<PAGE>
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 [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Diametrics Medical, Inc.
- --------------------------------------------------------------------------------
(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
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(4) Date Filed:
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Notes:
<PAGE>
DIAMETRICS MEDICAL, INC.
2658 Patton Road
Roseville, Minnesota 55113
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 12, 1999
TO THE SHAREHOLDERS OF DIAMETRICS MEDICAL, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Diametrics
Medical, Inc. (the "Company") will be held at 3:30 p.m. on Wednesday, May 12,
1999, at the Minneapolis Marriott City Center, 30 South Seventh Street,
Minneapolis, Minnesota, for the following purposes:
1. To elect three members to the Board of Directors to serve for a term
beginning May 12, 1999 and until their terms expire and until their
successors are elected and qualified.
2. To consider and act upon such other matters as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 26, 1999 as
the record date for the determination of shareholders entitled to notice of
and to vote at the meeting or any adjournment thereof. A copy of the Company's
Annual Report is included with this mailing, which is being first made
available on approximately the date shown below.
We encourage you to take part in the affairs of your Company either in
person or by executing and returning the enclosed proxy.
By Order of the Board of Directors,
Kenneth L. Cutler
Secretary
Dated: April 12, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS EXERCISED.
<PAGE>
DIAMETRICS MEDICAL, INC.
2658 Patton Road
Roseville, Minnesota 55113
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
May 12, 1999
This Proxy Statement is furnished in connection with the solicitation of the
enclosed proxy by the Board of Directors of Diametrics Medical, Inc. (the
"Company") for use at the Annual Meeting of Shareholders to be held on
Wednesday, May 12, 1999, at the Minneapolis Marriott City Center, 30 South
Seventh Street, Minneapolis, Minnesota at 3:30 p.m., Minneapolis time, and at
any adjournment thereof, for the purposes set forth in the Notice of Annual
Meeting of Shareholders. This Proxy Statement and the form of proxy enclosed
are being mailed to shareholders commencing on or about April 12, 1999.
All holders of the Common Stock, $.01 par value (the "Common Stock"), whose
names appear of record on the Company's books at the close of business on
March 26, 1999 will be entitled to vote at the Annual Meeting or any
adjournment thereof. At the close of business on March 26, 1999, a total of
24,164,781 shares of Common Stock were outstanding, each share being entitled
to one vote. The holders of a majority of the Common Stock entitled to vote
shall constitute a quorum for the transaction of business at the Annual
Meeting. If such quorum shall not be present or represented at the Annual
Meeting, the shareholders present or represented at the Annual Meeting may
adjourn the Annual Meeting from time to time without notice other than
announcement at the Annual Meeting until a quorum shall be present or
represented. Officers, directors and regular employees of the Company, who
will receive no extra compensation for their services, may solicit proxies by
telephone or in person. Expenses in connection with the solicitation of
proxies will be paid by the Company.
If the enclosed proxy is properly executed and returned, and if a
shareholder specifies a choice on the proxy, shares of the Common Stock
represented by the proxy will be voted in the manner directed by the
shareholder. If the proxy is signed and returned but no direction is made, the
proxy will be voted FOR the election of the nominees for director named in
this Proxy Statement. Shares voted as abstentions on any matter will be
counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum at the meeting and as unvoted, although
present and entitled to vote, for purposes of determining the approval of each
matter as to which the shareholder has abstained. If a broker submits a proxy
which indicates that the broker does not have discretionary authority as to
certain shares to vote on one or more matters, those shares will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum at the meeting, but will not be considered as present and
entitled to vote with respect to such matters. Proxies may be revoked at any
time before being exercised by delivery to the Secretary of the Company of a
written notice of termination of the proxies' authority or a duly executed
proxy bearing a later date. Any proxy also may be revoked by the shareholder
attending the Annual Meeting and voting in person. A notice of revocation need
not be on any specific form.
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no business that will be presented for consideration at the
Annual Meeting other than the matters described in this Proxy Statement. In
the event that any other matters properly come before the meeting calling for
a vote of shareholders, the persons named as proxies in the enclosed form of
proxy will vote in accordance with their best judgment on such other matters.
A copy of the Company's Annual Report for the year ended December 31, 1998
is being furnished to each shareholder with this Proxy Statement.
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide for a "classified board" of
directors. The number of members of the Board of Directors is currently set at
seven, and the directors are divided into three classes comprised as follows:
(i) David T. Giddings, Andre de Bruin and Richard A. Norling, whose terms
expire at the Annual Meeting; (ii) Roy S. Johnson and David V. Milligan,
Ph.D., whose terms expire at the annual meeting in 2000; and (iii) Gerald L.
Cohn and Mark B. Knudson, Ph.D., whose terms expire at the annual meeting in
2001 (or, in all cases, when their respective successors are elected and
qualified). The Board has nominated Messrs. Giddings, de Bruin and Norling for
reelection to the Board of Directors at the Annual Meeting for terms expiring
at the annual meeting in 2002. The nominees have indicated a willingness to
serve, but in case a nominee is not a candidate at the meeting, for reasons
not now known to the Company, the proxies named in the enclosed form of proxy
may vote for a substitute nominee in their discretion. The other directors of
the Company will continue in office for their existing terms. The affirmative
vote of a majority of the shares of Common Stock represented at the meeting is
required for the election of the nominees for director.
Certain biographical information furnished by the Company's current
directors and nominees for director is presented below.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
David T. Giddings (/1/)..... 55 President, Chief Executive Officer
and Chairman of the Board
Gerald L. Cohn (/2/)(/3/)... 70 Director
Andre de Bruin (/1/)(/3/)... 52 Director
Roy S. Johnson (/1/)........ 46 Executive Vice President and President and
Managing Director of Diametrics Medical, Ltd.,
and Director
Mark B. Knudson, Ph.D. 50 Director
(/2/)......................
