<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(C) or Rule 14a-12
SERACARE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
---------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
SERACARE, INC.
1925 Century Park East, Suite 1970
Los Angeles, California 90067
-----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 7, 1998
-----------------------------
The Annual Meeting of Stockholders of SeraCare, Inc. will be held on
Wednesday, October 7, 1998 at 9:00 AM local time at the Corporate Offices
located at 1925 Century Park East, Suite 1970. The purpose of the meeting
is:
1. To elect eight directors to serve one-year terms and until their successors
are duly elected and qualified.
2. To approve the proposed 1998 Stock Option Plan.
3. To consider and act upon such other business and matters or proposals as
may properly come before said Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 24, 1998
as the record date for determining the stockholders having the right to
receive notice of and to vote at said Annual Meeting.
By Order of the Board of Directors
Jerry L. Burdick
Secretary
Los Angeles, California
September 1, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN,
DATE AND MAIL PROMPTLY THE ENCLOSED PROXY WHICH IS BEING SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS. A RETURN ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT PURPOSE.
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<PAGE>
SERACARE, INC.
-----------------------------
PROXY STATEMENT
-----------------------------
ANNUAL MEETING OF STOCKHOLDERS
-----------------------------
OCTOBER 7, 1998
This Proxy Statement is furnished in connection with the solicitation by and on
behalf of the Board of Directors of SeraCare, Inc. (the "Company") of proxies
for use at the Annual Meeting of Stockholders of the Company to be held,
pursuant to the accompanying Notice of Annual Meeting, on Wednesday, October 7,
1998 at 9:00 AM local time (the "Annual Meeting"). The purposes of the meeting
are:
- - To elect eight directors to serve a term of one year and until their
successors are duly elected and qualified.
- - To approve the proposed 1998 Stock Option Plan.
- - To consider and act upon such other business and matters or proposals as
may properly come before said Annual Meeting or any adjournment thereof.
If a stockholder specifies in the Proxy accompanying this Proxy Statement (the
"Proxy") how it is to be voted, it will be voted in accordance with such
specification, but any Proxy which is signed and returned and which does not
specify how it is to be voted will be voted: (i) for the election of the
nominees for directors named herein; (ii) for the approval of the 1998 Stock
Option Plan; and (iii) in the discretion of the persons named in the proxy card
on any other proposals to properly come before the meeting or any adjournment
thereof. Any stockholder giving a Proxy in the accompanying form retains the
power to revoke it at any time before it is exercised by delivering a written
revocation to the Secretary of the Company, by executing and returning to the
Company a proxy bearing a later date or by attending the Annual Meeting and
voting his or her shares in person. Any stockholder who attends the Annual
Meeting in person will not be deemed thereby to revoke the stockholder's Proxy
unless such stockholder affirmatively indicates his or her intention to vote the
shares in person.
The Company's principal executive offices are located at 1925 Century Park East,
Suite 1970, Los Angeles, California. The Company mailed this Proxy Statement and
the Proxy on or about September 1, 1998 to its stockholders of record at the
close of business on August 14, 1998
ANNUAL REPORT AND INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Annual Report to Stockholders for the fiscal year ended February
28, 1998, including financial statements and the report of BDO Seidman LLP
thereon, is being mailed herewith to each of the Company's stockholders of
record at the close of business on August 24, 1998. At present the Company does
not anticipate that a representative of BDO Seidman LLP will be at the meeting.
It is the practice of the Company's Board of Directors at its first meeting
following the Annual Meeting of Stockholders to approve independent certified
public accountants for the next twelve months. The Audit Committee is currently
evaluating selection alternatives for the year ending February 28, 1999.
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<PAGE>
VOTING
The holders of record of shares of Common Stock of the Company at the close of
business on August 24, 1998 may vote at the Annual Meeting. On that date, there
were 7,210,539 shares of Common Stock outstanding and entitled to vote, and a
majority, or 3,605,270 of these shares, will constitute a quorum for the
transaction of business. Each share of Common Stock entitles the holder thereof
to one vote on all matters to come before the meeting, including the election of
directors and the proposed 1998 Stock Option Plan. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum for the transaction of business, but are not treated as a vote cast on
any matter.
As long as a quorum is present in person or by proxy at the Annual Meeting, the
Directors shall be elected by a plurality of the votes cast at the Annual
Meeting, and the director nominees who receive the greatest number of votes at
the Annual Meeting (up to the number of directors to be elected) will be
elected. Approval of the 1998 Stock Option Plan requires the affirmative vote of
a majority of the shares present or represented by proxy and approval of a
majority of the votes cast on the proposal.
INFORMATION AS TO ELECTION OF DIRECTORS
The Company's By-laws provide that the Board of Directors shall consist of not
less than one or such other number as may be determined from time to time by the
Board of Directors of the Company at a duly held meeting thereof. The Board of
Directors has currently fixed the number of directors at eight. In the event
that any of the nominees becomes unavailable (which is not now anticipated by
the Company), the vacancy shall be filled by a vote of a majority of the
remaining directors then in office, to serve until the next Annual Meeting of
Stockholders or Special Meeting of Stockholders or until their successors are
duly elected and qualified. The Board of Directors has no reason to believe that
any of the nominees will be unable or unwilling to serve if elected.
