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:
[ ] PRELIMINARY PROXY STATEMENT
[ X ] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SECTION 240.14A-11(C) OR SECTION
240.14A-12
UTAH MEDICAL PRODUCTS, INC.
(Name of Registrant as Specified In Its Charter)
UTAH MEDICAL PRODUCTS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ x ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $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 0-11:1
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
<PAGE>
Dear UM Shareholder:
Enclosed is our 1996 Annual Report to Shareholders, and proxy materials for the
next Annual Shareholders' Meeting scheduled for May 16, 1997. In a nutshell,
the year ending December 31, 1996 continued UM's consistent pattern of
increased profits. 1996 after-tax net profits were up $400,000 and earnings per
share (eps) at 93 cents were up 11 cents over 1995's 82 cents/share. You
might wish to refer to the ten-year performance charts on the inside of the
front cover of the new annual report.
I'm sure that you recall that 1995 was considered an outstanding year for UM
by investors, which opinion was reflected in a year-ending stock price of about
$20 and a price/earnings ratio (PER) of 25. If that same PER valuation were
applied now, UM's share price would be $23/ share. Of course it's not, because
the actual valuation has changed as a result of investors' uncertainty
regarding UM's future performance.
In the annual report, we discuss the changing business of UM. I want to take
this opportunity to acknowledge UM's 1Q 1997 performance will be disappointing
compared to recent quarters, but consistent with what we thought would happen.
Previously, in press releases and discussions with analysts, we have been open
about the fact that we expect 1997 to be a tough transition year, as the
Company replaces its old commodity product sales to Baxter which have
represented almost 40% of sales over the last six years and meets increasing
competition with its established products. In accomplishing this transition,
we expect success with sales of new proprietary products with huge market
potentials.
Despite the fact that 1Q 1997 is the first quarter since 1987 in which there
are no significant sales of DPT's to Baxter, the most telling impact on 1Q
financial performance will result from UM's termination of two more domestic
regional stocking distributors, including our largest one on the East Coast,
at the beginning of the year in favor of directly employed representatives.
UM has been systematically reducing its cadre of independent distributors over
the last five years as it introduces more and more new products which require
greater control and a commitment of time in training and educating the
marketplace with respect to their unique values. The short term negative
impact of the change is due to distribution "pipeline unfilling" as
distributors sell off their inventories without replacing them. In 1997,
UM is also being confronted for the first time in a serious way by two
competitors who we believe are infringing our INTRAN(R) patents. Defending
UM's proprietary property is fundamental to UM's ability to retain its
competitive advantage in the marketplace.
Despite the rough time we are having now, I believe UM's long term prospects
remain bright. We have in place a number of programs and actions that will
change the current situation. I summarize them as follows: 1) new products
with patent protection that address unfilled needs with large market potential,
2) continuing discovery and investment with leading practitioners in improving
cost-effective care and patient outcomes in specific disease categories,
3) globalization of business, 4) continual reduction in costs of
manufacturing, 5) aggressive litigation regarding protection of proprietary
rights, 6) an architectural shift in marketing programs designed to focus on
customers' key needs and prove the unique value of our products, and 7) active
deal-making initiatives to expand distribution partners for existing products
and expand availability of marketable products to our existing distribution
resources.
In future press releases, we will explain these initiatives in detail as they
become definite in terms of tangible results. In the meantime, I would like
to express my appreciation for your continued support and confidence in the
Company's future evidenced by your willingness to continue as an owner of
our stock. All of us in the management team are committed to continue to work
as hard as we can to reward your patience, with the belief that what we have in
process should yield a stock price four times higher than what we now have.
Sincerely,
/s/ Kevin L. Cornwell
<PAGE>
March 31, 1997
Dear UM Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of
Shareholders of Utah Medical Products, Inc. (UM). The meeting will be
held at 12:00 noon (local time) on Friday, May 16, 1997 at the corporate
offices of the Company, 7043 South 300 West, Midvale, Utah USA.
Please note that attendance at the Annual Meeting will be limited to
shareholders as of the record date (or their authorized representatives)
and to guests of the Company. If your shares are registered in your name
and you plan to attend the Annual Meeting, please bring the enclosed
proxy card with you to the meeting. If your shares are held by a broker,
bank or other nominee and you plan to attend the meeting, please contact
the person responsible for your account regarding your intention to
attend the meeting so they will know how you intend your shares to be
voted at that time. Shareholders will be admitted to the Annual Meeting
upon proper verification of stock ownership.
At the Annual Meeting, our shareholders will elect two directors and
consider other business. If you think you will be unable to attend the
meeting, please complete your proxy and return it as soon as possible.
If you decide later to attend the meeting in person you may revoke the
proxy.
Thank you for your ownership in UM!
Sincerely,
Kevin L. Cornwell
Chairman
<PAGE>
UTAH MEDICAL PRODUCTS, INC.
7043 SOUTH 300 WEST
MIDVALE, UTAH 84047
(801) 566-1200
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1997
TO THE SHAREHOLDERS OF UTAH MEDICAL PRODUCTS, INC.
The Annual Meeting of Shareholders (the "Annual Meeting") of Utah Medical
Products, Inc. (the "Company" or "UM"), will be held at the corporate offices of
the Company, 7043 South 300 West, Midvale, Utah, on May 16, 1997, at 12:00
noon, local time, for the following purposes:
(1)To elect two directors to serve for terms expiring at the 2000 Annual
Meeting and until successors are elected and qualified; and
(2)To transact such other business as may properly come before the Annual
Meeting.
Your Board of Directors recommends a vote "FOR" each of the nominated
directors, whose backgrounds are described in more detail in the accompanying
Proxy Statement.
ONLY SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MARCH 14, 1997
(THE "RECORD DATE"), ARE ENTITLED TO NOTICE OF AND TO VOTE AT THE ANNUAL
MEETING.
This Proxy Statement and form of proxy are being first furnished to
shareholders of the Company on approximately March 31, 1997.
