SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of the
Securities Exchange Act of 1934
(Amendment No. 2)
Utah Medical Products, Inc.
---------------------------
(Name of Issuer)
Utah Medical Products, Inc. (Issuer)
------------------------------------
(Name of Filing Persons)
Common Stock, Par Value $.01 Per Share
--------------------------------------
(Title of Class of Securities)
917488108
---------
(Cusip Number of Class of Securities)
Kevin L. Cornwell
Chairman and CEO
Utah Medical Products, Inc.
7043 South 300 West
Midvale, Utah 84047
(801-566-1200)
--------------
(Name, address and telephone numbers of person authorized to receive
notices and communications on behalf of filing persons)
CALCULATION OF FILING FEE
Transaction Valuation* Amount of Filing Fee**
$12,787,500 $1,176
* Calculated solely for the purpose of determining the amount of the filing
fee, based on the purchase of 750,000 shares of Common Stock, par value $.01
per share, at the tender offer price of $17.05 per share.
** .000092 of the aggregate transaction valuation, pursuant to Rule 0-11 of
the Securities Exchange Act of 1934, as amended by Fee Advisory #8,
effective January 16, 2002
[ ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)
(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
Amount Previously Paid: [ N/A ] Filing Party: [ N/A ]
Form or Registration No.: [ N/A ] Date Filed: [ N/A ]
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transaction to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[x] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3
[ ] amendment to Schedule 13D under Rule 13d-2
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
This Amendment No. 2 to the Tender Offer Statement on Schedule TO relates
to the tender offer by Utah Medical Products, Inc., a Utah corporation ("UTMD"
or the "Company"), to purchase 750,000 shares, or such lesser number of shares
as are validly tendered and not withdrawn, of its Common Stock, par value $.01
per share, including the associated common stock purchase rights issued pursuant
to the Rights Agreement, dated as of October 28, 1994, between Utah Medical
Products, Inc. and Registrar and Transfer Company as Rights Agent, at a price of
$17.05 per Share, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated October 11, 2002 (the "Offer to Purchase"), and in the
related Letter of Transmittal which, as they may be amended from time to time,
together constitute the "Offer," copies of which are attached as Exhibit
(a)(1)(A) and (a)(1)(B), respectively. This Amendment No. 2 to the Schedule TO
is intended to satisfy the reporting requirements of Rule 13e-4(c)(1) of the
Securities Exchange Act of 1934, as amended.
The information in the Offer to Purchase and the related Letter of Transmittal,
copies of which are filed with this Amendment No. 2 to the Schedule TO as
Exhibits (a)(1)(A) and (a)(1)(B), respectively, is incorporated in this
Amendment No. 2 to the Schedule TO by reference in answer to Items 1 through 11
of Schedule TO.
Item 12. Exhibits.
(a) (1) (A) Form of Offer to Purchase dated October 11, 2002.
(B) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Substitute Form W-9).
(C) Form of Notice of Guaranteed Delivery.
(D) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(E) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(F) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a) (2)-(4) Not applicable.
(a) (5)(A) Form of Press Release issued by the Company dated October 1, 2002*.
(B) Form of Press Release issued by the Company dated October 8, 2002*.
(C) Form of Letter to Stockholders of the Company dated October 11,
2002, from Kevin L. Cornwell, Chairman and Chief Executive Officer.
(b) (A) Loan Agreement, dated 3 July, 2002 between Utah Medical Products,
Inc. and U.S. Bank National Association (incorporated by reference
to Exhibit 1 of the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2002).
(B) Revolving Promissory Note, dated July 3, 2002, by Utah Medical
Products, Inc. to U.S. Bank National Association (incorporated by
reference to Exhibit 2 of the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2002).
(c)-(h) Not applicable.
* Previously filed on Schedule TO
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
UTAH MEDICAL PRODUCTS, INC.
By: /s/ KEVIN L. CORNWELL
-----------------------------------------
Name: Kevin L. Cornwell
Title: Chairman and Chief Executive Officer
Dated: October 11, 2002
EXHIBIT (a)(1)(A)
UTAH MEDICAL PRODUCTS, INC.
OFFER TO PURCHASE FOR CASH UP TO
750,000 SHARES OF ITS COMMON STOCK, PAR VALUE $.01 PER SHARE,
AT A PURCHASE PRICE OF $17.05 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 8, 2002,
UNLESS THE OFFER IS EXTENDED.
______________________________________________
Utah Medical Products, Inc., a Utah corporation ("UTMD" or the "Company"),
hereby invites its stockholders to tender up to 750,000 shares of its Common
Stock, par value $.01 per share (such shares, together with associated common
stock purchase rights issued pursuant to the Rights Agreement, dated as of
October 28, 1994, between UTMD and Registrar and Transfer Company as Rights
Agent, are hereinafter referred to as the "Shares"), to the Company at a price
of $17.05 per Share in cash, as specified by tendering shareholders, upon the
terms and subject to the conditions set forth herein and in the related Letter
of Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, pay the Purchase Price for all Shares validly tendered and not withdrawn,
upon the terms and subject to the conditions of the Offer, the procedure
pursuant to which Shares will be accepted for payment and the proration
provisions. Certificates representing Shares not purchased because of proration
will be returned at the Company's expense. UTMD reserves the right, in its sole
discretion, to purchase more than 750,000 Shares pursuant to the Offer. See
Section 14.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 6.
The Shares are listed and traded on The Nasdaq Stock Market ("Nasdaq")
under the symbol "UTMD." On September 30, 2002, the last full Nasdaq trading day
prior to announcement of the Offer, the closing per Share sales price as
reported by Nasdaq was $16.07 per Share. Stockholders are urged to obtain
current market quotations for the shares. See Section 7.
The Board of Directors of the Company has approved the Offer. However,
neither the Company nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their Shares.
Each stockholder must make the decision whether to tender Shares and, if so, how
many Shares to tender. The Company has been advised that none of its directors
or executive officers intends to tender any Shares pursuant to the Offer. See
Section 10.
The Date of this Offer to Purchase is October 11, 2002
IMPORTANT
Any stockholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee or an Agent's
Message (as defined below) and any other required documents to Registrar and
Transfer Company (the "Depositary"), and either mail or deliver the stock
certificates for such tendered Shares to the Depositary (with all such other
documents) or tender such Shares pursuant to the procedure for book-entry
delivery set forth in Section 3, or (b) request a broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. Stockholders having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact that
broker, dealer, commercial bank, trust company or other nominee if they desire
to tender their Shares. Any stockholder who desires to tender Shares and whose
certificates for such Shares cannot be delivered to the Depositary or who cannot
comply with the procedure for book-entry transfer or whose other required
documents cannot be delivered to the Depositary, in any case, by the expiration
of the Offer must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
Stockholders must complete the Letter of Transmittal to effect a valid
tender of Shares.
Additional copies of this Offer to Purchase, the Letter of Transmittal and
other tender offer materials may be obtained from the Company and will be
furnished at the Company's expense. Questions and requests for assistance may be
directed to the Company at its address and telephone number set forth on the
back cover of this Offer to Purchase. Stockholders may also contact their local
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
TABLE OF CONTENTS
PAGE
SUMMARY TERM SHEET.......................................................................................3
INTRODUCTION & BACKGROUND................................................................................5
THE OFFER................................................................................................7
1. NUMBER OF SHARES; PRORATION.....................................................................7
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER..............................................8
3. PROCEDURES FOR TENDERING SHARES.................................................................9
4. WITHDRAWAL RIGHTS..............................................................................12
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE...............................................13
6. CERTAIN CONDITIONS OF THE OFFER................................................................14
7. PRICE RANGE OF SHARES .........................................................................15
8. SOURCE AND AMOUNT OF FUNDS ....................................................................16
9. CERTAIN INFORMATION CONCERNING THE COMPANY.....................................................16
10. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES...........20
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE EXCHANGE ACT.............23
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS....................................................23
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES..........................................23
14. EXTENSION OF OFFER; TERMINATION; AMENDMENT.....................................................25
15. FEES AND EXPENSES..............................................................................26
16. MISCELLANEOUS..................................................................................26
2
SUMMARY TERM SHEET
Utah Medical Products, Inc, (UTMD) is providing this summary term sheet for your
convenience. It outlines the main terms of the tender offer, but you should
realize that it does not describe all of the terms as completely as does the
rest of this document and the letter of transmittal. You should read the entire
document and the letter of transmittal to learn the full details of the tender
offer. We have included references to the Sections of this document where you
will find a more complete description.
WHO IS OFFERING TO PURCHASE MY SHARES?
Utah Medical Products, Inc. is offering to purchase your
shares of UTMD common stock.
IF I TENDER MY SHARES, WHAT WILL THE PURCHASE PRICE FOR THE SHARES BE?
$17.05 per share, net to you, without any brokerage
commissions or stock transfer taxes deducted from your
payment. See Section 1.
HOW MANY SHARES WILL UTMD PURCHASE?
We would like to purchase 750,000 shares, but may purchase
less than that amount if less than 750,000 shares are
tendered. We may purchase up to 848,352 shares, and could
purchase even more, subject to meeting legal requirements.
See Section 1.
HOW WILL UTMD PAY ME FOR THE SHARES?
You will receive a check for the purchase price of the
shares we buy from you. We expect to obtain the funds needed
to pay for this tender offer from cash on hand of
approximately $2.5 million and the rest from borrowings
under the previously established revolving line of credit
with our bank. There is currently an unused credit balance
sufficient to fund this tender offer. See Sections 5. and 8.
WHEN WILL UTMD PAY ME FOR MY SHARES?
As soon as administratively possible after the expiration
date, currently set at November 8, 2002. UTMD's expects to
mail checks about two weeks after the expiration date. See
Section 5.
HOW LONG DO I HAVE TO DECIDE TO TENDER MY SHARES?
You may tender your shares until the tender offer expires.
The tender offer is set to expire on Friday, November 8 at
5:00 p.m. New York City time. See Section 3.
ONCE I HAVE TENDERED MY SHARES, CAN I WITHDRAW MY TENDER?
After you have tendered your shares, you may change your
mind and not sell your shares if you properly notify the
depositary before the expiration date. See Section 4.
HOW DO I TENDER MY SHARES?
1) You must properly complete and duly execute the Letter of
Transmittal and deliver it with your share certificate(s) to
the depositary at the address appearing on the back cover
page of this document; or
2) The depositary must receive a confirmation of receipt of
your shares by book-entry transfer and a properly completed
and duly executed Letter of Transmittal; or 3) You must
comply with the guaranteed delivery procedure. See Section 3
and the instructions for the Letter of Transmittal.
3
HOW WILL I BE NOTIFIED IF UTMD DECIDES TO EXTEND THE TENDER OFFER?
We will issue a press release by 9:00 A.M. New York City
time on November 11, the next business day after the
previously scheduled expiration date, if we decide to extend
the tender offer. See Section 14.
WHAT IS PRORATION AND HOW WOULD IT APPLY?
Proration will not occur unless the total number of shares
tendered is more than 750,000. Proration is calculating your
proportion of the total shares tendered when the total is
greater than the number of shares we actually purchase.
First, we subtract the number of odd lot shares from the
total shares tendered. Then we divide the number of shares
you tendered by the adjusted total to get your pro rata
proportion. We then multiply your pro rata proportion by the
total number of shares we actually purchase to calculate
your proration, which is the adjusted number of shares that
we buy from you. See Sections 1. and 5.
WHAT IS AN ODD LOT?
An odd lot is an amount of shares less than 100.
WHAT IS DIFFERENT ABOUT AN ODD LOT IF IT REPRESENTS ALL OF THE SHARES I OWN?
Odd lots are not subject to proration. That means all
properly tendered odd lots will be purchased in entirety
without proration in the event that more shares are tendered
than we purchase. To properly tender odd lots, you must
complete the section entitled "Odd Lots" in the Letter of
Transmittal. See Section 1.
WILL I HAVE TO PAY BROKERAGE COMMISSIONS IF I TENDER MY SHARES?
If you are a registered shareholder and you tender your
shares directly to the depositary, you will not incur any
brokerage commissions. If you hold your shares through a
broker or a bank, we urge you to consult your broker or bank
to determine whether they charge applicable transaction
costs. See Section 15.
WHAT ARE U.S. FEDERAL INCOME TAX CONSEQUENCES IF I TENDER MY SHARES?
Generally, you will be subject to U.S. federal income
taxation when you receive cash from UTMD in exchange for the
shares you tender. In addition, such receipt of cash for
your tendered shares will be treated either as a sale or
exchange eligible for capital gains treatment or a dividend
subject to ordinary income tax rates. See Section 13.
WILL I HAVE TO PAY STOCK TRANSFER TAX IF I TENDER MY SHARES?
You will not incur any stock transfer tax if you instruct
the depositary in the Letter of Transmittal to make payment
for the shares to the registered holder. See Sections 5 and
15.
ARE THERE ANY SPECIAL CONDITIONS TO THE OFFER?
Yes. The tender offer is subject to conditions such as the
absence of court and governmental action prohibiting the
offer, and changes in general market conditions or UTMD's
business that, in our judgment, may be materially adverse.
See Section 6.
HAS UTMD OR ITS BOARD OF DIRECTORS ADOPTED A POSITION ON THE OFFER?
UTMD's Board of Directors approved the Offer. However,
neither we nor the Board of Directors makes any
recommendation to you as to whether or not you should tender
your shares. You must make your own decision whether or not
to tender your shares, and if so, how many shares to tender.
UTMD's directors and officers have advised us that they do
not intend to tender any shares in the tender offer. See the
Introduction and Background section, as well as Sections 2.
and 10. through 12.
4
IF I DECIDE NOT TO TENDER, HOW DOES THE OFFER AFFECT MY SHARES?
There will be fewer shares outstanding after the tender
offer. As a percentage of shares currently outstanding after
the tender offer, you will own a larger portion of UTMD.
TO WHOM CAN I TALK IF I HAVE QUESTIONS?
Please call the depositary or Paul Richins at the Company.
Their contact information is listed on the last page of this
document. If you own your shares through a broker, he or she
should be able to assist you as well.
________________________________________________________________________________
TO THE HOLDERS OF COMMON STOCK OF UTAH MEDICAL PRODUCTS, INC.:
INTRODUCTION & BACKGROUND
Utah Medical Products, Inc., a Utah corporation (the "Company"), hereby
invites its stockholders to tender up to 750,000 shares of its common stock, par
value $.01 per share (hereinafter referred to as the "Shares"), to the Company
at a price of $17.05 per Share, upon the terms and subject to the conditions set
forth herein and in the related Letter of Transmittal (which together constitute
the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, purchase 750,000 Shares (or such lesser number of Shares as are validly
tendered and not withdrawn) pursuant to the Offer. The Company will pay the
Purchase Price for all Shares validly tendered, and not withdrawn, upon the
terms and subject to the conditions of the Offer, the procedure pursuant to
which Shares will be accepted for payment and the proration provisions.
Certificates representing Shares not purchased because of proration will be
returned at the Company's expense. The Company reserves the right, in its sole
discretion, to purchase more than 750,000 Shares pursuant to the Offer. See
Section 14.
This Offer is not conditioned upon any minimum number of Shares being
tendered in the Offer. The Offer is, however, subject to certain other
conditions. See Section 6.
