UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 1, 1998
Commission File No. 1-12575
UTAH MEDICAL PRODUCTS, INC.
(Exact name of Registrant as specified in its charter)
UTAH 87-0342734
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7043 South 300 West
Midvale, Utah 84047
Address of principal executive offices
Registrant's telephone number: (801) 566-1200
<PAGE>
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
On April 1, 1998, Perry L. Lane resigned as a director of Utah Medical Products,
Inc. ("UM"). Mr. Lane has furnished a letter describing disagreements between
himself and the operations, policies or practices of UM since 1993, and has
requested that the matter be disclosed. Mr. Lane's letter is attached as
Exhibit 1.
Mr. Lane indicated disagreements in two principal areas, and raised a number of
other "concerns": 1) new product development, especially Cordguard, a product
obtained in an asset purchase agreement on January 4, 1994 with OB Tech, Inc;
and 2) UM's share repurchase program, initiated in 1992.
1) In regard to new product development, Mr. Lane indicates that due diligence
efforts in acquiring Cordguard were inadequate, a safety issue was ignored, and
the board of directors was not informed of expenses. He also expresses
disappointment that a product was not developed for an idea he provided to UM.
UM believes that the descriptions provided by Mr. Lane are incorrect, incomplete
and misleading. Mr. Lane had and took advantage of unrestrained access to
senior management and technical personnel of UM. After an initial exposure to
Cordguard and favorable recommendation in early 1993 by UM's VP of New Product
Development, Dr.Gail Billings, due diligence efforts began in earnest in July
1993. UM's records include due diligence notes taken by members of UM's
established Steering Committee, composed of senior technical, marketing and
executive management personnel, in discussions with physicians, OB Tech
marketing and other management personnel, and two experienced venture capital
groups which had funded early Cordguard development, among others. Although
certain of UM's outside directors who were interested in the Cordguard
technology and the new product opportunity that it represented personally
participated in the due diligence process, Mr. Lane did not choose to do so.
Nevertheless, Mr. Lane voted in favor of a resolution unanimously passed at an
August 6, 1993 board meeting to authorize the negotiation of an agreement with
OB Tech, Inc. within guidelines established by the board, and later signed those
minutes. Mr. Lane did not offer any guidelines different from those adopted. A
tentative agreement to acquire Cordguard, contingent upon successful completion
of UM's own clinical evaluation of the product's efficacy, was publicly
announced on August 20, 1993. On September 8, Dr. Billings updated the board
respecting the results of UM's investigation to date and outlined additional
questions and matters under inquiry. Although Mr. Lane was present during the
September discussions, he did not indicate any due diligence questions that he
felt were not being properly assessed. Following the discussion of a term sheet
outlining the principal terms of the proposed acquisition, Mr. Lane voted in
favor of a resolution unanimously approved at the October 22, 1993 board meeting
to approve the acquisition of the assets of OB Tech, Inc. Again, Mr. Lane did
not suggest any terms or contingencies different from those included in the term
sheet, nor indicate any disagreement with the conclusion of the board to acquire
the Cordguard concept at a significant cost, clearly known to all at the
meeting, with the recognized requirement for further R&D and the related risks.
The purchase agreement was signed on January 4, 1994. UM's directors were aware
of the results of UM's clinical evaluations and participated in setting final
terms of the agreement. At no time in the five months between the August 6,
1993 board meeting at which he voted to pursue the Cordguard acquisition until
the agreement was signed on January 4, 1994, did Mr. Lane, as part of his due
diligence and the required exercise of his prudent business judgment as a
director, indicate that "ordinary management diligence" had not been exercised,
as he now asserts in his resignation letter.
The safety issue to which Mr. Lane alludes was first identified to Mr. Cornwell
in a letter written by Mr. Lane dated February 3, 1998 following a board meeting
on January 30, 1998. So that the entire board could properly consider Mr.