THE ATTENDANCE AT AND/OR VOTE OF EACH SHAREHOLDER AT THE ANNUAL MEETING IS
IMPORTANT, AND EACH SHAREHOLDER IS ENCOURAGED TO ATTEND.
BY ORDER OF THE BOARD OF DIRECTORS
Kevin L. Cornwell, Secretary
Salt Lake City, Utah
Dated: March 24, 1997
PLEASE FILL IN, SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY, WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING.
IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, NOMINEE, OR OTHER
INSTITUTION, ONLY IT CAN VOTE YOUR SHARES. PLEASE CONTACT PROMPTLY THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR YOUR SHARES TO BE VOTED.
<PAGE>
UTAH MEDICAL PRODUCTS, INC.
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of Utah Medical Products,
Inc. (the "Company" or "UM") in connection with the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at the corporate offices of the
Company, 7043 South 300 West, Midvale, Utah , on May 16, 1997, at 12:00 noon,
local time, and any postponement or adjournment(s) thereof. The enclosed proxy,
when properly executed and returned in a timely manner, will be voted at the
Annual Meeting in accordance with the directions set forth thereon. If the
enclosed proxy is signed and returned timely without specific instructions, it
will be voted at the Annual Meeting:
(1) FOR the election of Kevin L. Cornwell and Perry L. Lane as directors;
and
(2) IN accordance with the best judgment of the persons acting under the
proxies on other matters presented for a vote.
THE BOARD OF DIRECTORS HAS APPROVED THE FOREGOING PROPOSALS AND RECOMMENDS
THAT THE SHAREHOLDERS VOTE FOR EACH OF THE PROPOSALS. PROXIES SOLICITED BY THE
COMPANY WILL BE VOTED FOR EACH OF THE PROPOSALS UNLESS A VOTE AGAINST, OR AN
ABSTENTION FROM, ONE OR MORE OF THE PROPOSALS IS SPECIFICALLY INDICATED ON THE
PROXY.
A PROXY FOR THE ANNUAL MEETING IS ENCLOSED. IT IS IMPORTANT THAT EACH
SHAREHOLDER COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY,
WHETHER OR NOT SHE/HE PLANS TO ATTEND THE ANNUAL MEETING. ANY SHAREHOLDER WHO
EXECUTES AND DELIVERS A PROXY HAS THE RIGHT TO REVOKE IT AT ANY TIME PRIOR TO
ITS EXERCISE BY PROVIDING THE SECRETARY OF THE COMPANY WITH AN INSTRUMENT
REVOKING THE PROXY OR BY PROVIDING THE SECRETARY OF THE COMPANY WITH A DULY
EXECUTED PROXY BEARING A LATER DATE. IN ADDITION, A SHAREHOLDER MAY REVOKE
HER/HIS PROXY BY ATTENDING THE ANNUAL MEETING AND ELECTING TO VOTE IN PERSON.
PROXIES ARE BEING SOLICITED BY THE COMPANY, AND ALL COSTS AND EXPENSES
INCURRED IN CONNECTION WITH THE SOLICITATION WILL BE PAID BY THE COMPANY.
PROXIES ARE BEING SOLICITED BY MAIL, BUT, IN CERTAIN CIRCUMSTANCES, OFFICERS AND
DIRECTORS OF THE COMPANY MAY MAKE FURTHER SOLICITATION IN PERSON, BY TELEPHONE,
FACSIMILE TRANSMISSION, TELEGRAPH, OR OVERNIGHT COURIER.
Only holders of the 8,604,736 shares of common stock, par value $0.01 per
share, of the Company (the "Common Stock") issued and outstanding as of the
close of business on March 14, 1997 (the "Record Date"), will be entitled to
vote at the Annual Meeting. Each share of Common Stock is entitled to one vote.
Holders of at least a majority of the 8,604,736 shares of Common Stock
outstanding on the Record Date must be represented at the Annual Meeting to
constitute a quorum for conducting business.
All properly executed and returned proxies as well as shares represented in
person at the meeting will be counted for purposes of determining if a quorum is
present, whether or not the proxies are instructed to abstain from voting or
consist of broker non-votes. Under the Utah Revised Business Corporation Act
matters, other than the election of directors and certain specified
extraordinary matters, are approved if the number of votes cast FOR exceed the
number of votes cast AGAINST, and abstentions and broker non-votes are not
counted for purposes of determining whether a matter has been approved.
Directors are elected by a plurality of the votes cast; abstentions and broker
non-votes are not counted.
Officers and directors holding an aggregate of 101,058 shares, or
approximately 1.2% of the issued and outstanding stock, have indicated their
intent to vote in favor of all proposals.
- -------------------------------------------------------------------------
PROPOSAL NO. 1. ELECTION OF DIRECTORS
- -------------------------------------------------------------------------
GENERAL
The Company's Articles of Incorporation provide that the Board of Directors
is divided into three classes as nearly equal in size as possible, with the term
of each director being three years and until such director's successor is
elected and qualified. One class of the Board of Directors shall be elected
each year at the annual meeting of the shareholders of the Company. The Board
of Directors has nominated Mr. Kevin L. Cornwell and Mr. Perry L. Lane for
election as directors, each for a three year term expiring at the 2000 Annual
Meeting.
It is intended that votes will be cast, pursuant to authority granted by the
enclosed proxy, for the election of the nominees named above as directors of the
Company, except as otherwise specified in the proxy. In the event the nominees
shall be unable to serve, votes will be cast, pursuant to authority granted by
the enclosed proxy, for such other person(s) as may be designated by the Board
of Directors. Biographical information follows for the persons nominated. The
officers of the Company are elected at the annual meeting of the Board of
Directors to serve at the pleasure of the Board of Directors. The information
concerning the nominees and other directors and their security holdings has been
furnished by them to the Company. (See "PRINCIPAL SHAREHOLDERS" below.)