The Board of Directors of the Company has approved the Offer. However,
neither the Company nor its Board of Directors makes any recommendation to
stockholders as to whether to tender or refrain from tendering their
Shares. Each stockholder must make the decision whether to tender Shares
and, if so, how many Shares to tender. The Company has been advised that
none of its directors or executive officers intends to tender any Shares
pursuant to the Offer. See Section 10.
For some time, the Company's Board of Directors (the "Board") and senior
management have considered possible uses of excess cash generated by the
Company's operations and strategic initiatives. After careful consideration,
including presentations from financial advisors to the Company, the Board
concluded, beginning in 1992, that a significant share repurchase program would
be the most desirable use for the excess cash.
Over the past five years, the Board and senior management have taken a
number of actions with the primary goals of generating maximum value for the
Company's stockholders and focusing UTMD's resources on its key strategic
businesses:
o the 1997 acquisition of Columbia Medical, Inc.
5
o the 1998 acquisition of the neonatal product line of Gesco International/
Bard Access Systems, Inc.
o the 1997 through third quarter 2002 investment of $3.8 million in internal
research and development projects.
o the 1999 tender offer in which 1,153,900 shares were repurchased at an
average cost of $8.04 per share including legal and administrative costs.
o the 2000 tender offer in which 1,118,900 shares were repurchased at an
average cost of $8.22 per share including legal and administrative costs.
o the 1997 through third quarter 2002 repurchase of 1,785,000 shares in open
market transactions at an average cost of $8.50 per share, including
commissions.
In the current stock market environment, the Board believes the lower
trading activity of small capitalization stocks in comparison to the larger
capitalization stocks in the medical device industry may adversely affect the
Company's ability to properly negotiate its fair market value in the event of a
merger with another company. The Board has concluded that the current additional
share repurchases would demonstrate to the Company's stockholders the Company's
confidence in its business, and lead to a value more consistent with other
companies with comparable financial performance.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 750,000 Shares (or such greater number of
Shares as the Company may elect to purchase) are validly tendered, the Company
will purchase validly tendered and not withdrawn Shares first from all Odd Lot
Holders (as defined in Section 1) who validly tendered all their Shares and who
so certify in the appropriate place on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery, and then, after the purchase
of all of the foregoing Shares, all Shares tendered and not withdrawn prior to
the Expiration Date, on a pro rata basis (with appropriate adjustments to avoid
purchase of fractional Shares). See Section 1. All certificates representing
Shares not purchased pursuant to the Offer will be returned at the Company's
expense to the stockholders who tendered such Shares.
The Purchase Price will be paid net to the tendering stockholder in cash
for all Shares purchased. Tendering stockholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. However, any tendering stockholder or other payee who fails to
complete, sign and return to the depositary the substitute Form W-9 that is
included with the letter of transmittal may be subject to required united states
federal income tax backup withholding at the applicable withholding rate of the
gross proceeds payable to such stockholder or other payee pursuant to the offer.
See Section 3. The Company will pay all fees and expenses incurred in connection
with the Offer by Registrar and Transfer Company, which will act as the
depositary for the Offer (the "Depositary"). See Section 15.
As of October 1, 2002, the Company had issued and outstanding 4,917,589
Shares and had 928,568 Shares issuable on the exercise of stock options
exercisable within 60 days. The 750,000 Shares that the Company is offering to
purchase pursuant to the Offer represent approximately 15.3% of the outstanding
Shares. The Shares are listed and traded on The Nasdaq Stock Market ("Nasdaq")
under the symbol "UTMD." On September 30, 2002, the last full trading day before
announcement of the Offer, the closing per Share sales price as reported by
Nasdaq was $16.07 per share. Stockholders are urged to obtain current market
quotations for the Shares. See Section 7.
The Company has not authorized any person to make any recommendation on behalf
of the Company as to whether stockholders should tender or refrain from
tendering Shares pursuant to the Offer. The Company has not authorized any
person to give any information or to make any representation in connection with
the Offer on behalf of the Company other than those contained in this Offer to
Purchase or in the related Letter of Transmittal. Do not rely on any such
recommendation or any such information or representations, if given or made, as
having been authorized by the Company.
6
THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase 750,000 Shares or such lesser number of Shares as are validly tendered
(and not withdrawn in accordance with Section 4) prior to the Expiration Date
(as defined below) at a price of $17.05 per Share. The term "Expiration Date"
means 5:00 P.M., New York City time, on Friday, November 8, 2002, unless and
until the Company, in its sole discretion, shall have extended the period of
time during which the Offer will remain open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer, as
so extended by the Company, shall expire. See Section 14 for a description of
the Company's right to extend, delay, terminate or amend the Offer. The Company
reserves the right, in its sole discretion, to purchase more than 750,000 Shares
pursuant to the Offer. In accordance with applicable regulations of the
Securities and Exchange Commission (the "SEC"), the Company may purchase
pursuant to the Offer an additional amount of Shares not to exceed 2% of the
outstanding Shares without amending or extending the Offer. See Section 14. In
the event of an over-subscription of the Offer as described below, Shares
tendered prior to the Expiration Date will be eligible for proration, except for
Odd Lots as explained below. The proration period also expires on the Expiration
Date.
The Offer is not conditioned upon any minimum number of Shares being
tendered in the Offer. The Offer is, however, subject to certain other
conditions. See Section 6.
The Company will pay the Purchase Price for all Shares validly tendered
prior to the Expiration Date, upon the terms and subject to the conditions of
the Offer, the procedure pursuant to which Shares will be accepted for payment
and the proration provisions. All Shares tendered and not purchased pursuant to
the Offer, including Shares not purchased because of proration, will be returned
to the tendering stockholders at the Company's expense as promptly as
practicable following the Expiration Date. The Company reserves the right, in
its sole discretion, to purchase more than 750,000 Shares pursuant to the Offer.
See Section 14.
PRIORITY OF PURCHASES. Upon the terms and subject to the conditions of the
Offer, if more than 750,000 Shares (or such greater number of Shares as the
Company may elect to purchase pursuant to the Offer) have been validly tendered
and not withdrawn, the Company will purchase validly tendered and not withdrawn
Shares on the basis set forth below:
(a) first, all Shares tendered and not withdrawn prior to the Expiration
Date by any Odd Lot Holder (as defined below) who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder
(tenders of fewer than all Shares owned by such stockholder will
not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed
Delivery; and
(b) second, after purchase of all of the foregoing Shares, all Shares
tendered and not withdrawn prior to the Expiration Date, on a pro rata
basis (with appropriate adjustments to avoid purchases of fractional
Shares) as described below.
ODD LOTS. For purposes of the Offer, the term "Odd Lots" shall mean all
Shares validly tendered prior to the Expiration Date and not withdrawn by any
person who owned beneficially as of the close of business on October 10, 2002,
and continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares (and so certified in the appropriate place on the Letter
of Transmittal and, if applicable, on the Notice of Guaranteed Delivery) (an
"Odd Lot Holder"). As set forth above, Odd Lots will be accepted for payment
before proration, if any, of the purchase of other tendered Shares. In order to
qualify for this preference, an Odd Lot Holder must tender all such Shares in
accordance with the procedures described in Section 3. This preference is not
available for partial tenders or to the beneficial holders of an aggregate of
100 or more Shares, even if such holders have separate accounts or certificates
representing fewer than 100 Shares. By accepting the Offer, an Odd Lot Holder
would not only avoid the payment of brokerage commissions but also would avoid
any applicable odd lot charges in a sale of such holder's Shares. Any Odd Lot
Holder wishing to tender all of such stockholder's Shares should complete the
box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any stockholder who tendered all Shares owned
beneficially and who, as a result of proration, would then own beneficially an
aggregate of fewer than 100 Shares. If the Company exercises this right, it will
increase the number of Shares that it is offering to purchase by the number of
Shares purchased through the exercise of such right.
7
PRORATION. In the event that proration of tendered Shares is required, the
Company will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each stockholder tendering Shares, other than Odd
Lot Holders, shall be based on the ratio of the number of Shares tendered by
such stockholder (and not withdrawn) to the total number of Shares tendered by
all stockholders, other than Odd Lot Holders (and not withdrawn). Because of the
difficulty in determining the number of Shares properly tendered (including
Shares tendered by guaranteed delivery procedures, as described in Section 3)
and not withdrawn, and because of the odd lot procedure, the Company does not
expect that it will be able to announce the final proration factor and commence
payment for any Shares purchased pursuant to the Offer until approximately seven
Nasdaq trading days after the Expiration Date. The preliminary results of any
proration will be announced by press release as promptly as practicable after
the Expiration Date. Stockholders may obtain such preliminary information from
the Depositary or the Company and may be able to obtain such information from
their brokers.
As described in Section 13, the number of Shares that the Company will
purchase from a stockholder may affect the United States federal income tax
consequences to the stockholder of such purchase and therefore may be relevant
to a stockholder's decision whether to tender Shares. The Letter of Transmittal
affords each tendering stockholder the opportunity to designate the order of
priority in which Shares tendered are to be purchased in the event of proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the Company's
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The following discussion contains forward-looking statements which involve
risks and uncertainties. The Company's actual results may differ materially
from the results discussed in the forward-looking statements. Factors that
might cause such a difference include, but are not limited to, the matters
discussed below as well as the factors described in the Company's filings
with the SEC.
This Offer is an integral part of the Company's ongoing strategy of
allowing the Company to focus on its key businesses and maximize stockholder
value. The purpose of the Offer is to allow those stockholders desiring to
receive cash for all or a portion of their shares an opportunity to do so at a
premium over the recent trading prices for the shares. The Offer provides
shareholders who are considering a sale of all or a portion of their shares with
the opportunity to sell their Shares for cash, without the usual transaction
costs associated with market sales. In addition, shareholders owning fewer than
100 Shares, whose Shares are purchased pursuant to the Offer not only will avoid
the payment of brokerage commissions but also will avoid any applicable odd lot
charges payable on a sale of their Shares. In addition, the Offer gives
shareholders the opportunity to sell at prices greater than market prices
prevailing prior to announcement of the Offer. The Offer also allows
shareholders to sell a portion of their Shares while retaining a continuing
equity interest in UTMD.
The Company's Board believes that the Offer is in the best interests of
UTMD and its shareholders. The Company believes that the Offer and related
financing will be accretive to earnings per share (on both a basic and a diluted
basis) in the Company's fiscal year ending December 31, 2003, but there can be
no assurance to that effect. Stockholders who determine not to accept the Offer
will increase their proportionate interest in the Company and thus in the
Company's future earnings, subject to the Company's right to issue additional
shares and other equity securities in the future. The proforma financial
statements which follow in Section 9 quantify the amount by which the Offer and
related financing, for calendar year 2001 and latest quarter ending June 30,
2002, would have been accretive to earnings per share, in an amount equal to
about 10%. The proforma financial statements demonstrate that shareholders who
decide not to tender will own shares in a company with greater debt obligations
until the Company actually receives its patent infringement damages award or
future financial performance allows the debt to be repaid. Both receipt of the
damages award and future financial performance are uncertain.
The Board has determined that the Company's financial condition and outlook
and current market conditions, including recent trading prices of the shares,
make this an attractive time to repurchase a significant portion of the
outstanding shares. After comparing UTMD's recent share value with other
publicly traded companies in the medical device industry and/or with companies
of comparable financial performance, the Board believes UTMD's shares are
substantially undervalued. UTMD's shares are trading at about 60% of financial
8
multiples typical for the industry and broader index averages. In considering
alternatives, the Board believes the Company's own shares are the most
attractive investment available to it at this time, and the limited availability
of UTMD shares for sale on the open market make a tender offer the most
practical way to repurchase a significant portion of the Company's shares. After
the Offer is completed, the Company believes that its financial condition,
access to capital and outlook for continued favorable cash flow generation will
allow it to continue to reinvest in its business, including the ongoing
acquisition of complementary products and businesses. The Offer is consistent
with and will continue UTMD's pattern of investments with the primary goal of
generating maximum value for continuing shareholders.
In deciding to approve the Offer, the Board took into account the expected
financial impact of the Offer, including the increased interest expense and
financial and operating constraints associated with the financing required to
fund the Offer. The Company believes that its cash, short-term investments and
access to credit facilities following the completion of the Offer, together with
its anticipated cash flow from operations, are adequate for its needs in the
foreseeable future. As of September 30, 2002, the Company had available for
borrowing approximately $15 million under its Line of Credit.
The magnitude of the purchase of shares in the Offer is substantial. The
Board took into account that, if the Offer were fully subscribed, the Offer
would have the effect of reducing the outstanding shares by approximately 15% at
an aggregate cost of approximately $12.8 million and reducing the Company's
stockholders' equity from $21.8 million at June 30, 2002 to $9.0 million, on a
pro forma basis.
From time to time, the Company has had informal discussions with third
parties expressing varying degrees of interest in a possible acquisition of,
investment in or a combination with the Company. These discussions were
preliminary in nature and did not result in any proposals being recommended to
the Board. In reviewing the Offer, the Board reviewed the Company's strategic
business plans and was made aware of such discussions.
Shares that the Company acquires pursuant to the Offer will become
authorized but unissued Shares and will be available for reissuance by the
Company without further stockholder action (except as may be required by
applicable law or the rules of Nasdaq or any securities exchange on which the
Shares are listed). Subject to applicable state laws and rules of Nasdaq, such
Shares could be issued without stockholder approval for, among other things,
acquisitions, the raising of additional capital for use in the Company's
business, stock dividends or in connection with stock option plans and other
plans, or a combination thereof.
The Company may in the future purchase additional Shares on the open
market, in private transactions, through tender offers or otherwise. Any such
purchases may be on the same terms as, or on terms that are more or less
favorable to stockholders than, the terms of the Offer. However, Rule 13e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), generally prohibits the Company and its affiliates from purchasing any
Shares, other than pursuant to the Offer, until at least ten business days after
the expiration or termination of the Offer. Any possible future purchases by the
Company will depend on several factors including, without limitation, the
ability of the Company to make such purchases under its financing agreements in
effect at the time, the market price of the Shares, the results of the Offer,
the Company's business and financial position and general economic and market
conditions.
The Board of the Company has approved the Offer. However, neither the
Company nor its Board makes any recommendation to stockholders as to
whether to tender or refrain from tendering their Shares. Each stockholder
must make the decision whether to tender Shares and, if so, how many Shares
to tender. The Offer to purchase is being made to all holders of Shares,
including officers, directors, and affiliates of the Company.
3. PROCEDURES FOR TENDERING SHARES.
PROPER TENDER OF SHARES. For Shares to be validly tendered pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) including any required signature guarantees
or an Agent's Message (as defined below) and any other documents required by the
Letter of Transmittal, must be received prior to 5:00 P.M., New York City time,
on the Expiration Date by the Depositary at its address set forth on the back
cover of this Offer to Purchase or (b) the tendering stockholder must comply
with the guaranteed delivery procedure set forth below.
9
In addition, Odd Lot Holders who tender such Shares must complete the box
captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as set forth in Section 1.
SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required if (i) the Letter of Transmittal is signed by the registered holder(s)
of the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depositary Trust Company (the "Book-Entry Transfer Facility")
whose name appears on a security position listing as the owner of the Shares)
tendered therewith and such holder(s) have not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (ii) Shares are tendered for the
account of a member firm of a registered national securities exchange, a member
of the New York Stock Exchange (NYSE) or a commercial bank or trust company (not
a savings bank or a savings and loan association) having an office, branch or
agency in the United States (each such entity being hereinafter referred to as
an "Eligible Institution"). See Instruction 1 of the Letter of Transmittal. In
all other cases, all signatures on the Letter of Transmittal must be guaranteed
by an Eligible Institution. If a certificate for Shares is registered in the
name of a person other than the person executing a Letter of Transmittal, or if
payment is to be made, or Shares not purchased or tendered are to be issued, to
a person other than the registered holder, then the certificate must be endorsed
or accompanied by an appropriate stock power, in either case signed exactly as
the name of the registered holder appears on the certificate or stock power
guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal.
The method of delivery of all documents, including certificates for Shares,
the Letter of Transmittal and any other required documents, is at the
election and risk of the tendering stockholder. If delivery is by mail,
then registered mail with return receipt requested, properly insured, is
recommended. In all cases sufficient time should be allowed to assure
timely delivery.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at the Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
Facility to transfer Shares into the Depositary's account in accordance with
such Book-Entry Transfer Facility's procedures for transfer. Although delivery
of Shares may be effected through a book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, either (i) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof)
with any required signature guarantees or an Agent's Message, and any other
required documents must, in any case, be transmitted to and received by the
Depositary at its address set forth on the back cover of this Offer to Purchase
prior to the Expiration Date, or (ii) the guaranteed delivery procedure
described below must be followed. The confirmation of a book-entry transfer of
Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as "confirmation of a book-entry
transfer." Delivery of documents to the book-entry transfer facility does not
constitute delivery to the Depositary.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
confirmation of a book-entry transfer which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Company may enforce such agreement against the participant.
GUARANTEED DELIVERY. Stockholders whose Share certificates are not
immediately available, who cannot deliver their Shares and all other required
documents to the Depositary or who cannot complete the procedure for delivery by
10
book-entry transfer prior to the Expiration Date must tender their Shares
pursuant to the guaranteed delivery procedure set forth in this Section 3.
Pursuant to such procedure: (i) such tender must be made by or through an
Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (with any
required signature guarantees) must be received by the Depositary prior to the
Expiration Date, and (iii) the certificates for all physically delivered Shares
in proper form for transfer by delivery, or a confirmation of a book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility of
all Shares delivered electronically, in each case together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq trading days after the date the Depositary
receives such Notice of Guaranteed Delivery.
UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, the applicable withholding rate of the
gross proceeds payable to a stockholder or other payee pursuant to the Offer
must be withheld and remitted to the United States Treasury, unless the
stockholder or other payee provides its taxpayer identification number (employer
identification number or social security number) to the Depositary and certifies
that such number is correct. Therefore, each tendering stockholder must complete
and sign the Substitute Form W-9 included as part of the Letter of Transmittal
so as to provide the information and certification necessary to avoid backup
withholding, unless such stockholder otherwise establishes to the satisfaction
of the Depositary that it is not subject to backup withholding. Certain
stockholders (including, among others, all corporations and certain foreign
stockholders) are not subject to these backup withholding requirements. To
prevent possible erroneous backup withholding, an exempt holder must enter its
correct taxpayer identification number in Part 1 of Substitute Form W-9, certify
that such Stockholder is not subject to backup withholding in Part 2 of such
form, and sign and date the form. See the Guidelines for Certification of
Taxpayer Identification Number of Substitute Form W-9 enclosed with Letter of
Transmittal for additional instructions. In order for a foreign stockholder to
qualify as an exempt recipient, a foreign stockholder must submit an Internal
Revenue Service ("IRS") Form W-8 or a Substitute Form W-8, signed under
penalties of perjury, attesting to that stockholder's exempt status. Such
statements may be obtained from the Depositary. See Instruction 10 of the Letter
of Transmittal. Stockholders are urged to consult their own tax advisors
regarding the application of United States federal income tax withholding.
To prevent United States federal income tax backup withholding at the
applicable withholding rate of the gross payments made to stockholders for
Shares purchased pursuant to the Offer, each stockholder who does not
otherwise establish an exemption from such withholding must provide the
Depositary with the stockholder's correct taxpayer identification number
and provide certain other information by completing the substitute Form W-9
included with the Letter of Transmittal.
For a discussion of certain United States federal income tax consequences to
tendering stockholders, see Section 13.
WITHHOLDING FOR FOREIGN STOCKHOLDERS. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign stockholder or its agent unless (A) the Depositary
determines that a reduced rate of withholding is available pursuant to a tax
treaty or that an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business
within the United States or (B) the foreign stockholder establishes to the
satisfaction of the Company and the Depositary that the sale of Shares by such
foreign stockholder pursuant to the Offer will qualify as a "sale or exchange,"
rather than as a distribution taxable as a dividend, for United States federal
income tax purposes (see Section 13 below). For this purpose, a foreign
stockholder is any stockholder that is not (i) a citizen or resident of the
United States, (ii) a corporation, partnership, or other entity created or
organized in or under the laws of the United States, any State or any political
subdivision thereof, (iii) an estate the income of which is subject to United
States federal income taxation regardless of the source of such income, or (iv)
a trust the administration of which a court within the United States is able to
exercise primary supervision and all substantial decisions of which one or more
United States persons have the authority to control. In order to obtain a
reduced rate of withholding pursuant to a tax treaty, a foreign stockholder must
deliver to the Depositary before the payment a properly completed and executed
IRS Form 1001. In order to obtain an exemption from withholding on the grounds
that the gross proceeds paid pursuant to the Offer are effectively connected
with the conduct of a trade or business within the United States, a foreign
stockholder must deliver to the Depositary a properly completed and executed IRS
Form 4224. The Depositary will determine a stockholder's status as a foreign
11
stockholder and eligibility for a reduced rate of, or exemption from,
withholding by reference to any outstanding certificates or statements
concerning eligibility for a reduced rate of, or exemption from, withholding
(e.g., IRS Form 1001 or IRS Form 4224) unless facts and circumstances indicate
that such reliance is not warranted. A foreign stockholder may be eligible to
obtain a refund of all or a portion of any tax withheld if such stockholder
meets the "complete redemption," "substantially disproportionate" or "not
essentially equivalent to a dividend" test described in Section 13 or is
otherwise able to establish that no tax or a reduced amount of tax is due. Each
foreign stockholder is urged to consult its tax advisor regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption, and the refund
procedure. See Instruction 11 of the Letter of Transmittal.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares
to be accepted and the validity, form, eligibility (including time of receipt)
and acceptance of any tender of Shares will be determined by the Company, in its
sole discretion, and its determination shall be final and binding on all
parties. The Company reserves the absolute right to reject any or all tenders of
any Shares that it determines are not in appropriate form or the acceptance for
payment of or payments for which may be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in any tender with respect to any particular Shares or any
particular stockholder. No tender of Shares will be deemed to have been properly
made until all defects or irregularities have been cured by the tendering
stockholder or waived by the Company. None of the Company, the Depositary or any
other person shall be obligated to give notice of any defects or irregularities
in tenders, nor shall any of them incur any liability for failure to give any
such notice.
TENDERING STOCKHOLDER'S REPRESENTATION AND WARRANTY; COMPANY'S ACCEPTANCE
CONSTITUTES AN AGREEMENT. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering stockholder's acceptance of the
terms and conditions of the Offer, as well as the tendering stockholder's
representation and warranty to the Company that (a) such stockholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the SEC under the Exchange Act and (b) the tender of such Shares
complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person, directly
or indirectly, to tender Shares for such person's own account unless, at the
time of tender and at the end of the proration period or period during which
Shares are accepted by lot (including any extensions thereof), the person so
tendering (i) has a net long position equal to or greater than the amount of (x)
Shares tendered or (y) other securities convertible into or exchangeable or
exercisable for the Shares tendered and will acquire such Shares for tender by
conversion, exchange or exercise and (ii) will deliver or cause to be delivered
such Shares in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
stockholder and the Company upon the terms and conditions of the Offer.
Certificates for Shares, together with a properly completed Letter of
Transmittal and any other documents required by the Letter of Transmittal,
must be delivered to the Depositary and not to the Company. Any such
documents delivered to the Company will not be forwarded to the Depositary
and therefore will not be deemed to be validly tendered.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 5:00 P.M. New York City time, on Friday December 6, 2002.
For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic or facsimile transmission form and must be received prior
to the Expiration Date by the Depositary at its address set forth on the back
cover of this Offer to Purchase. Any such notice of withdrawal must specify the
name of the tendering stockholder, the name of the registered holder (if
12
different from that of the person who tendered such Shares), the number of
Shares tendered and the number of Shares to be withdrawn. If the certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
stockholder must also submit the serial numbers shown on the particular
certificates for Shares to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution (except in the case of
Shares tendered by an Eligible Institution). If Shares have been tendered
pursuant to the procedure for book-entry transfer set forth in Section 3, the
notice of withdrawal also must specify the name and the number of the account at
the Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the procedures of such facility. All questions as to the
form and validity (including time of receipt) of notices of withdrawal will be
determined by the Company, in its sole discretion, which determination shall be
final and binding. None of the Company, the Depositary, or any other person
shall be obligated to give notice of any defects or irregularities in any notice
of withdrawal nor shall any of them incur liability for failure to give any such
notice.
Withdrawals may not be rescinded and any Shares withdrawn will thereafter
be deemed not tendered for purposes of the Offer unless such withdrawn Shares
are validly retendered prior to the Expiration Date by again following one of
the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, as promptly as
practicable following the Expiration Date, the Company will accept for payment
and pay for (and thereby purchase) Shares validly tendered and not withdrawn
prior to the Expiration Date. For purposes of the Offer, the Company will be
deemed to have accepted for payment (and therefore purchased) Shares that are
tendered and not withdrawn (subject to the proration provisions of the Offer)
only when, as and if it gives oral or written notice to the Depositary of its
acceptance of such Shares for payment pursuant to the Offer. In accordance with
applicable regulations of the SEC, the Company may purchase pursuant to the
Offer an additional amount of Shares not to exceed 2% of the outstanding Shares
without amending or extending the Offer. If (i) the Company increases or
decreases the price to be paid for the Shares or the number of Shares being
sought in the Offer and, in the event of an increase in the number of Shares
being sought, such increase exceeds 2% of the outstanding Shares, and (ii) the
Offer is scheduled to expire at any time earlier than the tenth business day
from, and including, the date that notice of such increase or decrease is first
published, sent or given in the manner specified in Section 14, the Offer will
be extended until the expiration of such period of ten business days.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase and pay for all of the Shares accepted for payment pursuant to the
Offer as soon as practicable after the Expiration Date. In all cases, payment
for Shares tendered and accepted for payment pursuant to the Offer will be made
promptly (subject to possible delay in the event of proration) but only after
timely receipt by the Depositary of certificates for Shares (or of a timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) and any
other required documents.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering stockholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately seven Nasdaq trading days after the Expiration
Date. Certificates for all Shares tendered and not purchased, including Shares
not purchased due to proration, will be returned (or, in the case of Shares
tendered by book-entry transfer, such Shares will be credited to the account
maintained with the Book-Entry Transfer Facility by the participant therein who
so delivered such Shares) to the tendering stockholder as promptly as
practicable after the Expiration Date without expense to the tendering
stockholders. Under no circumstances will interest on the Purchase Price be paid
by the Company by reason of any delay in making payment. In addition, if certain
events occur, the Company may not be obligated to purchase Shares pursuant to
the Offer. See Section 6.
13
The Company will pay or cause to be paid all stock transfer taxes, if any,
payable on the transfer to it of Shares purchased pursuant to the Offer. If,
however, payment of the Purchase Price is to be made to, or (in the
circumstances permitted by the Offer) if unpurchased Shares are to be registered
in the name of, any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the person(s)
signing the Letter of Transmittal, the amount of all stock transfer taxes, if
any (whether imposed on the registered holder(s) or such other person or
otherwise) payable on account of the transfer to such person will be deducted
from the Purchase Price unless satisfactory evidence of the payment of the stock
transfer taxes, or exemption therefrom, is submitted. See Instruction 7 of the
Letter of Transmittal.
The Company may be required to withhold and remit to the IRS a portion of
the gross proceeds, at the applicable withholding rate, paid to any
tendering stockholder or other payee who fails to complete fully, sign and
return to the Depositary the substitute Form W-9 included in the Letter of
Transmittal. See Section 3. See Section 13 regarding United States federal
income tax consequences for foreign stockholders.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act, if at any time on or after October 11, 2002 and on or
prior to the Expiration Date any of the following events shall have occurred (or
shall have been determined by the Company to have occurred) that, in the
Company's judgment (regardless of the circumstances giving rise thereto,
including any action or omission to act by the Company), makes it inadvisable to
proceed with the Offer or with such acceptance for payment or payment:
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or administrative
agency, authority or tribunal or any other person, domestic or foreign, before
any court, authority, agency or tribunal that directly or indirectly (i)
challenges the making of the Offer, the acquisition of some or all of the Shares
pursuant to the Offer or otherwise relates in any manner to the Offer, or (ii)
in the Company's reasonable judgment, could materially and adversely affect the
business, condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially impair
in any way the contemplated future conduct of the business of the Company or any
of its subsidiaries or materially impair the contemplated benefits of the Offer
to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered, amended,
enforced or deemed to be applicable to the Offer or the Company or any of its
subsidiaries, by any court or any authority, agency or tribunal that, in the
Company's reasonable judgment, would or might directly or indirectly: (i) make
the acceptance for payment of, or payment for, some or all of the Shares illegal
or otherwise restrict or prohibit consummation of the Offer or otherwise relates
in any manner to the Offer; (ii) delay or restrict the ability of the Company,
or render the Company unable, to accept for payment or pay for some or all of
the Shares; (iii) materially impair the contemplated benefits of the Offer to
the Company; or (iv) materially and adversely affect the business, condition
(financial or other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way the
contemplated future conduct of the business of the Company or any of its
subsidiaries;
(c) there shall have occurred: (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the-counter market; (ii) the declaration of any banking moratorium or
any suspension of payments in respect of banks in the United States (whether or
not mandatory); (iii) the commencement of a war, armed hostilities or other
international or national crisis directly or indirectly involving the United
States; (iv) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event that, in the
Company's reasonable judgment, might effect, the extension of credit by banks or
other lending institutions in the United States; (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or (vi) any decline in either the Dow Jones
Industrial Average or the Standard and Poor's Index of 500 Industrial Companies
by an amount in excess of 10% measured from the close of business on October 10,
2002; or
14
(d) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger or acquisition proposal for the Company,
shall have been proposed, announced or made by another person or shall have been
publicly disclosed, or any person or group shall have filed a Notification and
Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
reflecting an intent to acquire the Company or any of its Shares, or the Company
shall have learned that any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Shares, or any new group
shall have been formed that beneficially owns more than 5% of the outstanding
Shares.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its sole
discretion.
The Company's failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
Any determination by the Company concerning the events described above will be
final and binding on all parties.
