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
Respironics, Inc.
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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Notes:
[LOGO OF RESPIRONICS INC.]
Dear Shareholder:
You are cordially invited to join us for our Annual Meeting of Shareholders to
be held this year on Thursday, November 19, 1998, at 1:00 p.m. (EST) at The
Renaissance Waverly at The Galleria Center, Atlanta, Georgia.
The Notice of Annual Meeting of Shareholders and the Proxy Statement that
follow describe the business to be conducted at the meeting. We will also
report on matters of current interest to our shareholders.
Representatives of the Company will be in attendance beginning at 12:00 p.m.
Please also take this opportunity to view Respironics products, which will be
on display.
YOUR VOTE IS IMPORTANT. Whether you own a few or many shares of stock, it is
important that your shares be represented. If you cannot personally attend, we
encourage you to make certain that you are represented at the meeting by
signing the accompanying proxy card and promptly returning it in the enclosed
envelope.
Very truly yours,
/s/ Dennis S. Meteny
Dennis S. Meteny
President and Chief Executive
Officer
October 19, 1998
RESPIRONICS, INC.
1501 Ardmore Boulevard
Pittsburgh, Pennsylvania 15221-4401
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------
The Annual Meeting of Shareholders of Respironics, Inc. will be held at The
Renaissance Waverly at The Galleria Center, 2450 Galleria Parkway, Atlanta,
Georgia on Thursday, November 19, 1998 at 1:00 p.m., in the Stanhope Room, for
the following purposes:
(1) To elect three directors;
(2) To approve amendments to the Company's 1992 Stock Incentive Plan to
increase the number of shares available for grant by 2,000,000 shares
to a total of 3,000,000 shares;
(3) To ratify the selection of auditors to examine the consolidated
financial statements of the Company for the fiscal year ending June 30,
1999; and
(4) To transact such other business as may properly come before the
meeting.
Please refer to the accompanying Proxy Statement for a description of the
matters to be considered at the meeting.
Please sign, date and return the enclosed proxy promptly in the envelope
provided, which requires no United States postage.
Dorita A. Pishko
Corporate Secretary
October 19, 1998
RESPIRONICS, INC.
1501 Ardmore Boulevard
Pittsburgh, Pennsylvania 15221-4401
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 19, 1998
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Respironics, Inc. (the "Company") for use at the Annual Meeting of
Shareholders to be held at 1:00 p.m., on Thursday, November 19, 1998 at The
Renaissance Waverly at The Galleria Center, 2450 Galleria Parkway, Atlanta,
Georgia. The accompanying Notice of Annual Meeting of Shareholders sets forth
the purposes of the meeting.
The enclosed proxy may be revoked at any time before its exercise by giving
notice of revocation to the Secretary of the Company. The shares represented
by proxies in the form solicited by the Board of Directors will be voted at
the meeting. If a choice is specified on the proxy with respect to a matter to
be voted upon, the shares represented by the proxy will be voted in accordance
with that specification. If no choice is specified, the shares will be voted
as stated below in this Proxy Statement.
It is expected that this Proxy Statement and the accompanying form of proxy
will first be mailed to shareholders of the Company on or about October 19,
1998. The Company's Annual Report to Shareholders for 1998 is enclosed with
this Proxy Statement but does not form a part of the proxy soliciting
material.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
If any shareholder wishes to present a proposal at the 1999 Annual Meeting
of Shareholders, the proposal must be received by the Secretary of the Company
by June 20, 1999 to be considered for inclusion in the Company's Proxy
Statement and form of proxy relating to the 1999 Annual Meeting. Any
shareholder proposal received by the Secretary of the Company after September
3, 1999 will be considered untimely under Rule 14a-4(c)(1) promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
The 1999 Annual Meeting is presently scheduled for November 18, 1999.
VOTING SECURITIES AND RECORD DATE
Holders of the Company's Common Stock of record as of the close of business
on October 2, 1998 (the "record date") are entitled to receive notice of and
to vote at the meeting. On the record date, the Company had outstanding
31,864,594 shares of Common Stock, the holders of which are entitled to one
vote per share.
SECURITY OWNERSHIP
Management
The following table shows the number of shares of Common Stock beneficially
owned by each director and nominee for director of the Company, the Chief
Executive Officer and the four other most highly compensated executive
officers of the Company and by all directors, nominees and executive officers
of the Company as a group, as of the record date. As used herein, "beneficial
ownership" means the sole or shared power to vote, or to direct the voting of,
a security, or the sole or shared investment power with respect to a security
(i.e., the power to dispose of, or to direct the disposition of, a security).
A person is deemed, as of any date, to have "beneficial ownership" of any
security that the person has the right to acquire within 60 days after that
date.
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AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OF BENFICIAL OWNER OWNERSHIP OF CLASS
- ----------------------- ---------- --------
Daniel P. Barry (1)........................................ 13,925 0.04%
Daniel J. Bevevino (2)..................................... 42,487 0.13%
Douglas A. Cotter (1)...................................... 41,600 0.13%
Robert D. Crouch (3)....................................... 307,966 0.71%
J. Terry Dewberry (4)...................................... 97,639 0.35%
Steven P. Fulton (5)....................................... 15,731 0.05%
James H. Hardie (1), (6)................................... 43,825 0.14%
Donald H. Jones (1)........................................ 14,825 0.05%
Joseph C. Lawyer (1), (7).................................. 17,125 0.05%
George J. Magovern, M.D. (1), (8).......................... 722,909 2.27%
Gerald E. McGinnis (9)..................................... 917,886 2.48%
Dennis S. Meteny (10)...................................... 427,053 1.34%
Craig B. Reynolds (11)..................................... 258,403 0.80%
All directors, nominees and executive officers as a group
(17 persons):............................................. 3,180,513 9.10%
- --------
(1) Includes shares which would be outstanding upon the exercise of currently
exercisable stock options granted under the 1991 Non-Employee Directors'
Stock Option Plan in the following amounts: Mr. Barry, 8,925 shares; Dr.
Cotter, 40,800 shares; Mr. Hardie, 26,825 shares; Mr. Jones, 3,825 shares;
Mr. Lawyer, 14,025 shares and Dr. Magovern, 39,325 shares.