Richard A. Norling 53 Director
(/2/)(/3/).................
David V. Milligan, Ph.D..... 58 Director
</TABLE>
- --------
(1) Member of the Nominating Committee of the Board of Directors.
(2) Member of the Compensation Committee of the Board of Directors.
(3) Member of the Audit Committee of the Board of Directors.
Mr. Giddings was appointed Chairman of the Board of Directors, President and
Chief Executive Officer of the Company in April 1996. Mr. Giddings was
formerly President and Chief Operating Officer of the United States operations
of Boehringer Mannheim Corporation ("BMC"), a U.S. subsidiary of Corange Ltd.,
a private global healthcare corporation. He joined BMC in 1992 after a 26 year
career with Eastman Kodak Company, where he held a number of senior management
positions, including General Manager and Vice President of Marketing and
Sales, clinical products division. He also served as Vice President and
General Manager of Kodak's imaging information system group and of its
printing and publishing division.
Mr. Cohn has been a director of the Company since June 1996 and has been a
private investor and consultant since 1991. Mr. Cohn is a consultant to and a
director of DVI, Inc., a health care finance company, and also a director of
Niagara Steel Corporation, a steel manufacturing company. Although Mr. Cohn
has been a director of the Company since 1996, Mr. Cohn also serves on the
Board of Directors of the Company as a representative of BCC Acquisition II
LLC. Pursuant to a Common Stock Purchase Agreement dated June 30, 1998 among
the Company, BCC Acquisition II LLC and certain other persons, the Company
agreed to appoint two representatives of BCC Acquisition II LLC to serve as
members of the Board of Directors, and to use its reasonable best efforts to
ensure that the two representatives will be included as nominees of the Board
of Directors and elected to serve on the Board of Directors so long as BCC
Acquisition II LLC and the other investors (or their assignees) collectively
own at least 5% of the Company's outstanding voting securities or at least 75%
of the number of shares issued under the Common Stock Purchase Agreement. BCC
Acquisition II LLC nominated Dr. Milligan and Mr. Cohn as their
representatives. Mr. Cohn is (1) a manager of Bay City
2
<PAGE>
Capital Management, LLC, the general partner of Bay City Capital Fund I, L.P.,
which is the managing member of BCC Acquisition II LLC, and (2) a manager of
Bay City Capital LLC, which provides investment advice to Bay City Capital
Fund I, L.P.
Mr. de Bruin has been a director of the Company since June 1996. He was
appointed President and Chief Executive Officer of QUIDEL Corporation in June
1998. Prior to that, Mr. de Bruin was Chairman, President and Chief Executive
Officer of Somatogen, Inc., a publicly held biotechnology company which he
joined in 1994. Immediately prior to joining Somatogen, he was Chairman,
President and Chief Executive Officer of Boehringer Mannheim Corporation. Mr.
de Bruin is also a director of Metabolex, Inc., a privately held company
founded to develop therapeutics for diabetes and related metabolic diseases.
Mr. Johnson joined the Company in November 1996 as an Executive Vice
President, and the President and Managing Director of Diametrics Medical, Ltd.
("DML"), a subsidiary of the Company established in conjunction with the
acquisition in November 1996 of Biomedical Sensors, Ltd. ("BSL"). DML markets
a line of indwelling monitoring systems for continuous blood and tissue
assessment of critically ill patients. Beginning in 1977, Mr. Johnson served
in a number of management positions for the predecessors of the BSL business,
most recently as President and Chief Executive Officer while it was a
subsidiary of Orange Medical Instruments, Inc. and later when it was an
operating unit of Pfizer Inc. Mr. Johnson started his career in 1974 with
Burroughs Welcome in pharmaceutical production management and was the head of
manufacturing in Burroughs' Sidney, Australia subsidiary.
Dr. Knudson has been a director of the Company since March 1990. Since
November 1996, Dr. Knudson has been the Chairman and founder of HeartStent, a
private company developing products for coronary revascularization. Since
1989, Dr. Knudson has also been a Managing Partner of Medical Innovation
Partners ("MIP") and, since 1993, a Managing Venture Partner of Medical
Innovation Partners II ("MIP II"), each a private investment partnership
active in the formation, management, financing and development of start-up
medical technology and service companies. MIP and MIP II are the general
partners, respectively, of Medical Innovation Fund, a Limited Partnership, and
Medical Innovation Fund II, a Limited Partnership. Dr. Knudson is also a
director of Integ Inc.
Mr. Norling has been a director of the Company since June 1996. He is the
Chief Executive Officer and a director of Premier, Inc. From July 1989 to
September 1997, he was President and Chief Executive Officer of Fairview
Hospital and HealthCare Services. From June 1988 to June 1989, Mr. Norling was
Executive Vice President and Chief Operating Officer of UniHealth America
("UniHealth"), a nonprofit system of hospitals and health care organizations
headquartered in Burbank, California. Prior to joining UniHealth, Mr. Norling
was employed in management positions with a variety of hospitals, HMO's and
healthcare related organizations that were predecessors to UniHealth,
including Executive Vice President and Chief Operating Officer of LHS
Corporation and President and Executive Director of the California Medical
Center, both located in Los Angeles. Mr. Norling is also a director of Express
Scripts, Inc., a managed care pharmaceutical company.
