NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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May 27, 1998
MERIT MEDICAL SYSTEMS, INC.
You are cordially invited to attend the Annual Meeting of Shareholders
of Merit Medical Systems, Inc. (the "Company"), which will be held on Wednesday,
May 27, 1998 at 3:00 p.m., at the Company's corporate offices at 1600 West Merit
Parkway, South Jordan, Utah (the "Annual Meeting"), for the following purposes:
(1) To elect two directors of the Company, each to serve for a term of
three years or until their respective successors have been duly elected
and qualified;
(2) To consider and vote upon a proposal to ratify the appointment of
Deloitte & Touche as independent auditor of the Company for the fiscal
year ending December 31, 1998; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 24,
1998 as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors,
KENT W. STANGER
April 27, 1998 Chief Financial Officer, Secretary and Treasurer
IMPORTANT
Whether or not you expect to attend the Annual Meeting in person, to
assure that your shares will be represented, please complete, date, sign and
return the enclosed proxy without delay in the enclosed envelope, which requires
no additional postage if mailed in the United States. Your proxy will not be
used if you are present at the Annual Meeting and desire to vote your shares
personally.
MERIT MEDICAL SYSTEMS, INC.
1600 Merit Parkway
South Jordan, Utah 84095
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PROXY STATEMENT
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Annual Meeting of Shareholders
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May 27, 1998
SOLICITATION OF PROXIES
This Proxy Statement is being furnished to the shareholders of Merit
Medical Systems, Inc., a Utah corporation (the "Company"), in connection with
the solicitation by the Board of Directors of the Company of proxies from
holders of outstanding shares of the Company's common stock, no par value (the
"Common Stock"), for use at the Annual Meeting of Shareholders of the Company to
be held on Wednesday, May 27, 1998 and at any adjournment or postponement
thereof (the "Annual Meeting"). This Proxy Statement, the Notice of Annual
Meeting of Shareholders and the accompanying form of proxy are first being
mailed to shareholders of the Company on or about April 27, 1998.
The Company will bear all costs and expenses relating to the
solicitation of proxies, including the costs of preparing, printing and mailing
to shareholders this Proxy Statement and accompanying material. In addition to
the solicitation of proxies by use of the mails, the directors, officers and
employees of the Company, without receiving additional compensation therefor,
may solicit proxies personally or by telephone or facsimile. Arrangements will
be made with brokerage firms and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of the shares
of Common Stock held by such persons, and the Company will reimburse such
brokerage firms, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred by them in connection therewith.
VOTING
The Board of Directors has fixed the close of business on April 24,
1998 as the record date for determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting (the "Record Date"). As of the
Record Date, there were issued and outstanding 7,413,748 shares of Common Stock.
The holders of record of the shares of Common Stock on the Record Date entitled
to be voted at the Annual Meeting are entitled to cast one vote per share on
each matter submitted to a vote at the Annual Meeting.
Proxies
Shares of the Common Stock which are entitled to be voted at the Annual Meeting
and which are represented by properly executed proxies will be voted in
accordance with the instructions indicated on such proxies. If no instructions
are indicated, such shares will be voted FOR the election of each of the two
director nominees for their respective terms; FOR the ratification of the
appointment of Deloitte & Touche to be the Company's independent auditor for the
fiscal year ending December 31, 1998; and in the discretion of the proxy holder
as to any other matters which may properly come before the Annual Meeting. A
shareholder who has executed and returned a proxy may revoke it at any time
prior to its exercise at the Annual Meeting by executing and returning a proxy
bearing a later date, by filing with the Secretary of the Company, at the
address set forth above, a written notice of revocation bearing a later date
than the proxy being revoked, or by voting the Common Stock covered thereby in
person at the Annual Meeting.
Vote Required
A majority of the issued and outstanding shares of Common Stock
entitled to vote, represented in person or by proxy, is required for a quorum at
the Annual Meeting. Abstentions and broker non-votes will be counted as
"represented" for the purpose of determining the presence or absence of a
quorum. Under Utah law, once a quorum is established, shareholder approval with
respect to a particular proposal is generally obtained when the votes cast in
favor of a proposal exceed the votes cast against the proposal. Accordingly,
abstentions and broker non-votes will not generally have the effect of being
considered as votes cast against any matter considered at the Annual Meeting. In
the election of directors, the two nominees receiving the highest number of
votes will be elected.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
At the Annual Meeting, two directors of the Company are to be elected
to serve for a term of three years or until their successors shall be duly
elected and qualified. Each of the nominees for director, identified below, is
currently a director of the Company. If any of the nominees should be
unavailable to serve, which is not now anticipated, the proxies solicited hereby
will be voted for such other persons as shall be designated by the present Board
of Directors. The two nominees receiving the highest number of votes at the
Annual Meeting will be elected.