DIRECTORS AND NOMINEES
The Board of Directors' nominees for election as directors of the Company at
the Annual Meeting are Kevin L. Cornwell and Perry L. Lane. The other members
of the Board of Directors were elected at the Company's 1995 and 1996 meetings
for terms of three years, and therefore are not standing for election at the
1997 Annual Meeting. Background information appears below with respect to the
incumbent directors whose terms have not expired, as well as the two directors
standing for election to the board.
Year Business Experience During Past
First Five Years
Name Age Elected and Other Information
- ------------- --- --------- ----------------------------------------
Perry L. Lane 79 1985 Retired Executive VP, VP and Director of
Marketing, and Director of Sorenson
Research Company, Salt Lake City, UT.
Has served as a director on seven other
company boards.
Kevin L. Cornwell 50 1993 Chairman since 1996. Received B.S.
degree in chemical engineering from
Stanford University, M.S. degree in
engineering-economic systems from
Stanford Graduate School of Engineering,
and MBA degree specializing in finance
from Stanford Graduate School of
Business. President and CEO of UM since
December 1992; Secretary since 1993. Has
served in various senior operating
management positions in several
technology-based companies over a 23 year
time span, including as a director on
seven other company boards.
Stephen W. Bennett 64 1994 Received B.A. degree in biology from
Stanford University, M.D. degree from
Stanford School of Medicine, M.P.H. and
T.M. degree and Dr.P.H. degree from
Tulane School of Medicine. Served five
years as fund manager, director and
senior analyst for health care
investments for an institutional
investment firm.
Lori A. Sessions 37 1994 Received B.S. degree in accounting and
MBA degree from the University of Utah.
Utah CPA since 1985. UM Controller since
1993. Previously served for 5 years in
various accounting and financial analysis
positions for Bourns Sensors/Controls,
Inc., Ogden, UT.
Ernst Hoyer 59 1996 Received B.S. degree in process
engineering from the University of
California, Berkeley and MBA degree from
the University of Santa Clara.
Previously served in engineering and
general management positions for four
technology-based companies over a 28 year
time span.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN PERSONS
The following table furnishes information concerning the ownership of the
Company's Common Stock as of March 14, 1997, by the directors, the nominees for
director, the executive officers named in the compensation tables on page 6, all
directors and officers as a group, and those known by the Company to own
beneficially more than 5% of the Company's outstanding Common Stock as of
December 31, 1996.
Number of
Nature of Shares
Name Ownership Owned Percent
---------------------- --------- --------- -------
PRINCIPAL SHAREHOLDERS
FMR Corp.
82 Devonshire Street
Boston, MA 02109 Direct 878,300 10.21%
T. Rowe Price
Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202 Direct 625,000 7.26%
These securities are owned by various individual and institutional investors
which T. Rowe Price Associates, Inc. (Price Associates) serves as an
investment advisor with power to direct investments and/or sole power to vote
the securities. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of
such securities; however, Price Associates expressly disclaims that it is, in
fact, the beneficial owner of such securities.
DIRECTORS AND EXECUTIVE OFFICERS
Kevin L. Cornwell Direct 0.43%
(2)(3) Options 156,875 1.79%
Total 193,975 2.21%
Perry L. Lane Direct 25,000 0.29%
(1)(2)(3)(4) Options 20,250 0.23%
Total 45,250 0.52%
Ernest D. Hammond Direct 22,568 0.26%
Options 12,500 0.15%
Total 35,068 0.41%
Ernst Hoyer Direct 6,000 0.07%
(1)(2)(3)(4)
Lori A. Sessions(2)(3) Direct 4,000 0.05%
Options 8,438 0.10%
Total 12,438 0.14%
Stephen W. Bennett Direct 1,500 0.02%
(1)(2)(3)(4) Options 7,500 0.09%
Total 9,000 0.10%
R. Gail Billings Direct 578 0.01%
Options 44,282 0.51%
Total 44,860 0.52%
ALL OFFICERS AND Direct 101,058
DIRECTORS AS A GROUP Options 266,158 1.17%
(9 PERSONS) Total 367,216 4.14%
(1) Audit Committee member.
(2) Nominating Committee member.
(3) Compliance Committee member.
(4) Compensation and Option Committee member.
In the previous table, shares owned directly by directors and executive
officers are owned beneficially and of record, and such record shareholder has
sole voting, investment, and dispositive power. Calculations of percentage of
shares outstanding assumes the exercise of options, to which the percentage
relates. Percentages calculated for totals assume the exercise of options
comprising such totals.
COMPLIANCE WITH EXCHANGE ACT REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of equity securities of the Company. Officers, directors,
and greater than 10% shareholders are required to furnish the Company with
copies of all section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, all section 16(a) requirements applicable to
persons who were officers, directors and greater than 10% shareholders during
the preceding fiscal year were complied with.
BOARD AND COMMITTEE MEETINGS
The directors held six meetings during 1996 and one meeting to date in
1997. All incumbent directors attended the meetings.
The Company has Audit, Compliance, Nominating, and Compensation and Option
Committees. The current members of the Company's committees are identified in
the preceding table.
The Audit Committee met once during 1996 and once to date in 1997 to review
the results of the annual audits by Deloitte & Touche. The Audit Committee
approves management's recommendation of independent accountants, approves the
scope of audit and related fees, and reviews financial reports, audit results,
internal accounting procedures, and programs to comply with applicable
requirements relating to financial accountability.
The Compliance Committee met in conjunction with each board meeting during
1996. In each meeting, after receiving the Company's routine compliance
reports, the Board reviewed compliance by the Company and its personnel,
including executive officers and directors, with applicable regulatory
requirements as well as the Company's own compliance policy, and compared its
established policies and procedures for compliance with current applicable laws
and regulations, under the guidance of Corporate Counsel.