Dr. Milligan has been a director of the Company since August of 1998. He
retired at the end of 1996 as Senior Vice President and Chief Scientific
Officer of Abbott Laboratories ("Abbott"), a post he had held since October of
1994. During his 17 years with Abbott, Dr. Milligan held a number of senior
research and development management positions. At different points in time he
led both the Diagnostics Products as well as the Pharmaceutical Products
research and development organizations. He is currently a vice-president of
Bay City Capital of San Francisco, CA as well as non-executive chairman of the
board of Caliper Technologies Inc. and Versicor Inc. In addition to the
Company, Dr. Milligan is also a director of Maxia Pharmaceuticals, ICOS
Corporation, and The Presbyterian Homes. Services rendered to Bay City Capital
during 1998 for which Dr. Milligan was compensated included consulting
services provided to the Company as part of Bay City Capital's financial
advisory services. Dr. Milligan was appointed as a director of the Company
upon the closing of the transactions contemplated by a Common Stock Purchase
Agreement dated June 30, 1998 among the Company, BCC Acquisition II LLC and
certain other persons. Pursuant to the Common Stock Purchase Agreement, the
Company agreed to appoint two representatives of BCC Acquisition II LLC to
serve as members of the Board of
3
<PAGE>
Directors, and to use its reasonable best efforts to ensure that the two
representatives will be included as nominees of the Board of Directors and
elected to serve on the Board of Directors so long as BCC Acquisition II LLC
and the other investors (or their assignees) collectively own at least 5% of
the Company's outstanding voting securities or at least 75% of the number of
shares issued under the Common Stock Purchase Agreement. BCC Acquisition II
LLC nominated Dr. Milligan and Mr. Cohn (who had already been a director of
the Company since 1996) as their representatives.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MESSRS.
GIDDINGS, de BRUIN AND NORLING AS DIRECTORS OF THE COMPANY.
Meetings and Committees of the Board of Directors
During the year ended December 31, 1998, the Board of Directors held six
meetings. All incumbent directors attended at least 75% of the aggregate of
those meetings of the Board and committees of which they were members that
were held while they were serving on the Board or on such committees. The
Company's Board and committees also act from time to time by written consent
in lieu of meetings.
The Board of Directors has a Compensation Committee which consists of Dr.
Knudson, Mr. Cohn and Mr. Norling. The Compensation Committee held two
meetings during the year ended December 31, 1998. The Compensation Committee
of the Board of Directors makes recommendations concerning executive salaries
and incentive compensation for employees of the Company, subject to
ratification by the full Board, and administers the Company's 1990 Stock
Option Plan.
The Board of Directors of the Company has an Audit Committee which consists
of Messrs. Cohn, de Bruin and Norling. The Audit Committee held two meetings
during the year ended December 31, 1998. The Audit Committee reviews the
results and scope of the audit and other services provided by the Company's
independent auditors, as well as the Company's accounting principles and its
system of internal controls, and reports the results of their review to the
full Board and to management.
The Board of Directors of the Company has a Nominating Committee which
consists of Messrs. Giddings, de Bruin and Johnson. The Nominating Committee
held one meeting during the year ended December 31, 1998. The Nominating
Committee of the Board of Directors makes recommendations concerning members
of the Board of Directors and other matters relevant to the Company's
organizational structure.
Compensation of Directors
Members of the Board of Directors who are not employees of the Company
receive an annual retainer of $8,000 and $2,000 per Board meeting attended in
person and $500 where the meeting is attended by means of telephonic
communication, with the proviso that there shall be not less than six Board
meetings in any 12-month period. In addition, each non-employee member of the
Board of Directors of the Company serving on the Compensation Committee, the
Audit Committee and the Nominating Committee receives $500 per committee
meeting attended. Each non-employee Director may elect, not later than the
last day of the Company's fiscal year, to be granted stock options in lieu of
the compensation and fees otherwise payable to such Director for the next
fiscal year. Such options shall be granted in quarterly installments on the
last day of each fiscal quarter in which such compensation and fees are
earned, to be fully exercisable immediately. The number of shares covered by
each option shall be determined by dividing the total amount of compensation
and fees payable at the end of each quarter by the option value of one share
on the date of grant. The option value per share is determined using the Black
Scholes option pricing model, and considers the annualized volatility of the
Company's stock price, its annualized risk-free interest rate and the expected
life of the options. All Directors are reimbursed for expenses actually
incurred in attending meetings of the Board of Directors and its committees.
4
<PAGE>
Non-employee Directors are eligible to participate in the Company's 1993
Directors' Stock Option Plan (the "Directors' Plan"). The Directors' Plan, as
amended, provides for an automatic grant of nonqualified stock options to
purchase 18,000 shares of Common Stock to non-employee Directors of the
Company on the date such individuals become directors of the Company (the
"Initial Grant"), and an option to purchase 8,000 shares of Common Stock on
each subsequent annual shareholder meeting date, subject to certain
limitations. Options granted in connection with the Initial Grant vest and
become exercisable as to 50% of such shares on the twelve month anniversary of
the date of such Initial Grant and 25% at each such successive anniversary
date thereafter if the holder remains a director on such dates. Options
granted on the date of each annual meeting of shareholders become exercisable
six months subsequent to the date of grant.
EXECUTIVE COMPENSATION
Report of Compensation Committee on Executive Compensation
Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain data and information in regard to the
compensation and benefits provided to the Company's Chief Executive Officer
and its other executive officers. The disclosure requirements for these
individuals include the use of tables and a report explaining the rationale
and considerations that led to fundamental executive compensation decisions
affecting those individuals. In fulfillment of the report requirement, the
Compensation Committee of the Board of Directors (the "Committee"), at the
direction of the Board of Directors, has prepared the following report for
inclusion in this Proxy Statement.
Overview
The Committee is responsible for establishing and making certain
recommendations to the Board of Directors concerning executive compensation,
including annual base salaries, grants of stock options and other benefits.
The Committee is composed entirely of independent outside directors of the
Company. The Committee annually reviews and evaluates the Company's corporate
performance, compensation levels and equity ownership of its executive
officers. The goal of the Committee is to establish compensation policies and
programs that will attract and retain highly qualified executives and provide
an incentive to such executives to focus on the Company's long-term strategic
goals by aligning their financial interests closely with long-term shareholder
interests.
The Committee intends to make the executive compensation program competitive
with the marketplace, with emphasis on compensation in the form of equity
ownership, the value of which is contingent on the Company's long-term market
performance. For this purpose, the Committee compares the Company with a
selected group of emerging growth companies with similar business
characteristics and strategies, and has considered the recommendations of an
independent compensation consultant to the Company.