Nominees for Election as Directors
Certain information with respect to each director nominee is set forth
below.
James J. Ellis, 64, has been a director of the Company since November
1995. He has been Managing Partner of Ellis/Rosier Financial Services since
1992. Mr. Ellis served as General Manager of MONY Financial Services, Dallas,
Texas from 1979 until his retirement in 1992. He also serves as a director of
Jack Henry & Associates, a publicly traded company. Mr. Ellis is nominated to
serve a three-year term.
Michael E. Stillabower, M.D., 54, has been as a director of the Company
since March 1996. Dr. Stillabower has been a physician in private practice in
Wilmington, Delaware since 1980. Since 1988, he has also been Chief, Cardiology,
Medical Center of Delaware where he has held a number of appointments including
Director, Coronary Care Unit, from 1984 to 1988. In May 1995 he was appointed
Clinical Associate Professor of Medicine, Jefferson Medical College in
Philadelphia, Pennsylvania where he obtained his M.D. degree in 1976. He is an
Elected Fellow of the American College of Cardiology and of other professional
associations and is actively engaged in cardiology research, instruction and
publication of related papers and abstracts. Dr. Stillabower is nominated to
serve a three-year term.
Directors Whose Terms of Office Continue
Fred Lampropoulos, 49, has been Chairman of the Board, President and
Chief Executive Officer of the Company since its formation in July 1987. From
1983 to June 1987, Mr. Lampropoulos was Chairman of the Board and President of
Utah Medical Products, Inc. ("Utah Medical"), a medical device company. Mr
Lampropoulos' term as a director expires in 2000.
Kent W. Stanger, 43, has been Chief Financial Officer, Secretary,
Treasurer and a director of the Company since 1987. Prior to joining the
Company, Mr. Stanger was the Controller for Utah Medical from 1985 to August
1987. Prior to 1985, he was the corporate controller for Laser Corporation,
American Laser and Modulaire Industries, Inc. Mr. Stanger is a certified public
accountant. Mr. Stanger's term as a director expires in 2000.
Rex Bean, 67, has been a director of the Company since 1988. Mr. Bean
retired from the U.S. Air Force in 1987 and is principally engaged in the
management of private investments. Mr. Bean's term as a director expires in
1999.
Richard W. Edelman, 57, has been a director of the Company since 1988.
He is Senior Vice President of Southwest Securities, Inc., a stock brokerage
firm located in Dallas, Texas. From 1996 to 1998 he was Managing Director of
Rodman & Renshaw, Inc., a stock brokerage firm. From 1987 to 1996 he was
employed by Southwest Securities, Inc., as Senior Vice President. Prior to
joining Southwest Securities, Inc., in 1987, Mr. Edelman was a securities
analyst and vice president for Schneider, Bernet and Hickman, a Dallas Texas
securities firm. Mr. Edelman obtained an MBA degree from Columbia University,
New York City, in 1966. Mr. Edelman's term as a director expires in 1999.
Committees, Meetings and Reports
The Board of Directors has a standing Audit Committee and an Executive
Compensation Committee. The members of the Audit Committee are Rex C. Bean
(Chairman), James J. Ellis and Richard W. Edelman. The members of the Executive
Compensation Committee are James J. Ellis (Chairman), Rex C. Bean and Richard W.
Edelman. The Company has no nominating committee.
The Audit Committee met once during the 1997 year. The functions of the
Audit Committee are: (i) to review and approve the selection of, and all
services performed by, the Company's independent auditor; (ii) to review the
Company's internal controls; and (iii) to review, act and report to the Board of
Directors with respect to the scope of audit procedures, accounting practices
and internal accounting and financial controls of the Company.
The Executive Compensation Committee met five times during the 1997
year. The Executive Compensation Committee has oversight responsibility for all
executive compensation and benefit programs of the Company. The Executive
Compensation Committee reviews and approves all executive compensation and
benefit plans, including the Company's Incentive Plan.
During the fiscal year ended December 31, 1997 there were 13 meetings
held by the Board of Directors of the Company. No director attended fewer than
75 percent of the total number of meetings of the Board and of any committee on
which he served.