7. PRICE RANGE OF SHARES.
The Shares are listed and traded on Nasdaq (symbol: UTMD). Prior to March
8, 2000, the Shares were traded on The New York Stock Exchange (symbol: UM). The
following table sets forth, for the periods indicated, the high and low closing
per Share sales prices as reported by the NYSE and Nasdaq (rounded to the
nearest $.01):
High Low
---- ---
2000:
1st Quarter......................................$8.00 $6.19
2nd Quarter.......................................7.69 6.50
3rd Quarter.......................................8.06 6.81
4th Quarter.......................................8.56 6.00
2001:
1st Quarter......................................10.50 7.03
2nd Quarter......................................12.40 8.80
3rd Quarter......................................14.00 9.40
4th Quarter......................................13.64 9.80
2002:
1st Quarter .....................................16.36 12.51
2nd Quarter......................................16.35 14.90
3rd Quarter .....................................17.04 13.45
On September 30, 2002, the last full Nasdaq trading day prior to
announcement of the Offer, the closing per Share sales price as reported by
Nasdaq was $16.07. The Company urges stockholders to obtain current market
quotations for the Shares.
The Company has not paid cash dividends since 1993. The Company's dividend
policy will be reviewed by the Board at such future times as may be appropriate
in light of relevant factors at such times. The Company does not expect to pay
cash dividends in the foreseeable future.
15
8. SOURCE AND AMOUNT OF FUNDS.
Assuming that the Company purchases 750,000 Shares pursuant to the Offer at
$17.05 per Share, the Company expects the maximum amount required to purchase
shares pursuant to the Offer and to pay related fees and expenses will be
approximately $12,817,500, which the Company expects to obtain from cash on hand
at the time of the payments of approximately $2,500,000, and the remainder from
borrowings under the Company's $15,000,000 unsecured revolving line of credit
("Line of Credit") with U.S. Bank National Association. The Line of Credit
expires on May 31, 2004. The loan balance immediately following the close of the
Offer should be approximately $10.3 million. According to the proforma
financials in Section 9, UTMD's debt ratio, expressed as the ratio of total
liabilities to total assets, would increase immediately following the close of
the Offer from 23% to 77% based on December 31, 2001 balance sheet data, and
from 10% to 63% based on June 30, 2002 balance sheet data.
For reference, in September 2000, UTMD completed a tender offer using its
bank line of credit to finance the purchase of 1,119,000 shares at a cost of
$9.2 million including fees and expenses. The September 30, 2000 bank loan
balance following the tender offer was $12.1 million. After the September 2000
tender offer and prior to this Offer during 2000, 2001 and 2002, UTMD purchased
an additional 234,900 shares in the open market for $3.1 million using its line
of credit and its own cash for financing. The line of credit was completely paid
off in May 2002. UTMD's cash balance on November 4, 2002, prior to the closing
of the Offer, is expected to be about $2.5 million. Therefore, the Company was
able to repay borrowings from share repurchases over the most recent two years
of about $15.2 million, as well as generate approximately an additional $2.5
million in cash.
The Company's ability to borrow funds under the Line of Credit is
contingent on being able to meet the following financial covenants on a
continuing basis: 1) UTMD must maintain a minimum net worth of $10,000,000,
calculated at the end of each calendar quarter; and 2) the quarter-end loan
balance must be less or equal to 1.25 times the most recent four calendar
quarters' pretax and preinterest earnings plus depreciation and amortization
(less or equal 1.25 times trailing four quarters' EBITDA). UTMD's net worth was
$21,796,000 at June 30, 2002. Without the Offer, UTMD would expect net worth at
December 31, 2002 to be about $23.7 million. EBITDA for the most recent twelve
months (LTM) through June 30, 2002 was $11,939,000. UTMD expects LTM to be about
$12 million for calendar 2002. The $10.3 million loan balance on the day after
closing of the Offer would be within covenants. There are no other material
covenants based on financial ratios.
The loan balance under the Line of Credit bears interest at a floating rate
equal to Prime Rate less 1.0%, LIBOR plus 1.25%, or LIBOR plus 1.35%. During the
most recent 60 days, the interest rate would have been 3.75% on the Prime
portion of the line, and between 3.0% and 3.2% on the LIBOR portions. Borrowings
normally receive the LIBOR plus 1.35% rate, adjusted daily. In order to receive
the more attractive LIBOR plus 1.25% rate, UTMD must lock in a loan amount, in
increments of $1,000,000, for any consecutive 30 days. UTMD may also elect to
have any loan amount subject to Prime Rate less 1.0%. The Company anticipates
that it will pay LIBOR plus 1.35% on amounts it believes it will be able to
repay during the next 30 days, and the more attractive LIBOR plus 1.25% rate on
the remaining balance. The overall loan balance is minimized by periodically
sweeping UTMD's operating funds.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
Utah Medical Products, Inc. is in the business of producing cost-effective
devices for the health care industry which are predominantly proprietary,
disposable and for hospital use. UTMD was formed as a Utah corporation in 1978.
In 1997, UTMD purchased Columbia Medical, Inc. (CMI), a Redmond, Oregon company
specializing in manufacturing and marketing vacuum-assisted obstetrical delivery
systems. In July, 1998 UTMD acquired the neonatal product line of Gesco
International, a subsidiary of Bard Access Systems and C.R. Bard, Inc. UTMD
publicly raised equity capital only one time in 1982. The Company's corporate
offices are located at 7043 South 300 West, Midvale, Utah 84047 USA. The
corporate telephone number is (801) 566-1200. European operations are located at
Garrycastle Industrial Estate, Athlone, County Westmeath, Ireland. The telephone
number in Ireland is (902) 73932. CMI's mailing address is P.O. Box 1530,
Redmond, Oregon 97756. The phone number in Oregon is (541) 548-7738.
The foregoing description of the Company's business is qualified in its
entirety by the more detailed discussion contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001 and in its other
filings made with the SEC under the Exchange Act.
16
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION. Set forth below is
certain summary historical consolidated financial information of the Company and
its subsidiaries. The historical financial information (other than the ratio of
earnings to fixed charges and book value per common share), has been derived
from the consolidated financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001 and from the Company's
Quarterly Reports of Form 10-Q for the quarters ended June 30, 2002 and June 30,
2001. The information presented below should be read in conjunction with the
Company's consolidated financial statements and notes thereto incorporated
herein by reference. More comprehensive financial information is included in
such financial statements, and the financial information which follows is
qualified in its entirety by reference to such financial statements, related
notes and the audit report contained therein, copies of which may be obtained as
set forth below under the caption "ADDITIONAL INFORMATION."
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(in thousands except ratios and per share data)
Year Ending Quarter Ending
----------- ---------------
December 31, June 30,
2001 2000 2002 2001
---- ---- ---- ----
INCOME STATEMENT DATA
Sales $26,954 $27,677 $6,800 $6,794
Net income 5,934 4,858 1,785 1,481
Earnings per common share (basic ) 1.18 .90 .36 .30
Earnings per common share (diluted) 1.14 .90 .33 .29
Shares outstanding (basic) 5,019 5,954 5,017 5,014
Shares outstanding (diluted) 5,210 5,978 5,367 5,195
Ratio of earnings to fixed charges (see note) 26.3x 17.8x 455.7x 22.8x
BALANCE SHEET AND OTHER DATA
Working capital 5,399 5,418 6,227 5,551
Total assets 23,572 25,423 24,141 24,184
Long-term debt 2,501 10,000 0 6,600
Shareholders' equity 18,207 12,347 21,796 14,859
Dividends per share -- -- -- --
Book value per common share 3.49 2.07 4.06 2.86
NOTE TO THE SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(1) The ratio of earnings to fixed charges was computed by dividing the sum of
(i) income from operations before taxes (ii) interest expense and (iii)
fixed lease charges by the sum of (i) interest expense and (ii) fixed lease
charges.
17
SUMMARY AUDITED AND UNAUDITED CONSOLIDATED CONDENSED PRO FORMA FINANCIAL
INFORMATION. The following summary audited and unaudited consolidated condensed
pro forma financial information gives effect to the purchase of Shares pursuant
to the Offer, and the payment of related taxes, fees and expenses, based on the
assumptions described in the Notes to Summary Audited and Unaudited Consolidated
Condensed Pro Forma Financial Information below, as if such transactions had
occurred on the first day of the periods presented, with respect to operating
statement data, and on the last day of the periods presented with respect to
balance sheet data. The summary audited and unaudited consolidated condensed pro
forma financial information should be read in conjunction with the summary
historical consolidated financial information incorporated herein by reference
and does not purport to be indicative of the results that would actually have
been obtained, or results that may be obtained in the future, or the financial
condition that would have resulted, if the purchase of the Shares pursuant to
the Offer, and the payment of related taxes, fees and expenses, had been
completed at the dates indicated.
SUMMARY AUDITED AND UNAUDITED CONSOLIDATED CONDENSED
PRO FORMA FINANCIAL INFORMATION (1)
(in thousands except ratios and per share data)
Fiscal Year Ending December 31, 2001 Quarter Ending June 30, 2002
-------------------------------------- ------------------------------------
Pro forma Pro forma
Historical Adjustments Pro forma Historical Adjustments Pro forma
---------- ----------- --------- ---------- ----------- ---------
INCOME STATEMENTS
Net sales $26,954 $26,954 $6,800 $6,800
Cost of sales 11,561 11,561 2,883 2,883
------ ------ ----- -----
Gross margin 15,393 15,393 3,917 3,917
Expenses 6,115 6,115 1,315 1,315
----- ----- ----- -----
Income from operations 9,278 9,278 2,602 2,602
Other Income 202 (705) (503) 126 (104) 22
------ ----- -------- ------- ----- -------
Income before income tax 9,480 (705) 8,775 2,728 (104) 2,624
Income tax expense (3,546) 264 (3,282) (943) 36 (907)
------ ---- ------- ----- -- -----
Net income 5,934 (441) 5,493 1,785 (68) 1,717
========= ========= ======== ======== ======= =======
Earnings per share - basic 1.18 .11 1.29 .36 .04 .40
Earnings per share - diluted 1.14 .09 1.23 .33 .04 .37
Shares outstanding - basic 5,019 (750) 4,269 5,017 (750) 4,267
Shares outstanding - diluted 5,210 (750) 4,460 5,367 (750) 4,617
Ratio of earnings to fixed 26.3x 9.1x 455.7x 25.3x
charges (2)
18
SUMMARY AUDITED AND UNAUDITED CONSOLIDATED CONDENSED
PRO FORMA FINANCIAL INFORMATION (CONT.) (1)
(in thousands except ratios and per share data)
As of December 31, 2001 As of June 30, 2002
----------------------- --------------------
Pro forma Pro forma
Historical Adjustments Pro forma Historical Adjustments Pro forma
---------- ----------- --------- ---------- ----------- ---------
BALANCE SHEET DATA
------------------
ASSETS
Cash $370 $370 $823 $823
Accounts receivable - net 3,585 3,585 3,458 3,458
Inventories 3,248 3,248 3,351 3,351
Other current assets 670 670 740 740
-------- -------- -------- --------
Total current assets 7,873 7,873 8,372 8,372
Property & equipment - net 8,877 8,877 8,990 8,990
Intangible assets - net 6,822 6,822 6,779 6,779
------- ------- ----- -----
Total assets 23,572 23,572 24,141 24,141
====== ====== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable 457 457 514 514
Accrued expenses 2,017 2,017 1,631 1,631
----- ----- ----- -----
Total current liabilities 2,474 2,474 2,145 2,145
Note payable 2,501 12,788 15,289 0 12,788 12,788
Deferred income taxes 390 390 200 200
-------- -------- -------- --------
Total liabilities 5,365 12,788 18,153 2,345 12,788 15,133
STOCKHOLDERS' EQUITY
Preferred stock - - - -
Common stock 50 (8) 42 50 (8) 42
Cumulative foreign currency
translation adjustment (1,816) (1,816) (1,341) (1,341)
Retained earnings 19,973 (12,780) 7,193 23,087 (12,780) 10,307
------ -------- ------- ------ -------- ------
Total stockholders' equity 18,207 (12,788) 5,419 21,796 (12,788) 9,008
Total liabilities and equities 23,572 23,572 24,141 24,141
====== ====== ====== ======
Working capital 5,399 5,399 6,027 6,027
Book value per common share
3.49 1.22 4.06 1.95
NOTES TO SUMMARY AUDITED AND UNAUDITED CONSOLIDATED CONDENSED PRO FORMA
FINANCIAL INFORMATION
(1) The following assumptions were made in presenting the summary audited and
unaudited consolidated condensed pro forma financial information:
(a) The information assumes that 750,000 shares are repurchased and
returned to the status of authorized but unissued shares at $17.05 per
Share.
19
(b) Expenses directly related to the Offer are assumed to be $30,000 and
have been charged against retained earnings.
(c) The information assumes additional interest expense at an assumed rate
of 5.5% for the year ended December 31, 2001, and 3.25% for the quarter
ended June 30, 2002 (which approximates the rates at which interest was
paid on the Line of Credit during the periods presented) on funds used
to purchase the Shares under, and pay the expenses of, the Offer. It
also assumes no reduction in the Line of Credit balance.
(d) The assumed income tax rate applicable to pro forma adjustments was
consistent with the rate for each of the respective historical periods.
(2) The pro forma ratio of earnings to fixed charges was computed by dividing
the sum of (i) income from continuing operations before taxes (ii)
estimated interest expense and (iii) fixed lease charges by the sum of (i)
estimated interest expense and (ii) fixed lease charges.
ADDITIONAL INFORMATION. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the SEC relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company is required
to be disclosed in proxy statements distributed to the Company's stockholders
and filed with the SEC. Such reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by the SEC
at 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549. Copies of such
material may also be obtained by mail, upon payment of the SEC's customary
charges, from the Public Reference Section of the SEC at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a Web
site on the World Wide Web at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the SEC.
10. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING SHARES.
As of September 30, 2002, the Company had issued and outstanding 4,917,589
Shares and had 928,568 Shares issuable on the exercise of stock options
exercisable within 60 days. The 750,000 Shares that the Company is offering to
purchase represent approximately 15.3% of the Shares then outstanding. As of
September 30, 2002, the Company's directors and officers as a group (7 persons)
beneficially owned (including 755,827 shares issuable on the exercise of options
exercisable within 60 days) an aggregate of 876,704 Shares representing
approximately 15.0% of the outstanding Shares (including Shares issuable on the
exercise of options exercisable within 60 days).
20
The following table identifies the aggregate number and percentage of the
common stock owned by each of UTMD's executive officers, directors and
controlling persons, as well as the amount each of these persons will own after
the offering, assuming exercise of all vested options.
Percentage Ownership
Percentage Ownership after Tender Offer
of Shares (Assuming UTMD Purchases
Shares of UTMD Common Outstanding as of 750,000 Shares and no
Directors and Stock Beneficially September 30, 2002 Director or Executive
Executive Officers (1) Owned (2) (3) Officer Tenders) (3)
-----------------------------------------------------------------------------------------------------------
Kevin L. Cornwell 620,375 11.38% 13.19%
(Chairman of the Board &
Chief Executive Officer)
Ernst G. Hoyer 70,000 1.41% 1.66%
(Director)
Stephen W. Bennett 64,500 1.30% 1.53%
(Director)
Paul O. Richins 44,790 0.90% 1.06%
(Director & Vice President)
Barbara A. Payne 35,350 0.71% 0.84%
(Director)
(1) The business address of each of the directors and executive officers of the
Company is 7043 South 300 West, Midvale, Utah 84047. The business phone
number is (801) 566-1200.