Each of the following directors has been nominated for reelection at the Annual
Meeting:
BARRY D. PLOST, age 52, has served as Chairman, President and Chief Executive
Officer of the Company since February 6, 1996. Mr. Plost currently also serves
on the board of Recycling Industries, Inc. Prior to joining the Company, Mr.
Plost was a Management Consultant with the management consulting firm of David
Barrett, Inc. for the period January 1995 until February 6, 1996. Mr. Plost was
President and Chief Executive Officer of Country Wide Transport Services, Inc.,
a trucking company, from February 1991 through June 1994, and President and
Chief Operating Officer of Freymiller Trucking, Inc., a trucking company, from
November 1979 through August 1991.
JERRY L. BURDICK, age 59, has served as Executive Vice President, Chief
Financial Officer, Secretary and a Director since December 1, 1995. From August
1993 through November 1995, Mr. Burdick was a consultant to SeraCare, Inc. and
served as the acting Controller and Chief Financial Officer. Mr. Burdick
operated his own financial consulting practice from March 1988 through August
1993. Mr. Burdick is a Certified Public Accountant in the State of California.
At the time the Company filed for protection under Chapter 11 of the Federal
Bankruptcy Code, Mr. Burdick was a consultant to the Company. Mr. Burdick has
also held financial executive
4
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positions at various companies including International Rectifier Corporation
and Getty Oil Company.
SAM ANDERSON age 61, was elected a Director effective April 16, 1996. Since
April of 1996, Mr. Anderson has also been a consultant to SeraCare, Inc. From
March 1990 to March 1991, Mr. Anderson served as president of Trancel, Inc., a
start-up bio-tech development company and prior to that served as Chairman and
Chief Executive Officer of Alpha Therapeutic Corporation, a manufacturer of
pharmaceutical products and on of the largest plasma collection company and
fractionator in the world, until he retired in February 1990.
M. EZZAT JALLAD, age 35, was elected a Director effective October 28, 1996. Mr.
Jallad has been Chairman and President of Softpoint, Inc., which develops and
markets point of sale software and hardware for the fast food and retail markets
since June 1995. Previously, he was Executive Vice President of FCIM
Corporation, a financial consulting firm, from April 1988 to May 1995.
DR. NELSON TENG, age 51, was elected a Director effective January 29, 1997. Dr.
Teng has been the Director of Gynecologic Oncology and Associate Professor of
Gynecology and Obstetrics at Stanford University School of Medicine since 1981.
Dr. Teng also co-founded ADEZA Biomedical in 1984, and UNIVAX Biologics in 1988.
In addition, Dr. Teng has served as a scientific advisor and consultant to
several biotechnology companies and venture capital firms and has authored over
100 publications and 15 patents. Dr. Teng serves on several other boards of
directors.
MICHAEL F. CROWLEY, SR., age 54, was elected a Director effective April 15, 1998
and has also served as President of the Western States Plasma Division of the
Company since February 1998. Mr. Crowley founded Western States Group in 1983.
Prior to that, Mr. Crowley worked for 12 years for Baxter International, Inc.
from 1970 to 1982 and served first as Sales and Operations Manager in Baxter's
international division in England and later as Director of Operations for
Baxter's diagnostic division, Hyland Laboratories, a pharmaceutical company.
WILLIAM J. CONE, age 47, was elected a Director effective April 15, 1998 and has
also served as President of the Consolidated Technologies Division of the
Company since February 1998. Mr. Cone joined Consolidated Technologies, Inc. in
1972 (three years after his father founded the company in 1969) and was
President and sole shareholder of the company from 1988 until February 1998. Mr.
Cone attended Southwest Texas State University where he majored in microbiology.
ROBERT J. CRESCI, age 54, was elected a Director effective April 15, 1998. Mr.
Cresci has been a Managing Director of Pecks Management Partners Ltd., an
investment management firm, since September 1990. Mr. Cresci currently serves on
boards of Bridgeport Machines, Inc., EIS International, Inc., Sepracor, Inc.,
Arcadia Financial, Ltd., Hitox, Inc., Garnet Resources Corporation, Film Roman,
Inc., Educational Medical, Inc, Source Media, Inc., Castle Dental Centers, Inc.,
Candlewood Hotel Co., and several private companies.
CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors of the Company, which held nine meetings during the
fiscal year ended February 28, 1998, has the following committees:
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<PAGE>
The COMPENSATION COMMITTEE consists of Messrs. Jallad and Anderson. It is the
responsibility of the Compensation Committee: to administer the 1998 Stock
Option Plan; to administer the Company's bonus plans; to determine the
compensation of the Chief Executive Officer and other executive officers of the
Company; and to advise the Board of Directors on compensation matters.
The AUDIT COMMITTEE consists of Messrs. Cresci, Teng and Jallad. It is the
responsibility of the Audit Committee: to make recommendations to the Board of
Directors with regard to the selection of the Company's independent auditors; to
review the Company's financial statements and the results of the independent
audit; to review the adequacy of internal controls; and to advise the Board of
Directors on any such matters as may need corrective action.
Each director of the Company attended more than 75% of the aggregate of (1) all
meetings of the Board held during the period during which he or she was a
director and (2) all meetings of each committee of which he or she was a member
during the fiscal year just ended.