Lane's substantive comments, in the January 30 meeting Mr. Lane was asked to
disclose to the full board all of his objections regarding new product
development projects. Mr. Lane did not raise the Cordguard safety issue,
although in the meeting Mr. Lane withdrew his support for both the Cordguard and
fetal pH projects. The February 3, 1998 letter, which identified Mr. Lane's
Cordguard safety concern, was the thirty-seventh letter sent by Mr. Lane to UM
since June 1997, requesting written responses to questions in a format
acceptable to Mr. Lane, which information either had been already provided,
clearly and in detail satisfactory to Mr. Lane at the time it was presented, or
was available in the records of the Company open for review by Mr. Lane, or was
available from contact with various UM employees at all levels to which Mr. Lane
had free access. During this latter period since June 1997, Mr. Lane declined
to contact UM's scientific, sales and management employees directly responsible
for the project, notwithstanding the fact that he had previously felt free to do
so, particularly in connection with the review of his own product concept that
he had introduced to UM as noted below. Although Mr. Lane had referred to
Cordguard in several of the previous 36 letters since June 1997, he had never
referred to his concerns respecting the safety of the product. Apparently,
according to Mr. Lane's February 3, 1998 letter, in Mr. Lane's discussion with a
neighbor, a physician, in January 1997, the physician speculated that the use of
Cordguard to sever the cord, for a baby born with the umbilical cord tightly
wrapped around its neck, might be hazardous. Mr. Lane did not say whether the
physician had ever used Cordguard. Based on UM's validation of Cordguard
performance criteria, the U.S. FDA concurred with UM's premarketing claims of
safety and efficacy in December 1995. Since the December 1995 release by the
FDA, approximately 9,000 Cordguard units have been used without any reports of a
safety risk associated with the umbilical cord wrapped tightly around a baby's
neck. If Mr. Lane was so greatly concerned about his January 1997 findings, the
other directors now question why Mr. Lane never brought it up in a board
meeting, never exercised his power to call a special board meeting himself, and
waited more than a year to express his concerns.
Mr. Lane's repeated statements that the board was not informed of expenses are
not credible. The other directors can state from personal knowledge that all
directors were informed. Acquisition costs were discussed by the entire board
and agreed upon as part of setting the terms of the OB Tech agreement. Lori
Sessions, UM's Controller, on the board of directors from February 1994 until
August 1997, was responsible for collecting and reporting the details of all of
UM's expenses, including product development. Mr. Lane had free access to Ms.
Sessions, who provided accounting information regularly to the board, as well as
directly to individual directors when requested. Ms. Sessions was also
responsible for preparing the budgets which were part of the annual operating
plans reviewed in detail and approved each year by resolution of the board of
directors. Mr. Lane signed minutes at the beginning of each year of 1994, 1995,
1996 and 1997 that contained unanimous board approval for operating plans
including budgeted Cordguard product development spending.
With regard to the R&D project that Mr. Lane claims had "economic advantages and
clinical benefits readily apparent," UM's R&D managers were responsible for
independently evaluating the feasibility of Mr. Lane's idea, and chose in
November 1995 not to pursue it. Inasmuch as Mr. Lane admits in his resignation
letter that he had sufficient access to UM's engineers to learn that a patent
might be obtained, the other directors are perplexed as to why Mr. Lane also
could not learn in late 1995 why his project wasn't pursued. Although R&D
investigated Mr. Lane's idea more than a year earlier, Mr. Lane did not bring
this complaint to the board's attention prior to May 1997.
2) Mr. Lane indicates disagreements with the value of share repurchases and the
use of sales of puts to accomplish the repurchase objective.
The board unanimously approved the Company's share repurchase program as
detailed below and consistently bought shares at prices favorable to UM when
compared to contemporaneous market prices and trading conditions. Of course, it
is convenient now to be disappointed in view of the lower market prices. The
directors disagree with Mr. Lane's recent attempt to disavow responsibility for
repurchases that were made with his authorization as a director. Prior to Mr.
Cornwell's involvement at UM, on August 25, 1992, UM's board of directors by
unanimous written consent initiated a share repurchase program to repurchase up
to $2 million of UM's stock at a price up to $12/ share. Mr. Lane participated
in that resolution.
Subsequent to Mr. Cornwell's employment, Mr. Lane participated in board
meetings, consistently supported the stock repurchase plan and signed the
minutes to authorize additional repurchases or to formally ratify repurchases
previously made:
a)4-17-93: Authorized an additional $4 million in continuance of repurchase
plan. (Mr. Lane voted FOR)
b)5-21-93: Authorized uncovered put writing in order to facilitate share
repurchases at a predetermined price. (Mr. Lane abstained because he said
he did not understand put options.)
c)10-22-93: Authorized an additional $2 million in continuance of repurchase
plan. (Mr. Lane voted FOR)
d)1-28-94: Ratified all share repurchases and sales of puts to date. (Mr.
