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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___)
Filed by the Registrantx
Filed by a Party other than the Registranto
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o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
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Diagnostic Products Corporation
Diagnostic Products Corporation
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1. | To elect a Board of Directors to serve until the next Annual Meeting of Shareholders and until their respective successors are elected and qualified. The nominees for election to the Board of Directors are: Sidney A. Aroesty, Frederick Frank, Kenneth A. Merchant, John H. Reith, Dr. James D. Watson, Ira Ziering and Michael Ziering. | |
2. | To transact such other business and to consider and take action upon any and all matters that may properly come before the Meeting or any adjournment thereof. |
By Order of the Board of Directors | |
FRITZ BACKUS | |
Secretary |
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Principal | Director | |||||||||
Name | Age | Occupation | Since | |||||||
Sidney A. Aroesty | 58 | President | 1981 | |||||||
Frederick Frank | 73 | Vice Chairman, Lehman Brothers Inc. | 1996 | |||||||
Kenneth A. Merchant | 58 | Professor of Accounting, University of Southern California | 2003 | |||||||
John H. Reith | 56 | President, The Reith Company | 2004 | |||||||
James D. Watson, Ph.D. | 77 | Chancellor, Cold Spring Harbor Laboratory | 1987 | |||||||
Ira Ziering | 46 | Senior Vice President, Business and Legal | 2000 | |||||||
Michael Ziering | 49 | Chairman and Chief Executive Officer | 1994 |
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• | the fact that a DPC director, or an immediate family member of a director, is an executive officer, director or equity owner of another company that makes payments to, or receives payments from, DPC in any single fiscal year for property or services in an amount that is less than 1% of the annual consolidated gross revenues of the other company; or | |
• | the fact that a DPC director, or an immediate family member of a director, serves as an officer, director or trustee of a charitable or not-for-profit organization for which a DPC executive officer or director also serves as an officer, director or trustee or to which DPC makes charitable or other payments in any single fiscal year in an amount that is less than 1% of the organization’s annual consolidated gross revenues. |
• | Code of Business Conduct — This Code sets forth the Company’s values and expectations regarding ethical and lawful conduct by its directors, officers and employees. | |
• | Corporate Governance Guidelines — These are practices and procedures to assist the Board in the exercise of its responsibilities. | |
• | Code of Ethics for Senior Financial Officers — The purpose of this Code is to deter wrongdoing and to promote honest and ethical conduct and compliance with applicable laws and regulations by the Company’s senior financial officers. |
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Name | Age | Position | ||||
Michael Ziering | 49 | Chairman of the Board and Chief Executive Officer | ||||
Sidney A. Aroesty | 58 | President and Chief Operating Officer | ||||
Marilyn Ziering | 73 | Senior Vice President | ||||
James L. Brill | 54 | Vice President, Finance and Chief Financial Officer | ||||
Ira Ziering | 46 | Senior Vice President, Business and Legal | ||||
Robert DiTullio | 52 | Vice President, Regulatory Affairs and Quality Systems | ||||
Kathy J. Maugh | 60 | Vice President, Quality Control and Technical Services | ||||
Nicholaas Arnold | 54 | Vice President, Sales and Marketing | ||||
Douglas Olson | 58 | Chief Scientific Officer |
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Annual | Long-Term | ||||||||||||||||||||
Compensation(1) | Compensation | ||||||||||||||||||||
Securities | |||||||||||||||||||||
Underlying | All Other | ||||||||||||||||||||
Name and Principal Position | Year | Salary($) | Bonus($) | Options(#) | Compensation($)(2) | ||||||||||||||||
Michael Ziering | 2004 | 555,000 | 60,000 | 0 | 21,000 | ||||||||||||||||
Chief Executive Officer | 2003 | 530,000 | 40,000 | 0 | 28,450 | ||||||||||||||||
2002 | 510,000 | 0 | 0 | 30,700 | |||||||||||||||||
Sidney A. Aroesty | 2004 | 302,083 | 40,000 | 0 | 21,000 | ||||||||||||||||
President | 2003 | 200,000 | 0 | 0 | 23,500 | ||||||||||||||||
2002 | 325,000 | 22,500 | 0 | 27,000 | |||||||||||||||||
James L. Brill | 2004 | 285,000 | 40,000 | 0 | 21,000 | ||||||||||||||||
Vice President, Finance | 2003 | 264,600 | 40,000 | 0 | 24,469 | ||||||||||||||||
2002 | 252,000 | 22,500 | 0 | 25,540 | |||||||||||||||||
Ira Ziering | 2004 | 285,000 | 40,000 | 0 | 21,000 | ||||||||||||||||
Senior Vice President, | 2003 | 215,000 | 40,000 | 0 | 23,725 | ||||||||||||||||
Business and Legal | 2002 | 200,000 | 22,500 | 0 | 24,500 | ||||||||||||||||