Section 16(a) Beneficial ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers and directors to file
with the Securities and Exchange Commission (the "Commission") initial reports
of ownership and reports of changes in ownership of Common Stock and other
securities which are derivative of the Common Stock. Executive officers and
directors are required by Commission regulations to furnish the Company with
copies of all Section 16(a) reports they file. Based solely upon a review of the
copies of such forms furnished to the Company and written representations from
the Company's executive officers and directors, the Company believes that all
Section 16(a) reports required to be filed by the Company's officers and
directors were properly filed.
Director Compensation
Directors who are not employees of the Company receive a director's fee
of $1,000 per meeting attended in person and $250 for telephonic Board meetings.
All directors also are reimbursed by the Company for their out-of-pocket travel
and related expenses incurred in attending all Board and committee meetings.
EXECUTIVE OFFICERS
In addition to Messrs. Lampropoulos and Stanger, whose biographies are
included elsewhere in this Proxy Statement, certain information is furnished
with respect to the following executive officers of the Company:
B. Leigh Weintraub, 48, was appointed Chief Operating Officer in
February 1997 and was appointed Vice President of Operations in April 1995. She
was Director or Vice President of Regulatory Affairs and Quality Assurance of
the Company from August 1993 to 1995. From 1992 to August 1993, she was Director
of Regulatory Affairs and Clinical Programs for Endomedix, a medical device
company based in Irvine, California. From 1988 to 1992, Ms. Weintraub was
employed by Baxter Healthcare Corporation as Manager of Quality Strategies and
Quality Engineering and as Project Engineer, Quality Engineering. Ms. Weintraub
completed an executive MBA program at Pepperdine University in April 1993.
Brian L. Ferrand, 43, has been Vice President of Sales of the Company
since June 1993. He was Director of Sales of the Company from May 1992 to May
1993 and was National Sales Manager of the Company from December 1991 to April
1992. From 1987 to December 1991, Mr. Ferrand was employed by Medical Marketing
Associates and held positions as medical products sales representative, sales
manager, and vice president of marketing and sales.
Compensation of Executive Officers
The compensation of Fred P. Lampropoulos, the Company's Chief Executive
Officer, and the three other most highly paid executive officers ("Named
Executive Officers") during the fiscal year ended December 31, 1997 is shown on
the following pages in three tables and discussed in a report from the
Compensation Committee of the Board of Directors.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
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Annual Compensation Awards
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Fiscal Options/ All Other
Name and Position Year Salary Bonus SARs (#) Compensation(1)
- --------------------------------------------------------------------------------------------------
Fred P. Lampropoulos ................ 1997 $250,000 $ 9,615 107,500 $ 4,385
Chairman of the Board and ......... 1996 245,000 8,071 42,500 4,367
Chief Executive Officer ......... 1995 230,000 20,000 5,000 0
Brian L. Ferrand .................... 1997 198,904 10,846 40,000 4,319
Vice President of Sales ........... 1996 174,038 37,880 15,000 4,340
1995 149,039 49,650 10,000 121
B. Leigh Weintraub .................. 1997 182,411 16,525 10,000 4,358
Vice President of Operations ...... 1996 142,254 13,016 25,000 3,063
1995 125,971 6,698 0 0
Kent W. Stanger ..................... 1997 175,000 673 17,500 4,139
Chief Financial Officer, .......... 1996 162,500 4,615 22,500 3,472
Secretary, Treasurer and Director 1995 150,000 1,000 10,000 199
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(1) Amounts shown reflect contributions made by the Company for the benefit of
the Named Executive Officers under the Company's 401(k) Profit Sharing
Plan.
Option Grants in Last Fiscal Year
The following table sets forth individual grants of stock options made
to the Named Executive Officers during the fiscal year ended December 31, 1997.
As of December 31, 1997 the Company had not granted any stock appreciation
rights:
Percent of Potential Realizable
Total Value at Assumed Annual
Options Rates of Stock Price
Granted to Appreciation for
Employees Option Term
Options in Fiscal Exercise Expiration ------------------------
Name Granted Year Price Date 5% 10%
- -------------------------------- -------------- ------------- --------- -------------- ------------ -----------
Fred P. Lampropoulos 100,000 19.1% $7.63 09/23/2002 $210,500 $465,700
7,500(1) 1.4% 7.50 05/21/2002 15,540 34,343
Kent W. Stanger . . . . . . . 10,000 1.9% 5.81 12/18/2002 16,050 35,490
7,500(1) 1.4% 7.50 05/21/2002 15,540 34,343
Brian L. Ferrand. . . . . . . 30,000 5.7% 7.50 05/21/2002 62,160 137,372
10,000 1.9% 5.81 12/18/2002 16,050 35,490
B. Leigh Weintraub. . . . . . 10,000 1.9% 5.81 12/18/2002 16,050 35,490
- ---------------------------
(1) Reflects stock options granted under the formula plan provisions of the
Incentive Plan.