Each non-employee director is reimbursed for the out-of-pocket costs of
attending meetings of the Board. The Company has paid no annual fees or
attendance fees to directors, but has granted stock options to non-employee
directors based upon their active participation in the strategic planning
process, the product development programs and customer relations of the Company.
SAM ANDERSON, an outside Director, has a consulting agreement with the Company
which runs through March 31, 2002 at $50,000 per year plus fully vested options
to purchase 30,000 shares of the Company's common stock at $1.50 per share which
expire in three years. Mr. Anderson also was granted fully vested, three year
options to purchase 20,000 shares of the Company's common stock at $1.00 per
share in conjunction with a $100,000 bridge loan Mr. Anderson made to the
Company on July 2, 1996 and on August 27,1997 was granted fully vested five year
options to purchase 100,000 shares at $2.25. SUSAN PRESTON was granted fully
vested three-year options to purchase 15,000 shares of the Company's common
stock at $1.50 per share on April 16, 1996 and fully vested five-year options to
purchase 15,000 shares at $2,25 on August 27, 1997. Susan Preston resigned as a
director effective April 15, 1998. DR. NELSON TENG was granted fully vested
three-year options to purchase 50,000 shares of the Company's common stock at
$1.50 per share in January 1997 and fully vested five-year options to purchase
15,000 shares at $2,25 on August 27, 1997. Ezzat Jallad was granted fully vested
five-year options to purchase 15,000 shares at $2,25 on August 27, 1997.
There are no family relationships among any of the directors or executive
officers of the Company.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation and other consideration
paid by the Company to its executive officers whose cash compensation exceeded
$100,000.
<TABLE>
<CAPTION>
Paid Paid
Fiscal Fiscal
Name and Principal Position 1998 1997 Options Other
- --------------------------- ------------------------------------------- -----
<S> <C> <C> <C> <C>
(5) Barry D. Plost, President, $172,115 $124,167 100,000 (1) (3)(4)
Chairman and CEO
6
<PAGE>
(6) Jerry L. Burdick, 125,576 125,000 25,000 (2) (3)(4)
Executive V. P., Secretary and CFO
</TABLE>
- --------------------
(1) These options are fully vested five-year options granted on August 27, 1997
at a price of $3.00.
(2) These options are fully vested five year options granted on April 10, 1997
at a price of $2.00.
(3) The Company has a Management Bonus Pool whereby ten percent (10%) of
earnings before taxes which are in excess of $4,384,187 in the year ending
February 28, 1999 will be allocated to a bonus pool to be paid pro rata to
all officers of the Company on the basis of salaries.
(4) To the extent that quarterly earnings before taxes exceed $100,000, the
excess will be paid on a pro-rata basis to all officers up to an annual
maximum of $10,000 each.
(5) Effective on February 6, 1996, the Company signed an employment agreement
with Mr. Plost through February 5, 1999. The agreement was amended on
February 13, 1998, providing for a current annual salary of $225,000. Mr.
Plost also participates in the Management Bonus Pool on the same basis as
other officers of the Company during the term of his agreement and also
received certain options as indicated. Mr. Plost was not an employee prior
to February 6, 1996.
(6) Effective on February 6, 1996, the Company signed an employment agreement
with Mr. Burdick through February 5, 1999. The agreement was amended on
February 13, 1998, providing for a current annual salary of $140,000. Mr.
Burdick also participates in the Management Bonus Pool on the same basis as
other officers of the Company during the term of his agreement and also
received stock options as indicated above. Mr. Burdick functioned as an
accountant and consultant to the Company prior to February 6, 1996.
AGGREGATE OPTIONS / SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
No options were exercised by any officer or director during the year ended
February 28, 1998.
The following table sets forth certain information with respect to options held
by the named executive officers as of February 28, 1998.
<TABLE>
<CAPTION>
Number of Shares Value of
Underlying Unexercised
Name and Principal Position Unexercised In-the-Money
Options at Options at
Year-End (1) Year-End(1)
---------------------------------------
<S> <C> <C>
Barry D. Plost, President, 1,394,647 $7,029,345
Chairman and CEO
Jerry L. Burdick, 67,110 $ 367,133
Executive V. P., Secretary and CFO
</TABLE>
(1) As of February 28, 1998, there were no options which were unexercisable.
OPTIONS / SAR GRANTS LAST FISCAL YEAR
During the fiscal year ended February 28, 1998, Mr. Barry D. Plost, the
President and CEO, was granted 100,000 fully vested five-year options on August
27, 1997 at a price of $3.00 which represented 80% of the individual grants
during the year and Mr. Jerry L. Burdick was granted 25,000 fully vested five
year options on April 10, 1997 at a price of $2.00 which represented 20% of the
individual grants during the year.
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EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of the executive officers of the
Company, consisting of: Mr. Barry D. Plost, Chairman, President and Chief
Executive Officer; and Mr. Jerry L. Burdick, Executive Vice President, Chief
Financial Officer and Secretary. The employment agreements with both Mr. Plost
and Mr. Burdick were effective on February 6, 1996 and have terms expiring on
February 5, 1999. As of February 28, 1998, Mr. Plost was receiving a base salary
of $225,000 and Mr. Burdick was receiving a base salary of $140,000. Both Mr.
Plost and Mr. Burdick are eligible to participate in the management incentive
bonus plan if the Company achieves certain performance objectives.