Douglas Olson | 2004 | 272,917 | 40,000 | 0 | 21,000 | ||||||||||||||||
Chief Scientific Officer(3) | 2003 | 225,750 | 30,000 | 0 | 23,886 | ||||||||||||||||
2002 | 215,000 | 18,000 | 0 | 22,650 |
(1) | While the Named Officers enjoy certain perquisites, the amounts did not exceed the lesser of $50,000 or 10% of each such person’s salary plus bonus and, accordingly, such amounts have been omitted from the table as permitted by SEC rules. |
(2) | These amounts represent Company contributions to its retirement plans. |
(3) | Mr. Olson was elected Chief Scientific Officer in 2004. |
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Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised Options | In-the-Money Options at | |||||||||||||||||||||||
Shares | at December 31, 2004(#) | December 31, 2004($)(1) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise(#) | Realized($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Michael Ziering | 20,000 | 602,000 | 146,000 | 84,000 | 4,975,540 | 3,475,760 | ||||||||||||||||||
Sidney A. Aroesty | 20,000 | 700,000 | 44,000 | 36,000 | 1,542,240 | 1,320,160 | ||||||||||||||||||
James L. Brill | 4,000 | 155,640 | 33,200 | 48,000 | 1,058,296 | 1,794,000 | ||||||||||||||||||
Ira Ziering | 0 | 0 | 60,000 | 60,000 | 2,092,600 | 1,980,600 | ||||||||||||||||||
Douglas Olson | 0 | 0 | 27,999 | 10,001 | 1,094,282 | 394,518 |
(1) | Represents the difference between the aggregate market value on December 31, 2004 ($55.05 per share) and the aggregate exercise price. |
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Compensation Committee | |
Kenneth A. Merchant, Chair | |
Frederick Frank |
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![Performance Graph](https://capedge.com/proxy/DEF 14A/0000950129-05-007478/v10297dv1029701.gif)
Diagnostic Products | S&P 600 Health Care | |||||||||||
Corporation | Equipment | S&P Small Cap 600 | ||||||||||
1999 | 100 | 100 | 100 | |||||||||
2000 | 226.32 | 139.84 | 111.8 | |||||||||
2001 | 366.79 | 174.46 | 119.11 | |||||||||
2002 | 324.22 | 154.98 | 101.69 | |||||||||
2003 | 387.82 | 205.88 | 141.13 | |||||||||
2004 | 467.68 | 247.64 | 173.09 |
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Number | ||||||||||
of | Percentage | |||||||||
Name | Shares(1) | Ownership | ||||||||
Directors and Named Officers | ||||||||||
Sidney A. Aroesty | 44,000 | (2) | ** | |||||||
James L. Brill | 51,200 | (3) | ** | |||||||
Frederick Frank | 59,999 | (4) | ** | |||||||
Kenneth A. Merchant | 6,000 | (5) | ** | |||||||
Douglas Olson | 31,373 | (6) | ** | |||||||
John H. Reith | 0 | |||||||||
Dr. James D. Watson | 70,138 | (7) | ** | |||||||
Ira Ziering | 393,591 | (8) | 1.3 | % | ||||||
Michael Ziering | 689,670 | (9) | 2.3 | % | ||||||
All directors and executive officers as a group (13 persons) | 6,164,865 | (10) | 20.7 | % | ||||||
5% or More Shareholders | ||||||||||
American Express Financial Corporation | 2,311,598 | (11) | 7.9 | % | ||||||
200 AXP Financial Center | ||||||||||
Minneapolis, MN 55474 | ||||||||||
Columbia Wanger Asset Management, L.P. | 1,847,100 | (11) | 6.3 | % | ||||||
227 West Monroe Street, Suite 3000 | ||||||||||
Chicago, IL 60606 | ||||||||||
Louis Colen | 1,470,505 | (11) | 5.0 | % | ||||||
2727 Krim Drive | ||||||||||
Los Angeles, CA 90064 | ||||||||||
Kayne Anderson Rudnick Investment | 2,220,694 | (11) | 7.6 | % | ||||||
Management, LLC | ||||||||||
1800 Avenue of the Stars | ||||||||||
Los Angeles, CA 90067 | ||||||||||
Wellington Management Company, LLP | 1,728,390 | (11) | 5.9 | % | ||||||
75 State Street | ||||||||||
Boston, MA 02109 | ||||||||||
Marilyn Ziering | 4,768,894 | 16.3 | % | |||||||
5210 Pacific Concourse Drive | ||||||||||
Los Angeles, CA 90045 |
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(1) | Includes shares allocated to each executive officer’s individual account but held directly by the Company’s retirement plan. | |
(2) | Includes 44,000 shares subject to options which are exercisable within 60 days. | |
(3) | Includes 41,200 shares subject to options which are exercisable within 60 days. | |
(4) | Includes 59,999 shares subject to options which are exercisable within 60 days. | |
(5) | Includes 6,000 shares subject to options which are exercisable within 60 days. | |
(6) | Includes 31,065 shares subject to options which are exercisable within 60 days. | |
(7) | Includes 26,668 shares subject to options which are exercisable within 60 days. | |
(8) | Includes 92,000 shares subject to options which are exercisable within 60 days, and 2,140 shares held by Mr. Ziering’s wife, as to which beneficial ownership is disclaimed. | |
(9) | Includes 150,000 shares subject to options which are exercisable within 60 days and 1,170 shares held by Mr. Ziering’s wife, as to which beneficial ownership is disclaimed. |
(10) | See Notes above. Also includes the shares held by Marilyn Ziering and 46,200 shares subject to options which are exercisable within 60 days held by executive officers not named in the foregoing table. |