In evaluating compensation relative to Company performance, the Committee
considers specific objective goals, such as the Company's stock performance,
its operating revenues and earnings, and its progress toward profitability.
The Committee also ties compensation to performance goals that involve a more
subjective element and take into account the achievement of such nonfinancial
goals such as the introduction of new products, development of the Company's
sales and marketing force and growing market acceptance of the Company's
products.
Executive Compensation Program
The components of the Company's executive compensation program which are
subject to the discretion of the Committee on an individual basis consist
primarily of base salaries, bonuses and stock options. The ultimate
composition of executive compensation reflects the Company's goals of
attracting and retaining highly qualified personnel and supporting a
performance-oriented environment that rewards both corporate and personal
performance over the long term.
5
<PAGE>
Base Salary and Bonus. Annual base salaries and bonuses are established as a
result of the Committee's analysis of each executive officer's individual
performance during the prior year, the overall performance of the Company
during the prior year and historical compensation levels within the executive
officer group.
Stock Options. In general, stock option grants are used to enhance the
competitiveness of compensation packages, to reward exceptional performance
and provide incentive for reaching further performance goals. The Company's
1990 Stock Option Plan (the "Stock Option Plan") is designed to align a
portion of executive and other senior employee compensation with the long-term
interests of shareholders. The stock options give the holder the right to
purchase shares of the Common Stock over a ten-year period at the fair market
value per share as of the date the option is granted. In addition to options,
the Stock Option Plan permits the granting of several types of stock-based
awards, including stock bonuses, and the Committee has granted performance-
based stock bonuses from time to time.
In determining whether to grant options to an executive officer, the
Committee typically considers the individual's performance as such performance
relates to the achievement of Company objectives and any planned change in
functional responsibility. Although the stock option position of executive
officers generally is reviewed on an annual basis, the Company's policy is to
not grant stock options annually, but to review each individual's stock option
position, at which point the Committee may or may not grant additional options
at its discretion. The determination of whether any additional options will be
granted to an executive officer is based on a number of factors, including
Company performance, individual performance and levels of options granted by
the comparable companies referred to above.
Compensation of Chief Executive Officer
Compensation for the Chief Executive Officer consists of the following
components: base salary, incentive bonus and stock options. Mr. Giddings
joined the Company in April 1996 as Chief Executive Officer. His 1998 base
salary remained unchanged from 1997 at $300,000. As part of his 1996
compensation, Mr. Giddings received a $100,000 signing incentive advance, to
be earned in equal increments of $33,333 per year over a period of three
years. Should Mr. Giddings elect to leave the Company prior to the end of the
three year period, the unearned portion of this incentive will be returned to
the Company.
Mr. Giddings' original compensation package was established by the Committee
based on the general experience of the Committee members in dealing with
compensation matters at other emerging growth companies, and was designed to
attract an individual with Mr. Giddings' abilities and experience to the
Company. Although no stock options were granted to Mr. Giddings in 1998, the
Committee believes that stock options previously granted to Mr. Giddings
provide a significant and appropriate tie between overall compensation and the
performance of the Company over the long term.
Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended, did not
affect the deductibility of compensation paid to the Company's executive
officers in 1998 and is not anticipated to affect the deductibility of such
compensation expected to be paid in 1999. The Committee will continue to
monitor this matter and may propose additional changes to the executive
compensation program if warranted.
MARK B. KNUDSON,
GERALD L. COHN and
RICHARD A. NORLING
The Members of the Compensation
Committee
6
<PAGE>
Compensation Committee Interlocks and Insider Participation
Dr. Knudson, Mr. Cohn and Mr. Norling served as members of the Company's
Compensation Committee during 1998.
Effective March 31, 1998, the Company secured a $1,000,000 receivable backed
credit line with DVI Business Credit Corporation. DVI Business Credit
Corporation is a business unit of DVI, Inc., of which Mr. Cohn is a director
and consultant. The loan agreement requires the Company's accounts receivable
collections to be applied to reduce the loan balance, including advances,
interest and fees. All advances under the line of credit bear interest on the
unpaid principal amount at a fluctuating rate equal to the Prime Rate plus
three percent. Interest is payable monthly in arrears. The loan agreement
requires the monthly payment of an annualized unutilized loan fee equal to one
half of one percent (.5%) of the difference between the committed available
loan amount and the average outstanding loan balance. The Company has no
outstanding balance drawn on the line of credit as of the date of this Proxy
Statement.
Beginning November 26, 1996, the Company entered into three note agreements
totaling $1,557,933 with DVI, Inc. The loan agreements require principal and
interest payments in monthly installments at varying amounts through September
2002, at annual interest rates ranging from 10.1% to 10.95%. Maturity dates of
the notes range from December 1, 2001 to September 25, 2002, and all notes are
secured by equipment.
On August 4, 1998, the Company completed the sale in a private placement of
2,142,858 shares of Common Stock at a price of $7.00 per share pursuant to a
Common Stock Purchase Agreement dated June 30, 1998 among the Company, BCC
Acquisition II LLC and certain other persons, resulting in proceeds to the
Company of $15,000,006. The purchasers also received five-year warrants to
purchase 714,286 shares of Common Stock at $8.40 per share, providing
additional future funding potential of approximately $6,000,000. The warrants
are exercisable immediately and are callable after a twelve month waiting
period if the Common Stock closing price exceeds certain levels for twenty
consecutive trading days. Proceeds from the sale of shares of Common Stock
will be used for product development, sales and marketing and other general
corporate purposes.
In addition, the Company issued Convertible Senior Secured Fixed Rate Notes
to an investor group lead by BCC Acquisition II LLC, with proceeds aggregating
$7,300,000. The notes are due in five years, require quarterly interest
payments at a rate of 7% per annum, and are convertible into the Company's
Common Stock at $8.40 per share. Proceeds of the notes were used to retire
other debt of the Company.