Discretionary compensation awards for executives, including stock options are
made solely by the Board of Directors.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's common shares at February 28,
1998 of each present director, all officers, all officers and directors as a
group and each beneficial owner of more than 5% of the Company's common stock.
<TABLE>
<CAPTION>
PRESENTLY EXERCISABLE
-----------------------
% OF COMMON SERIES A
INDIVIDUAL / GROUP CLASS SHARES OPTIONS WARRANTS(2)
- --------------------------------------- ----- ------ ------- -----------
- -------
<S> <C> <C> <C> <C>
Barry D. Plost, President & Chairman 20.8% 393,034 1,394,647 -
Brad Rabe, Executive VP & COO(1) 5.2% 308,889 - 72,500
J.L. Burdick, Executive, CFO & Director 2.1% 82,546 67,110 -
Brian Olson, VP Operations(1) .1% 45,777 28,073 -
Nelson Teng, Director 5.2% 315,000 65,000 -
Samual Anderson, Director 4.7% 191,932 150,000
Susan Preston, Director 0.4% - 30,000 -
Ezzat Jallad, Director 0.6% 25,000 15,000 -
All Officers and Directors 35.3% 1,362,178 1,749,830 72,500
Other Beneficial owners:
Brad Gaspard 7.5% 358,500 200,000
Pecks Management Partners, Ltd 22.6% 2,100,572
Consolidated Technologies, Inc. 6.1% 436,364
</TABLE>
(1) Mr. Rabe and Mr. Olson resigned from Company in March 1998.
(2) All Series A Warrants were exercised in August 1998.
Of the issued and outstanding shares as of August 24, 1998, no person or entity
owns or controls 10% or more of the company's common stock.
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CERTAIN TRANSACTIONS
TRANSACTIONS INVOLVING OFFICERS, DIRECTORS AND RELATED PARTIES
BRIDGE LOANS
In January 1998, the Company entered into agreements with related parties,
approved by the Board of Directors, which provided for bridge loans totaling
$599,000. The related parties consisted of: Sam Anderson, a director who loaned
$133,000; Dr. Nelson Teng, a director who loaned $130,000; Chang Ming Teng,
father of Dr. Nelson Teng who loaned $50,000; Ezzat Jallad, a director who
loaned $50,000; Stranco Investments Ltd, an investment fund managed by Ezzat
Jallad a director which loaned $200,000; and Peggy Burdick, wife of Jerry
Burdick an officer and director who loaned $36,000. Interest is payable monthly
at ten percent per annum. In connection with the 1998 bridge loans, the Company
granted the holders warrants to purchase 599,000 shares of restricted common
stock at an exercise price of $3.50, which approximated the fair market value of
the shares on the date of grant. In February 1998, these warrants were exchanged
for 299,500 shares of restricted common stock.
At various times during the year ended February 28, 1998, the Company entered
into agreements with Mr. Barry Plost, the Company's president, which provided
for loans totaling $1,125,000, which are all outstanding at February 28, 1998.
These loans are due upon demand, and are secured by all the assets of the
Company. The loans accrue interest at ten and twelve percent per annum. In
connection with these loans, the Company granted options to its president to
purchase 742,500 and 116,000 shares of restricted common stock at $2.00 and
$3.00 per share, which was at the then fair market value, respectively. In
addition, in conjunction with the January 1998 bridge, the Company's president
made a bridge loan to the Company totaling $200,000. Terms of the bridge loan
agreement were exactly the same as the terms other bridge loans made by related
parties in January 1998 (see above). In February 1998 the warrants received in
connection with the bridge loan were exchanged for 100,000 shares of restricted
stock.
During 1997, the Company entered into agreements with related parties, approved
by the Board of Directors, which provided for bridge loans of $550,000. Of this
amount: $450,000 was loaned by Mr. Barry Plost, President and Chairman of the
Company; and, $100,000 was loaned by Mr. Sam Anderson, a director. The bridge
loans are due on demand and are secured by all of the assets of SeraCare's
consolidated operations. The loans accrue interest at twelve percent per annum.
During the year ended February 28, 1997, $332,500 of the bridge loans were
converted to equity in private placements. The holders received 221,667 shares
of common stock and warrants to purchase 112,500 shares of common stock at an
exercise price of $2.75. In connection with the 1997 bridge loans, the Company
granted three year options to purchase 150,000 shares of common stock at an
exercise price of $1.00. The Company calculated $100,000 as the value (original
issue discount) of the options issued in conjunction with the bridge loans,
which estimated fair market value in excess of the exercise price of these
options at the date of issue. All of the original issue discount was amortized
to interest expense during the year ended February 28, 1997.
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ACQUISITION OR DISPOSITION OF ASSETS.
CONSOLIDATED TECHNOLOGIES, INC.
On February 13, 1998, SeraCare, Inc. acquired substantially all of the operating
assets of Consolidated Technologies, Inc., a Texas corporation and Conco
Associates, Inc. (dba Cone Biotech), a Texas corporation located in Austin,
Texas for $5,600,000 in cash and 439,000 shares of SeraCare common stock. Mr.
William J. Cone was President and a principal of Consolidated Technologies, Inc.
and Cone Associates, Inc. Mr. Cone has served as has served as a director of
SeraCare, Inc. since April 15, 1998 and is a nominee for reelection.