(11) | Holdings at December 31, 2004, as reported in a Schedule 13G filed by such party with the SEC. |
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• | Discussed and considered the independence of the Company’s independent auditors, including a review, as necessary, of all relationships and services which might bear on the objectivity of the auditor; | |
• | Received written affirmation that the auditor is independent in accordance with the requirements of Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees;” | |
• | Discussed with management and the auditor the audit scope and process, and received and reviewed all reports in respect thereof; | |
• | Reviewed and discussed the Company’s annual audited financial statements with management and the independent auditors; | |
• | Discussed with the independent auditor the matters required to be reviewed by auditing standards generally accepted in the United States, including the matters required to be discussed by Statement of Auditing Standards No. 61, as amended, “Communication with Audit Committees” (“SAS 61”); and | |
• | Provided to the independent auditor full access to the Committee and the Board to report on any and all appropriate matters. |
Submitted by: | Kenneth A. Merchant, Chair Frederick Frank John H. Reith |
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2003 | 2004 | |||||||
Audit fees(1) | $ | 871,500 | $ | 2,924,000 | ||||
Audit-related fees(2) | 259,000 | 113,000 | ||||||
Tax fees(3) | 713,000 | 634,000 | ||||||
All other fees | -0- | -0- |
(1) | These fees relate to the audits of the annual financial statements, reviews of the quarterly financial statements, the audit of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and consultation with respect to various accounting and financial matters. |
(2) | These fees relate principally to advisory services relating to compliance with the Sarbanes-Oxley Act. |
(3) | These fees relate principally to federal, state and local tax return assistance, assistance with tax audits and appeals, and assistance with research and development tax credit documentation and analysis for amended returns. |
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By Order of the Board of Directors |
FRITZ BACKUS | |
Secretary |
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DIAGNOSTIC PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS SEPTEMBER 8, 2005
The undersigned hereby appoints MICHAEL ZIERING and JAMES L. BRILL and each of them, the attorneys and proxies of the undersigned with full power of substitution to appear and to vote all of the shares of common stock of DIAGNOSTIC PRODUCTS CORPORATION held of record by the undersigned on July 15, 2005, at the Annual Meeting of Shareholders to be held on September 8, 2005, and any postponements or adjournments thereof, as designated herein.
Retirement Plan Participants – Voting Instructions
The undersigned participant in the Diagnostic Products Corporation Retirement Plan hereby directs the Plan trustee to vote the number of shares of Company common stock held in the undersigned’s account on July 15, 2005, in accordance with the instructions given herein at the Annual Meeting of Shareholders to be held on September 8, 2005, and any postponements or adjournments thereof. Shares in the Plan for which voting instructions are not received bySeptember 1, 2005,will not be voted.
(Continued, and to be marked, dated and signed, on the other side)
Address Change/Comments(Mark the corresponding box on the reverse side)
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Mark Here for Address Change or Comments. | o | |
SEE REVERSE SIDE |
FORall nominees listed below (except as marked to the contrary below) | WITHHOLD AUTHORITY to vote for all nominees listed below | |||||||
o | o | |||||||
1. | ELECTION OF DIRECTORS | |||||||
Nominees: | ||||||||
(01) Sidney A. Aroesty | ||||||||
(02) Frederick Frank | ||||||||
(03) Kenneth A. Merchant | ||||||||
(04) John H. Reith | ||||||||
(05) Dr. James D. Watson | ||||||||
(06) Ira Ziering | ||||||||
(07) Michael Ziering |
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DIAGNOSTIC PRODUCTS CORPORATION. IF NO VOTE IS INDICATED, THIS PROXY WILL BE VOTED WITH AUTHORITY FOR THE ELECTION OF THE DIRECTORS NAMED ABOVE.
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENVELOPE PROVIDED. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THIS MEETING. THE EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
To withhold authority to vote for any individual nominee, write that nominee’s name on the space provided below. | If you plan to attend the Annual Meeting, please mark the WILL ATTEND box | |
WILL ATTEND o | ChooseML LinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect®at www.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment. |
Signature | Signature | Date | ||||||||