Aggregated Option Exercises in Last Fiscal Year and Year End Option Values
The following table sets forth the number of shares of Common Stock
acquired during the fiscal year ended December 31, 1997 upon the exercise of
stock options, the value realized upon such exercise, the number of unexercised
stock options held on December 31, 1997 and the aggregate value of such options
held by the Named Executive Officers:
Number of Number of Value of Unexercise
Shares Value Unexercised Options at In-the-Money Options at
Acquired Realized December 31, 1997 December 31, 1997(1)
on on ---------------------------- ----------------------------
Name Exercise Exercise(1) Exercisable Unexercisable Exercisable Unexercisable
------------------------------ ----------- ----------- ------------- ------------- ------------- -------------
Fred P. Lampropoulos 40,000 $ 91,156 36,000 126,500 $4,110 $2,740
Kent W. Stanger 30,000 87,600 33,000 27,000 6,000 8,365
Brian L. Ferrand 25,000 68,750 16,000 49,000 0 4,375
B. Leigh Weintraub 0 0 25,000 35,000 25,000 10,625
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(1) Reflects the difference between the exercise price of the Options granted
and the value of the Common Stock on December 31, 1997. The closing sale
price of the Common Stock on December 31, 1997 as reported by NASDAQ was
$6.25 per share.
Change of Control Employment Agreements
In March 1998, the Board of Directors of the Company approved Change in Control
Employment Agreements ("Employment Agreements") for each of the Named Executive
Officers of the Company. These Employment Agreements provide certain benefits in
the event of a change of control of the Company as well as payments and benefits
in the event of termination of employment under certain circumstances.
The Employment Agreements provide for the continued employment of the
Named Executive Officers for two years following a change in control (three
years in the case of Mr. Lampropoulos) (the "Employment Period") in essentially
the position held prior to the change in control and at an annual base salary
and average annual bonus which is based on the salary paid during the last
fiscal year and the average of the bonuses paid during the three fiscal years
prior to the change of control. In addition, during the Employment Period, the
Named Executive Officers are entitled to participate in all retirement plans,
benefit plans and other employee benefits in effect prior to the change in
control or, if more favorable, in those benefit programs provided to employees
after the change of control.
Upon termination of employment following a change of control, other
than for death, disability or cause, or if the Named Executive Officer
terminates employment for good reason, the Named Executive Officer is entitled
to receive the sum of (i) his or her base salary and bonus through the date of
termination, (ii) any accrued or deferred compensation or benefits, (iii) an
amount equal to the Named Executive Officer's annual base salary and average
annual bonus multiplied by the number of whole or fractional years remaining in
the Employment Period, and (vi) continued coverage during the remainder of the
Employment Period under the Company's benefit plans, programs, practices or
policies. The Employment Agreements provide that the Named Executive Officer may
voluntarily terminate employment during a 30-day window period following the
first 12 months of the Employment Period and that such a termination will be
deemed for good reason. If termination of the Employment of a Named Executive
Officer occurs which is not related to a change in control and is for other than
death, disability or cause, the Named Executive Officer is entitled to receive
the sum of (i) and (ii), above, plus a sum equal to his or her annual base
compensation and average bonus (based on the base salary paid during the last
fiscal year and bonuses paid during the last three fiscal years).
If termination of employment of a Named Executive Officer occurs by
reason of death or disability, he or she shall be entitled to payment of base
salary and bonus through the date of termination, any deferred or accrued
benefits and such other death or disability benefits equal to the most favorable
benefits provided by the Company to other employees and their families. If the
Named Executive Officer is terminated for cause during the Employment Period,
the Company shall be obligated to pay to the Named Executive Officer his or her
annual base salary through the date of termination , the amount of any
compensation previously deferred and any other benefits due through the date of
termination, in each case to the extent not previously paid.