Pursuant to the Common Stock Purchase Agreement, the Company agreed to
appoint two representatives of BCC Acquisition II LLC to serve as members of
the Board of Directors, and to use its reasonable best efforts to ensure that
the two representatives will be included as nominees of the Board of Directors
and elected to serve on the Board of Directors so long as BCC Acquisition II
LLC and the other investors (or their assignees) collectively own at least 5%
of the Company's outstanding voting securities or at least 75% of the number
of shares issued under the Common Stock Purchase Agreement. BCC Acquisition II
LLC nominated Dr. Milligan and Mr. Cohn (who has been a director of the
Company since 1996) as their representatives. Mr. Cohn is (1) a manager of Bay
City Capital Management, LLC, the general partner of Bay City Capital Fund I,
L.P., which is the managing member of BCC Acquisition II LLC, and (2) a
manager of Bay City Capital LLC, which provides investment advice to Bay City
Capital Fund I, L.P.
In addition to his affiliation with BCC Acquisition II LLC, Mr. Cohn,
through his spouse and the Gerald L. Cohn Revocable Trust, participated in the
Common Stock Purchase Agreement and the related sale of Convertible Senior
Secured Fixed Rate Notes. Mr. Cohn's spouse purchased 2,000 shares, and
received warrants to purchase an additional 667 shares. The Gerald L. Cohn
Revocable Trust purchased Convertible Senior Secured Fixed Rate Notes in the
principal amount of $400,000, which are convertible into 47,619 shares of
Common Stock. Certain other Cohn family trusts not beneficially owned by Mr.
Cohn also participated as investors in the Common Stock Purchase Agreement.
7
<PAGE>
Summary Compensation Table
The following table sets forth the cash and noncash compensation for each of
the last three fiscal years awarded to or earned by the Chief Executive
Officer and the other most highly compensated executive officers of the
Company whose salary and bonus earned in the fiscal year ended December 31,
1998 exceeded $100,000 for services rendered:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual
Compensation Stock
----------------- Options All Other
Year Salary Bonus (Shares) Compensation
---- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
David T. Giddings 1998 $300,000 -- -- --
President, Chief Executive 1997 300,000 $180,000 100,000 --
Officer and Chairman 1996 216,923 235,000(/2/) 500,000 --
of the Board(/1/)
Roy S. Johnson 1998 $189,000 $ -- -- $48,804(/4/)
Executive Vice President and 1997 166,400 40,350 25,000 38,300(/4/)
President and Managing 1996 9,400 -- 150,000 --
Director of DML(/3/)
Laurence L. Betterley 1998 $175,000 $ 10,500 -- $ --
Senior Vice President and 1997 159,615 47,885 75,000 --
Chief Financial Officer(/5/) 1996 53,077 -- 75,000 --
James R. Miller 1998 $175,000 $ 11,813 -- $ --
Senior Vice President of Sales 1997 164,415 39,460 25,000 --
1996 159,014 47,340 24,000 57,023(/6/)
</TABLE>
- --------
(1) Mr. Giddings was employed by the Company on April 12, 1996.
(2) Includes a $100,000 signing incentive advance, earned in equal increments
of $33,333 per year over a period of three years. Should Mr. Giddings
elect to leave the Company prior to the end of the three year period, the
unearned portion will be returned to the Company.
(3) Mr. Johnson was employed by the Company on November 6, 1996, as part of
the Company's acquisition of Biomedical Sensors, Ltd., now known as
Diametrics Medical, Ltd.
(4) Includes Company pension plan contributions made on Mr. Johnson's behalf
and Company expenses related to Mr. Johnson's use of a Company automobile.
(5) Mr. Betterley was employed by the Company on August 26, 1996.
(6) Includes relocation-related tax and expense reimbursements.
Employment Contracts and Change in Control Agreements
Except as provided below, none of the Company's executive officers has a
written employment agreement. Pursuant to a Severance Pay Agreement dated July
31, 1998, in addition to payment of full base salary, bonus and benefits
earned through date of termination, Mr. Giddings will receive a lump-sum cash
severance payment equal to three times his full base salary in effect
immediately prior to termination, plus the targeted bonus Mr. Giddings would
have earned for the year in which termination is effective (assuming for such
propose the achievement of targeted performance), under certain circumstances
following a change in control of the Company, as defined in the Severance Pay
Agreement, subject to certain tax adjustments. Mr. Giddings' Severance Pay
Agreement is for a three year term and automatically renews for an additional
three year term unless earlier canceled in writing. Mr. Giddings' stock
options also will vest immediately in the event of a change in control.
8
<PAGE>
Similar severance arrangements for the Company's executive officers under
certain circumstances following a change in control have been established,
with lump-sum cash severance payments equal to two times full base salary in
effect immediately prior to termination, plus the targeted bonus such
executive officers would have earned for the year in which termination is
effective (assuming for such purpose the achievement of targeted performance),
subject to certain tax adjustments. In addition, severance arrangements have
been established for the Company's executive officers in the event of
termination for reasons other than "cause," providing for the payment of full
base salary, bonus and benefits earned through date of termination, as well as
the continuation of payment of the full base salary then in effect for an
additional twelve month period, plus a pro rata portion of the targeted bonus
such executive officer would have earned for the year in which termination is
effective (assuming for such purpose the achievement of targeted performance).
As described below in footnote (1) to the table entitled "Aggregate Value of
Options Held at December 31, 1998," the exercisability of options granted to
named executive officers is accelerated in the event of a "change in control"
involving the Company.
Stock Options
No stock options were granted to the executive officers named in the Summary
Compensation Table above during the year ended December 31, 1998. The
following table summarizes the value of all options held by such persons at
December 31, 1998. No options held by such executive officers were exercised
during the 1998 fiscal year.