(2) Includes 40,775 shares that would be outstanding upon the exercise of
currently exercisable stock options granted under the Company's 1984
Incentive Stock Option Plan and 1992 Stock Incentive Plan. Also includes
1,341 shares in Mr. Bevevino's 401(k) plan account, for which he has the
power to direct the voting.
(3) Includes 147,325 shares that would be outstanding upon the exercise of
currently exercisable stock options granted under the Company's 1984
Incentive Stock Option Plan and 1992 Stock Incentive Plan. Also includes
2,462 shares in Mr. Crouch's 401(k) plan account, for which he has the
power to direct the voting.
(4) Includes 72,138 shares that would be outstanding upon the exercise of
currently exercisable stock options which were granted to Mr. Dewberry by
Healthdyne Technologies, Inc. ("Healthdyne") and which were converted into
options to purchase the Company's Common Stock pursuant to the merger
involving Healthdyne.
(5) Includes 12,850 shares that would be outstanding upon the exercise of
currently exercisable stock options granted under the Company's 1992 Stock
Incentive Plan. Also includes 1,098 shares in Mr. Fulton's 401(k) plan
account, for which he has the power to direct the voting.
(6) Includes 12,000 shares held by a partnership in which Mr. Hardie is a
general partner and 4,900 shares held by Mr. Hardie's personal IRA
account. Does not include 16,000 shares owned by Mr. Hardie's wife, as to
which he disclaims beneficial ownership.
(7) Does not include 2,400 shares held by Mr. Lawyer's wife or 100 shares held
by Mr. Lawyer's son, who have sole voting and investment power of these
shares and as to which Mr. Lawyer disclaims beneficial ownership.
(8) Includes 319,697 shares held jointly with Dr. Magovern's wife, as to which
voting and investment power is shared, and 236,686 shares held by the
Magovern Grandchildren's Trust, of which Dr. Magovern and his wife are the
trustees, and 5,554 shares held by the Magovern Family Foundation Trust,
of which Dr. Magovern and his wife are the trustees, and 117,647 shares
held by the Broadmore Trust, of which Dr. Magovern and his wife are the
trustees.
2
(9) Includes 145,128 shares held in the Gerald E. McGinnis Charitable
Foundation. Does not include 29,200 shares held by Mr. McGinnis' wife, as
to which he disclaims beneficial ownership. Also includes 3,249 shares in
Mr. McGinnis' 401(k) plan account, for which he has the power to direct
the voting.
(10) Includes 366,898 shares held jointly with Mr. Meteny's wife, as to which
voting and investment power is shared, and 4,000 shares held by Mr.
Meteny's minor children, as to which he controls voting and investment
power. Also included are 56,155 that would be outstanding upon the
exercise of currently exercisable stock options granted under the
Company's 1984 Incentive Stock Option Plan and 1992 Stock Incentive Plan.
Also includes 5,465 shares in Mr. Meteny's 401(k) plan account, for which
he has the power to direct the voting.
(11) Includes 240,471 shares that would be outstanding upon the exercise of
currently exercisable stock options which were granted to Mr. Reynolds by
Healthdyne and which were converted into options to purchase the
Company's Common Stock pursuant to the merger involving Healthdyne.
The information presented is based upon the knowledge of management and, in
the case of the named individuals, upon information furnished by them.
Other Beneficial Owners
There are no shareholders known to the Company to be the beneficial owner of
more than 5% of the outstanding Common Stock as of the record date.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors has four committees to assist in the management of
the affairs of the Company: the Stock Option and Compensation Committee, the
Audit Committee, the Nominating Committee and the Strategy Committee.
Stock Option and Compensation Committee. The Stock Option and Compensation
Committee (the "Compensation Committee") currently consists of Dr. Cotter
(Chairman) and Messrs. Jones and Lawyer. The Compensation Committee
administers the Company's 1984 Incentive Stock Option Plan and the 1992 Stock
Incentive Plan and the Company's other stock option plans, and has the
authority to grant options thereunder. The Compensation Committee also makes
recommendations regarding the compensation payable, including compensation
under the Company's bonus plan, to all executive officers of the Company and
certain other management personnel.
Audit Committee. The Audit Committee consists of Messrs. Hardie (Chairman),
Barry and Dewberry. This committee assists the Board in fulfilling its
functions relating to corporate accounting and reporting practices and
financial and accounting controls.
Nominating Committee. The Nominating Committee consists of Messrs. McGinnis
(Chairman), Meteny and Reynolds, and Dr. Magovern. The Nominating Committee
reviews the size and composition of the Board of Directors and makes
recommendations with respect to nominations for directors. The Nominating
Committee will consider nominees recommended by shareholders provided that
shareholders submit the names of nominees in writing to the Secretary of the
Company together with a statement of the nominee's qualifications. Such
information should be received no later than May 31, 1999 with respect to
nominations for election at the 1999 Annual Meeting of Shareholders.
Strategy Committee. The Strategy Committee consists of all Directors. The
Strategy Committee makes recommendations to the Board of Directors with
respect to general corporate strategy, including the development or
acquisition of present and new products, and the development of strategies for
continued growth and profitability of the Company's business.
The Compensation Committee and the Strategy Committee both met four times,
the Audit Committee met twice, and the Nominating Committee did not meet
during fiscal year 1998. Each of these committees also met
3
informally by telephone during the fiscal year as needed. The Board of
Directors held four regular meetings and seven special meetings during fiscal
year 1998. Mr. Barry, because of a prior business commitment, was unable to
attend one of the special meetings. Mr. Lawyer, because of personal illness,
was unable to attend the June 1998 Board and Strategy Committee meetings. Dr.
Magovern, because of a prior commitment that could not be rescheduled, was
unable to attend two special meetings of the Board, one in February 1998 and
the second in March 1998.
Each director who is not an employee of the Company receives an annual fee
of $9,600 for his service as a director and committee member. Non-employee
directors receive a fee of $500 for attendance at meetings of the full Board
of Directors. In addition, each non-employee director serving as a committee
chairperson receives $600 while all other committee members receive $300 for
attendance at committee meetings. All directors are reimbursed for travel
expenses related to meetings of the Board. Directors of the Company who are
not employees also hold and receive stock options under the Company's 1991
Non-Employee Directors' Stock Option Plan. Under this Plan, each non-employee
director is granted an option on the third business day following each Annual
Meeting of Shareholders to purchase 5,100 shares of the Company's Common Stock
at the fair market value on such date. Each option has a term of 10 years, is
exercisable in installments and becomes fully exercisable after three years
from date of grant.