Certain Relationships and Related Transactions
The Company periodically has made advances to Fred P. Lampropoulos,
Chairman of the Board, President and Chief Executive Officer. The highest
aggregate amount of such advances outstanding during 1997, and the amount
outstanding at the end of the year, was $128,971. The advances are repayable to
the Company on demand, together with interest at the prime rate plus 2% per
annum.
Report of the Executive Compensation Committee
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Exchange Act, that incorporates by reference, in whole or in part, subsequent
filings including, without limitation, this Proxy Statement, the following
Report of the Executive Compensation Committee and the Performance Graph set
forth on page nine hereof shall not be deemed to be incorporated by reference
into any such filings.
General. The Company's executive compensation program is administered
by the Executive Compensation Committee, which is responsible for establishing
the policies and amounts of compensation for the Company's executive officers.
The Executive Compensation Committee, composed of three independent directors,
has oversight responsibility for executive compensation and executive benefit
programs of the Company, including the Incentive Plan.
Executive Compensation Principles. The Company's executive compensation
program is designed to align executive compensation with the values, objectives
and performance of the Company. The executive compensation program is designed
to achieve the following objectives:
Attract and retain highly qualified individuals who are
capable of making significant contributions to the long-term
success of the Company.
Reward executive officers for long-term strategic management
and the enhancement of shareholder value.
Promote a performance-oriented environment that encourages
Company and individual achievement.
Executive Compensation Program. The Company's executive compensation
program consists of both cash and equity-based compensation. The components of
the Company's executive compensation program and the policies which govern their
implementation are outlined briefly below.
Cash Compensation. The Company's cash compensation policy is
designed to provide competitive levels of compensation to attract and retain
qualified individuals and to reward individual initiative and achievement. The
Company's existing executive compensation program is a base compensation plan
with a discretionary bonus compensation element.
The salary for Fred P. Lampropoulos, the President and Chief
Executive Officer, is based generally upon comparisons with levels of
compensation paid to chief executive officers of other comparably sized medical
device manufacturers. The overall performance of the Company and the Company's
progress towards achieving specific objectives are also important factors in
setting compensation for Mr. Lampropoulos. Specific objectives in Fiscal 1997
focused on new strategic market expansion and related product development. The
Company's efforts to reduce costs and increase the efficiency of its operations
and Mr. Lampropoulos' performance in achieving those objectives are also
considered. On or as of December 16, 1995 Mr. Lampropoulos' base salary was set
at $250,000, but this increase was voluntarily delayed until July 1996.
Cash compensation for executive officers other than the Chief
Executive Officer is based generally upon comparisons with comparably sized
medical device manufacturers and is targeted at the mid-range of the salary
levels of those manufacturers. Compensation of executive officers is based, in
part, upon their respective responsibilities as compared to similar positions in
comparable companies. The Executive Compensation Committee also considers
individual merit and the Company's performance. It is the practice of the
Committee to solicit and review recommendations of the Chief Executive Officer
when determining salary levels for executive officers other than the Chief
Executive Officer.
Equity-Based Compensation. The Incentive Plan is designed to
promote and advance the interests of the Company and its shareholders by
strengthening the mutuality of interests between the executive officers of the
Company and the Company's shareholders. The Company has limited the payment of
executive incentive compensation in the form of annual cash bonuses, preferring
to make stock-based grants under the Incentive Plan. Since executive incentive
compensation is based on shares of Common Stock, the value of those awards to
executive officers increases as the value of the Common Stock increases. During
the 1997 fiscal year discretionary option grants were made to the chief
executive officer and the other named executive officers as set forth in the
option table above. In addition, Mr. Lampropoulos and Mr. Stanger, as directors
of the Company, were each granted options to purchase 7,500 shares of Common
Stock pursuant to the nondiscretionary formula plan provisions of the Incentive
Plan.
Benefits. The Company's policy is to provide an attractive benefit
package to all employees. Executive officers of the Company are generally
eligible to participate, on the terms and conditions applicable to all eligible
employees of the Company, in the Merit Medical Systems 401(k) Profit Sharing
Plan, a contributory savings and profit sharing plan for all Company employees
over the age of 21 who have completed one year of service, and in the Company's
Employee Stock Purchase Plan. Certain executive officers may elect to defer
certain awards or compensation under the Company's employee benefit plans.