(2) Shares shown as beneficially owned include shares subject to options which
are presently exercisable or which will become exercisable on or before
November 30, 2002. See the following table for detailed information
regarding options owned by directors and executive officers.
(3) Calculations of percentages assumes the exercise of options to which the
percentage relates.
If the Company purchases 750,000 Shares pursuant to the Offer, the
Company's executive officers and directors as a group would own beneficially
(including Shares issuable on the exercise of options exercisable within 60
days) approximately 17.8% of the outstanding Shares immediately after the Offer
(including Shares issuable on the exercise of options exercisable within 60
days).
The Company has stock option plans which authorize the grant of stock
options to eligible employees, directors, and other individuals to purchase up
to an aggregate of 2,800,000 shares of common stock. All options granted under
the plans may be exercised between six months and ten years following the date
of grant, subject to vesting schedules and continued employment (in the case of
employees) or ongoing service (in the case of directors and other individuals).
The exercise price is the market price on the date of the grant. Most
outstanding options vest in the right to exercise over a four-year period. All
optionees may use shares previously owned for at least six months to exercise
options. The Company may also accept owned shares to cover withholding or other
taxes. In the event of a change of control, the Company is required to pay the
optionee a cash amount equal to the excess of the market price over the exercise
price of all options granted, whether or not vested.
21
The following table lists each of UTMD's executive officers, directors or
controlling persons who have received options under UTMD's stock option plans,
the number of options received, vesting dates, exercise price and expiration
date.
Shares Exercise
Option Shares Exercisable Price Per Vesting Expiration
Name Date Granted on 11/30/02 Share Dates Date
---------------------------------------------------------------------------------------------------
Kevin L. Cornwell 9/8/93 75,000 75,000 $10.00 1994-97 9/8/03
1/28/94 95,000 95,000 $7.25 1995-98 1/28/04
1/26/95 40,000 40,000 $9.50 1996-99 1/26/05
7/26/96 90,000 90,000 $14.25 1997-00 7/26/06
2/1/97 65,000 65,000 $11.50 1998-01 2/1/07
1/30/98 85,000 85,000 $7.25 1999-02 1/30/08
1/29/99 90,000 84,375 $6.50 2000-03 1/29/09
Ernst G. Hoyer 9/3/96 10,000 10,000 $14.25 1997-00 9/3/06
3/31/97 10,000 10,000 $10.875 1998-01 3/31/07
3/31/98 10,000 10,000 $7.188 1999-02 3/31/08
1/29/99 20,000 20,000 $6.50 1999 1/29/09
Stephen W. Bennett 3/31/94 10,000 10,000 $7.50 1995-98 3/31/04
3/31/95 10,000 10,000 $10.625 1996-99 3/31/05
9/3/96 10,000 10,000 $14.25 1997-00 9/3/06
3/31/97 10,000 10,000 $10.875 1998-01 3/31/07
3/31/98 10,000 10,000 $7.188 1999-02 3/31/08
1/29/99 10,000 10,000 $6.50 1999 1/29/09
Paul O. Richins 9/8/93 1,500 1,500 $10.00 1994-97 9/8/03
1/28/94 6,000 6,000 $7.25 1995-98 1/28/04
1/26/95 4,000 4,000 $9.50 1996-99 1/26/05
7/26/96 2,500 2,500 $14.25 1997-00 7/26/06
2/1/97 4,000 4,000 $11.50 1998-01 2/1/07
5/1/97 4,000 4,000 $6.75 1998-01 5/1/07
1/30/98 6,000 6,000 $7.25 1999-02 1/30/08
1/29/99 8,000 7,500 $6.50 2000-03 1/29/09
1/28/00 5,000 3,438 $6.75 2001-04 1/28/10
2/2/01 2,000 875 $9.125 2002-05 2/2/11
3/1/02 1,000 0 $15.01 2003-06 3/1/12
Barbara A. Payne 8/2/97 5,000 5,000 $8.00 1998-01 8/2/07
3/31/98 10,000 10,000 $7.188 1999-02 3/31/08
1/29/99 15,000 15,000 $6.50 1999 1/29/09
The Company has been advised that none of its directors or executive
officers intends to tender any Shares pursuant to the Offer.
During the 40 business days prior to the date hereof, the Company purchased
1,000 Shares on August 26, 2002 at a price of $14.69 per Share in an open market
transaction subject to a repurchase plan authorized by the Board. To the best of
the Company's knowledge, none of the Company's directors or executive officers,
nor any affiliates of any of the foregoing, had any transactions in the Shares
during the same time period.
Except for outstanding options to purchase Shares granted from time to time
to certain employees (including executive officers) of UTMD and to outside
directors pursuant to the Company's stock option plans and an option to purchase
Shares granted to a consultant of the Company and except as otherwise described
herein, neither UTMD nor, to the best of the Company's knowledge, any of its
affiliates, directors or executive officers is a party to any contract,
arrangement, understanding or relationship with any other person relating,
directly or indirectly, to the Offer with respect to any securities of UTMD
including any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against loss
or the giving or withholding of proxies, consents or authorizations.
22
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of stockholders. However, the Company believes that there will still be a
sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares
and, based on the published guidelines of Nasdaq, continued listing of the
Company's securities on Nasdaq.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such Shares as collateral. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
Shares the Company acquires pursuant to the Offer will be returned to the
status of authorized but unissued shares and will be available for the Company
to issue without further stockholder action (except as may be required by
applicable law or the rules of Nasdaq or any securities exchange on which the
Shares are listed) for purposes including the acquisition of other businesses,
the raising of additional capital for use in the Company's business and the
satisfaction of obligations under existing or future stock option and employee
benefit plans. UTMD has no current plans for issuance of the Shares repurchased
pursuant to the Offer.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and the SEC and comply with the SEC's proxy rules in connection with meetings of
the Company's stockholders. The Company believes that its purchase of Shares
pursuant to the Offer will not result in the Shares becoming eligible for
deregistration under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit that appears
to be material to the Company's business that might be adversely affected by the
Company's acquisition of Shares as contemplated herein or of any approval or
other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein. Should
any such approval or other action be required, the Company presently
contemplates that such approval or other action will be sought. The Company is
unable to predict whether it may determine that it is required to delay the
acceptance for payment of or payment for Shares tendered pursuant to the
Offering pending the outcome of any such matter. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the
Company's business. The Company's obligations under the Offer to accept for
payment and pay for Shares are subject to certain conditions. See Section 6.
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes certain United States federal income tax
consequences relevant to the Offer. The discussion contained in this summary is
based upon the Internal Revenue Code of 1986, as amended to the date hereof (the
"Code"), existing and proposed United States Treasury regulations promulgated
thereunder, administrative pronouncements and judicial decisions, changes to
which could materially affect the tax consequences described herein and could be
made on a retroactive basis.
23
This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular stockholders in light of their
personal circumstances, or to certain types of stockholders (such as certain
financial institutions, dealers in securities or commodities, insurance
companies, tax-exempt organizations or persons who hold Shares as a position in
a "straddle" or as part of a "hedging" or "conversion" or "constructive sale"
transaction for United States federal income tax purposes). In particular, the
discussion of the consequences of an exchange of Shares for cash pursuant to the
Offer applies only to a United States stockholder (herein, a "Holder"). For
purposes of this summary, a "United States stockholder" is a beneficial owner of
the Shares who is (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States, any State or any political subdivision thereof, (iii)
an estate the income of which is subject to United States federal income
taxation regardless of source, or (iv) a trust the administration of which a
court within the United States is able to exercise primary supervision and all
substantial decisions of which one or more United States persons have the
authority to control. This discussion does not address the tax consequences to
foreign stockholders who will be subject to United States federal income tax on
a net basis on the proceeds of their exchange of Shares pursuant to the Offer
because such income is effectively connected with the conduct of a trade or
business within the United States. Such stockholders are generally subject to
tax in a manner similar to United States stockholders; however, certain special
rules apply. Foreign stockholders who are not subject to United States federal
income tax on a net basis should see Section 3 for a discussion of the
applicable United States withholding tax rules and the potential for obtaining a
refund of all or a portion of the tax withheld. This summary does not apply to
foreign stockholders who hold, actually or constructively, more than 5% of the
stock of the Company. Any such stockholder is strongly advised to consult its
own tax advisor. This summary may not be applicable with respect to Shares
acquired as compensation (including Shares acquired upon the exercise of options
or which were or are subject to forfeiture restrictions). This summary also does
not address the state, local or foreign tax consequences of participating in the
Offer. Each Holder of Shares should consult such Holder's tax advisor as to the
particular consequences to it of participation in the Offer.
CONSEQUENCES TO TENDERING HOLDERS OF EXCHANGE OF SHARES FOR CASH PURSUANT
TO THE OFFER. An exchange of Shares for cash pursuant to the Offer by a Holder
will be a taxable transaction for United States federal income tax purposes. As
a consequence of the exchange, the Holder will, depending on such Holder's
particular circumstances, be treated either as recognizing gain or loss from the
disposition of the Shares or as receiving a dividend distribution from the
Company. In general, if a Holder does not exercise control over the affairs of
the Company and all Shares actually or constructively owned by such Holder under
the applicable attribution rules are tendered and exchanged for cash in the
Offer, the Holder should be treated as recognizing gain or loss from the
disposition of Shares.
Under Section 302 of the Code, a Holder will recognize gain or loss on an
exchange of Shares for cash if the exchange (i) results in a "complete
termination" of all such Holder's equity interest in the Company, (ii) results
in a "substantially disproportionate' redemption with respect to such Holder or
(iii) is "not essentially equivalent to a dividend" with respect to the Holder.
In applying each of the Section 302 tests, a Holder must take into account not
only Shares actually owned by the Holder but also Shares owned by certain
related individuals and entities that are constructively owned by such Holder
pursuant to Section 318 of the Code.
A Holder that exchanges all Shares actually or constructively owned by such
Holder for cash pursuant to the Offer will be regarded as having completely
terminated such Holder's equity interest in the Company. An exchange of Shares
for cash will be a "substantially disproportionate" redemption with respect to a
Holder if the percentage of the then outstanding Shares owned by such Holder
immediately after the exchange is less than 80% of the percentage of the Shares
owned by such Holder immediately before the exchange. If an exchange of Shares
for cash fails to satisfy the "substantially disproportionate" test, the Holder
may nonetheless satisfy the "not essentially equivalent to a dividend" test. A
Holder who wishes to satisfy (or avoid) the "not essentially equivalent to a
dividend" test is urged to consult such Holder's tax advisor because this test
will be met only if the reduction in such Holder's proportionate interest in the
Company constitutes a "meaningful reduction" given such Holder's particular
facts and circumstances. The IRS has indicated in published rulings that any
reduction in the percentage interest of a stockholder whose relative stock
interest in a publicly held corporation is minimal (an interest of less than 1%
should satisfy this requirement) and who exercises no control over corporate
affairs should constitute such a "meaningful reduction." There is some authority
that if a Holder sells Shares to persons other than the Company at or about the
time such Holder also sells shares to the Company pursuant to the Offer, and the
various sales effected by the Holder are part of an overall plan to reduce or
terminate such Holder's proportionate interest in the Company, then the sales to
persons other than the Company may, for United States federal income tax
purposes, be integrated with the Holder's sale of Shares pursuant to the Offer
and, if integrated, may be taken into account in determining whether the Holder
satisfies any of the three tests described above. A Holder should consult his
tax advisor regarding the treatment of other exchanges of Shares for cash which
may be integrated with such Holder's sale of Shares to the Company pursuant to
the Offer.
24
If a Holder is treated as recognizing gain or loss from the disposition of
Shares for cash, such gain or loss will be equal to the difference between the
amount of cash received and such Holder's tax basis in the Shares exchanged
therefor. Any such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if the holding period of the Shares exceeds one
year as of the date of the exchange. Any long-term capital gain recognized by
Holders that are individuals, estates or trusts will be taxable at a maximum
rate of 20% if the holding period of the Shares exceeds 12 months. However, any
short-term capital gain recognized by Holders that are individuals, estates or
trusts and any long-term or short-term capital gain recognized by Holders that
are corporations will be taxable at regular income tax rates.
If a Holder is not treated under the Section 302 tests as recognizing gain
or loss on an exchange of Shares for cash, the entire amount of cash received by
such Holder in such exchange will be treated as a dividend to the extent of the
Company's current and accumulated earnings and profits as determined for United
States federal income tax purposes. Such a dividend will be includible in the
Holder's gross income as ordinary income in its entirety, without reduction for
the tax basis of the Shares exchanged, and no loss will be recognized. The
Holder's tax basis in the Shares exchanged, however, will be added to such
Holder's tax basis in the remaining Shares that the Holder owns. To the extent
that cash received in exchange for Shares is treated as a dividend to a
corporate Holder, (i) it will be eligible for a dividends-received deduction
(subject to applicable limitations) and (ii) it will be subject to the
"extraordinary dividend" provisions of the Code. A corporate Holder should
consult its tax advisor concerning the availability of the dividends-received
deduction and the application of the "extraordinary dividend" provisions of the
Code.
The Company cannot presently determine whether or the extent to which the
Offer will be oversubscribed. If the Offer is oversubscribed, proration of
tenders pursuant to the Offer will cause the Company to accept fewer shares than
are tendered. Therefore, a Holder can be given no assurance that a sufficient
number of such Holder's Shares will be purchased pursuant to the Offer to ensure
that such purchase will be treated as a sale or exchange, rather than as a
dividend, for United States federal income tax purposes pursuant to the rules
discussed above.
CONSEQUENCES TO STOCKHOLDERS WHO DO NOT TENDER PURSUANT TO THE OFFER.
Stockholders who do not accept the Company's Offer to tender their Shares will
not incur any tax liability as a result of the consummation of the Offer.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign stockholders and backup
withholding.
The tax discussion set forth above is included for general information
only. Each stockholder is urged to consult such holder's own tax advisor to
determine the particular tax consequences to it of the Offer, including the
applicability and effect of state, local and foreign tax laws.
14. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 hereof by giving oral or written notice of
such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, the
Company further reserves the right, in its sole discretion, and regardless of
whether any of the events set forth in Section 6 shall have occurred or shall be
deemed by the Company to have occurred, to amend the Offer in any respect
(including by decreasing or increasing the consideration offered in the Offer to
holders of Shares or by decreasing or increasing the number of Shares being
sought in the Offer). Amendments to the Offer may be made at any time and from
time to time effected by public announcement thereof, such announcement, in the
case of an extension, to be issued no later than 9:00 a.m., New York City time,
on the next business day after the last previously scheduled or announced
Expiration Date. Any public announcement made pursuant to the Offer will be
disseminated promptly to stockholders in a manner reasonably designed to inform
stockholders of such change. Without limiting the manner in which the Company
may choose to make a public announcement, except as required by applicable law,
the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rule 13e-4(d)(2)
promulgated under the Exchange Act. This rule requires that the minimum period
during which an offer must remain open following material changes in the terms
of the Offer or information concerning the Offer (other than a change in price
or a change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms or information.
If (i) the Company increases or decreases the price to be paid for Shares or the
number of Shares being sought in the Offer and, in the event of an increase in
the number of Shares being sought, such increase exceeds 2% of the outstanding
Shares, and (ii) the Offer is scheduled to expire at any time earlier than the
tenth business day from, and including, the date that notice of an increase or
decrease is first published, sent or given in the manner specified in this
Section 14, the Offer will then be extended until the expiration of such ten
business days.