Aggregate Value of Options Held At December 31, 1998
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options Held at In-the-Money Options Held
December 31, 1998(1) at December 31, 1998(2)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
David T. Giddings........... 275,000 325,000 $13,938 $41,813
Roy S. Johnson.............. 81,250 93,750 $14,063 $14,063
Laurence L. Betterley....... 101,250 48,750 $34,688 $ -0-
James R. Miller............. 110,250 38,750 $ -0- $ -0-
</TABLE>
- --------
(1) Each option represents the right to purchase one share of Common Stock and
all grants were made pursuant to the Stock Option Plan. To the extent not
already exercisable, the options granted to the named executive officers
become exercisable in the event of a "change in control" (as defined in
the stock option agreements) involving the Company.
(2) Value based on the difference between the fair market value of the shares
of Common Stock at December 31, 1998 ($4.9375) and the exercise price of
the options.
9
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total return of the Nasdaq Stock
Market Index and the Nasdaq Medical Devices, Instruments and Supplies
Manufacturer Index over the same period for the period from June 14, 1994 (the
date of the initial public offering of the Common Stock) to December 31, 1998
(assuming the investment in the Common Stock and each index was $100 on June
14, 1994, and that dividends, if any, were reinvested). The Company previously
compared its cumulative total shareholder return with the cumulative total
return of the Nasdaq Non-Financial Stock Index. During 1998, Nasdaq began to
provide an index for medical devices, instruments and supplies manufacturers.
The Company determined that this new index is more reflective of the Company's
industry and competitors. The cumulative total return of the Nasdaq Non-
Financial Index as of December 31, 1998 was $304.37.
Comparison of Cumulative Total Return since June 14, 1994
among Diametrics Medical, Inc., the Nasdaq Stock Market Index
and the Nasdaq Medical Devices, Instruments and Supplies Manufacturer Index
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
6/14/94 12/30/94 12/29/95 12/31/96 12/31/97 12/31/98
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Diametrics Medical, Inc... $100.00 $ 84.00 $ 78.00 $ 70.00 $ 89.00 $ 79.00
Nasdaq Stock Market Index. 100.00 102.84 145.45 178.86 219.43 308.46
Nasdaq Medical Devices,
Instruments and Supplies
Manufacturer Index....... 100.00 114.20 173.31 162.34 185.99 210.27
</TABLE>
10
<PAGE>
CERTAIN TRANSACTIONS
Effective March 31, 1998, the Company secured a $1,000,000 receivable backed
credit line with DVI Business Credit Corporation. DVI Business Credit
Corporation is a business unit of DVI, Inc., of which Mr. Cohn is a director
and consultant. The loan agreement requires the Company's accounts receivable
collections to be applied to reduce the loan balance, including advances,
interest and fees. All advances under the line of credit bear interest on the
unpaid principal amount at a fluctuating rate equal to the Prime Rate plus
three percent. Interest is payable monthly in arrears. The loan agreement
requires the monthly payment of an annualized unutilized loan fee equal to one
half of one percent (.5%) of the difference between the committed available
loan amount and the average outstanding loan balance. The Company has no
outstanding balance drawn on the line of credit as of the date of this Proxy
Statement.
Beginning November 26, 1996, the Company entered into three note agreements
totaling $1,557,933 with DVI, Inc. The loan agreements require principal and
interest payments in monthly installments at varying amounts through September
2002, at annual interest rates ranging from 10.1% to 10.95%. Maturity dates of
the notes range from December 1, 2001 to September 25, 2002, and all notes are
secured by equipment.
On August 4, 1998, the Company completed the sale in a private placement of
2,142,858 shares of Common Stock at a price of $7.00 per share pursuant to a
Common Stock Purchase Agreement dated June 30, 1998 among the Company, BCC
Acquisition II LLC and certain other persons, resulting in proceeds to the
Company of $15,000,006. The purchasers also received five-year warrants to
purchase 714,286 shares of Common Stock at $8.40 per share, providing
additional future funding potential of approximately $6,000,000. The warrants
are exercisable immediately and are callable after a twelve month waiting
period if the Common Stock closing price exceeds certain levels for twenty
consecutive trading days. Proceeds from the sale of shares of Common Stock
will be used for product development, sales and marketing and other general
corporate purposes.
In addition, the Company issued Convertible Senior Secured Fixed Rate Notes
to an investor group led by BCC Acquisition II LLC, with proceeds aggregating
$7,300,000. The notes are due in five years, require quarterly interest
payments at a rate of 7% per annum, and are convertible into the Company's
Common Stock at $8.40 per share. Proceeds of the notes were used to retire
other debt of the Company.
Pursuant to the Common Stock Purchase Agreement, the Company agreed to
appoint two representatives of BCC Acquisition II LLC to serve as members of
the Board of Directors, and to use its reasonable best efforts to ensure that
the two representatives will be included as nominees of the Board of Directors
and elected to serve on the Board of Directors so long as BCC Acquisition II
LLC and the other investors (or their assignees) collectively own at least 5%
of the Company's outstanding voting securities or at least 75% of the number
of shares issued under the Common Stock Purchase Agreement. BCC Acquisition II
LLC nominated Dr. Milligan and Mr. Cohn (who had already been a director of
the Company since 1996) as their representatives.
For a discussion of certain Company transactions with Mr. Cohn, see
"Executive Compensation-- Compensation Committee Interlocks and Insider
Participation" above.
