with the Company while he receives such monthly payments, and he has
also agreed to provide consulting services after his retirement. Discharge for
cause will void the retirement payments to Dr. Ziering.
1999 YEAR-END OPTION VALUES
No options were granted to or exercised by the Named Officers in 1999.
Shown below is information regarding holdings of unexercised stock options at
December 31, 1999 by the Named Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999(#) DECEMBER 31, 1999($)(1)
-------------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- ------------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
Sigi Ziering 0 0 0 0
Michael Ziering 29,000 61,000 18,750 18,750
Sidney A. Aroesty 8,666 16,334 0 0
Said El Shami 36,000 16,000 144,000 0
Nicholaas Arnold 6,840 27,060 340 1,530
Kathy J. Maugh 8,510 16,680 6,510 29,295
Julian R. Bockserman 18,000 8,000 72,000 0
</TABLE>
- ---------------
(1) Represents the difference between the aggregate market value on December 31,
1999 ($24.50 per share) and the aggregate exercise price of options that had
an exercise price of less than $24.50.
Options generally vest at the rate of 10% to 25% 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. In September 1999, the Board of Directors amended the
Company's 1990 and 1997 Stock Option Plans to provide that all outstanding
options will become immediately exercisable in the event of a
"change-in-control," as defined in the plans. Under the terms of the 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.
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, Chairman of the Board.
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 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 1999 salaries of the Company's 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 1998. The Company does not base annual salaries on the
achievement of objective performance-related criteria. Based on Dr. Ziering's
recommendation, the Compensation Committee continued Dr. Ziering's salary for
1999 at the same level as the prior year. Michael Ziering, having assumed the
position of Chief Executive Officer in December 1999, was compensated in 1999 at
the level established for him in his capacity as President and Chief Operating
Officer. The 1999 salary increases for executive officers were generally in line
with Company-wide employee compensation increases for 1999.
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.
Section 162(m) of the Internal Revenue Code provides that publicly held
companies may not deduct in any taxable year compensation paid to any of the
individuals named in the Summary Compensation Table in excess of $1,000,000 that
is not "performance-based." The Company's stock option plans currently do not
meet the requirements of performance-based compensation. In light of the current
level of executive compensation, the Compensation and Stock Option Committees do
not plan to take any action to qualify any compensation plans under Section
162(m). The Compensation Committee will, however, continue to evaluate whether
future compliance with the deductibility requirements of Section 162(m) would be
appropriate.
7
<PAGE> 10
The Company also maintains broad-based employee benefit plans in which
executive officers participate on the same terms as other employees. For fiscal
year 1999, the Company contributed the required 10% of participants'
compensation to its pension plan, but made no contribution to the profit sharing
plan.
The Compensation Committee The Stock Option Committee
Louis Colen Maxwell H. Salter
Maxwell H. Salter Sigi Ziering
Frederick Frank
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION AND RELATED TRANSACTIONS
During 1999, 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 1999, the members of the Stock Option Committee were Maxwell H.
Salter, a non-employee director of the Company, and Sigi Ziering, Chairman of
the Board and, until December 1999, Chief Executive Officer of the Company. Dr.
Ziering is the husband of Marilyn Ziering and the father of Michael Ziering and
Ira Ziering, all of whom are executive officers of the Company. As Vice
President, Marketing Communications, Marilyn Ziering was paid an annual salary
of $125,000 in 1999. Ira Ziering, Vice President, International, was paid an
annual salary of $120,000 in 1999.
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 1999, 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, 1999, with the S&P Composite-500
Stock Index and the S&P Small Cap Medical Products Index.
<TABLE>
<CAPTION>
DIAGNOSTIC PRODUCTS HEALTH CARE (MEDICAL
CORPORATION PRODS & SUPP)-SMALL S&P 500 INDEX
------------------- -------------------- -------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 146.16 147.35 137.58
1996 101.24 150.33 169.17
1997 110.39 175.75 225.60
1998 125.98 187.97 290.08
1999 101.08 232.27 351.12
</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, 1994.
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 March 7, 2000 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 2,416,906(1) 17.7%
5700 West 96th Street
Los Angeles, California 90045
Maxwell H. Salter 341,966(2) 2.5%
Sidney A. Aroesty 91,666(3)(4) **
Dr. James D. Watson 44,234(5) **
Michael Ziering 325,628(3)(6) 2.4%
Frederick Frank 39,999(7) **
Said El Shami 48,000(8) **
Nicholaas Arnold 6,840(9) **
Kathy J. Maugh 8,510(10) **
All directors and executive officers
as a group (12 persons) 3,474,624(11) 25.0%
Brown Capital Management, Inc. 1,092,600(12) 8.0%
1201 N. Calvert Street
Baltimore, Maryland 21202
Louis Colen 795,800 5.8%
2727 Krim Drive
Los Angeles, California 90064
Julian R. Bockserman 33,000(13) **
</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 6,666 shares subject to options which are exercisable within 60
days.
(3) Includes 30,000 shares owned by the Company's Profit Sharing Plan over
which Michael Ziering, Sidney A. Aroesty and James L. Brill, 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.
(4) Includes 8,666 shares subject to options which are exercisable within 60
days.
(5) Includes 39,649 shares subject to options which are exercisable within 60
days.
(6) Includes 29,000 shares subject to options which are exercisable within 60
days, and 1,125 shares held by Mr. Ziering's wife, as to which beneficial
ownership is disclaimed.
(7) Includes 39,999 shares subject to options which are exercisable within 60
days.
10
<PAGE> 13
(8) Includes 48,000 shares subject to options which are exercisable within 60
days.
(9) Includes 6,840 shares subject to options which are exercisable within 60
days.
(10) Includes 8,510 shares subject to options which are exercisable within 60
days.
(11) See Notes above. Also includes 174,875 shares outstanding and 6,000 shares
subject to options which are exercisable within 60 days held by executive
officers not named in the foregoing table.
(12) Holdings at December 31, 1999 as reported in a Schedule 13G filed with the
Securities and Exchange Commission. According to such Schedule 13G, the
shares are owned by various investment advisory clients of Brown Capital
Management, Inc., which is deemed to be a beneficial owner of the shares
under SEC rules due to its discretionary power to make investment decisions
over such shares for its clients and its ability to vote the shares.
(13) Includes 14,000 shares subject to options which are exercisable within 60
days.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require the Company to
disclose late filings of reports of stock ownership by directors, executive
officers and more than 10% shareholders. During 1999, James L. Brill and Ira
Ziering each filed a Form 3 late. In making these disclosures, the Company has
relied solely on written representations of its directors and executive officers
and on copies of the reports they have 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, 1999. 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, 1999 as filed with the Securities and Exchange Commission
accompanies this Proxy Statement.
SHAREHOLDER PROPOSALS FOR 2001 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 2001, such proposal must be received no later than the close of
business on November 30, 2000, 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 2001 other than in accordance with Rule 14a-8 and
that shareholder does not provide notice of his proposal to the Company by
February 14, 2001, the holders of any proxy solicited by the Company's Board of
Directors for use at that meeting will have discretionary authority to vote with
respect to that proposal without a description of the proposal in the Company's
proxy statement for that meeting.
11
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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 29, 2000
12
<PAGE> 15
PROXY
DIAGNOSTIC PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS MAY 9, 2000
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 17, 2000, at
the Annual Meeting of Shareholders of said Company to be held on May 9, 2000,
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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