The Nominating Committee met informally during 1996. The Nominating
Committee takes the lead in nominating new directors. The Nominating Committee
will consider nominees recommended by shareholders. In accordance with the
Company's bylaws, shareholder's nominations for election as directors must be
submitted in writing to the Company at its principal offices not less than 30
days prior to the Annual Meeting at which the election is to be held (or if less
than 60 days' notice of the date of the Annual Meeting is given or made to
shareholders, not later than the tenth day following the date on which the
notice of the Annual Meeting was mailed). The notice to the Company from a
shareholder who intends to nominate a person at the Annual Meeting for election
as a director must contain certain information about the shareholder and the
person(s) nominated by him, including, among other things, the name and address
of the shareholder, a representation that the shareholder is entitled to vote at
the Annual Meeting and intends to appear in person or by proxy at the Annual
Meeting, a description of all arrangements or understandings between the
shareholder and each nominee, such other information as would be required to be
included in a proxy statement soliciting proxies for the election of the
proposed nominee, and the consent of each nominee to serve as a director if so
elected.
The Compensation and Option Committee, comprised of the outside directors,
consulted by telephone throughout 1996 and met once formally at the end of 1996
to review management performance, recommend compensation, and develop
compensation strategies and alternatives throughout the Company, including those
discussed in the committee's report contained in this Proxy Statement. The
deliberations included an independent analysis of the CEO's compensation, which
culminated in recommendations at the February 1997 Board Meeting.
EXECUTIVE OFFICER COMPENSATION
The following table sets forth, for each of the last three fiscal years,
cash compensation received by the Company's Chief Executive Officer during 1996
and any remaining executive officers whose salary and bonus for all services in
all capacities exceeded $100,000 for the fiscal year ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------
Pay-
Annual Compensation Awards outs
------------------------------------ --------------------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Underlying All
Year Compensa- Stock Options/ LTIP Other
Name and Ended Salary Bonus tion Award(s) SARs Payouts Compen-
Principal Dec. 31 ($) ($) ($)(1) ($) (#)(2) ($) sation
Position ($)
- ---------------- ------- ------ ------- -------- -------- -------- ------ ------
Kevin L. Cornwell 1996 180,000 125,280 900 -- 180,000 -- --
hairman & Chief 1995 170,000 120,000 900 -- 40,000 -- --
Executive 1994 157,500 70,000 900 -- 95,000 -- --
Officer
Ernest D. Hammond 1996 84,669 40,136 900 -- -- -- --
VP, Sales and 1995 82,659 40,040 900 -- 10,000 -- --
Marketing 1994 76,250 26,250 900 -- 10,000 -- --
R. Gail Billings 1996 85,120 22,040 900 -- 10,000 -- --
VP, Research & 1995 83,640 26,400 900 -- 10,000 -- --
Development 1994 82,000 17,500 900 -- 25,000 -- --
</TABLE>
(1) Amounts are Company payments for 401(k) matching contributions.
(2) Amounts for 1996 are twice the number of option shares outstanding due to
the replacement of February 1996 option awards of 90,000 to Mr. Cornwell
and 5,000 to Mr. Billings which were canceled in September in exchange for
options to purchase the same number of shares at a lower exercise price and
a longer vesting schedule. (See below.)
The following table sets forth information respecting all individual grants
of options made during the last completed fiscal year to any of the executives
named in the Summary Compensation Table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realized
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for
Option Term(2)
- ----------------------------------------------------------
-------------------
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
% of Total
Number of Options/SARs
Securities Granted to Exercise
Underlying Employees or Base Expira-
Name Options/ During Price tion 5%($) 10%($)
SARs Fiscal ($/share) Date
Granted(#) Year(1)
- ----------- ----------- ---------- --------- -------- --------- --------
Kevin L.
Cornwell 25,000(3)(5) 6.6% $17.50 Feb 2006 n/a n/a
65,000(3)(5) 17.3% $20.50 Feb 2006 n/a n/a
90,000(4)(5) 23.9% $14.25 Jul 2006 440,100 1,460,400
R. Gail 5,000(3)(5) 1.3% $20.50 Feb 2006 n/a n/a
Billings
5,000(4)(5) 1.3% $14.25 Jul 2006 24,400 81,100
</TABLE>
(1)The Company awarded new options to employees representing 190,000 shares in
February 1996. All of these were canceled in July 1996 upon the grant of
186,500 replacement options at a lower exercise price and extended vesting
schedule. (Please see the Report of the Compensation and Audit Committee
for rationale.) Percentages shown are based on the 376,500 total of both
awards. As of March 1997, 142,500 shares of the 1996 awards remain
outstanding.
(2)Value was calculated based on grant date market prices ($20.625 per share
for February grants and $11.75 per share for July grants) and assuming the
indicated appreciation rates compounded annually.
(3)Canceled in exchange for an option to purchase the same number of shares at
a lower exercise price and a longer vesting schedule.
(4)Granted upon the cancellation of options granted in February 1996.
(5)All optionees may use Company shares owned for a period of at least six
months to pay for the exercise of options. The Company may accept shares to
cover withholding or other employee taxes. In the event of a change in
control, the Company is required to pay the optionee a cash amount equal to
the excess of the market price over the exercise price of all options
granted, whether or not vested.
The following table sets forth information respecting the exercise of options
during the last completed fiscal year by each executive named in The Summary
Compensation Table above and the December 31, 1996 fiscal year end values of
unexercised options, based on the closing price ($13.375) of the Company's
common stock on the New York Stock Exchange on December 31, 1996.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARs at Options/SARs at
Name Acquired on Value FY-End (#) FY-End ($)
Exercise (#) Realized Exercisable/ Exercisable/
($) Unexercisable Unexercisable
- ----------- ------------- --------- --------------- -----------------
Kevin L.
Cornwell -- -- 143,751/156,249 $673,520/$316,480
Ernest D.