MATTERS TO BE ACTED UPON
1. ELECTION OF DIRECTORS
The Board of Directors, acting pursuant to the Restated Certificate of
Incorporation of the Company, has determined that the number of directors
constituting the full Board of Directors shall be nine at the present time.
The Board is divided into three classes. One such class is elected every
year at the Annual Meeting of Shareholders for a term of three years.
Accordingly, a class is to be elected at the 1998 Annual Meeting of
Shareholders, with each director so elected to hold office until the 2001
Annual Meeting of Shareholders or until the director's prior death,
disability, resignation or removal.
The Board of Directors has nominated Douglas A. Cotter, Ph.D. and Gerald E.
McGinnis for reelection to the Board for the class of 2001 and Craig B.
Reynolds, currently a member of the class of 2000, for election to the class
of 2001, and each of them has agreed to serve if elected. The Board of
Directors recommends that the shareholders vote "FOR" the election of the
three persons nominated to the Board of Directors. Proxies are solicited in
favor of these nominees and will be voted for them unless otherwise specified.
If any nominee becomes unable or unwilling to serve as director, it is
intended that the proxies will be voted for the election of such other person,
if any, as shall be designated by the Board of Directors.
Pursuant to the Agreement and Plan of Reorganization dated as of November
10, 1997 (as amended, the "Reorganization Agreement") among the Company, RIGA,
Inc. and Healthdyne, the Company agreed to nominate Parker H. Petit, formerly
a member of the class of 1998, for reelection to the class of 2001. Mr. Petit
resigned from the Board in August 1998 and indicated that he did not desire to
stand for reelection to the class of 2001. Pursuant to the Reorganization
Agreement, if Mr. Petit were unwilling or unable to be nominated for
reelection at the 1998 Annual Meeting of Shareholders, Messrs. Petit, Dewberry
and Reynolds (the "Continuing Healthdyne Directors") are entitled to designate
the person to be nominated in Mr. Petit's stead, subject to reasonable
approval of such person by the Board. The Continuing Healthdyne Directors have
approved the Board's nomination of Mr. Reynolds for election to the class of
2001 in Mr. Petit's stead. At the present time, the Board has determined to
fix the number of directors at nine, such that there will not be a vacancy on
the Board as a result of the election of Mr. Reynolds to the class of 2001.
Consideration is being given to the possibility of expanding the Board to ten
members at a later date to afford the Continuing Healthdyne Directors an
opportunity to designate a person to be nominated to fill the vacancy created
thereby, subject to reasonable approval of such person by the Board.
4
The Restated Certificate of Incorporation of the Company provides that the
size of the Board of Directors shall be determined by the Board of Directors.
Vacancies in the Board of Directors may be filled by Board action. The term of
office of any director so elected to the Board by the Board itself lasts until
the next election of the class of directors to which such director was
elected.
Information concerning those nominees for director (class of 2001) and the
other directors who will continue in office after the meeting (classes of 1999
and 2000) is set forth below.
NAME POSITION WITH THE COMPANY
---- -------------------------
Class of 2001
Douglas A. Cotter Ph.D. Director
Gerald E. McGinnis Chairman of the Board
Craig B. Reynolds Senior Vice President and Director
Class of 2000
James H. Hardie Director
Joseph C. Lawyer Director
Dennis S. Meteny President, Chief Executive Officer and Director
Class of 1999
Daniel P. Barry Director
J. Terry Dewberry Director
Donald H. Jones Director
Mr. Barry is 51 years old and a private investor. He has been a director of
the Company since August 1995. Mr. Barry had been the Vice Chairman of the
former AMSCO International, Inc. ("AMSCO") (now merged with Steris
Corporation) from July 1995 through May 1996. Prior to that, he served as
President and Chief Executive Officer of AMSCO from October 1994 through July
1995 and had been the Chief Financial Officer of, as well as serving in
various other executive and consulting capacities with AMSCO, since 1981. Mr.
Barry was a director of AMSCO from 1991 through 1996. He is also a director of
Tollgrade Communications, Inc.
Dr. Cotter is 55 years old. He has been a director of the Company since
February 1989. In April of 1998, Dr. Cotter re-established Healthcare
Decisions, Inc., a Massachusetts health care and biotechnology consulting firm
specializing in corporate development, strategic planning and acquisitions.
Dr. Cotter is the President of Healthcare Decisions, Inc. Between April 1996
and March 1998, Dr. Cotter was Vice President of Decision Resources, an
international consulting firm specializing in the health care industry
(primarily pharmaceuticals). From 1985 to 1996, he was President of the above-
mentioned Healthcare Decisions, Inc. For nineteen years prior to joining
Healthcare Decisions, Dr. Cotter was employed by Corning Glass Works, where he
held various management positions in research, product development and
clinical information systems.
Mr. Dewberry, age 54, is a private investor. He has served as a director of
the Company since the completion of the merger between the Company and
Healthdyne on February 11, 1998. From March 1992 until March 1996, Mr.
Dewberry was Vice Chairman of Healthdyne, Inc. From 1984 to 1992, Mr. Dewberry
served as President and Chief Operating Officer, and Executive Vice President
of Healthdyne. He is also a Director of Healthdyne Information Enterprises,
Inc.
Mr. Hardie is 68 years old. He has been a director of the Company since
November 1991. He is a lawyer and a partner of Reed Smith Shaw & McClay LLP, a
law firm with principal offices in Pittsburgh, Washington and Philadelphia,
which since 1988 has performed legal services for the Company. Mr. Hardie has
been a partner of that firm since 1962. He is a Director of Access
Corporation, a marketer and developer of document and image handling systems
and related software. He is also a director of a number of other corporations,
the securities of which are not publicly traded.