25
15. FEES AND EXPENSES.
The Company has retained Registrar and Transfer Company to act as
Depositary. The Depositary, will receive approximately $5,000 as compensation
for its services. In addition, the Company estimates approximately an additional
$25,000 for administrative expenses including legal services and mailing costs
in connection with the Offer.
The Company may retain an Information Agent to contact stockholders by
mail, telephone, telegraph and personal interviews and to request brokers,
dealers and other nominee stockholders to forward materials relating to the
Offer to beneficial owners. The Depositary will receive reasonable and customary
compensation for its services as such, will be reimbursed by the Company for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities in connection with the Offer, including certain liabilities
under the federal securities laws. The Depositary has not been retained to make
solicitations or recommendations in connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer or other
person for soliciting tenders of Shares pursuant to the Offer. The Company will,
however, upon request through the Depositary or the Company, reimburse brokers,
dealers and commercial banks for customary mailing and handling expenses
incurred by such persons in forwarding the Offer and related materials to the
beneficial owners of Shares held by any such person as a nominee or in a
fiduciary capacity. No broker, dealer, commercial bank or trust company has been
authorized to act as the agent of the Company for purposes of the Offer.
The Company will pay or cause to be paid all stock transfer taxes, if any,
on its purchase of Shares except as otherwise provided in Instruction 7 in the
Letter of Transmittal.
16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction. In any jurisdiction the
securities or blue sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on the Company's behalf
by one or more registered brokers or dealers license under the laws of such
jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the SEC an Issuer Tender Offer
Statement on Schedule TO which contains additional information with respect to
the Offer. Such Schedule TO, including the exhibits and any amendments thereto,
may be examined, and copies may be obtained, at the same places and in the same
manner as is set forth in Section 9 with respect to information concerning the
Company.
No person has been authorized to give any information or make any
representation on behalf of the Company in connection with the Offer other
than those contained in this Offer to Purchase or in the related Letter of
Transmittal. If given or made, such information or representation must not
be relied upon as having been authorized by the Company.
UTAH MEDICAL PRODUCTS, INC.
October 11, 2002
________________________________________________________________________________
26
Facsimile copies of the Letter of Transmittal will be accepted from Eligible
Institutions. The Letter of Transmittal and certificates for Shares and any
other required documents should be sent or delivered by each stockholder or his
or her broker, dealer, commercial bank, trust company or other nominee to the
Depositary at its address set forth below.
The Depositary for the Offer is:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Attn: Reorganization Department
Facsimile Number: (908) 497-2311
Telephone Number: (800) 368-5948
Additional copies of the Offer to Purchase, the Letter of Transmittal or other
tender offer materials may be obtained from the Company and will be furnished at
the Company's expense. Questions and requests for assistance may be directed to
the Company as set forth below. Stockholders may also contact their local
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
Utah Medical Products, Inc.
Paul O. Richins
7043 South 300 West
Midvale, Utah 84047
Banks and Brokers Call: (801) 566-1200
All Others Call Toll Free: (800) 533-4984
27
EXHIBIT (a)(1)(B)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK OF
UTAH MEDICAL PRODUCTS, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 11, 2002
________________________________________________________________________________
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 8, 2002 UNLESS THE OFFER IS EXTENDED.
________________________________________________________________________________
THE DEPOSITARY FOR THE OFFER IS:
REGISTRAR AND TRANSFER COMPANY
By Facsimile Transmission (For Eligible Institutions Only): (908) 497-2311
Call Toll Free: (800) 368-5948
Mailing Address:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
By Hand:
c/o The Depository Trust Co.
Transfer Agent Drop
55 Water Street, 1st Floor
New York, NY 10041-0099
DESCRIPTION OF SHARES TENDERED
------------------------------
SHARES TENDERED (ATTACH LIST IF NECESSARY)
--------------------------
TOTAL NUMBER
NAME AND ADDRESS OF REGISTERED HOLDER OF SHARES NUMBER
PLEASE FILL IN EXACTLY AS NAME(S) CERTIFICATE REPRESENTED BY OF SHARES
APPEAR(S) ON CERTIFICATE(S) NUMBER(S)(1) CERTIFICATE(s) TENDERED(2)
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
Total Shares:
______________________________________________________________________________________________
[ ] Check the box to the left if you have lost any of your certificates and
complete Affidavit For Lost Certificates on the reverse side.
(See Instruction 6)
Indicate in this box the order (by certificate number) in which Shares are to be
purchased in the event of proration. (3) (Attach additional signed list if
necessary.) See Instruction 13.
1st:
2nd:
3rd:
4th:
5th:
28
(1) Need not be completed by stockholders tendering Shares by book-entry
transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by each Share certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
(3) If you do not designate an order, then in the event less than all Shares
tendered are purchased due to proration, Shares will be selected for
purchase by the Depositary. See Instruction 13.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING
INSTRUCTIONS, CAREFULLY BEFORE CHECKING ANY BOX BELOW.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT
BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY.
DELIVERIES TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE VALID
DELIVERY TO THE DEPOSITARY.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase (as defined below).
Stockholders whose Shares certificates are not immediately available, who
cannot deliver certificates and any other documents required to the Depositary
by the Expiration Date (as defined in the Offer to Purchase), or who cannot
complete the procedure for book-entry transfer prior to the Expiration Date must
tender their Shares using the guaranteed delivery procedure set forth in Section
3 of the Offer to Purchase. See Instruction 2.
NOTE: SIGNATURES MUST BE PROVIDED ON REVERSE. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Utah Medical Products, Inc., a Utah
corporation (the "Company"), the above-described shares of its common stock, par
value $.01 per share (such shares, together with associated common stock
purchase rights issued pursuant to the Rights Agreement, dated as of October 28,
1994, between the Company and Registrar and Transfer Company as Rights Agent, as
amended, are hereinafter referred to as the "Shares"), at the price per Share of
$17.05, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated October 11, 2002 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby or
orders the registration of such Shares tendered by book-entry transfer that are
purchased pursuant to the Offer to or upon the order of the Company and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(i) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences
of transfer and authenticity, to or upon the order of the Company upon
receipt by the Depositary, as the undersigned's agent, of the Purchase
Price (as defined below) with respect to such Shares;
(ii) present certificates for such Shares for cancellation and transfer on
the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby.
29
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by and shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's acceptance of the terms and
conditions of the Offer, as well as the undersigned's representation and
warranty to the Company that (i) the undersigned has a net long position in the
Shares or equivalent securities being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and (ii) the tender of such Shares complies with Rule 14e-4 of the
Exchange Act. The Company's acceptance for payment of Shares tendered pursuant
to the Offer will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The names and addresses of the registered holders should be printed, if
they are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates and the number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes on
this Letter of Transmittal.
The undersigned understands that the Company will purchase 750,000 Shares
(or such lesser number of Shares as are validly tendered and not withdrawn) at
the Purchase Price, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions of the Offer, including its proration
provisions, and that the Company will return all other Shares, including Shares
not purchased because of proration. See Section 1 of the Offer to Purchase.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Purchase Price of any Shares purchased, and/or
return any Shares not tendered or not purchased, in the name(s) of the
undersigned (and, in the case of Shares tendered by book-entry transfer, by
credit to the account at the Book-Entry Transfer Facility). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the Purchase Price of any Shares purchased and any certificates for Shares
not tendered or not purchased (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the Purchase Price of
any Shares purchased and return any Shares not tendered or not purchased in the
name(s) of, and mail such check and any certificates to, the person(s) so
indicated. The undersigned recognizes that the Company has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from the
name of the registered holder(s) thereof if the Company does not accept for
payment any of the Shares so tendered.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
SHARES ARE BEING TENDERED AT $17.05 PER SHARE
ODD LOTS
(SEE INSTRUCTION 8)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially, as of the close of business on October
10, 2002, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] owned beneficially as of the close of business on October 10, 2002, and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations
made to it by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on October 10, 2002, and continues
to own beneficially as of the Expiration Date, an aggregate of fewer than
100 Shares and is tendering all such Shares.
30
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8) (SEE INSTRUCTIONS 6 AND 8)
To be completed ONLY if the check for the To be completed ONLY if the check for
the aggregate Purchase Price of Shares purchased Purchase Price of Shares purchased and/or
and certificates for Shares not tendered or not certificates for Shares not tendered or not
purchased are to be issued in the name of purchased are to be mailed to someone other than
someone other than the undersigned. the undersigned or to the undersigned at an
address other than that shown below the
Issue [ ] check and/or [ ] certificate(s) to: undersigned's signature(s).
------
Name: Issue [ ] check and/or [ ] certificate(s) to:
_____________________________________
(PLEASE PRINT) Name:
_________________________________________
Address: Address:
__________________________________ ______________________________________
__________________________________ ______________________________________
__________________________________ ______________________________________
(Including Zip Code) (Including Zip Code)
___________________________________________ ___________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.) (TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
___________________________________________ ___________________________________________
(Book-Entry Transfer Facility Account Number) (Book-Entry Transfer Facility Account Number)
IMPORTANT
PLEASE SIGN HERE
(To be completed by all Stockholders)
Signature(s) of stockholder(s):_________________________________________________
________________________________________________________________________________
Dated:_________________________, 2002
Name(s):________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title):__________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please set forth full title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Firm Name:______________________________________________________________________
(PLEASE PRINT)
Authorized Signature:___________________________________________________________
Title:__________________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ________________________________________________
Dated:_____________________, 2002
AFFIDAVIT FOR LOST STOCK CERTIFICATE(S)
The undersigned hereby attests and certifies the following: That I am the
lawful owner of the certificate(s) listed on this letter of transmittal as lost.
That a search for the certificate(s) has been conducted and that these
certificate(s) cannot be located. That these certificate(s) have not been
endorsed, hypothecated, sold or had their ownership pledged or encumbered in any
form, whatsoever.
In requesting the replacement of this certificate(s), I hereby agree
that: If these certificate(s) are subsequently located, they will be tendered
for cancellation. That I indemnify, protect and hold harmless Utah Medical
Products, Inc., Seaboard Surety Company, Registrar and Transfer Company, and any
other party from and against all losses, expenses, costs and damages including
legal fees that may be subjected to these parties at any time in the future as a
result of the cancellation and replacement of the certificate(s). All rights
accruing to these parties will not be limited by their negligence, breach of
duty, accident, or other obligation on the part of or by any officer of employee
of the parties.
I acknowledge that the certificate(s) will be replaced under an
insurance bond underwritten by Seaboard Surety Company. My check, payable to the
Seaboard Surety Company, to cover the premium of 1.5% of the market value of the
stock, is enclosed. I further acknowledge that any filing of an insurance
application with materially false or misleading information is a fraudulent
insurance act and may be considered a crime.
Sign Here:_______________________________________
Co-owner, if any:_________________________________ Date:_____________, 20____
31
PAYER'S NAME: UTAH MEDICAL PRODUCTS, INC.
SUBSTITUTE FORM W-9
Department of the Treasury
Internal Revenue Service
Payer's Request for Taxpayer Identification Number
(See Instruction 8)
Please fill in your name and address below.
Name
Business name, if different from above
Check appropriate box:
[ ] Individual/Sole proprietor
[ ] Corporation
[ ] Partnership
[ ] Other
Address (number and street)
City, State and Zip Code
Part 1 - TAXPAYER IDENTIFICATION NO. - FOR ALL ACCOUNTS ENTER YOUR TAXPAYER
IDENTIFICATION NUMBER IN THE APPROPRIATE BOX. FOR MOST INDIVIDUALS AND SOLE
PROPRIETORS, THIS IS YOUR SOCIAL SECURITY NUMBER. FOR OTHER ENTITIES, IT IS YOUR
EMPLOYER IDENTIFICATION NUMBER. IF YOU DO NOT HAVE A NUMBER, SEE "HOW TO OBTAIN
A TIN" IN THE ENCLOSED GUIDELINES.
Note: If the account is in more than one name, see the chart on the enclosed
Guidelines to determine what number to enter.
Social Security Number(s)
OR
Employer Identification Number(s)
Part 2 - Certification - For Payees Exempt from Backup Withholding (see enclosed
Guidelines) - Under penalties of perjury, I certify that: (1) The number shown
on this form is my correct Taxpayer Identification Number (or I am waiting for a
number to be issued to me) and (2) I am not subject to backup withholding either
because: (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends or (c)
the IRS has notified me that I am no longer subject to backup withholding; and
(3) I am a U.S. person (including a U.S. resident alien).
Part 3 - Awaiting TIN [ ]
Certification Instructions - You must cross out Item (2) in Part 2 above if you
have been notified by the IRS that you are currently subject to backup
withholding because you have failed to report all interest or dividends on your
tax return and you have not been notified by the IRS that you are no longer
subject to backup withholding. For real estate transactions, item 2 does not
apply. For mortgage interest paid, acquisition or abandonment of secured
property, cancellation of debt, contributions to an individual retirement
arrangement (IRA), and generally, payments other than interest and dividends,
you are not required to sign the Certification, but you must provide your
correct TIN. (See the enclosed Guidelines).
SIGNATURE _______________________________________ DATE ______________, 2002
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
AT THE APPLICABLE WITHHOLDING RATE OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
TENDER OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number to you within 60 days, you
are required to withhold the applicable withholding rate of all reportable
payments thereafter made to me until I provide a number.
SIGNATURE _______________________________________ DATE ______________, 2002
32
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as provided below, all signatures All
signatures on this Letter of Transmittal must be guaranteed by a firm that is an
Eligible Institution (as defined below), unless (i) this Letter of Transmittal
is signed by the registered holder(s) of the Shares (which term, for purposes of
this document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered herewith and such holder(s) have not completed the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal, or (ii) such Shares are tendered
for the account of a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company (not a savings bank or savings and loan association)
having an office, branch or agency in the United States (each such entity, an
"Eligible Institution"). See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be used either if Share
certificates are to be forwarded herewith or if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof) and any other documents required by this Letter of
Transmittal, must be received by the Depositary at its address set forth on the
front page of this Letter of Transmittal prior to the Expiration Date. If
certificates are forwarded to the Depositary in multiple deliveries, a properly
completed and duly executed Letter of Transmittal must accompany each such
delivery.
Stockholders whose Share certificates are not immediately available, who
cannot deliver their Shares and all other required documents to the Depositary
or who cannot complete the procedure for delivery by book-entry transfer prior
to the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any required
signature guarantees) along with a properly completed and duly executed Letter
of Transmittal must be received by the Depositary prior to the Expiration Date;
and (iii) the certificates for all physically delivered Shares in proper form
for transfer by delivery, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
electronically, in each case together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three trading days on The Nasdaq Stock Market after the date the
Depositary receives such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION
AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERTY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or facsimile thereof), the tendering stockholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares that are to
be tendered in the box entitled "Number of Shares Tendered." In such case, a new
33
certificate for the remainder of the Shares represented by the old certificate
will be sent to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the "Special Payment Instructions" or "Special Delivery
Instructions" boxes on this Letter of Transmittal, as promptly as practicable
following the expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signatures(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of such Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the Purchase Price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), in which case the certificate(s) evidencing
the Shares tendered hereby must b endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such certificates. Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificate(s). Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
6. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or its
order pursuant to the Offer. If, however, payment of the aggregate Purchase
Price is to be made to, or Shares not tendered or not purchased are to be
registered in the name of, any person other than the registered holder(s), or if
tendered Shares are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to
Purchase. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO
AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED
HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, or any
Shares not tendered or not purchased are to be returned to, a person other than
the person(s) signing this Letter of Transmittal, or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and "Special
Delivery Instructions" on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer will have any Shares not
accepted for payment returned by crediting the account maintained by such
stockholder at the Book-Entry Transfer Facility from which such transfer was
made.