Lane voted FOR)
e)5-06-94: Ratified a repurchase of 300,000 shares at $7.875/ share from a
single shareholder. (Mr. Lane voted FOR)
f)7-22-94: 1) Ratified all share repurchases and sales of puts to date. (Mr.
Lane voted FOR); 2) Ratified 5-26-94 telephonic poll of directors to
authorize a further $2 million in continuance of repurchase plan. (Mr. Lane
voted FOR); and 3) Authorized an additional $2 million in continuance of
repurchase plan. (Mr. Lane voted FOR)
g)1-27-95: Ratified all share repurchases to date. (Mr. Lane voted FOR)
h)5-19-95: 1) Ratified all share repurchases to date. (Mr. Lane voted FOR);
and 2) Ratified 4-6-95 telephonic poll of directors to authorize a further
$2.5 million in continuance of repurchase plan. (Mr. Lane voted FOR)
i)7-28-95: Ratified all share repurchases to date. (Mr. Lane voted FOR)
j)10-27-95: Ratified all share repurchases to date. (Mr. Lane voted FOR)
k)12-27-95: Authorized an additional $3 million in continuance of repurchase
plan. (Mr. Lane voted FOR)
l)2-02-96: Ratified all share repurchases to date. (Mr. Lane voted FOR)
m)5-17-96: 1) Ratified all share repurchases and put sales to date. (Mr. Lane
voted FOR); and 2) Ratified 3-14-96 and 4-24-96 telephonic polls of
directors to authorize a further $6 million in continuance of repurchase
plan. (Mr. Lane voted FOR)
n)7-26-96: 1) Ratified all share repurchases and sales of puts to date. (Mr.
Lane voted FOR); 2) Ratified 6-24-96 telephonic poll of directors to
authorize a further $3 million in continuance of repurchase plan. (Mr. Lane
voted FOR); and 3) Authorized agreement with Swiss Bank Corporation to
privately sell put options. (Mr. Lane voted FOR)
o)10-25-96: Ratified all share repurchases and sales of puts to date. (Mr.
Lane voted FOR)
p)2-01-97: Ratified all share repurchases to date. (Mr. Lane voted FOR)
Put option sales were used by UM to lock in a purchase price for shares to be
repurchased. The exercise prices agreed upon were equal to or below the current
market price of the stock at the time the put option was sold. In fact, this
mechanism greatly benefitted stockholders by reducing UM's effective cost of
repurchasing shares by about $1.00/ share below the market price prevailing
during the time that the shares were repurchased. Mr. Lane's description of
"expended .... in sales contracts" is an incorrect representation. The amounts
"expended" were the purchase price of shares repurchased. This purchase price
resulting from the exercise of put options was reduced by the premiums received
when the put options were sold. Mr. Lane was accurate in saying at the May 21,
1993 board meeting that he does not understand this financial mechanism.
Mr. Lane lists additional concerns which include a number of conclusionary
allegations that are essentially a disagreement on management style. The other
directors believe that Mr. Lane's characterization of events is out of proper
context, full of gross exaggerations and misleading. As to allegations made by
certain executive managers through Mr. Lane, the majority of the board felt that
direct investigation by independent outside directors was the best method of
evaluating the situation. All outside directors met with the executive
managers, found the complaints were unsupported and voted to continue to support
Mr. Cornwell.
In October 1997, about five months after the outside board members had
investigated Mr. Lane's management concerns, the Executive Committee of the
board of directors, comprised of two outside directors and Mr. Cornwell who
represented a majority of the board of directors, recommended that Mr. Lane
resign as a director because of its finding that the matters initiated by Mr.
Lane were baseless and unfairly presented, and that Mr. Lane sought to change
top management through methods that were irresponsible and not in proper regard
for shareholder interests.
Mr. Lane's miscellaneous other disagreements include a claim that the Company's
line of credit was misused. The other directors disagree with Mr. Lane's
conclusions. Although the other directors agree that the primary impetus in
getting the line was to provide funding for acquiring Columbia Medical, Inc.,
the general purpose of the line was to provide liquidity to allow UM to take
advantage of opportunities to increase shareholder value, which includes share
repurchases authorized by the board of directors.