Mr. Jones is 61 years old. He has been a director of the Company since May
1996. Currently, Mr. Jones serves as chairman of Triangle Capital Corporation,
an investment banking and management firm. From 1990 to
5
1996, Mr. Jones served as Chairman of IndustryNet, an online electronic
commerce company linking business-to-business buyers and sellers through
electronic networks including the Internet. Mr. Jones founded IndustryNet in
1990. In 1996 IndustryNet, together with a subsidiary of another large
corporation, was merged into Nets, Inc. Mr. Jones was not an executive officer
of Nets, Inc., which filed for bankruptcy under Chapter 11 in May, 1997. In
1982 Mr. Jones launched International Cybernetics Corporation ("ICC"), a
developer of advanced factory automation control systems. In 1985 Mr. Jones
merged ICC into the Industrial Automation Systems Division of Gould
Electronics Inc. ("Gould") and he became Vice President of business
Development for Gould. In 1988 the division was sold to AEG, a West German
based multinational company and Mr. Jones ceased to be an officer. Mr. Jones
is a director of The Associated Group Inc., a telecommunications company; and
Teligent Corporation, a national facilities based competitive local exchange
carrier.
Mr. Lawyer is 53 years old. Since 1988, he has been President, Chief
Executive Officer and a Director of Chatwins Group, Inc. ("CGI"),
headquartered in Pittsburgh, which designs, manufactures and markets a broad
range of fabricated and machined parts and products, in a variety of
industries primarily to original equipment manufacturers. From 1986 to 1988 he
was President, Chief Executive Officer and a Director of CP Industries, a
predecessor company of CGI. Prior thereto, he held various operations,
marketing, sales, finance and strategic planning positions for U.S. Steel
Corporation for 17 years. Mr. Lawyer is also a Director of American
Architectural Products Corp.
Mr. McGinnis is 64 years old. He has been a director of the Company since
1977 and Chairman of the Board since November 1994. He served as Chief
Executive Officer of the Company between 1977 and 1994, and President between
1984 and 1994. Prior to 1977, Mr. McGinnis was President of Lanz Medical
Products Corporation, the predecessor to the Company. From 1971 to 1975, Mr.
McGinnis also served on the staff of the Critical Care Department,
Presbyterian University Hospital, Pittsburgh, where he participated in various
medical engineering programs seeking the application of technology to medical
care. Prior thereto, Mr. McGinnis was head of the Surgical Research Department
at Allegheny General Hospital, Pittsburgh, for two years and for eleven years
he was employed at the research and development laboratory of Westinghouse
Electric Corporation. At Westinghouse he served six years as the Manager of
the Bio-Engineering Department and headed the medical product development
activities.
Mr. Meteny is 45 years old. He has been a director of the Company since
January 1986 and President and Chief Executive Officer since November 1994.
From August 1992 through November 1994, Mr. Meteny served as Executive Vice
President and Chief Operating and Financial Officer of the Company. He was
Vice President--General Manager and Chief Financial Officer of the Company
from January 1988 through August 1992 and was Vice President--Finance and
Accounting from 1984 through January 1988. For eight years prior to joining
the Company he was employed as an accountant in various auditing capacities by
Ernst & Young. Mr. Meteny is also a Director of UBICS, Inc., an information
technology professional services provider.
Mr. Reynolds is 50 years old. He has been a director of the Company since
the completion of the merger between the Company and Healthdyne on February
11, 1998. Prior to joining the Company, Mr. Reynolds served as President of
Healthdyne since January 1987 and Chief Executive Officer since 1993.
Previously, he served as President of the Healthdyne Cardiovascular Division
of Healthdyne, from January 1985 to December 1986 and as Vice President of
Business and Technology Development of the Technologies Division of Healthdyne
from January 1981 to December 1984.
2. AMENDMENTS TO 1992 STOCK INCENTIVE PLAN TO INCREASE NUMBER OF SHARES
AVAILABLE
The Company's 1992 Stock Incentive Plan (the "Plan") was adopted by the
Board of Directors on September 28, 1992 and approved by the Company's
shareholders at the 1992 Annual Meeting of Shareholders on November 17, 1992.
At the time of its adoption, the number of shares of Common Stock that could
be issued under the Plan was 500,000 shares. As a result of the two-for-one
split of the Common Stock in 1995, the number of shares of Common Stock that
can be issued under the Plan increased to 1,000,000 pursuant to the terms of
the
6
Plan. After giving effect to stock options already granted under the Plan,
approximately 40,000 shares of Common Stock remain available under the Plan.
On August 21, 1998, the Board of Directors approved amendments to the Plan
to increase the total number of shares of the Company's Common Stock which may
be issued under the Plan by an additional 2,000,000 shares from 1,000,000 to
3,000,000 shares.
Under the Plan, eligible employees may receive options to purchase shares of
the Company's Common Stock at option prices that may not be less than the fair
market value on the date of grant. Stock options granted under the Plan become
exercisable no sooner than six months after the date of grant (subject to
acceleration under certain circumstances). Options granted under the Plan may
include cash payment rights. Eligible employees may also be awarded restricted
shares of Common Stock under the Plan.
The Company believes that having these additional shares available under the
Plan is critical to its efforts to compensate adequately its key employees, to
provide them with incentives to maintain and increase the Company's
profitability and to recruit and retain employees of a caliber necessary to
continue the Company's growth. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" ADOPTION OF THE AMENDMENTS TO THE PLAN. The proxies
solicited on behalf of the Board of Directors will be voted for the amendments
to the Plan unless otherwise specified. The favorable vote of the holders of a
majority of the outstanding shares of Common Stock represented in person or by
proxy at the Annual Meeting of Shareholders is required for adoption of the
amendments to the Plan.
3. SELECTION OF AUDITORS
The Board of Directors, following the recommendation of the Audit Committee,
has selected the independent public accounting firm of Ernst & Young LLP as
the auditors to examine the consolidated financial statements of the Company
for fiscal year 1999. THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP. The proxies
solicited on behalf of the Board of Directors will be voted to ratify
selection of that firm unless otherwise specified.
Ernst & Young LLP has served as the independent auditors for the Company
since 1984. Representatives of Ernst & Young LLP are expected to be present at
the Annual Meeting of Shareholders. They will have the opportunity to make
statements if they desire to do so and will be available to respond to
appropriate questions.
4. OTHER BUSINESS
The Board of Directors does not know of any other business to be presented
to the Annual Meeting of Shareholders. If any other matters properly come
before the meeting, however, the persons named in the enclosed form of proxy
will vote the proxy in accordance with their best judgment.