THE WESTERN STATES GROUP, INC.
On February 13, 1998 SeraCare acquired all of the stock of The Western States
Group, Inc., a California corporation located in Fallbrook, California for
$4,033,204 in cash and 125,000 shares of SeraCare common stock. In addition, the
selling shareholders are entitled to receive "earn-out" cash payments for the
first and second twelve full calendar months after the Closing Date. Mr. Michael
F. Crowley, Sr. was President and a principal of The Western States Group, Inc.
when it was acquired. Mr. Crowley has served as a director of SeraCare, Inc.
since April 15, 1998 and is a nominee for reelection.
OTHER
On February 13, 1998, SeraCare executed a Securities Purchase Agreement with
Pecks Management Partners Ltd on behalf of certain investors and issued
$16,000,000 in Senior Subordinated Debentures due 2005. In connection with the
Debentures, the Company also issued and delivered to the investors warrants to
purchase an aggregate of 2,100,572 shares of its Common Stock representing an
aggregate of 16% of the fully diluted outstanding shares of SeraCare at any time
at an exercise price of $.01 per share. Mr. Robert J. Cresci has been a Managing
Director of Pecks Management Partners Ltd since September 1990. Mr. Cresci has
served as a director of SeraCare, Inc. since April 15, 1998 and is a nominee
for reelection.
APPROVAL OF PROPOSED 1998 STOCK OPTION PLAN
On September 2, 1998, the Board adopted the SeraCare, Inc. 1998 Stock Option
Plan (the "PLAN"), subject to the receipt of stockholder approval of the Plan at
the Annual Meeting. The principal terms of the Plan are summarized below. The
following summary is qualified in its entirety by the full text of the Plan, a
copy of which is included as Exhibit I to this Proxy Statement. Capitalized
terms used in the summary but not defined herein have the meanings assigned to
them in the Plan.
SUMMARY DESCRIPTION OF THE PLAN
The Plan authorizes the grant of stock options, as described below. The purpose
of the Plan is to provide incentives through the grant of options to promote the
success of the Company and the interests of its stockholders and to align the
interests of the Company's stockholders and those persons eligible to
participate in the Plan.
10
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ADMINISTRATION. The Plan will be administered by the Board or by one or more
committees appointed by the Board (the appropriate acting body is referred to as
the "Administrator"). The Administrator is currently the Company's Compensation
Committee. See "CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS" on page
6. The Board of Directors--Committees" above on page 6 of this Proxy Statement.
The Administrator has broad authority to determine the number of shares that are
to be subject to options and the terms and conditions of such options, including
the exercise price of options. Subject to the other provisions of the Plan, the
Administrator has the authority: (i) to permit the recipient of any option to
pay the exercise price of the option in cash, the delivery of previously owned
shares of Common Stock or other property, or by a cashless exercise; (ii) to
amend the terms of options and accelerate the receipt or vesting of benefits
pursuant to an option; and (iii) to make certain adjustments to an outstanding
option and authorize the conversion, succession or substitution of an option in
connection with certain reorganizations or Change in Control Events (as
generally described below under "Limits on Options; Authorized Shares"). Other
than as a result of a reorganization or Change in Control Event (as generally
described below), in no event will the exercise price of an option be reduced
(through amendment or adjustment) to a price less than the fair market value of
a share of Common Stock as of the grant date of the option.
ELIGIBILITY. Persons eligible to receive options under the Plan include officers
and employees of the Company and any of its subsidiaries, and directors and
certain other consultants or advisors who render or have rendered services to
the Company or any of its subsidiaries. Currently, there are approximately 350
officers and employees and eight directors considered eligible under the Plan,
subject to the power of the Administrator to determine those particular eligible
persons to whom awards will be granted.
TRANSFER RESTRICTIONS. Subject to customary exceptions, options granted under
the Plan are not transferable by the recipient other than by will or the laws of
descent and distribution and are generally exercisable only by the recipient.
Any amounts payable or shares issuable pursuant to an option will be paid only
to the recipient or the recipient's beneficiary or representative. The
Administrator may, however, permit the transfer of an option if the transferor
presents satisfactory evidence to the Administrator that the transfer is for
estate and/or tax planning purposes and is without consideration (other than
nominal consideration).
LIMITS ON OPTIONS; AUTHORIZED SHARES. The maximum number of shares of Common
Stock that may be delivered pursuant to all options granted under the Plan is
1,000,000 shares. A maximum of 1,000,000 shares of Common Stock may be delivered
under the Plan pursuant to options qualified as "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). A maximum of 100,000 shares of Common Stock may be subject to Options
granted under the Plan to any individual during any calendar year. As is
customary in incentive plans of this nature, the number and kind of shares
available under the Plan and the then outstanding options, as well as exercise
prices and share limits, are subject to adjustment in the event of certain
reorganizations, mergers, combinations, consolidations, recapitalizations,
reclassifications, stock splits, stock dividends, asset sales or other similar
events, or extraordinary dividends or distributions of property to the
stockholders. The Plan will not limit the authority of the Board or other
Committee to grant options or authorize any other compensation, with or without
reference to the Common Stock, under any other plan or authority.