EXECUTIVE COMPENSATION COMMITTEE
James J. Ellis, Chairman
Richard W. Edelman
Rex C. Bean
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information as of April 10, 1998 with
respect to the beneficial ownership of shares of the Common Stock by each person
known by the Company to be the beneficial owner of more than 5% of the Common
Stock, by each director, by each director nominee, by each executive officer
named in the Summary Compensation Table and by all directors and officers as a
group. Unless otherwise noted, each person named has sole voting and investment
power with respect to the shares indicated. Percentages are based on 7,413,748
shares outstanding.
Beneficial Ownership
--------------------------
Number of Percentage
Shares of Class
Vertical Group, L.P.(3) 679,100 9.2%
Fred P. Lampropoulos(1)(2) 589,848 7.9
Kent W. Stanger(1)(2) 316,077 4.2
Rex C. Bean(2) 286,942 3.9
Richard W. Edelman(2) 57,001 *
James J. Ellis(2) 38,400 *
Brian L. Ferrand(1)(2) 33,686 *
B. Leigh Weintraub(1)(2) 31,260 *
Michael E. Stillabower, M.D.(2) 23,000 *
All officers and directors as a group (8 persons) 1,376,214 18.0%
- ----------------------
* Represents holdings of less than 1%
(1) The computations above include the following share amounts which are held
in the Company's 401(k) Profit Sharing Plan on behalf of participants
thereunder: Fred P. Lampropoulos,10,821 shares; Kent W. Stanger, 8,845
shares; Brian L. Ferrand, 8,986 shares; B. Leigh Weintraub,1,147 shares;
and all officers and directors as a group, 29,799 shares.
(2) The computations above include the following share amounts which are
subject to options exercisable within 60 days, none of which have been
exercised: Fred P. Lampropoulos, 58,500 shares; Kent W. Stanger, 39,000
shares; Rex C. Bean, 27,000 shares; Richard W. Edelman, 27,000 shares;
James J. Ellis 15,000 shares; Michael E. Stillabower M.D., 15,000 shares;
Brian L. Ferrand, 24,000 shares; B. Leigh Weintraub, 30,000 shares; and all
officers and directors as a group, 235,500 shares.
(3) Based on a Schedule 13D dated October 27, 1997.
STOCK PERFORMANCE COMPARISON
----------------------------
Index Description 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
MERIT MEDICAL SYSTEMS, INC. 100.0 71.7 58.3 90.0 113.3 83.3
Nasdaq Stock Market (US Companies) 100.0 114.8 112.2 158.7 195.2 239.6
Nasdaq Stocks (SIG 3840-3849 US Companies) 100.0 80.6 85.9 130.9 122.7 140.0
Surgical, Medical, and Dental Instruments
and supplies
Notes: A. Index levels were derived from compounded daily returns that include
all dividends.
B. The indexes Were reweighted daily, using the market capitalization
on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, was not a
trading day, the preceding trading day was used.
D. The index level for all series was set to $100.0 on 12/31/92.
PROPOSAL NO. 2 -- RATIFICATION OF SELECTION OF AUDITOR
The Audit Committee has recommended, and the Board of Directors has
selected, the firm of Deloitte & Touche, independent certified public
accountants, to audit the financial statements of the Company for the fiscal
year ending December 31, 1998 subject to ratification by the shareholders.
Deloitte & Touche has acted as independent auditor for the Company since 1987.
The Board of Directors anticipates that one or more representatives of Deloitte
& Touche will be present at the Annual Meeting and will have an opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
The Board of Directors recommends that shareholders vote FOR
ratification of the appointment of Deloitte & Touche as the Company's
independent auditor.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of
no other matters to be presented for action at the Annual Meeting. If, however,
any further business should properly come before the Annual Meeting, the persons
named as proxies in the accompanying form will vote on such business in
accordance with their best judgment.
PROPOSALS OF SHAREHOLDERS
Proposals which shareholders intend to present at the Annual Meeting of
Shareholders to be held in calendar year 1999 must be received by Kent W.
Stanger, Chief Financial Officer, Secretary and Treasurer of the Company, at the
Company's executive offices (1600 West Merit Parkway, South Jordan, Utah 84095)
no later than December 31, 1998.
ADDITIONAL INFORMATION
The Company will provide without charge to any person from whom a proxy
is solicited by the Board of Directors, upon the written request of such person,
a copy of the Company's 1997 Annual Report on Form 10-K, including the financial
statements and schedules thereto (as well as exhibits thereto, if specifically
requested), required to be filed with the Securities and Exchange Commission.
Written requests for such information should be directed to Kent W. Stanger,
Chief Financial Officer, Secretary and Treasurer of the Company, at the address
indicated above.