VOTE REQUIRED
Under Delaware law, the three nominees for election as directors at the
Annual Meeting of Shareholders who receive the greatest number of votes cast
for the election of directors by the holders of the Company's Common Stock
present in person or represented by proxy and entitled to vote at the meeting,
a quorum being present, will be elected as directors. The affirmative vote of
the holders of a majority of the shares of the Company's Common Stock present
in person or represented by proxy and entitled to vote at the Annual Meeting
of Shareholders, a quorum being present, is necessary for the ratification of
the selection of Ernst & Young LLP. The vote required for adoption of the
amendment to the 1992 Stock Incentive Plan is set forth above. The aggregate
number of shares for which a vote "For", "Against" or "Abstain" is made is
counted for the purpose of determining the minimum number of affirmative votes
required for approval, and the total number of votes cast "For" approval is
counted for the purpose of determining whether sufficient votes are received.
An abstention from voting on a matter other than election of directors by a
shareholder present in person or
7
represented by proxy and entitled to vote has the same legal effect as a vote
"Against" the matter. If a broker or similar nominee limits on a proxy card
the number of shares voted on a proposal or indicates that the shares
represented by a proxy card are not voted on the proposal, such broker "non-
votes" will not be voted on the proposal and will not be counted in
determining the number of affirmative votes required for approval.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation paid to
the Chief Executive Officer of the Company and the four highest paid executive
officers other than the Chief Executive Officer (the "named officers") for
services rendered in all capacities to the Company and its subsidiaries during
the fiscal years ended June 30, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- --------------------- -------
SECURITIES
OTHER UNDERLYING
ANNUAL RESTRICTED OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION STOCK SAR'S PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) (A) ($) ($) (B) AWARDS (#) ($) ($) (C)
------------------ ---- ------- ------- ------------ ---------- ---------- ------- ------------
Gerald E. McGinnis
Chairman of the Board 1998 190,394 -- -- -- 15,600 153,665
1997 190,258 -- -- -- -- -- 145,191
1996 190,258 -- 19,277 -- -- -- 138,413
Dennis S. Meteny
President and Chief
Executive Officer 1998 277,491 25,000 -- -- 10,300 -- 30,000
1997 232,005 94,500 -- -- 10,600 -- 32,486
1996 204,888 130,898 -- -- -- -- 28,294
Robert D. Crouch
Senior Vice
President--New Ventures 1998 191,163 7,000 -- -- 4,300 -- 22,140
1997 162,207 65,025 -- -- 4,500 -- 23,034
1996 144,830 82,402 -- -- -- -- 20,232
Steven P. Fulton
Vice President,
General Counsel 1998 158,536 10,000 -- -- 8,800 -- 20,290
1997 155,421 58,088 -- -- 8,800 -- 21,073
1996(D) -- -- -- -- -- -- --
Daniel J. Bevevino
Vice President--
Chief Financial
Officer 1998 134,331 15,000 -- -- 2,900 -- 16,800
1997 108,664 45,000 -- -- 2,900 -- 15,440
1996 85,257 67,000 -- -- -- -- 3,364
- --------
(A) This column represents base salary and includes tax deferred Section
401(k) contributions under the Company's Retirement Savings Plan.
(B) The dollar value of perquisites and other personal benefits is required to
be disclosed under this column if the amount for any named officer equals
or exceeds $50,000 or 10% of the total of annual salary and bonus.
8
The dollar value of the perquisites and other personal benefits did not
exceed the threshold amount for any of the named officers for any of the
year covered in the table other than for Mr. McGinnis in 1996. The only
prequisite received by Mr. McGinnis in that year in excess of 25% of the
total perquisites received by him was an auto allowance of $17,100.
(C) The amounts in this column for 1998 represent the following: matching
contributions under the Company's Retirement Savings Plan (Mr. McGinnis,
$4,800; Mr. Meteny, $4,800; Mr. Crouch, $4,800; Mr. Fulton, $4,800 and Mr.
Bevevino, $4,800); annuity plan premiums paid on the officer's behalf (Mr.
McGinnis, $39,150; Mr. Meteny, $25,200; Mr. Crouch, $17,340; Mr. Fulton,
$15,490, and Mr. Bevevino $12,000); and life insurance premiums paid by
the Company for policies under which the named officer (or his estate)
will receive the accumulated cash surrender value of the policy upon the
earlier of his death or his reaching age 65 and the Company will receive
the remainder of the death benefit (Mr. McGinnis, $109,713).
(D) Mr. Fulton was not an executive officer in fiscal year 1996.
STOCK OPTIONS
The following table sets forth information concerning stock option grants
made to the named officers during the fiscal year ended June 30, 1998. The
Company has not granted any stock appreciation rights ("SAR's") to any of the
named officers or any other officers or employees of the Company.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- -------------------------------------------------------------------------- ----------------------
NUMBER OF
SECURITIES % OF
UNDERLYING TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE
NAME (#) (A) FISCAL YEAR ($/SH) (B) EXPIRATION DATE 5% ($) 10% ($)
- ---- ---------- ------------- ----------- ----------------- ---------- -----------
Gerald E. McGinnis 15,600 7% 24.63 November 19, 2007 241,630 612,335
Dennis S. Meteny 10,300 5% 24.63 November 19, 2007 159,538 404,298
Robert D. Crouch 4,300 2% 24.63 November 19, 2007 66,603 168,785
Steven P. Fulton 5,000 2% 24.31 August 15, 2007 76,455 193,751
3,800 2% 24.63 November 19, 2007 58,859 149,159
Daniel J. Bevevino 2,900 1% 24.63 November 19, 2007 44,918 113,832
- --------
(A) Options granted in 1998 are exercisable starting 12 months after the grant
date, with 25% of the shares covered thereby becoming exercisable at that
time and an additional 25% of the option shares becoming exercisable on
each successive anniversary date, with all option shares exercisable on
the fourth anniversary date. Under the terms of the Company's stock option
plans, this exercise schedule may be accelerated in certain specific
situations.
(B) Under the terms of the Company's stock option plans, there are no
provisions that permit these options to be repriced other than to reflect
stock splits, stock dividends, or similar events.