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STOCK OPTIONS. An option is the right to purchase shares of Common Stock at a
future date at a specified price (the "exercise price" of the option). The per
share exercise price of each option granted under the Plan will be determined by
the Administrator at the time of grant. The Administrator also determines the
vesting schedule and term applicable to each option. The maximum term of each
option granted under the Plan is ten years. Full payment for shares purchased on
the exercise of any option must be made at the time of such exercise in a manner
approved by the Administrator. An option may either be an incentive stock option
or a nonqualified stock option. Incentive stock option benefits are taxed
differently from nonqualified stock options, as described under "Federal Income
Tax Treatment of Options under the Plan" below. Incentive stock options are also
subject to more restrictive terms and are limited in amount by the Code and the
Plan.
ACCELERATION OF OPTIONS; POSSIBLE EARLY TERMINATION OF OPTIONS. Unless prior to
a Change in Control Event the Administrator determines that, upon its
occurrence, benefits will not be accelerated, then generally upon the Change in
Control Event each option will become immediately exercisable. A Change in
Control Event under the Plan generally includes (subject to certain exceptions)
a 50% or more change in ownership of the Company, certain changes in a majority
of the Board, certain mergers or consolidations approved by the Company's
stockholders, or stockholder approval of a liquidation of the Company or sale of
substantially all of the Company's assets.
TERMINATION OF OR CHANGES TO THE PLAN. The Board may amend or terminate the Plan
at any time and in any manner. Unless required by applicable law or deemed
necessary or advisable by the Board, stockholder approval for any amendment will
not be required. No new options may be granted under the Plan after September
30, 2003, although the authority of the Administrator will continue as to any
then outstanding options. As noted above, outstanding options may be amended,
but the consent of the holder is required if the amendment materially and
adversely affects the holder.
SECURITIES UNDERLYING OPTIONS. The fair market value of the Common Stock as of
August 21, 1998 was $6.00 per share. Upon receipt of stockholder approval of the
Plan and prior to any options becoming exercisable, the Company plans to
register under the Securities Act of 1933, as amended, the shares of Common
Stock available under the Plan.
FEDERAL INCOME TAX TREATMENT OF OPTIONS UNDER THE PLAN. The federal income tax
consequences of the Plan under current federal law, which is subject to change,
are summarized in the following discussion of general tax principles applicable
to the Plan. This summary is not intended to be exhaustive and, among other
considerations, does not describe state or local tax consequences. With respect
to nonqualified stock options, the Company is generally entitled to deduct and
the optionee recognizes taxable income in an amount equal to the difference
between the exercise price of the option and the fair market value of the shares
at the time of exercise. With respect to incentive stock options, the Company is
generally not entitled to a deduction nor does the participant recognize income
at the time of exercise. If an option is accelerated under the Plan in
connection with a change in control (as this term is used under the Code), the
Company may not be permitted to deduct the portion of the compensation
attributable to the acceleration ("parachute payments") if it exceeds certain
threshold limits under the Code (and certain related excise taxes may be
triggered). Furthermore, if the compensation attributable to awards is not
"performance-based" within the meaning of Section 162(m) of the Code, the
Company may not be permitted to deduct the
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aggregate non performance-based compensation in excess of $1,000,000 in
certain circumstances.
SPECIFIC BENEFITS. For information regarding options granted to executive
officers of the Company, see the material under the heading "Executive
Compensation" beginning on page 6.
Except as noted above, the number, amount and type of options to be received by
or allocated to eligible persons under the Plan cannot be determined at this
time. The Administrator has not yet considered any specific awards under the
Plan.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD "FOR" THIS PROPOSAL
The Board believes that the Plan will promote the interests of the Company and
its stockholders and continue to enable the Company to attract, retain and
reward persons important to the Company's success and to provide incentives
based upon increases in stockholder value.
Approval of the Plan requires the affirmative vote of a majority of the Common
Stock present, or represented at the Annual Meeting and approval by a majority
of the votes cast on the proposal.
THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE PLAN. Proxies solicited by the Board will be so voted unless
stockholders specify otherwise in their proxies. Broker non-votes and
abstentions on this proposal have the effect described on page 4. All members of
the Board and all executive officers are eligible to receive awards under the
Plan.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next annual meeting of
stockholders must be received by the Company at its principal executive offices
by May 4, 1998 for inclusion in the proxy statement and form of proxy relating
to that meeting and must comply with the applicable requirements of the federal
securities laws. Shareholder proposals intended to be presented at the next
annual meeting of stockholders but submitted outside the processes of Rule 14a-8
under the Securities Exchange Act of 1934 (i.e., a proposal which is not
submitted for inclusion in the Company's proxy statement) must be received by
the Company at its principal executive office by July 19, 1999 to be considered
timely under the Securities and Exchange Commission's proxy rules.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
Exchange Commission (SEC) initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Executive
officers, directors and greater-than ten percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
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To the Company's knowledge, based solely on its review of the copies of such
reports furnished to the Company during the fiscal years ended February 28, 1997
and 1998, all Section 16(a) filing requirements applicable to its executive
officers, directors, and greater-than ten percent beneficial owners have been
satisfied.
Messrs. Plost, Burdick, Anderson, Teng and Jallad, Ms. Susan Preston (a former
director of the Company) and Messrs. Brian Olson and Brad Rabe (former executive
officers of the Company) each filed a delinquent Form 3 - Initial Statement of
Beneficial Ownership on February 25, 1998, except for Ms Preston, who reported
the required information on a Form 5 - Annual Statement of Beneficial Ownership
("Form 5") filed with the SEC on April 14, 1998.