With regard to Mr. Lane's observations regarding his contacts with third
parties, Mr. Cornwell properly reminded Mr. Lane that third parties should be
referred to the CEO per the corporate policy governing handling of corporate
opportunities. The NYSE company referred to in Mr. Lane's letter did not make
an offer of any kind but merely initiated a preliminary overture in a manner
that would best serve such company's own interests. Regarding the telephone
call to Mr. Lane during negotiations regarding a supply agreement, the outside
firm solicited Mr. Lane in a transparent effort to circumvent and undermine UM's
established negotiating position. The call to Mr. Lane did not affect the terms
of the agreement, but did result in the board replacing Mr. Lane as Chairman.
The Company referred to has since breached the most significant terms of the
agreement, and the agreement has been terminated.
Mr. Lane's claim of "a flagrant distortion" in the February 1, 1997 minutes is a
matter of self-interest. A draft of all proposed resolutions, including a
resolution to limit outside director options, was circulated prior to the
meeting, considered and passed at the meeting, and was included in the minutes
of the meeting that Mr. Lane later signed. Notwithstanding the effect of the
resolution to deny Mr. Lane additional options, Mr. Lane has benefitted by
several hundred thousand dollars from options previously granted while a
director of UM. At the next board meeting in May 1997, Mr. Lane objected to the
February 1, 1997 resolution limiting his own options. Since that May 1997
meeting, Mr. Lane's subsequent objections relative to board meeting minutes have
been based on format, not substance. The other outside directors do not agree
with Mr. Lane that any of the minutes are inaccurate.
The other directors believe it is management's job to be enterprising,
optimistic and proactive. Not every initiative succeeds. Mr. Lane attended all
of the board meetings over the last 51/4 years since Mr. Cornwell was hired as
the chief executive officer of UM, approximately six meetings per year, and
regularly participated in unanimous approval of board actions. Mr. Lane had the
full opportunity to be heard and to express his disagreement with any of UM's
business decisions during that period of time, but he did not. When he
belatedly began writing letters raising questions since June 1997, those topics
were always included in the next possible board meeting. In view of Mr. Lane's
active participation in board discussions, his opportunity to request a more
complete review, his access to corporate information and personnel and his
regular vote in favor of board resolutions, the other directors object to Mr.
Lane's attempts in retrospect to disavow business judgments he previously
supported, and consider his actions irresponsible. Furthermore, Mr. Lane's
reference in his resignation letter that management was "unable to achieve what
I consider minimal corrective action" is misleading because, although Mr. Lane
had and took advantage of unrestrained access to the management of UM, he never
offered any coherent counter proposals or definition of what minimal corrective
action he expected.
As a practical matter, the other directors do not agree that there were
significant differences with Mr. Lane regarding operations, policies or
practices of UM. Mr. Lane's resignation is a result of an unsuccessful personal
campaign against Kevin L. Cornwell, Chairman & CEO. Mr. Lane's sole focus on
after-the-fact fault finding, without any coherent alternative proposals, made
him deteriorate into an ineffective board member. The other board members think
his resignation is in the best interest of UM and its shareholders. Mr. Lane's
resignation will have no negative impact on implementing UM's clear plan for the
future.
ITEM 7. EXHIBITS
c)Exhibit
SEC
Exhibit # Reference # Title of Document
1 17 Letter from Perry L. Lane, dated 30 March, 1998,
to Utah Medical Products, Inc. regarding director
resignation.
SIGNATURES
Pursuant to the requirements of the Securities Exchanges Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UTAH MEDICAL PRODUCTS, INC.
REGISTRANT
Date: 4/7/98 By:\s\ Kevin L. Cornwell
Kevin L. Cornwell
CEO and CFO
2798 Arcadia Heights Circle
Salt Lake City, Utah 84109
30 March, 1998
Kevin L Cornwell, President, CEO, CFO
Chairman, Secretary Board of Directors
Utah Medical Products, Inc.
7043 South 300 WestMidvale, UT 84047
Dear Kevin:
This in response to the Executive Committee, created 8/1/97, recommendation
for my resignation as a Director at UM. Having served since 1985, I find this
most disappointing. Please accept this letter as my resignation as a member of
the Board of Directors, Utah Medical Products, effective 1 April, 1998. Because
this resignation is due to many disagreements between me and the operations,
policies or practices of Utah Medical, I request these matters be disclosed and
this letter be filed as an exhibit to the Form 8-K to be filed by UM disclosing
my resignation, all as provided in item 6 of the SEC regulation.