8. ODD LOTS. As described in Section 1 of the Offer to Purchase, if fewer
than all Shares validly tendered and not withdrawn prior to the Expiration Date
are to be purchased, the Shares purchased first will consist of all Shares
tendered by any stockholder who owned beneficially as of the close of business
on October 10, 2002, and continues to own beneficially as of the Expiration
Date, an aggregate of fewer than 100 Shares and who validly tendered all such
Shares. Partial tenders of Shares will not qualify for this preference and this
preference will not be available unless the box captioned "Odd Lots" in this
Letter of Transmittal and the Notice of Guaranteed Delivery, if any, is
completed.
34
9. SUBSTITUTE FORM W-9 AND FORM W-8. Under the United States federal income
tax backup withholding rules, unless an exemption applies under the applicable
law and regulations, the applicable withholding rate of the gross proceeds
payable to a stockholder or other payee pursuant to the Offer must be withheld
and remitted to the United States Treasury, unless the stockholder or other
payee provides such person's taxpayer identification number (employer
identification number or social security number) to the Depositary and certifies
that such number is correct. Therefore, each tendering stockholder must complete
and sign the Substitute Form W-9 included as part of this Letter of Transmittal
so as to provide the information and certification necessary to avoid backup
withholding, unless such stockholder otherwise establishes to the satisfaction
of the Depositary that it is not subject to backup withholding. Certain
stockholders (including, among others, all corporations and certain foreign
stockholders) are not subject to these backup withholding requirements. To
prevent possible erroneous backup withholding, an exempt holder must enter its
correct taxpayer identification number in Part 1 of Substitute Form W-9, certify
that such Stockholder is not subject to backup withholding in Part 2 of such
form, and sign and date the form. See the enclosed Guidelines for Certification
of Taxpayer Identification Number or Substitute Form W-9 for additional
instructions. In order for a foreign stockholder to qualify as an exempt
recipient, a foreign stockholder must submit an Internal Revenue Service ("IRS")
Form W-8 or a Substitute Form W-8, signed under penalties of perjury, attesting
to that stockholder's exempt status. Form W-8 may be obtained from the
Depositary.
10. WITHHOLDING ON FOREIGN STOCKHOLDERS. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign stockholder or its agent unless (A) the Depositary
determines that a reduced rate of withholding is available pursuant to a tax
treaty or that an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business in
the United States or (B) the foreign stockholder establishes to the satisfaction
of the Company and the Depositary that the sale of Shares by such foreign
stockholder pursuant to the Offer will qualify as a "sale or exchange," rather
than as a distribution taxable as a dividend, for United States federal income
tax purposes (see Section 13 of the Offer to Purchase). For this purpose, a
foreign stockholder is any stockholder that is not (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States, any State or any political
subdivision thereof, (iii) an estate, the income of which is subject to United
States federal income taxation regardless of the source of such income or (iv) a
trust the administration of which a court within the United States is able to
exercise primary supervision and all substantial decisions of which one or more
United States persons have the authority to control. In order to obtain a
reduced rate of withholding pursuant to a tax treaty, a foreign stockholder must
deliver to the Depositary a properly completed IRS Form 1001. In order to obtain
an exemption from withholding on the grounds that the gross proceeds paid
pursuant to the Offer are effectively connected with the conduct of a trade or
business within the United States, a foreign stockholder must deliver to the
Depositary a properly completed IRS Form 4224. The Depositary will determine a
stockholder's status as a foreign stockholder and eligibility for a reduced rate
of, or an exemption from, withholding by reference to outstanding certificates
or statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
stockholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such stockholder meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 13 of the Offer to Purchase or is otherwise able to establish that no
tax or a reduced amount of tax is due. Each foreign stockholder is urged to
consult its tax advisor regarding the application of United States federal
income tax withholding, including eligibility for a withholding tax reduction or
exemption and refund procedures.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Depositary or the Company at its address
and telephone number below. Requests for additional copies of the Offer to
Purchase, this Letter of Transmittal or other tender offer materials may be
directed to the Depositary or the Company, and such copies will be furnished
promptly at the Company's expense. Stockholders may also contact their local
broker, dealer, commercial bank or trust company for documents relating to, or
assistance concerning, the Offer.
12. IRREGULARITIES. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company, in its sole discretion, which determination
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders it determines not to be in proper form or the
acceptance of or payment for which may, in the opinion of the Company's counsel,
be unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer and any defect or irregularity in the tender of any
particular Shares or any particular stockholder. No tender of Shares will be
deemed to be validly made until all defects or irregularities have been cured or
waived. None of the Company, the Depositary, or any other person is or will be
obligated to give notice of any defects or irregularities in tenders, and none
of them will incur any liability for failure to give any such notice.
35
13. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, stockholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the United States federal income tax classification of any
gain or loss on the Shares purchased. See Sections 1 and 13 of the Offer to
Purchase.
14. LOST CERTIFICATES. If the certificate(s) which a registered holder (or
transferee) wants to surrender has been lost or destroyed, that fact should be
indicated on the face of this Letter of Transmittal which should then be
delivered to the Exchange Agent after being otherwise properly completed and
duly executed. In such event, the Exchange Agent will forward additional
documentation necessary to be completed in order to effectively replace such
lost or destroyed certificate(s).
36
EXHIBIT (a)(1)(C)
UTAH MEDICAL PRODUCTS, INC.
Notice of Guaranteed Delivery of Shares of Common Stock
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of common
stock of Utah Medical Products, Inc. are not immediately available, if the
procedure for book-entry transfer cannot be completed on a timely basis, or if
time will not permit all other documents required by the Letter of Transmittal
to be delivered to the Depositary (as defined below) prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase defined below). Such form
may be delivered by hand or transmitted by mail or overnight courier, or (for
Eligible Institutions only) by facsimile transmission, to the Depositary. See
Section 3 of the Offer to Purchase. The eligible institution which completes
this form must communicate the guarantee to the Depositary and must deliver the
Letter of Transmittal and certificates for Shares to the Depositary within the
time shown herein. Failure to do so could result in a financial loss to such
eligible institution.
The Depositary for the Offer is:
Registrar and Transfer Company
By Mail:
10 Commerce Drive
Cranford, New Jersey 07016-3572
Overnight Delivery:
10 Commerce Drive
Cranford, New Jersey 07016-3572
By Hand:
c/o The Depository Trust Co.
Transfer Agent Drop
55 Water Street, 1st Floor
New York, NY 10041-0099
By Facsimile Transmissions: (908) 497-2311
(For Eligible Institutions only)
Call Toll Free: (800) 368-5948
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than the one listed
above will not constitute a valid delivery.
This form is not to be used to guarantee signatures. If a signature on a Letter
of Transmittal is required to be guaranteed by an Eligible Institution under the
instructions thereto, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal.
FOR USE BY ELIGIBLE INSTITUTIONS ONLY
Ladies and Gentlemen:
The undersigned hereby tenders to Utah Medical Products, Inc., a Utah
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated October 11, 2002 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number of shares of common stock,
par value $.01 per share (such shares, together with associated common stock
purchase rights issued pursuant to the Rights Agreement, dated as of October 28,
1994, between the Company and Registrar and Transfer Company as Rights Agent,
are hereinafter referred to as the "Shares"), of the Company listed below,
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase.
Certificate Nos. (if available): Number of Shares:
Name(s):
(Please Print)
Address(es):
Zip Code
Name of Institution that Guaranteed Delivery:
Area Code and Telephone Number:
SIGN HERE
Dated:
If Shares will be tendered by book entry transfer:
Name of Tendering Institution:
DTC Participant Number:
ODD LOTS
(SEE INSTRUCTION 8)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owned beneficially as of the close of business on October
10, 2002, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] owned beneficially as of the close of business on October 10, 2002, and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations
made to it by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on October 10, 2002, and continues
to own beneficially as of the Expiration Date, an aggregate of fewer than
100 Shares and is tendering all such Shares.
2
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national
securities exchange or NYSE, or a commercial bank or trust company (not a
savings bank or savings and loan association) having an office, branch or agency
in the United States hereby guarantees: (i) that the above-named person(s) has a
net long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended; (ii) that
such tender of Shares complies with Rule 14e-4; and (iii) to deliver to the
Depositary at its address set forth above certificate(s) for the Shares tendered
hereby, in proper form for transfer, or a confirmation of the book-entry
transfer of the Shares tendered hereby into the Depositary's account at The
Depositary Trust Company, in each case together with a properly completed and
duly executed Letter(s) of Transmittal (or facsimile(s) thereof), with any
required signature guarantee(s) and any other required documents, all within
three trading days on The Nasdaq Stock Market after the Depositary receives this
Notice.
______________________________________ ______________________________________
Name of Firm Authorized Signature
______________________________________ ______________________________________
Address Name (Please Print)
______________________________________ ______________________________________
City, State, Zip Code Title
______________________________________ ______________________________________
Area Code and Telephone Number Dated:
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM.
YOUR SHARE CERTIFICATES MUST BE SENT WITH
THE LETTER OF TRANSMITTAL
3
EXHIBIT (a)(1)(D)
UTAH MEDICAL PRODUCTS, INC.
OFFER TO PURCHASE FOR CASH
UP TO 750,000 SHARES OF ITS COMMON STOCK
AT
A PURCHASE PRICE OF $17.05 PER SHARE
________________________________________________________________________________
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 8, 2002, UNLESS THE OFFER IS EXTENDED.
________________________________________________________________________________
October 11, 2002
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing the material listed below relating to the offer of Utah
Medical Products, Inc., a Utah corporation (the "Company"), to purchase up to
750,000 shares of its common stock, par value $.01 per share (such shares
together with associated common stock purchase rights issued pursuant to the
Rights Agreement, dated as of October 28, 1994, as amended, between the Company
and Registrar and Transfer Company as Rights Agent, are hereinafter referred to
as the "Shares"), at a price of $17.05 per Share (the "Purchase Price"), net to
the seller in cash, specified by tendering stockholders, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated October 11,
2002 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, purchase 750,000 Shares (or such lesser number of Shares as are validly
tendered and not withdrawn) pursuant to the Offer. The Company will pay the
Purchase Price for all Shares validly tendered and not withdrawn, upon the terms
and subject to the conditions of the Offer, the procedure pursuant to which
Shares will be accepted for payment and the proration provisions. Certificates
representing Shares not purchased because of proration will be returned at the
Company's expense. The Company reserves the right, in its sole discretion, to
purchase more than 750,000 Shares pursuant to the Offer.
THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF THE OFFER TO PURCHASE.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Company will, upon request, reimburse you for
reasonable and customary handling and mailing expenses incurred by you in
forwarding any of the enclosed materials to your clients.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. The Offer to Purchase;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A letter to stockholders of the Company from Kevin L. Cornwell,
Chairman and Chief Executive Officer;
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (each as defined in the Offer to
Purchase);
5. A letter that may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with
space for obtaining such clients' instructions with regard to the
Offer; and
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to United States
federal income tax backup withholding.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 8, 2002, UNLESS THE OFFER IS
EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer. The Company
will, upon request, reimburse you for reasonable and customary handling and
mailing expenses incurred by you in forwarding materials relating to the Offer
to your customers. The Company will pay all stock transfer taxes applicable to
its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the
Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in the Offer to Purchase, if more than 750,000 Shares (or such
greater number of Shares as the Company may elect to purchase pursuant to the
Offer) have been validly tendered and not withdrawn prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase) the Company will accept
Shares for purchase in the following order of priority: (i) all Shares validly
tendered and not withdrawn prior to the Expiration Date by any shareholder who
owned beneficially as of the close of business on October 10, 2002 and who
continues to own beneficially as of the Expiration Date, an aggregate of fewer
than 100 Shares and who validly tenders all of such Shares (partial tenders will
not qualify for this preference) and completes the box captioned "Odd Lots" in
the Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery;
and (ii) after purchase of all of the foregoing Shares, all other Shares validly
tendered and not withdrawn prior to the Expiration Date on a pro rata basis.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER SHARES OR REFRAIN FROM TENDERING THEIR
SHARES. EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT
NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES
PURSUANT TO THE OFFER.
Any questions or requests for assistance may be directed to the Company at
its address and telephone number set forth on the back cover of the enclosed
Offer to Purchase. Additional copies of the enclosed materials may be requested
from the Company.
Very truly yours,
Utah Medical Products, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS THE AGENT OF THE COMPANY, THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT
ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
EXHIBIT (a)(1)(E)
UTAH MEDICAL PRODUCTS, INC.
OFFER TO PURCHASE FOR CASH
UP TO 750,000 SHARES OF ITS COMMON STOCK
AT
A PURCHASE PRICE OF $17.05 PER SHARE
________________________________________________________________________________
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 8, 2002, UNLESS THE OFFER IS EXTENDED.
________________________________________________________________________________
October 11, 2002
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated October 11,
2002 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by Utah Medical
Products, Inc., a Utah corporation (the "Company"), to purchase up to 750,000
shares of its common stock, par value $.01 per share (such shares, together with
associated common stock purchase rights issued pursuant to the Rights Agreement,
dated as of October 28, 1994, between the Company and Registrar and Transfer
Company as Rights Agent, are hereinafter referred to as the "Shares"), at a
price of $17.05 per Share (the "Purchase Price"), net to the seller in cash,
upon the terms and subject to the conditions of the Offer. Also enclosed
herewith is certain other material related to the Offer.
The Company will, upon the terms and subject to the conditions of the
Offer, purchase 750,000 Shares (or such lesser number of Shares as are validly
tendered and not withdrawn) pursuant to the Offer. The Company will pay the
Purchase Price for all Shares validly tendered and not withdrawn, upon the terms
and subject to the conditions of the Offer, the procedure pursuant to which
Shares will be accepted for payment and the proration provisions. Certificates
representing Shares not purchased because of proration will be returned at the
Company's expense. The Company reserves the right, in its sole discretion, to
purchase more than 750,000 Shares pursuant to the Offer. See Section 1 of the
Offer to Purchase.
THIS OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF THE OFFER TO PURCHASE.
We are the holder of record of Shares held for your account. As such, a
tender of such Shares can be made only by us as the holder of record and
pursuant to your instructions. The Letter of Transmittal is furnished to you for
your information only and cannot be used by you to tender Shares held by us for
your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
(1) You may tender Shares at a price of $17.05 per Share, as indicated in
the attached Instruction Form, net to you in cash.
3
(2) The Offer is for a maximum of 750,000 Shares, constituting
approximately 15.3% of the total Shares outstanding as of October 1,
2002. The Offer is subject to certain conditions set forth in Section 6
of the Offer to Purchase.
(3) The Offer, proration period and withdrawal rights will expire at 5:00
P.M., New York City time, on Friday, November 8, 2002, unless the
Offer is extended. Your instructions to us should be forwarded to us in
ample time to permit us to submit a tender on your behalf.