Mr. Plost filed his initial Form 5 on February 25, 1998, which report covered
the fiscal year ended February 28, 1997. Mr. Plost did not file a Form 4 -
Statement of Changes in Beneficial Ownership ("Form 4") to cover a disposition
(pursuant to Rule 144 under the Securities Act) and two cashless exercises of
warrants to purchase Common Stock of the Company, which transactions occurred
during fiscal year ended February 28, 1998. Each of these transactions were
reported on a Form 5 which was filed with the SEC on April 14, 1998.
Mr. Burdick did not file a Form 4 covering a cashless exercise of warrants to
purchase Common Stock of the Company, which transaction occurred during fiscal
year ended February 28, 1998. This transaction was reported on a Form 5 which
was filed with the SEC on April 14, 1998.
Mr. Anderson filed his initial Form 5 on February 25, 1998, which report covered
the fiscal year ended February 28, 1997. Mr. Anderson did not file a Form 4 to
cover a purchase of Common Stock of the Company and two cashless exercises of
warrants to purchase Common Stock of the Company, which transactions occurred
during fiscal year ended February 28, 1998. Each of these transactions were
reported on a Form 5 which was filed with the SEC on April 14, 1998.
Dr. Teng did not file a Form 4 covering two cashless exercises of warrants to
purchase Common Stock of the Company, which transactions occurred during fiscal
year ended February 28, 1998. These transactions were reported on a Form 5 which
was filed with the SEC on April 14, 1998.
Mr. Jallad did not file a Form 4 covering a cashless exercise of warrants to
purchase Common Stock of the Company, which transaction occurred during fiscal
year ended February 28, 1998. This transaction was reported on a Form 5 which
was filed with the SEC on April 14, 1998.
Mr. Olson (a former officer of the Company) filed his initial Form 5 on February
25, 1998, which report covered the fiscal year ended February 28, 1997.
Mr. Rabe (a former officer of the Company) did not timely file a form 5 to
report two purchases of Common Stock and warrants to purchase shares of Common
Stock of the Company (through a private placement approved by the Board of
Directors). These transactions were reported by Mr. Rabe on a Form 5 which was
filed with the SEC on April 15, 1998.
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as shown above. However, if any
such other business should come
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before the Annual Meeting, it is the intention of the persons named in the
enclosed Proxy to vote the Proxies in respect of such business in accordance
with their best judgement.
The cost of preparing, assembling and mailing this proxy material will be borne
by the Company. The Company may solicit Proxies otherwise than by use of the
mail, in that certain officers and regular employees of the Company, without
compensation, may use their personal efforts, by telephone or otherwise, to
obtain Proxies. Such assistance may take the form of personal, telephonic or
written solicitation or any combination thereof. The Company will also request
persons, firms and corporations holding shares in their names, or in the names
of their nominees, which shares are beneficially owned by others, to send this
proxy material to and obtain Proxies from such beneficial owners and will
reimburse such holders for their reasonable expenses in doing so.
By Order of the Board of Directors
Jerry L. Burdick
Secretary
August 28, 1998
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EXHIBIT I
SERACARE, INC.
1998 STOCK OPTION PLAN
1. PURPOSE OF PLAN.
The purpose of this 1998 Stock Option Plan (this "PLAN") of SeraCare,
Inc., a Delaware corporation (the "COMPANY"), is to provide incentives
through the grant of options to promote the success of the Company and
the interests of its stockholders and to align the interests of the
Company's stockholders and eligible persons.
2. PERSONS ELIGIBLE UNDER PLAN.
Any Eligible Person shall be eligible to be considered for the grant of
an option or options under this Plan. "ELIGIBLE PERSON" means: (a) any
officer (whether or not a director) or other employee of the Company or
any of its subsidiaries; or (b) any director or any individual
consultant or advisor who renders or has rendered bona fide services
(other than services in connection with the offering or sale of
securities of the Company in a capital raising transaction) to the
Company, provided that no non-employee shall be selected as an Eligible
Person if such person's participation in this Plan would adversely
affect (i) the Company's eligibility to use Form S-8 to register under
the Securities Act of 1933, as amended, the offering of securities
issuable under this Plan by the Company or (ii) the Company's
compliance with other applicable laws.
3. STOCK SUBJECT TO PLAN.
Subject to the provisions of Section 7, the capital stock that may be
delivered under this Plan will be shares of the Company's Common Stock,
par value $0.001 per share (the "COMMON SHARES"). Subject to adjustment
as provided in or pursuant to this Section 3 or Section 7:
3.1 AGGREGATE SHARE LIMIT. The maximum number of Common Shares
that may be delivered pursuant to options granted under this
Plan is 1,000,000 shares.
3.2 INDIVIDUAL SHARE LIMIT. The maximum number of Common Shares
that may be subject to options granted under this Plan during
any calendar year to any individual is 100,000 shares.
3.3 ISO SHARE LIMIT. The maximum number of Common Shares that may
be delivered pursuant to options qualified as incentive stock
options under Section 422 of the Internal Revenue Code
("ISOs") granted under this Plan is 1,000,000 shares in the
aggregate and, in the individual case, the applicable limits
under Section 422 of the Internal Revenue Code, as amended
from time to time (the "Code").