9
The following table sets forth information concerning the stock option
exercises by the named officers during the fiscal year 1998 and the
unexercised stock options held at June 30, 1998 by the named officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR FY-END OPTION VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)
VALUE ------------- ----------------
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE (2)/
NAME ON EXERCISE (#) ($) (1) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- --------- ------------- ----------------
Gerald E. McGinnis -- -- --/15,600 --/--
Dennis S. Meteny 79,720 899,321 49,820/19,360 381,977/--
Robert D. Crouch 80,000 1,350,000 145,125/7,675 1,364,640/--
Steven P. Fulton -- -- 8,450/19,150 8,194/2,731
Daniel J. Bevevino -- -- 39,325/5,075 363,141/--
- --------
(1) Represents the amount by which the fair market value of the shares
acquired on exercise at the exercise date exceeded the exercise price of
such shares.
(2) Represents the amount by which the fair market value ($15.56) of the
shares covered by the stock options on June 30, 1998 exceeded the exercise
price of such stock options.
EMPLOYMENT AGREEMENTS AND OTHER TRANSACTIONS
Effective April 1, 1995 the Company entered into an Employment Agreement
with Mr. McGinnis providing for his employment as Chairman of the Company's
Board of Directors for a three year term ending March 31, 1998. Each year
until March 31, 1997, the term of the Agreement is automatically extended for
one additional year unless previously either Mr. McGinnis or the Company gives
notice in the then current first year of the term that the term will not be
further extended. Under the terms of the Agreement, Mr. McGinnis agreed to
spend not less than two-thirds of his working time in the performance of his
duties as Chairman, including assisting the Company's President in fulfilling
the Company's civic and charitable responsibilities, serving as Chairman of
the Company's Strategy Committee, providing guidance and direction in new
product development as well as acquisition of new products and businesses and
ensuring good liaison between the Board and the Company's management. The
Agreement provides for a base salary at the rate of $190,000 per year (subject
to annual adjustment) plus participation in the Company's benefit plans on a
basis comparable with other executives in the Company.
Effective December 1, 1994 the Company entered into an Employment Agreement
with Mr. Meteny providing for his employment as President and Chief Executive
Officer of the Company for a three year term ending November 30, 1997.
Effective the same date the Company and Mr. Crouch entered into an Employment
Agreement providing for his employment as Vice President of Sales and
Marketing (now Vice President--New Ventures) also for a three year term ending
November 30, 1997. Each agreement is automatically extended each year for one
additional year absent prior notice by either party. The Agreements provide
for base salaries for Messrs. Meteny and Crouch of $195,600 per year (subject
to annual adjustment) and $138,200 per year (subject to annual adjustment),
respectively, plus participation in the Company's benefit and incentive plans
on a basis comparable with other executives in the Company.
Effective December 30, 1996, the Company entered into an Employment
Agreement with Mr. Fulton providing for his employment as Vice President,
Human Resources and General Counsel for a three year term ending December 30,
1999. Effective March 28, 1997, the Company entered into an Employment
Agreement with Mr. Bevevino providing for his employment as Vice President and
Chief Financial Officer for a three year term ending March 27, 2000. Each
agreement is automatically extended each year for one additional year absent
10
prior notice by either party. The Agreements provide for base salaries for
Messrs. Fulton and Bevevino of $147,524 per year (subject to annual
adjustment) and $120,000 per year (subject to annual adjustment),
respectively, plus participation in the Company's benefit and incentive plans
on a basis comparable with other executives in the Company.
Effective February 11, 1998, the Company entered into an Employment
Agreement with Mr. Reynolds providing for his employment as Senior Vice
President for a three year term ending February 11, 2001. This Agreement is
automatically extended each year for an additional year absent prior notice by
either party and provides for a base salary for Mr. Reynolds of $251,538 per
year (subject to annual adjustment) plus participation in the Company's
benefit and incentive plans on a basis comparable with other executives in the
Company.
EXECUTIVE OFFICERS
The executive officers of the Company, other than those who also serve as
directors and are described in the preceding pages, are Daniel J. Bevevino,
38, Vice President and Chief Financial Officer; Robert D. Crouch, 50, Senior
Vice President--New Ventures; Raymond W. Dyer, 52, Group Vice President--
Asthma, Allergy and OEM; Steven P. Fulton, 39, Vice President--General
Counsel; John L. Miclot, 39, Vice President Sales & Marketing and Group Vice
President--Sleep Disorders; Robert E. Tucker, 49, Group Vice President--
Respiratory; and Geoffrey Waters, 48, Vice President International Sales and
Marketing.
Mr. Bevevino joined the Company in 1988 as Manager of Cost Accounting. From
1990 to 1994 Mr. Bevevino served as Controller. In November of 1994, Mr.
Bevevino was elected Chief Financial Officer and in May 1996 was also elected
Vice President. Prior to his affiliation with the Company, Mr. Bevevino--a
Certified Public Accountant--spent five years with Ernst & Young.
Mr. Crouch joined the Company as Director of Sales and Marketing in January
1989. From 1989 to 1997, he was Vice President Sales and Marketing. He was
promoted to Senior Vice President Sales and Marketing in May 1997. In August
1998, Mr. Crouch accepted the position of Senior Vice President--New Ventures.
Prior to joining the Company from 1986 to 1989, Mr. Crouch worked as a
consultant for various companies on administrative and governmental affairs
issues. From 1985 to 1986, he was employed by Cryogenic Associates, serving as
Executive Vice President and later President. From 1983 to 1985, Mr. Crouch
was President, Chief Executive Officer and Chairman of the Board of BetaMed
Pharmaceuticals.
Mr. Dyer joined the Company in May 1997, as Vice President Marketing. In
February 1998, Mr. Dyer accepted the position of Group Vice President--Asthma,
Allergy and OEM--for one of the Company's three business groups. Prior to
joining the Company, he had been President of DeVilbiss Health Care, a
subsidiary of Sunrise Medical, Inc. since 1994. Mr. Dyer served in various
positions with Cobe Laboratories, Inc. from 1972 to 1993. In 1994, Mr. Dyer
moved to National Medical Care, Inc. as President of its Renal Products Group.