(4) As described in the Offer to Purchase, if at the expiration of the
Offer, more than 750,000 Shares (or such greater number of Shares as
the Company may elect to purchase pursuant to the Offer) have been
validly tendered and not withdrawn, the Company will purchase Shares in
the following order of priority:
(a) all Shares validly tendered and not withdrawn prior to the
Expiration Date by any shareholder who owned beneficially as of
the close of business on October 10, 2002 and who continues to
own beneficially as of the Expiration Date, an aggregate of fewer
than 100 Shares and who validly tenders all of such Shares
(partial tenders will not qualify for this preference) and
completes the box captioned "Odd Lots" in the Letter of
Transmittal and, if applicable, the Notice of Guaranteed
Delivery; and
(b) after purchase of all the foregoing Shares, all other Shares
validly tendered and not withdrawn prior to the Expiration Date,
on a pro rata basis (with appropriate adjustments to avoid
purchase of fractional shares). See Section 1 of the Offer to
Purchase for a discussion of proration.
(5) Tendering stockholders who are registered holders will not be obligated
to pay any brokerage commissions, solicitation fees or, subject to
Instruction 7 of the Letter of Transmittal, stock transfer taxes on the
Company's purchase of Shares pursuant to the Offer. However, a
tendering stockholder who holds Shares through a broker, dealer or
custodian may be required by such entity to pay a service charge or
other fee.
(6) If you owned beneficially as of the close of business on October 10,
2002, and continue to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares and you instruct us to tender all
such Shares prior to the Expiration Date and check the box captioned
"Odd Lots" in the Instruction Form, all such Shares will be accepted
for purchase before proration, if any, of the other tendered Shares.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR
SHARES. EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT
NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER ANY SHARES
PURSUANT TO THE OFFER.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us the
attached Instruction Form. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the Instruction Form.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF BY THE EXPIRATION DATE OF THE OFFER.
The Offer is being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction. In any jurisdiction the securities or blue
sky laws of which require the Offer to be made by a licensed broker or dealer,
the Offer is being made on the Company's behalf by one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
4
INSTRUCTION FORM
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
UP TO 750,000 SHARES OF COMMON STOCK
OF UTAH MEDICAL PRODUCTS, INC.
AT A PURCHASE PRICE OF $17.05 PER SHARE
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated October 11, 2002, and the related Letter of Transmittal
(which together constitute the "Offer"), in connection with the Offer by Utah
Medical Products, Inc. (the "Company") to purchase up to 750,000 shares of its
common stock, par value $.01 per share (such shares, together with associated
common stock purchase rights issued pursuant to the Rights Agreement, dated as
of October 28, 1994, between the Company and Registrar and Transfer Company as
Rights Agent, are hereinafter referred to as the "Shares"), at a price of $17.05
per Share, net to the undersigned in cash, specified by the undersigned, upon
the terms and subject to the terms and conditions of the Offer.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are held
by you for the account of the undersigned, upon the terms and subject to the
conditions of the Offer.
[ ] By checking this box, all Shares held by us for your account will be
tendered.
If fewer than all Shares held by us for your account are to be tendered,
please check the following box and indicate below the aggregate number of Shares
to be tendered by us. [ ]*
___________________________ SHARES
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
ODD LOTS
(SEE INSTRUCTION 8)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owned beneficially as of the close of business on October
10, 2002, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] owned beneficially as of the close of business on October 10, 2002, and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations
made to it by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on October 10, 2002, and continues
to own beneficially as of the Expiration Date, an aggregate of fewer than
100 Shares and is tendering all such Shares.
5
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
Date:________________________ SIGN HERE:____________________________________
Authorized Signature(s)
_______________________________ ______________________________________________
Area Code and Telephone Number Name(s) (Please Print)
___________________________________ _____________________________________
Taxpayer Identification or
Social Security Number (s) _____________________________________
_____________________________________
Address
6
EXHIBIT (a)(1)(F)
GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR.
Social Security numbers have nine digits separated by two hyphens: i.e
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF:
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or, if combined funds,
(joint account) any one of the individuals on the account (1)
3. Husband and wife The actual owner of the account or, if joint funds,
(joint account) either person(1)
4. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
5. Adult and minor The adult or, if the minor is the only contributor, the
(joint account) minor(1)
6. Account in the name of guardian or committee The ward, minor, or incompetent person(3)
for a designated ward, minor, or incompetent
person
7. a. The usual revocable savings trust account The grantor-trustee(1)
(grantor is also trustee)
b. So-called trust account that is not a legal or The actual owner(1)
valid trust under State law
8. Sole proprietorship account The owner(4)
9. The valid trust, estate, or pension trust The legal entity (do not furnish the trust identifying
number of the personal representatives or trustee unless
the legal entity itself is not designated in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable or educational The organization
organization account
12. Partnership account The partnership
13. Association, club, or other tax-exempt The organization
organization
14. The broker or registered nominee The broker or nominee
15. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a State or local
government, school district, or prison) that receives
agricultural program payments
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments
include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1). o An entity registered at all times under the
Investment Company Act of 1940. o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
o Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
o Payments described in section 6049(b)(5) to non-resident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
2
Privacy Act Notice. Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to Payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Effective January 1, 2002, payers
must generally withhold the applicable withholding rate of taxable interest,
dividend, and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number. If you
fail to furnish your Taxpayer Identification Number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments. If you fail
to include any portion of includible payments for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to the failure unless there is clear and convincing
evidence to the contrary.
(3) Civil Penalty for False Information With Respect to Withholding . If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information. Falsifying certifications
or affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
3
EXHIBIT (a)(5)(A)
UTMD LOGO
PRESS RELEASE
UTMD Announces Self-Tender for 15% of Its Shares
Contact: Paul Richins October 1, 2002
(801) 566-1200
Salt Lake City, Utah - Utah Medical Products, Inc. (Nasdaq:UTMD) announced today
that it intends to repurchase at a price of $17.05 per share up to 750,000 of
its shares, if tendered and not withdrawn by shareholders on or before November
8 representing approximately 15% of its currently outstanding shares. The
offering price is approximately 21% higher than the average price of UTMD shares
trading in the open market during the last twelve months. The offering price is
also higher than the highest trading price during the last twelve months, and
since the stock has been publicly-traded, adjusted for splits.
The tender offer will commence October 11, or as soon as possible thereafter,
and will expire twenty business days thereafter, unless extended by the Company.
If the offer is over-subscribed, shares will be purchased first from
shareholders owning fewer than 100 shares and tendering all of such shares and
then from all other shares tendered on a prorata basis. The Company reserves the
right to purchase more than 750,000 shares. The tender offer will not be
conditioned on any minimum number of shares being tendered.
The Board of Directors of the Company has approved the tender offer but neither
the Company nor the Board of Directors is making any recommendation to
shareholders as to whether to tender or refrain from tendering their shares.
Shareholders must make their own decision whether or not to tender their shares
and, if so, how many shares to tender.
UTMD has obtained committed financing for the self-tender in the form of a
revolving line of credit from its bank. According to Chairman & CEO Kevin
Cornwell, "UTMD has recently received a judgment representing a large damages
award, although an appeal might change the result. After income taxes, the award
will cover the cost of the tender offer. UTMD's management believes it in the
best interest of shareholders to use the awarded funds to repurchase its shares
in lieu of paying a cash dividend. Even if the damages award is not received,
UTMD has a very healthy business with cash flows capable of servicing the
additional debt it will incur to finance the tender offer. The investment by
antidilution will substantially enhance the value of shares held by shareholders
confident in UTMD's future who wish to continue holding UTMD's shares, and give
investors liquidity who would like to sell their UTMD shares at a premium over
the current market price." Selling shareholders will have the added benefit of
avoiding brokerage commissions and odd lot fees.
This press release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any shares of the Company's common
stock. The solicitation of offers to buy the Company's common stock will only be
made pursuant to the offer to purchase and related materials that the Company
will be sending out to its shareholders shortly. Shareholders should carefully
read the offer to purchase and related materials that the Company will be
sending out shortly because they contain important information, including
4
various terms and conditions to the offer. Shareholders can obtain the offer to
purchase and related materials free at the SEC's website at http://www.sec.gov,
which site can be accessed from UTMD's website at http://www.utahmed.com, or
from UTMD's information agent, Registrar and Transfer Company, 10 Commerce
Drive, Cranford, NJ 07016 Attn: Reorganization Department, Telephone: (800)
368-5948, Facsimile Number: (908) 497-2311. Shareholders are urged to carefully
read these materials prior to making any decision with respect to the offer.
Safe Harbor Statement: Except for historical information contained herein, the
matters set forth in this press release are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and are
subject to the safe harbor provisions of that Act. The forward-looking
statements set forth involve a number of risks and uncertainties that could
cause actual results to differ materially from any such statement. These risks
and uncertainties, and assumptions regarding the Company's future operations and
performance, could prove inaccurate and, therefore, there can be no assurance
that the forward-looking statements will prove to be accurate.
Utah Medical Products, Inc., with particular interest in healthcare for women
and their babies, develops, manufactures, assembles and markets a broad range of
disposable and reusable specialty medical devices designed for better health
outcomes for patients and their care-providers.
5
EXHIBIT (a)(5)(B)
UTMD LOGO
PRESS RELEASE
UTMD Adjusts Self-Tender Offer Dates
Contact: Paul Richins October 8, 2002
(801) 566-1200
Salt Lake City, Utah - In order to ensure shareholders receive offering
memoranda with sufficient time for review, Utah Medical Products, Inc.
(Nasdaq:UTMD) announces it is rescheduling its self-tender offer to commence on
October 11, and terminate on November 8. UTMD intends to repurchase at a price
of $17.05 per share up to 750,000 of its shares, if tendered and not withdrawn
by shareholders on or before the termination date.
This press release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any shares of the Company's common
stock. The solicitation of offers to buy the Company's common stock will only be
made pursuant to the offer to purchase and related materials that the Company
will be sending out to its shareholders by October 11. Shareholders should
carefully read the offer to purchase and related materials that the Company will
be sending out shortly because they contain important information, including
various terms and conditions to the offer. Shareholders can obtain the offer to
purchase and related materials free at the SEC's website at http://www.sec.gov,
which site can be accessed from UTMD's website at http://www.utahmed.com, or
from UTMD's information agent, Registrar and Transfer Company, 10 Commerce
Drive, Cranford, NJ 07016 Attn: Reorganization Department, Telephone: (800)
368-5948, Facsimile Number: (908) 497-2311. Shareholders are urged to carefully
read these materials prior to making any decision with respect to the offer.
Utah Medical Products, Inc., with particular interest in healthcare for women
and their babies, develops, manufactures, assembles and markets a broad range of
disposable and reusable specialty medical devices designed for better health
outcomes for patients and their care-providers
EXHIBIT (a)(5)(C)
UTMD LOGO
October 11, 2002
Dear UTMD Shareholder:
Utah Medical Products, Inc. (UTMD) is offering to purchase up to 750,000 shares
of its common stock at $17.05 per share. The $17.05 per share price represents a
21% premium over the average price of the stock during the last twelve months,
and is slightly higher than the highest trading price over the last six years,
prior to our announcement of this Offer. In our October 1 press release
announcing the Offer, we incorrectly stated that the Offer price was the highest
since the stock has been publicly-traded, adjusted for splits. I apologize for
that misstatement. You may wish to access BigCharts.com on the Internet for an
historical price chart from 1983.
The conditions of the Offer are explained in detail in the enclosed Offer to
Purchase and Letter of Transmittal. Please read the materials carefully before
making any decision with respect to the Offer. The Board of Directors of the
Company has approved the tender offer but neither the Company nor the Board of
Directors is making any recommendation to shareholders as to whether to tender
or refrain from tendering their shares. Shareholders must make their own
decision whether or not to tender their shares and, if so, how many shares to
tender. YOU DO NOT HAVE TO SELL YOUR SHARES. However, if you wish to tender your
shares, instructions on how to tender (sell) shares are provided in the enclosed
materials.
The purpose of the Offer is to provide liquidity for those stockholders desiring
to sell all or a portion of their shares at a premium over the recent trading
prices for the shares. The Company has received a judgment awarding UTMD
approximately $23 million in damages and accrued interest as a result of the
January 2002 jury verdict that the Tyco International/ Kendallo LTP 4000
Softrans(R) Intrauterine Pressure Catheter (IUPC) literally infringes UTMD's
United States Letters Patent No. 4,785,822. In addition, UTMD will be seeking
damages for sales of infringing product that Tyco has continued to make after
the January verdict, which might be another $5 million. In lieu of paying a cash
dividend, UTMD's Board of Directors believes an appropriate use of these awards
is to repurchase shares. Receipt of the damages, however, is uncertain. Tyco has
indicated its intent to appeal the decision to a higher court. Given the
Company's current financial condition, the Board of Directors determined this to
be an attractive time to repurchase a significant portion of outstanding shares.
The Company believes that its current cash and access to credit facilities
following the completion of the Offer, together with its anticipated cash flow
from operations going forward, are adequate for its needs in the forseeable
future. UTMD's first half 2002 sales were up 1%, and its after-tax cash
generated from operations was up 6%, relative to the same period in 2001. UTMD's
profitability has been steady, and earnings per share continue to grow at a
rapid rate. UTMD's EBITDA for the most recently reported twelve months, which
includes the last half of 2001 and the first half of 2002, was $11,939,000.
Because of excellent positive cash flow, UTMD can afford to make a significant
investment that will, by antidilution, substantially enhance the value of shares
held by shareholders who are confident in the Company's future and do not sell
at this time.
I would like to be clear that in my opinion UTMD's shares are undervalued at
$17.05 per share. Using current average medical device industry and S&P 500
stock market valuation multiples, UTMD's stock should be fairly trading in the
$25-30 per share range. The Board believes that this Offer demonstrates to
UTMD's stockholders the Company's confidence in its business, enhances liquidity
in the trading of its shares, and will lead to a value more consistent with
other companies with comparable financial performance.
Going forward, UTMD management remains confident in our ability to grow and
improve financial performance. As you know, our market strategy is different
from most of the larger companies. We are trying to focus on satisfying special
needs of clinicians, not on becoming a provider of commodity medical products.
6
After completing the share repurchase investment, UTMD's anticipated financial
performance and credit facility are adequate to fund planned internal new
product development and make acquisitions similar to Columbia Medical Inc.
acquired in 1997 and Gesco acquired in 1998.
Please note that the Offer is scheduled to expire at 5:00 p.m. New York City
time, on Friday November 8, unless extended by UTMD. Please give us a call if
you have any further questions.
Sincerely,
/s/ Kevin L. Cornwell
Kevin L. Cornwell
Chairman & CEO
7
EXHIBIT (b)(A)
LOAN AGREEMENT, DATED 3 JULY, 2002 BETWEEN UTAH MEDICAL PRODUCTS, INC.
AND U.S. BANK NATIONAL ASSOCIATION
Incorporated by reference to Exhibit 1 of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002
8
EXHIBIT (b)(B)
REVOLVING PROMISSORY NOTE, DATED JULY 3, 2002 BY UTAH MEDICAL PRODUCTS, INC.
TO U.S. BANK NATIONAL ASSOCIATION
Incorporated by reference to Exhibit 2 of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002
9