Hammond -- -- 11,250/8,750 59,063/40,938
R. Gail
Billings -- -- 40,829/1,671 187,252/80,560
</TABLE>
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
Number of Market
Securities Price of Exercise Length of
Underlying Stock at Price at Original
Options/ Time of Time of New Option Term
SARs Repricing Repricing Exer- Remaining at
Repriced or or cise Date of
Name Date or Amended Amendment Amendment Price Repricing or
($) ($) ($) Amendment
- ----------------- -------- ---------- --------- --------- ------- ------------
Kevin L. Cornwell 7/26/96 25,000 $11.75 $17.50 $14.25 9 years 6
Chairman, 7/26/96 65,000 $11.75 $20.50 $14.25 months
President, Chief 9/8/93 75,000 $ 9.88 $12.17 $10.00 9 years 6
Executive Officer months
4 years 4
months
R. Gail Billings 7/26/96 5,000 $11.75 $20.50 $14.25 9 years 6
Vice President, 9/8/93 11,250 $ 9.88 $15.00 $10.00 months
Research and 9/8/93 11,250 $ 9.88 $11.33 $10.00 3 years 4
Development months
9 years 6
months
Gary I. Tobian 9/8/93 15,000 $ 9.88 $12.50 $10.00 2 years 11
Former Executive 9/8/93 15,000 $ 9.88 $13.50 $10.00 months
Vice President, 3 years 3
Chief Operating months
Officer
Christopher A. Cutler 10/21/87 75,000 $ 0.75 $ 1.42 $ 0.75 3 years 5
Former Vice months
President, Research
& Development
</TABLE>
REPORT OF THE COMPENSATION AND OPTION COMMITTEE
General
Under the supervision of the Compensation and Option Committee, the Company
has developed and implemented compensation policies, plans, and programs that
seek to enhance the long-term profitability and growth of the Company, and thus
shareholder value, by aligning closely the financial interests of the Company's
senior managers and other key employees with those of its shareholders. The
Compensation and Option Committee of the Board of Directors is responsible for
evaluating and recommending specific executive compensation for formal board
approval on an annual basis.
The Company applies a consistent philosophy to compensation for all
employees, including senior management. The philosophy is based on the premise
that the achievements of the Company result from the coordinated efforts of all
individual employees working toward common objectives. The Company strives to
achieve those objectives through teamwork that is focused on meeting the needs
and expectations of customers and shareholders.
There are seven basic objectives for the Company's compensation program:
(1) Pay for Performance. The basic philosophy is that rewards are
provided for the value of individual contribution and performance to the
Company. Rewards are both recurring (e.g., base salary) and non-recurring
(e.g., bonuses), and both financial and non-financial (e.g., recognition and
non-financial awards).
(2) Provide for Fairness and Consistency in the Administration of Pay.
Compensation is based on the value of the job, what each individual brings to
the job, and how well each individual performs on the job, consistently applied
across all functions of the Company.
(3) Pay Competitively. The Company believes it needs to attract and
retain the best people in the industry in order to continue to achieve one of
the best performance records in the industry. In doing so, the Company needs to
be perceived as rewarding well, where competitive compensation includes the
total package of base pay, bonuses, awards, and other benefits.
(4) Conduct an Effective Performance Review Process. The Company believes
it needs to encourage individual employee growth and candidly review each
individual's performance in a timely way. This feedback process is bilateral,
providing management with an evaluation of the Company through the eyes of its
employees.
(5) Effectively Plan and Administer the Compensation Program.
Expenditures for employee compensation must be managed to what the Company can
afford and in a way that meets management goals for overall performance and
return on shareholder equity.
(6) Communicate Effectively. The Company believes that an effective
communication process must be employed to assure that its employees understand
how compensation objectives are being administered and met.
(7) Meet All Legal Requirements. The compensation program must conform to
all state and federal employment laws and guidelines.
The Company uses essentially five vehicles in its compensation program.
(1) Salary. UM sets base salaries by reviewing the aggregate of base
salary and annual bonus for competitive positions in the market. Executive base
salaries are set at the beginning of each calendar year by the Board of
Directors. For senior management, base salaries are fixed at levels somewhat
below the competitive amounts paid to senior management with comparable
qualifications, experience, and responsibilities at other similarly sized
companies engaged in the same or similar businesses. Then, annual bonuses and
longer term incentive compensation are more highly leveraged and tied closely to
the Company's success in achieving significant financial and non-financial
goals.
(2) Bonuses. UM has sales, research and development, and management
bonuses, which are generated out of an annual pretax profit sharing pool, the
Management Bonus Plan, which is calculated after the year-ending independent
financial audit has been completed. The Board of Directors has approved 4% of
pretax, prebonus earnings, plus 10% of pretax, prebonus earnings improvements
over the prior year's results, as an allocation for the Plan. For example, if
the Company achieves 20%-25% growth in pretax earnings, the sales, research and
development, and management bonus pool will accrue 6%-6.5% of pretax earnings,
which will be paid under recommendation of the Compensation and Option
Committee. In 1996, pretax earnings actually grew 6% and the amount actually
allocated to the Plan was 4.5% of the pretax, prebonus earnings.
UM management personnel, beginning with the first level of supervision and
professional management, and including certain non-management specialists and
technical people, together with all direct sales representatives, are eligible
as regular participants in the Management Bonus Plan. In 1996, seventy-five
regular participants were included in the Plan. The Management Bonus Plan also
funds extraordinary performance bonuses paid during the year to non-
participants, attendance bonuses paid to non-exempt personnel and the annual
Christmas gift to employees. In addition, the Plan funded severance paid to
employees who were laid off in December 1996.
The Company makes occasional cash awards, in amounts determined on an
individual basis, to employees who make extraordinary contributions to the
performance of the Company within a given period. These payments are made as
frequently and contemporaneously as possible to recognize excellent
accomplishments when they occur. In 1996, eighteen such awards were made. The
awards are funded from the accrued Plan described above, and therefore do not
impact the Company's financial performance. Senior management is not eligible
for these awards.
In 1996, senior management employees received a total bonus of $187,456,
which was equal to about 54% of their aggregate base salaries and about 29% of
the pool accrued per the formula above. Actual individual bonuses resulted from
the Compensation and Option Committee's assessment of each senior executive's
achievement of specific objectives and value of contribution to the Company's
overall performance. Senior management bonuses might range between 20% and 100%
of an individual's regular base pay, depending on actual performance relative to
targeted objectives.