Mr. Fulton joined the Company on a part time basis in May 1995 serving as
General Counsel. In January 1996 his role was expanded to full time status. On
October 8, 1996, Mr. Fulton was elected Vice President, Human Resources. In
February 1998, Mr. Fulton was appointed to the position of Vice President--
General Counsel. Prior to joining the Company, Mr. Fulton was a partner in the
Pittsburgh office of Reed Smith Shaw & McClay. He joined the law firm in May
1984. Prior to this employment, he served briefly in an engineering capacity
for Westinghouse Electric Corporation.
Mr. Miclot, as part of the Company's merger with Healthdyne, joined the
Company in February 1998 as Group Vice President--Sleep Disorders. Since
August 1998, in addition to his Group Vice President role he has acquired the
added responsibility of Vice President Sales and Marketing. From 1995 to
February of 1998, Mr. Miclot had been Senior Vice President Sales and
Marketing for Healthdyne. Prior to that time, he was Vice President of
Marketing for Medex, Inc. which he joined in February 1994. Mr. Miclot
previously held several senior positions in marketing, international
activities and sales with Ohmeda, a Division of British Oxygen Corporation,
which he joined in 1988.
11
Mr. Tucker, as part of the Company's merger with Healthdyne, joined
Respironics in February 1998 as Group Vice President--Respiratory. From March
1994 to February 1998, he had been Senior Vice President of Operations for
Healthdyne. From September 1985 to March 1994, Mr. Tucker was Vice President
of Operations of Healthdyne.
Mr. Waters, as part of the Company's acquisition of LIFECARE International,
Inc., joined Respironics in October 1996, as Vice President Customer
Satisfaction. In February 1998, Mr. Waters was transitioned to the position of
Vice President--International Sales and Marketing. Prior to joining the
Company, Mr. Waters was employed in various capacities by LIFECARE
International, Inc. from 1984 to 1996. His last position with LIFECARE was
President and Chief Operating Officer.
REPORT OF THE COMPENSATION COMMITTEE
INTRODUCTION
Decisions regarding compensation of the Company's executives generally are
made based on recommendations by the Compensation Committee, which is composed
of three independent outside directors. All decisions of the Compensation
Committee relating to compensation of the Company's executive officers are
reviewed and approved by the full Board. Set forth below is a report submitted
by Dr. Cotter and Messrs. Jones and Lawyer (the current members of the
Compensation Committee; Mr. Petit, who joined the Board at the completion of
the merger with Healthdyne in February 1998, served on the Compensation
Committee from February 1998 until his resignation from the Board in August
1998) in their capacity as members of the Board's Compensation Committee
addressing the Company's compensation policies for fiscal year 1998 as they
affected executive officers of the Company, including Mr. Meteny, the
President and Chief Executive Officer, and Messrs. McGinnis, Crouch, Fulton
and Bevevino, the four executive officers other than Mr. Meteny who were, for
fiscal year 1998, the Company's most highly compensated executive officers.
COMPENSATION
The Company's executive and key employee compensation program consists of a
base salary component, a component providing the potential for an annual
profit sharing bonus based on overall Company performance as well as
individual performance, and a component providing the opportunity to earn
stock options linking the employee's long-term financial success to that of
the Company's stockholders.
Cash Compensation
Officers are compensated within salary ranges that are generally based on
similar positions in companies of comparable size and complexity to the
Company. Companies are selected based on products marketed, customers and
markets served, geographic distribution, manufacturing locations and
complexity of operations (which involves several factors, with sales revenue
being a major factor) for those companies operating in the respiratory
products market. In addition, the Company participates in compensation surveys
and receives summary compensation survey information from these and other
sources.
The methodology used to determine guidelines for compensation was a matching
of each executive's responsibilities to a comparable position described in the
surveys. Based on this matching, each executive's salary was compared to the
corresponding salary range of comparable executives in the surveys. Then, an
appropriate salary range (e.g., 25th percentile, median, 75th percentile) was
selected based on the comparison of the executive's responsibilities to those
of the comparable position in the surveys. The comparable companies operating
in the respiratory market and other data were then examined for reasonableness
on a position-by-position basis. Salaries were established based on the
performance of the executive given his responsibilities within a specific
position and the relationship of the current salary to the appropriate
percentile for the most comparable position available within the surveys.
During the fiscal year 1998 salary review process, recognition
12
was also given to the expanded responsibilities of the executive officers and
to the increased size of the Company resulting from the merger with
Healthdyne.
The primary level of compensation is based on a combination of years of
experience and performance. An officer's performance is based on how well he
meets objectives set by his supervisor through a Company-wide process of
stating objectives for each associate (employee), insuring compatibility of
objectives among associates, reviewing performance against objectives and
recognizing the accomplishment of these objectives. The Board of Directors
establishes and reviews the objectives of the Chairman of the Board, and the
Board also assesses the Chairman's performance compared to these objectives.
The salary of all officers is reviewed annually in November, with the amount
of the increases (which take effect the following February) based on factors
such as Company performance, general economic conditions, marketplace
compensation trends and individual performance. The relative weight of each of
these factors in determining salary increases varies for each annual salary
determination. There is no fixed weighting. However, in the past, the factors
which have generally had the greatest influence on salary increases have been
(in decreasing significance) Company performance, individual performance,
marketplace trends in compensation and general economic conditions.
Profit Sharing and Other Bonuses
The second compensation component is a Company-wide profit sharing program
under the Company's Profit Sharing Bonus Plan. Bonuses are primarily based on
the Company's annual financial performance and secondarily on the performance
of the individual. Bonuses under this program generally range from zero to 50%
of base salary. The measures of annual financial performance used in
determining the amount of bonuses include sales growth, earnings growth and
achievement of net income targets. Based on these factors, no profit sharing
bonuses were accrued for fiscal year 1998 for the named officers or any other
employees of the Company.
In addition, from time to time, special bonuses may be awarded to employees
based on individual effort and performance on specific projects or tasks.
During fiscal year 1998, special bonuses were paid to a variety of employees
including certain of the named executive officers. The amounts of the special
bonuses paid to named executive officers are shown in the Summary Compensation
Table in the Bonus column.
Stock Options
The third major component of the officer's compensation consists of stock
options. The primary purpose of granting stock options is to link the
officers' financial success to that of the stockholders of the Company. The
exercise price of stock options is determined by the Compensation Committee at
the time the option is granted, but may not be less than the fair market value
of the Company's Common Stock as of the date of grant. Options become
exercisable commencing a minimum of six months from the date of grant and are
exercisable for a maximum period of 10 years, as determined by the
Compensation Committee.