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock, as of March 26, 1999 by: (i) each person who is
known by the Company to beneficially own more than 5% of the Common Stock,
(ii) each of the Company's directors and nominees for director, (iii) each of
the officers named under the "Summary Compensation Table" above and (iv) all
directors, nominees and executive officers of the Company as a group:
<TABLE>
<CAPTION>
Number of
Shares Percent
Beneficially of
Name of Beneficial Owner Owned (/1/) Class
- ------------------------ ------------ -------
<S> <C> <C>
BCC Acquisition II LLC (/2/).............................. 3,400,541 13.3%
c/o Bay City Capital LLC
750 Battery Street, Suite 600
San Francisco, CA 94111
Amarfour, L.L.C. (/3/).................................... 1,789,100 7.4
200 West Madison Street
Suite 3800
Chicago, IL 60606
Investment Advisors, Inc. (/4/)........................... 1,490,498 6.2
3700 First Bank Place
P.O Box 357
Minneapolis, MN 55440
State of Wisconsin Investment Board (/5/)................. 1,413,800 5.9
P.O. Box 7842
Madison, WI 53707
David T. Giddings (/6/)................................... 385,414 1.6
Mark B. Knudson, Ph.D. (/7/).............................. 382,821 1.6
Gerald L. Cohn (/8/)...................................... 286,832 1.2
James R. Miller (/9/)..................................... 115,250 *
Laurence L. Betterley (/10/).............................. 134,700 *
Roy S. Johnson (/11/)..................................... 85,343 *
Andre de Bruin (/12/)..................................... 53,357 *
Richard A. Norling (/13/)................................. 28,857 *
David V. Milligan, Ph.D. (/14/)........................... 502 *
All directors and executive officers as a group (9
persons) (/15/).......................................... 1,473,076 5.9
</TABLE>
- --------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes generally voting power
and/or investment power with respect to securities. Shares of Common
Stock subject to options, warrants or other securities currently
exercisable or convertible, or exercisable or convertible within 60 days
of March 26, 1999, are deemed outstanding for computing the percentage of
the person holding such options but are not deemed outstanding for
computing the percentage of any other person. Except as indicated by
footnote, the persons named in the table above have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.
(2) In a Schedule 13D dated as of August 4, 1998, BCC Acquisition II LLC
indicated that it is the beneficial owner of 3,400,541 shares of Common
Stock with shared voting and dispositive power with respect to such
shares. Includes 650,731 shares of Common Stock issuable upon the
exercise of outstanding warrants, and 797,619 shares of Common Stock
issuable upon the conversion of outstanding convertible notes.
(3) In a Schedule 13D dated as of August 4, 1998, Amarfour, L.L.C.
("Amarfour") indicated that it is the beneficial owner of 1,789,100
shares of Common Stock, with sole voting and dispositive power with
respect to such shares. Amarfour also indicated that an affiliate of
Amarfour (the "RA Trusts") directly owned
12
<PAGE>
25,319 shares of Common Stock, and that such affiliate owned indirect
interests in each of BCC Acquisition II LLC, the Bay City Capital Fund I,
L.P., Bay City Capital Management LLC and Bay City Capital LLC, which
entities had acquired beneficial ownership of up to 3,400,541 shares of
Common Stock as of such date. Amarfour also indicated that as of August 4,
1998 certain trusts primarily for the benefit of the lineal descendants of
Nicholas J. Pritzker, deceased (the "Hoinfad Trusts") owned less than 10%
interest in AEOW 96, LLC ("AEOW"), and that as of August 4, 1998, AEOW
acquired beneficial ownership of 30,953 shares of the Company's Common
Stock and, as of such date, beneficially owned an aggregate of 91,042
shares of the Company's Common Stock. Different individuals serve as
trustees of the member trusts of Amarfour and the RA Trusts on the one hand
and the Hoinfad Trusts on the other hand, and their is no overlap in
trusteeships between the Hoinfad Trusts and the member trusts of Amarfour,
but there is overlap in trusteeships between the member trusts of Amarfour
and the RA Trusts. Amarfour disclaims the existence of any group and
beneficial ownership of such shares.
(4) In a Schedule 13G dated as of September 9, 1998, Investment Advisors,
Inc. ("IAI") indicated (i) that it is the beneficial owner of 1,123,598
shares of Common Stock, (ii) that it has sole voting and dispositive
power with respect to 772,998 of such shares and shared voting and
dispositive power with respect to 350,600 of such shares, and (iii) that
all of such shares are held by various custodial institutions for the
benefit of clients of IAI, none of whom individually own beneficially
more than 5% of the Common Stock. Pursuant to a telephone conversation
between the Company and IAI, IAI confirmed that it beneficially owns
1,490,498 shares of the Company's Common Stock. IAI is an investment
adviser registered under Section 203 of the Investment Advisers Act of
1940.
(5) In a Schedule 13G dated as of January 16, 1999, the State of Wisconsin
Investment Board indicated that it is the beneficial owner of 1,413,800
shares of Common Stock with sole voting and dispositive power with
respect to such shares.
(6) Includes 375,000 shares of Common Stock issuable upon exercise of
outstanding options.
(7) Includes 50,500 shares of Common Stock issuable upon the exercise of
outstanding options. Includes 156,250 shares of Common Stock beneficially
owned by Medical Innovation Fund II ("MIF II"). Dr. Knudson is a general
partner of Medical Innovation Partners II, the general partner of MIF II.
Dr. Knudson disclaims beneficial ownership of these securities except to
the extent of his proportionate pecuniary interest in the partnerships.
Excludes 418,666 shares of Common Stock held by Medical Innovation Fund
("MIF"), as well as 290,994 shares of Common Stock issuable upon the
exercise of certain warrants held by MIF. Medical Innovation Partners
("MIP") is the general partner of MIF. Dr. Knudson is a limited partner
of MIP. Dr. Knudson disclaims beneficial ownership of such shares except
to the extent of his proportionate pecuniary interests in such
partnerships.
(8) Includes 126,899 shares of Common Stock held by the Gerald L. Cohn
Revocable Trust, as well as 47,619 shares issuable to the Gerald L. Cohn
Revocable Trust upon the conversion of outstanding convertible notes.
Includes 3,000 shares owned by Mr. Cohn's spouse, as well as 667 shares
issuable to Mr. Cohn's spouse upon the exercise of outstanding warrants.