(3) Employee Stock Options. The Compensation and Option Committee
believes that its awards of stock options have successfully focused the
Company's key management personnel on building profitability and shareholder
value. When taken together with the share repurchase program, the net result of
the option program over the last four years has been awarding option shares to
key employees at a higher price, and in smaller amounts, than shares actually
repurchased in the open market during the same time period. The Board of
Directors considers this policy highly contributory to growth in future
shareholder value. The number of options granted in 1996 reflects the judgment
of the Committee of the number of options sufficient to constitute a material,
recognizable benefit to recipients. No explicit formula criteria were utilized,
other than avoiding dilution to shareholder interests.
The Board of Directors ordinarily awards employee options once each year, at
its regularly scheduled board meeting following the audited close of the prior
year's financial performance. In February 1996, the Board of Directors approved
grants to 50 employees of options to purchase a total of 190,000 shares.
Included in this number are options on 95,000 shares granted to senior
management. With the exception of some options awarded Mr. Cornwell at a lower
price, the exercise price for the 1996 employee options was set at $20.50. The
exercise price was equal to the market price at the time of the regularly
scheduled February Board meeting and the Compensation Committee's review of
management performance following the close of the prior financial year.
The share price of the Company's stock at the regular annual award time in
1996 was near its all time historical high which was approximately 141% higher
than the $8.50 year-ending price of the prior year, although latest four
quarters' earnings per share had increased only 21%. The high price had
apparently been the result of a favorable stock market and investor optimism
regarding the Company's new but untested products in the marketplace, a stock
price which was short-lived.
Relative to the Board's objective of providing an incentive to key personnel
to devote the utmost effort and skill to the advancement and betterment of the
Company that will maximize shareholder value from increasing performance, the
Committee noted that setting the exercise price at an uncommonly high price
would not allow such key personnel to fairly participate in the increases in the
future value of the Company which they help produce. Despite record 1996
earnings, after the Company's announcement of its change in relationship with
Baxter on March 7, 1996, the average price of the stock traded at much lower
levels for the balance of the year. The average price at which the Company
repurchased its shares in 1996 was $13.58. In light of the above
considerations, in July the Committee recommended new 1996 options be awarded at
an exercise price of $14.25 as a replacement for February optionees still
employed. At the date of the exchange, the closing market price for the
Company's common stock was $11.75 per share. Optionees traded February options
that had a $6.25/ share higher exercise price for new options that began vesting
six months later.
Subsequent to the February award date and prior to the July replacement
option date, options representing 3,500 shares of the 190,000 total were
canceled upon the resignation of certain employees. Options on an additional
44,000 shares of the 186,500 balance have subsequently been canceled upon the
resignation and termination of certain employees, leaving a current balance of
142,500 1996 option shares awarded. All options vest over a four year period,
with a ten year exercise period. Management expects to recommend similar
quantities of options be awarded on an annual basis to the Company's key
employees based on its belief that sharing the wealth of the Company with those
who help create it is the best way to assure growth in shareholder value.
(4) 401(k) Retirement Plan. The Compensation and Option Committee
believes that a continuance of the Company plan instituted in 1985 is consistent
with ensuring a stable employment base by helping to provide Company employees
with a vehicle to build long-term financial security. The Company matched a
portion of employee contributions in 1996 by an amount equal to $70,400. Of
this total amount, senior management received $2,700. The Board of Directors
has approved a matching formula of 30%, up to certain individual limits
including a fixed individual maximum of $900 per year, for employees who meet
eligibility requirements.
(5) Group Benefit Plan. The Company provides a group health, dental, and
life insurance plan for its employees consistent with self-funded group plans
offered by other similar companies. A portion of the monthly premium cost is
generally paid by plan participants. All employees, including executive
officers and senior managers, pay premiums on the same basis.
CEO and other Executive Officer Compensation
Utilizing the compensation objectives and vehicles outlined previously, the
Compensation and Option Committee comprised of outside directors established
base compensation for executive officers, including the CEO, by reference to
surveys of similar companies, adjusted as the Committee deemed appropriate for
variations in industry type, geographic location, size, and profitability. Base
salaries were fixed at levels somewhat below the competitive amounts paid to
executive officers with comparable qualifications, experience, and
responsibilities at other similarly sized companies engaged in the same or
similar businesses. Then, annual bonuses and long term incentive compensation
in the form of stock options were more highly leveraged and tied closely to the
Company's success in achieving significant financial and non-financial goals.
Bonuses for executive officers were awarded on the same basis as all
employees included in the Management Bonus Plan. At the beginning of the year,
the CEO and other executive officers were awarded participation units in the
bonus plan, proportional to base salary and responsibility, based on the
Committee's determination of the relative contribution expected from each person
toward attaining Company goals. Each executive's individual performance
objectives, derived as the applicable contribution needed from that executive to
achieve the Company's overall business plan for the year, were reviewed by the
Committee. These goals included financial (weighted most heavily) and non-
financial goals. Financial goals included net sales, gross profit margin,
after-tax profits, and return on equity, and particularly in the case of the
CEO, growth in earnings per share. Non-financial goals included continuing the
development of a talented and motivated team of employees, conceiving and
implementing programs to maintain competitive advantages and to achieve
consistent growth, promoting the Company's participation in socially responsible
programs, maintaining compliance with regulatory requirements, achieving a high
regard of shareholders and the broad business community in the integrity of the
Company and its management, and minimizing factors that represent significant
business risks.
The amounts of bonuses to the CEO and other executive officers were based
on the Committee's evaluation of each executive's success in meeting the
respective performance objectives, supplemented by the Committee's evaluation of
each executive's performance and contribution in meeting the Company's non-
financial objectives. In 1996, revenue growth objectives set in the operating
plan at the beginning of the year were not met. However, given changing market
conditions including the rapid change in Baxter's purchase of UM's blood
pressure monitoring products and the lack of market acceptance of Cordguard, the
Committee believes that financial performance exceeded expectations. In
addition, each of the non-financial goals of the executive officers was met or
exceeded. Further, the CEO also was credited by the Committee with continuing
to lead the Company's effort to identify and develop unique new products,
building a skilled and cohesive management team, and identifying strategies for
long-term growth in profitability and shareholder value.