I have been an executive, director, consultant and investor in the health
care industry for several years and believe my experience to be of worth to UM.
Relying on this experience, I have strived for many months to question
management's performance in a number of areas. As a fiduciary, I have felt it
my duty to do so. Unable to achieve what I consider to be minima1 corrective
action, I feel to disclose some causes for my dissent.
During 1993, to assure unrestrained Board support, you were extended
discretionary authority by the Board in in all areas you recommended and
requested.
1. You had authority to negotiate for and acquire from outside sources, or
develop in-house, new products that would continue to strengthen the
profitability of UM into the ongoing future. In 1993, UM acquired "Cordguard"
with your assurances to the Board of its' viability. By 1996, UM had met with
near total rejection of the device at market. In January, 1997, upon your
invitation, I made some quick contacts of clinicians known to me. Each
responded (1) our sales price of 3+ times higher than currently used devices
with minimal increase in clinical benefit was unrealistic, and (2) a baby's life
could be imperiled, under certain circumstances, if Cordguard was depended upon
for umbilical cord severance. Had ordinary management diligence been exercised
in acquiring the product, these then existing circumstances should have been
apparent and reported to the Board when approval to proceed was requested.
My findings were promptly reported with specific urging that management
investigate the reported possible safety issue. On 1/30/98, thc Board was
informed of efforts to reduce cordguard manufacturing costs and intent to resume
sales efforts. The design configuration, which I had indicated as central to
the safety issue did not appear to have been addressed. On 2/3/98, I wrote you
asking for a report of our investigation of the possible peril in usage. As in
l997, I also asked for a full disclosure of expenses incurred in the cordguard
project. I felt this important to assist in Board determination of adequate
diligence in future projects. On 3/11/98, I traced for a response. As of
3/30/98, still no reply. I continue concerned. It is my estimate we have
expended over $1 million in this endeavor with only a few thousand in revenue
return.
During 1993-1994 the company received only approximately $100,000+ in sales
of new products, not existing in 1992. In 1995, I suggested a market-demand
type product, based on my long experience in the market, with economic
advantagaes and clinical benefits readily apparent. I felt success at market
was virtually assured. It was endorsed by the UM steering committee. The
R&D design engineer expressed probable patent achievement could be expected.
Nothing further happened. Other companies have since commercialized the idea.
Though there have been some engineering modifications or changes on pre-1993
products, such as Intran, DPT, etc., based on financia1 data furnished the Board
in 1997, less than one-half of one percent of total sales revenues 1993-2Q 1997
were derived from new products either acquired or developed by UM in those
years.
2. In 1993, to maximize return on surplus cash flow and to demonstrate
confidence in our continued growth, you strongly recommended buy-back of company
stock. You were granted discretionary authority to so do. During 1993-1997,
approximately $39+ million was expended in buy-backs of company stock. Market
value of these buy backs on 1/2/98 approximated $27+ million - a decline of 31%.
3. In 1993, you were granted discretionary authority to engage in sale of
Puts. We were assured by you, this could be accomplished without impairment of
company resources and provide a higher return on our investments. At our 6/7/97
Board meeting, it was disclosed we had received premiums of $548,404 in such
sales, 1993-1996. This was good and as expected. It was also disclosed we had,
in 1997, received $95,000 in premiums and expended $1,162,500 in sales
contracts. Also, that we had an existing liability of $1,068,000 due later in
1997 on sales contracts -- a total of $2,230,000 for the year.
Our 1996 annual report informed our stockholders we had established a bank
line of credit to facilitate our ability to acquire other companies, with
established revenues, if/when the opportunity should arise. However, in Q2,
1997, UM borrowed on the bank LOC for operational purposes, largely due to
excess use of cash flow in our stock buy-back and sales efforts. At our 6/7/97
Board meeting, I proposed that the Board rescind authority extended to you as
CEO for stock buy-backs and Puts sales. The motion failed.