Also includes 26,875 shares of Common Stock issuable upon exercise of
outstanding options. Excludes 3,400,541 shares beneficially owned by BCC
Acquisition II LLC. On August 4, 1998, BBC Acquisition II LLC, a Delaware
limited liability company, acquired shares of Common Stock, warrants to
acquire additional shares of Common Stock and notes convertible into
shares of Common Stock. Mr. Cohn disclaims direct beneficial ownership in
the Company's securities held by BBC Acquisition II LLC and any
transaction therein.
(9) Includes 110,250 shares of Common Stock issuable upon the exercise of
outstanding options.
(10) Includes 111,250 shares of Common Stock issuable upon the exercise of
outstanding options.
(11) Includes 81,250 shares of Common Stock issuable upon exercise of
outstanding options.
(12) Includes 52,357 shares of Common Stock issuable upon exercise of
outstanding options.
(13) Includes 500 shares owned by Mr. Norling's spouse and 28,357 shares of
Common Stock issuable upon exercise of outstanding options.
(14) Includes 502 shares of Common Stock issuable upon exercise of outstanding
options.
(15) See Notes (6)--(14) above.
13
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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
ten percent 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 common stock and other equity securities of
the Company. Officers, directors and greater-than ten percent shareholders are
also required by SEC regulation 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 and written representations that no other
reports were required, during the fiscal year ended December 31, 1998 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with, except that (1)
a statement of change in beneficial ownership on Form 4 was not timely filed
by Mr. Norling to reflect a purchase of 500 shares by his spouse in September
of 1998, but such change was subsequently reported on Form 4, and (2) an
annual statement of beneficial ownership on Form 5 was not timely filed by Mr.
Cohn to reflect the annual grant to outside directors of an option to purchase
8,000 shares on May 13, 1998, the date of the 1998 Annual Meeting of
Shareholders, but such grant was subsequently reported.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP as independent
auditors for the Company for the fiscal year ending December 31, 1999. KPMG
Peat Marwick LLP has served as the Company's independent auditors since 1990
and has no relationship with the Company other than that arising from its
employment as independent auditors. Representatives of KPMG Peat Marwick LLP
are expected to be present at the Annual Meeting, will have an opportunity to
make a statement if they desire to do so, and will be available to respond to
appropriate questions from shareholders.
PROPOSALS FOR THE NEXT ANNUAL MEETING
Pursuant to federal securities laws, any proposal by a shareholder to be
presented at the 2000 Annual Meeting of Shareholders and to be included in the
Company's proxy statement must be received at the Company's executive offices,
2658 Patton Road, Roseville, Minnesota 55113, no later than the close of
business on December 14, 1999. Proposals should be sent to the attention of
the Secretary. Pursuant to the Company's Bylaws, in order for business to be
properly brought before the next annual meeting by a shareholder, the
shareholder must give written notice of such shareholder's intent to bring a
matter before the annual meeting no later than fifteen days following the day
on which the notice of the 2000 Annual Meeting of Shareholders is mailed to
shareholders. Each such notice should be sent to the attention of the
Secretary, and must set forth certain information with respect to the
shareholder who intends to bring such matter before the meeting and the
business desired to be conducted, as set forth in greater detail in the
Company's Bylaws. The Company intends to exercise its discretionary authority
with respect to any matter not properly presented by such date in accordance
with the proxy rules adopted under the Securities Exchange Act of 1934.
BY ORDER OF THE BOARD OF DIRECTORS
Kenneth L. Cutler
Secretary
April 12, 1999
14
<PAGE>
DIAMETRICS MEDICAL, INC.
2658 Patton Road
Roseville, Minnesota 55113
Annual Meeting of Shareholders May 12, 1999
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned appoints David T. Giddings and Laurence L. Betterley, and
each of them, with power to act without the other and with all the right of
substitution in each, the proxies of the undersigned to vote all shares of
Diametrics Medical, Inc. (the "Company") held by the undersigned on March 26,
1999, at the Annual Meeting of Shareholders of the Company to be held on
Wednesday, May 12, 1999 at 3:30 p.m., at the Minneapolis Marriott City Center,
30 South Seventh Street, Minneapolis, Minnesota, and at all adjournments
thereof, with all the powers the undersigned would possess if present in person.
All previous proxies given with respect to the meeting are revoked.
Receipt of Notice of Annual Meeting of Shareholders and Proxy Statement is
acknowledged by your execution of this proxy. Complete, sign, date and return
the proxy in the addressed envelope -- no postage required. Please mail promptly
to save further solicitation expenses.
(To be Signed on Reverse Side)
<PAGE>
-- Please Detach and Mail in the Envelope Provided --
- --------------------------------------------------------------------------------
Please mark your
[X] votes as in this
example
FOR all nominees WITHHOLD
(except as marked to AUTHORITY
the contrary below: to vote for all
nominees
(1) Election of Directors: [ ] [ ]
Nominees: David T. Giddings
Andre de Bruin
Richard A. Norling
To withhold authority to vote for a specific nominee, place a line through such
nominee's name at right
(2) To vote with discretionary authority on such other matters as may properly
come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS PROVIDED BY THE UNDERSIGNED
SHAREHOLDER, THE PROXY WILL BE VOTED "FOR" ALL PERSONS NAMED IN ITEM 1 AT LEFT,
ON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST INTEREST OF
THE COMPANY.
SIGNATURE(S)_________________________________
_________________________________ Dated ___________________, 1999
INSTRUCTIONS: When shares are held by joint tenants, all joint tenants should
sign. When signing as attorney, executor, administrator,
custodian or guardian, please give full title as such. If shares
are held by a corporation, this proxy should be signed in full
corporate name by its president or other authorized officer. If
a partnership holds the shares subject to this proxy, an
authorized person should sign in the name of such partnership.
- --------------------------------------------------------------------------------