1996 stock options were awarded the CEO and other executive officers
incorporating the criteria utilized for establishing cash bonuses as discussed
above, supplemented by the Committee's evaluation of the suitability of long-
term option awards as an effective incentive for each individual executive.
Upon application of the above criteria by the Compensation and Option
Committee and upon its recommendation in early 1997, the Board of Directors
awarded Mr. Cornwell a bonus for 1996 of $125,280 under the Management Bonus
Plan. In addition, the Board set Mr. Cornwell's 1997 base salary at $185,000.
The Committee intends that stock options serve as a significant component
of Mr. Cornwell's total compensation package in order to retain his efforts on
behalf of the Company and to focus his efforts on enhancing shareholder value.
In that regard, shareholders in 1994 approved a Performance Option Plan under
which Mr. Cornwell could be granted options to purchase up to 400,000 shares of
common stock, contingent upon the Company achieving compounded 25% per annum
growth in earnings-per-share starting in 1994, or on such other terms as the
Board of Directors may specify. In the first three years of the plan, actual
compounded primary earnings-per-share growth averaged about 16%. In early 1997,
upon the recommendation of the Compensation Committee, the Board awarded Mr.
Cornwell stock options to purchase an additional 65,000 shares with an exercise
price of $11.50 per share, vesting over four years. After consideration for the
1997 award, Mr. Cornwell could earn options to purchase up to an additional
aggregate of 110,000 shares at a future market price under the CEO Performance
Option Plan.
The foregoing report has been furnished by: Stephen W. Bennett
Ernst G. Hoyer
Perry L. Lane
COMPENSATION AND OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Option Committee are Stephen W.
Bennett, Ernst G. Hoyer, and Perry L. Lane. No member of such committee is a
present or former officer of the Company or any subsidiary. There are no other
interlocks. No member of such Committee, his family, or his affiliate was a
party to any material transactions with the Company or any subsidiary since the
beginning of the last completed fiscal year. No executive officer of the
Company serves as an executive officer, director, or member of a compensation
committee of any other entity, an executive officer or director of which is a
member of the Compensation and Option Committee of UM.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT, AND CHANGE IN CONTROL
On December 31, 1992, the Company entered into an employment agreement with
Kevin L. Cornwell, President and Chief Executive Officer that expired on
December 31, 1993, except for the provision under which the Company is required
to pay Mr. Cornwell one year's salary in the event his employment is terminated
as a result of a change in control, at the election of the Company, or by the
mutual agreement of Mr. Cornwell and the Company. In addition, the Company is
required to pay Mr. Cornwell appreciation of stock value for issued options
above the option exercise price, in the event of a change in control of the
Company or if terminated at the election of the Company. The Company has a
performance option plan under which Mr. Cornwell could earn options to purchase
up to an additional aggregate of 110,000 shares at a future market price if the
Company attains 25% compounded per annum growth in earnings per share, or on
such other terms as the Board of Directors may determine. The Company is
required to pay other senior management including Ernest D. Hammond and R. Gail
Billings, as well as all other optionees under employee option plans, and the
outside directors under the Directors' Option Plan, the appreciation of stock
value for issued options above the option exercise price in the event of a
change of control of the Company.
The Company presently has no other employment agreements in the U.S. In
Ireland, the Company is subject to providing certain advance notice to its
employees in the event of termination. Under the terms of employment grants
awarded as incentives by the Industrial Development Agency (Ireland), the
Company would be obligated to repay grants during a five year period if
employment declined from levels at which grants were claimed by UM.
DIRECTOR'S COMPENSATION
Outside (non-employed) directors receive annual cash compensation of
$12,000 each, plus reimbursement of expenses in attending meetings. In
addition, pursuant to the 1993 Directors' Stock Option Plan approved by
shareholders at the 1994 annual meeting, UM may award to each director options
to purchase 10,000 shares at an exercise price equivalent to the closing price
ten days after the public release of the Company's annual financial results.
Pursuant to the (outside) directors' option plan, the Company granted
options for 45,000 shares at prices of $20.50 per share in March, 1996. The
directors note that, in accordance with the provisions of the 1993 Directors'
Stock Option Plan, options were automatically granted to directors as of March
30, 1996, the 90th day after the fiscal year end of the Company, December 31,
1995. Also in accordance with the Plan, the $20.50 exercise price of the
options was based on the closing bid price on the Nasdaq Stock Market for the
stock on the day that was 10 days after the date that the Board of Directors
publicly released its year-end financial information.
Subsequently, the 1996 award representing 10,000 shares to David Chase was
canceled upon his resignation from the board. In September 1996, directors with
March options representing 35,000 shares exchanged those options for new options
to purchase 30,000 shares at $14.25 per share, with extended vesting schedules.
(Please see the replacement option rationale explained in the Report of
the Compensation and Option Committee. The directors believe the rationale
applies equally to outside directors and employees.) At the date of the
directors' option exchange, the closing market price for the Company's common
stock was $12.50 per share.
The board notes that the purpose of the Directors' Stock Option Plan, as
ratified and approved by the shareholders at an annual meeting, is to aid the
Company in retaining and attracting new outside directors without interlocking
interests, to provide directors with an incentive to remain directors of the
Company, and to use their best efforts to promote the success of UM's business.
In order to effectuate these purposes, the directors believe it is appropriate
to review the exercise price of the Directors' Options granted in March 1996,
and to reduce the exercise prices consistent with the trading prices for the
Company's common stock during most of 1996, discounting the impact of the short-
lived significant increases in price during the early part of the year that
coincided with the grant date of the Directors' Options. In doing so, the
directors note that in July they approved a repricing of options to executives
and employees at $14.25, and conclude that it would be consistent with the
incentive program for employees to adjust the exercise price of the Directors'
Options to the same amount, notwithstanding the fact that the Company's common
stock traded during July and August 1996 in a range from $11.00 to $13.125.