The Compensation Committee awarded stock options to 130 of the Company's
employees during fiscal year 1998. Stock options granted to named officers
during fiscal year 1998 are listed on the table entitled "Option Grants in
Last Fiscal Year."
CEO COMPENSATION
The following factors constitute the basis for the compensation paid to Mr.
Meteny, the Company's Chief Executive Officer ("CEO"), during fiscal year
1998; his responsibilities as the Company's CEO, with recognition given to his
expanded responsibilities and the increased size of the Company resulting from
the merger with Healthdyne; the Company's ability to achieve its objectives
for revenue and earnings growth and its objectives for long-term growth; the
salaries paid to other CEO's of comparable companies as reported in the
industry surveys; and Mr. Meteny's experience compared to the CEO's of
comparable companies in the industry surveys. In fiscal year 1998 the
Compensation Committee recommended and the Board approved a base salary
13
increase for Mr. Meteny of 29% considering the foregoing factors, Mr. Meteny
was awarded no profit sharing bonus for fiscal year 1998.
Compensation Committee of the Company's Board of Directors:
Douglas A. Cotter, Chairman
Donald H. Jones
Joseph C. Lawyer
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Securities and Exchange Commission's rules relating to the disclosure of
executive compensation require that the Proxy Statement include certain
information about "insider" participation on compensation committees and about
specific kinds of "interlocking" relationships between the compensation
committees of different companies, under the foregoing caption. All members of
the Compensation Committee are outside directors, and no such interlocking
relationships exist.
The Compensation Committee of the Board of Directors is responsible for
executive compensation decisions as described above under "Board of Directors
and Committees of the Board." During fiscal year 1998, the Committee consisted
of Dr. Cotter (Chairman) and Messrs. Jones and Lawyer and, for the period from
February 1998 through June 1998, Mr. Petit.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and 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 (the "Commission") and the National
Association of Securities Dealers National Market System initial reports of
ownership and reports of change in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
shareholders are required by Commission regulation to furnish the Company with
copies of all Section 16(a) forms they file.
All Forms 3, 4, and 5 have been filed within the guidelines of Commission
during fiscal year 1998. In making this disclosure, the Company has relied
solely on the written representation of its directors and officers and copies
of the reports that they have filed with the Commission.
14
PERFORMANCE GRAPH
The following graph shows a five year comparison of cumulative total returns
for the Company, the NASDAQ Market Index and the Standard & Poor's Medical
Products and Supplies Index ("Hlthcare-500"). The graph assumes that the value
of the investment in the Company's Common Stock and each index was $100 at June
30, 1993, and that all dividends were reinvested.
Performance Graph Appears Here
FISCAL YEAR ENDED JUNE 30
-------------------------------------------------
1993 1994 1995 1996 1997 1998
-------------------------------------------------
NASDAQ........................ $100.00 $100.96 $134.79 $173.04 $210.36 $277.56
Hlthcare-500.................. $100.00 $ 96.40 $147.90 $194.31 $257.49 $344.44
Respironics, Inc.............. $100.00 $ 74.18 $125.27 $162.64 $185.71 $136.82
MISCELLANEOUS
The cost of soliciting proxies will be borne by the Company. Following the
original mailing of the proxy solicitation material, proxies may be solicited
personally, or by telephone, facsimile or other electronic means, by employees
of the Company and its subsidiaries who will receive no additional compensation
for such services. In addition, D.F. King & Co., Inc., 77 Water Street, New
York, New York 10005, has been retained by the Company to assist in the
solicitation of proxies at a retainer of $5,000 plus reasonable out-of-pocket
expenses. The Company will reimburse brokerage houses and other custodians,
nominees and fiduciaries for reasonable expenses incurred in the sending of
proxy solicitation material and the 1998 Annual Report to beneficial owners of
stock held in their names.
Dorita A. Pishko
Corporate Secretary
October 19, 1998
15
RESPIRONICS, INC.
1501 Ardmore Boulevard
Pittsburgh, PA 15221
Annual Meeting of Shareholders, November 19, 1998
Gerald E. McGinnis, Dennis S. Meteny and Dorita A. Pishko, or any of them,
are hereby appointed proxies with full power of substitution, to vote the shares
of the shareholder(s) named on the reverse side hereof at the Annual Meeting of
Shareholders of Respironics, Inc. to be held at The Renaissance Waverly at The
Galleria Center, 2450 Galleria Parkway, Atlanta, GA 30339, on November 19, 1998,
and at any adjournment thereof, as directed hereon, and in their discretion to
vote and act upon any other matters as may properly come before this meeting.
(Continued on reverse side)
/\ FOLD AND DETACH HERE /\
Unless you attend and vote in person, you MUST sign and return your proxy in
order to have your shares voted at the meeting.
Please mark
your votes as
indicated in X
this example
1. Election of Directors.
NOMINEES: Douglas A. Cotter Ph.D., Gerald E. McGinnis and Craig B. Reynolds
FOR all nominees WITHHOLD AUTHORITY
(listed above except to vote for all
as marked to the nominees listed above
contrary)
[ ] [ ]
FOR AGAINST ABSTAIN
2. To increase the number of shares available for grant [ ] [ ] [ ]
under the Company's 1992 Stock Incentive Plan by
2,000,000 shares to a total of 3,000,000.
FOR AGAINST ABSTAIN
3. To ratify the selection of Ernst & Young LLP as [ ] [ ] [ ]
independent public accountants for the fiscal year
ending June 30, 1999.
(Instruction: To withhold authority to vote for any nominee, write
that nominee's name in the space provided below.)
- ------------------------------------------------------------
------- This proxy is solicited on behalf of the Board of Directors and
| will be voted as specified. A vote FOR the election of nominees
| listed includes discretionary authority to vote for a substitute if
| any nominee is unable to serve or for good cause will not serve
Date: ,1998
--------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
Shareholder(s) signature should correspond to the name(s)
shown hereon. (Executors, Administrators, Trustees, etc. should
so indicate when signing.)
PLEASE SIGN, DATE AND MAIL YOUR PROXY TODAY!
/\ FOLD AND DETACH HERE /\