Some additional concerns:
On 4/4/96, as Board Chairman, I responded to an invitation from the
President/CEO of a NYSE listed health care company to discuss a possible merger
or other business combination he felt mutually beneficial. He reported he had
tried to discuss their ideas with you but you had rejected any discussion with
haughty disdain. found what I felt was merit in their ideas and so reported to
you my intent to place on the agenda for our next Board meeting. Your response
was negative and stated that if I did place it on the agenda, you would oppose
it and felt you would have the 3/2 majority Board in support. I well knew that
if you opposed it, the whole idea would be doomed. On 5/9/96, the inviting CEO
again encouraged us to agree to try dialogue between our two managements. Your
response to this second request was even more vehemently negative. Comparing
NYSE quotes on 4/4/96 and 1/2/98, their stock had increased 29%/share; UM stock
had decreased 57%/share.
Late on 6/12/96, the President/CEO of a NASDAQ trading company with whom
you were negotiating for a distribution agreement on our products formerly
handled by Baxter Laboratories called me. He requested I intercede, as Board
Chairman, in negotiations because of what he termed unethical, arrogant changes
by you on points agreed in previous discussions. Since I knew little of the
negotiations, I suggested he call you the following morning and that I would
report our discussion and inform you of the anticipated call for further
discussion.. The call was made. An agreement was reached.
On 6/13/96, you informed me you had polled the Board and a majority
concurred in your recommendation you be appointed Chairman, replacing me,
effective immediately
Upon review of the Board meeting minutes for 2/1/97, as written, I note a
flagrant distortion. This after
I had signed the signature page of approval. I protested and offered
correction. In this and subsequent Board meetings, a majority approved the
minutes as written. Since May, 1997, I have declined to sign approval of the
Board minutes, as written, except the meeting of 10/31/97 because of errors,
omissions, and/or distortions.
On 5/3/97, a group of employees, reportedly representing approximately 90%
of the UM work force, requested a meeting with me as the only outside Director
locally available, stating their request was based upon advice of legal counsel.
They expressed myriads of complaints, including some which they claimed illegal,
of your management processes. Their expressed motivation in Board contact was
their apprehension of continued decline in company fortunes and fears of further
job erosion for the work force.
On 5/5/97, a Board meeting was requested and report given to the Board from
notes made on 5/3/97. 1 felt this was a matter for the entire Board to give
immediate attention. On 5/16/97, all officers except you, met with all outside
Directors and expressed their concerns and reasons therefor. On 5/23/97, you
categorically denied to me, all assertions made by the employee delegation. On
5/30/97, officers Fishman, Hammond and Sessions issued a written recommendation
to the Board it would be in the best interests of the Company that you step
aside and further recommended an independent, outside investigation be conducted
for verification. They offered to submit to the same scrutiny of their own
individual performances.
At our 6/7/97 Board meeting, the motion was made to conduct an independent,
outside investigation of the employee allegations with a report to the Board of
findings. The motion was defeated by majority vote. The motion you be
requested to step aside was defeated by majority vote. On advice of corporate
counsel, then present, you changed your vote to abstain thus resulting in a tie
vote and continued defeat of the motion.
VP Dr. Billings had resigned in late April, 1997. VP Hammond and VP
Fishman were fired at opening of business on 6/9/97, and offered severance pay.
Director/Controller Sessions CPA, resigned 8/25/97 and asked for severance same
as offered to other officers signatory to the above recommendation. Her request
was denied. She was later offered severance pay from her job, conditional upon
her resignation from the Board.
In 1995, you proposed Ms. Payne as a nominee for the Board incident to a
pending vacancy. She was found to be affable, highly educated, and expressed a
desire to learn the business. We also learned she was a career statistician, a
good personal friend of yours since college days and had had no experience in
corporate management or the health care industry. We had some concerns incident
to her qualifications. On 8/1/97, Ms. Payne was nominated and elected as a 6th
member of the UM board by majority vote.
Market capitalization for UM on 1/4/93 was approximately $141,225,872.00.
On 1/2/98, UM market capitalization was approximately $55,100,000 -- a decline
of 59%.
All stock options awarded me since 1/1/93, which I had considered as a
major portion of compensation to me for my time and effort all carry strike
prices over current market.
Regretably, I submit this resignation feeling further efforts to serve
effectively as a Director will be for naught. As an ongoing owner of UM stock,
I express my hope appropriate steps will be taken to restore UM as a viable,
growth oriented company.
Very sincerely,
/s/ Perry L. Lane