On February 1, 1997, the Board of Directors voted to place a cumulative
limit on options awarded since 1992 to any particular outside director to 50,000
shares. On March 31, 1997, outside directors will be granted options
representing an additional total of 20,000 shares at an exercise price of
$10.875 per share. In five years under the plan including 1997, outside
directors have been awarded options for 210,000 shares, of which 85,000 have
been canceled without exercise. All of the options vest over a four year period
from the award date. Outside director options which have not been canceled or
exercised represent about 20% of total Company options awarded and uncanceled
since 1993. The Company is required to pay optionees under the outside
directors' option plan the appreciation of stock value for issued options above
the option exercise price in the event of a change of control of the Company.
STOCK PERFORMANCE CHART
The following chart compares what an investor's five year cumulative total
return (assuming re-investment of dividends) would have been assuming initial
$100 investments on December 31, 1991 for the Company's Common Stock and the two
indicated indices. The Company's common stock traded on NASDAQ until December
26, 1996 when it began trading on the New York Stock Exchange.
Performance Graph appears here. Detailed below are the plot points:
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Utah Medical
Products 100.0 76.0 49.5 53.5 124.6 84.1
Nasdaq Stock Market
(US & Foreign) 100.0 116.0 134.3 130.3 183.0 224.1
Nasdaq Stocks (SIC
3800-3899 US Companies) 100.0 85.8 72.6 78.2 115.1 120.0
</TABLE>
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INDEPENDENT PUBLIC ACCOUNTANTS
- ---------------------------------------------------------------------------
The Board of Directors retained Deloitte & Touche LLP, the Company's
auditors for the last preceding five years, as the Company's independent
certified public accountants for the year ending December 31, 1996. The
selection of the Company's auditors for the current fiscal year is not being
submitted to the shareholders for their consideration in the absence of a
requirement to do so. The selection of the independent auditors for 1997 will
be made by the Company's Board of Directors, with the advice of the Audit
Committee, at such time as they may deem it appropriate. There are no
disagreements on accounting policies or practices between the Company and its
current auditors.
It is anticipated that representatives of Deloitte & Touche LLP will be
present at the Annual Meeting and will be provided the opportunity to make a
statement, if they desire to do so, and to be available to respond to
appropriate questions.
- ---------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- ---------------------------------------------------------------------------
No proposals have been submitted by shareholders of the Company for
consideration at the Annual Meeting. It is anticipated that the next Annual
Meeting of Shareholders will be held during May 1998. Shareholders may present
proposals for inclusion in the Proxy Statement to be mailed in connection with
the 1998 Annual Meeting of Shareholders of the Company, provided such proposals
are received by the Company no later than December 5, 1997, and are otherwise in
compliance with applicable laws and regulations and the governing provisions of
the articles of incorporation and bylaws of the Company.
- ---------------------------------------------------------------------------
MISCELLANEOUS
- ---------------------------------------------------------------------------
OTHER BUSINESS
Management does not know of any business other than that referred to in the
Notice which may be considered at the Annual Meeting. If any other matters
should properly come before the Annual Meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the proxies held by them
in accordance with their best judgment.
In order to assure the presence of the necessary quorum and to vote on the
matters to come before the Annual Meeting, please indicate your choices on the
enclosed proxy and date, sign, and return it promptly in the envelope provided.
The signing of a proxy by no means prevents your attending the meeting.
By Order of the Board of Directors,
UTAH MEDICAL PRODUCTS, INC.
Salt Lake City, Utah Kevin L. Cornwell
March 24, 1997 Chairman and CEO
<PAGE>
PROXY
ANNUAL MEETING OF THE SHAREHOLDERS OF (THIS PROXY IS SOLICITED ON BEHALF
UTAH MEDICAL PRODUCTS, INC. OF THE BOARD OF DIRECTORS)
The undersigned hereby appoint Kevin L. Cornwell and Paul O. Richins, and
each of them, proxies, with full power of substitution, to vote the shares of
common stock of Utah Medical Products, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held at the corporate offices of the
Company, 7043 South 300 West, Midvale, Utah, on May 16, 1997, at 12:00 noon,
local time, and any postponement or adjournment(s) thereof, such proxies being
directed to vote as specified below. IF NO INSTRUCTIONS ARE SPECIFIED, SUCH
PROXIES WILL BE VOTED "FOR" EACH PROPOSAL.
To vote in accordance with the Board of Directors' recommendations, sign
below; the "FOR" boxes may, but need not be, checked. To vote against any of
the recommendations, check the appropriate box(es) marked "WITHHOLD AUTHORITY"
or "AGAINST," below.
(1) To elect Kevin L. Cornwell, and Perry L. Lane as directors of the
Company to serve three year terms and until each's respective
successor is elected and qualified;
KEVIN L. CORNWELL: FOR WITHHOLD AUTHORITY
PERRY L. LANE: FOR WITHHOLD AUTHORITY
(2) To transact such other business as may properly come before the Annual
Meeting.
FOR AGAINST ABSTAIN
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS IN THE RECORDS OF THE COMPANY. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. IF YOUR SHARES ARE HELD AT
A BROKERAGE HOUSE, PLEASE INDICATE THE NAME OF THE BROKERAGE HOUSE AND THE
NUMBER OF SHARES HELD.
Dated ----------------------
No. of Shares ----------------
Signature -----------------------
Signature -----------------------
(if held jointly)
Print Name ----------------------
Print Name ----------------------
PLEASE MARK, SIGN, DATE, AND RETURN PROXY IN THE BUSINESS REPLY ENVELOPE
PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
UTAH MEDICAL PRODUCTS, INC.
7043 SOUTH 300 WEST
MIDVALE, UTAH 84047
END