3.4 REISSUE OF SHARES. Common Shares that are subject to options
that expire or for any reason are terminated, cancelled, fail
to vest or are otherwise settled and are not issued, as well
as Common Shares reacquired pursuant to the terms of this
Plan, shall be available for subsequent options under this
Plan.
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4. ADMINISTRATOR OF PLAN.
4.1 THE ADMINISTRATOR. This Plan shall be administered by the
Board of Directors of the Company (the "BOARD") or by one or
more committees (each a "COMMITTEE") appointed by the Board
and each consisting of one or more directors. With respect to
options intended to satisfy the requirements for
performance-based compensation under Section 162(m) of the
Code and applicable regulations and interpretations thereunder
("SECTION 162(m)"), this Plan shall be administered by a
Committee consisting solely of two or more outside directors
(as this requirement is applied under Section 162(m)). (The
appropriate acting body, be it the Board or a Committee, is
referred to as the "ADMINISTRATOR.") Transactions in or
involving options intended to be exempt under Rule 16b-3
("RULE 16b-3") under Section 16 of the Securities Exchange Act
of 1934, as amended from time to time (the "EXCHANGE ACT"),
must be duly and timely authorized by the Board, a committee
of Non-Employee Directors (as this term is used in or under
Rule 16b-3), or as otherwise required or permitted thereby.
POWERS OF THE ADMINISTRATOR. Subject to the express provisions
of this Plan, the Administrator shall be authorized and
empowered to do all things necessary or desirable in
connection with the authorization of options and the
administration of this Plan within its delegated authority,
including, without limitation, the authority to:
(a) adopt, amend and rescind rules, regulations and
procedures relating to this Plan and its
administration or the options granted under this Plan
and determine the forms of options;
(b) determine which persons meet the requirements of
Section 2 hereof for eligibility under this Plan and
to which of such persons, if any, options will be
granted under this Plan;
(c) grant options to persons determined to be Eligible
Persons and determine the terms and conditions of
such options, including but not limited to the number
of Common Shares issuable pursuant thereto, the times
(subject to Section 5.4) at which and conditions upon
which options become exercisable or vest or shall
expire or terminate, the fair market value of the
Common Shares from time to time and/or the manner in
which it will be determined, and (subject to
applicable law) the consideration, if any, to be paid
upon exercise of options;
(d) determine the date of grant of each option;
(e) determine whether, and the extent to which,
adjustments are required pursuant to Section 7
hereof;
(f) interpret and construe this Plan and the terms and
conditions of any option granted hereunder, whether
before or after the date set forth in Section 6;
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(g) determine the circumstances under which, consistent
with the provisions of Section 8, any outstanding
option may be amended; and
(h) acquire or settle rights under options in cash, stock
of equivalent value, or other consideration.
All authority granted herein (except as to initial grants
under clauses (b) and (c) above) shall remain in effect so
long as any option remains outstanding under this Plan.
4.2 SPECIFIC ADMINISTRATOR RESPONSIBILITY AND DISCRETION REGARDING
OPTIONS. Subject to the express provisions of this Plan, the
Administrator, in its sole and absolute discretion, shall
determine all of the terms and conditions of each option
granted under this Plan, which terms and conditions may
include, subject to such limitations as the Administrator may
from time to time impose, among other things, provisions that:
(a) permit the recipient of such option to pay the
exercise price of the option, or any applicable tax
withholding obligation in respect of such option, in
whole or in part, by any one or more of the
following:
(i) cash, cash equivalent, or electronic funds
transfer;
(ii) the delivery of previously owned shares of
capital stock of the Company (including
shares acquired as or pursuant to options)
or other property; or
(iii) a cashless exercise.
(b) accelerate the receipt and/or vesting of benefits
pursuant to the option upon or in connection with
(whether before, at the time of or after) the
occurrence of a specified event or events, including,
without limitation, an event of the type referenced
in Section 7, a termination of employment, an event
of a personal nature, or otherwise, in any case as
deemed appropriate by the Administrator;
(c) qualify such option as an ISO;
(d) adjust the exercisability, term (subject to other
limits) or vesting schedule of any or all
outstanding options, adjust the number of Common
Shares subject to any option, adjust the exercise
price of any or all outstanding options or otherwise
change previously imposed terms and conditions, in
the circumstances referenced in clause (b) above or
in other circumstances or upon the occurrence of
other events (including events of a personal nature)
as deemed appropriate by the Administrator, by
amendment of an outstanding option, by substitution
of an outstanding option, by waiver or by other
legally valid means (which may result, among other
changes, in a greater or lesser number of shares
subject to the option, a shorter or longer vesting
or exercise period, or, except as provided below, an
exercise price that is higher or lower than the
original or prior option), in each case subject to
Sections 3 and 8[, but in no case
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shall the exercise price of any option be reduced
to a price below the fair market value of the option
on the date of its grant];
(e) authorize (subject to Sections 7, 8, and 10) the
conversion, succession or substitution of one or more
outstanding options upon the occurrence of an event
of the type described in Section 7 or in other
circumstances or upon the occurrence of other events
as deemed appropriate by the Administrator; and/or
(f) determine the value of and acquire or otherwise
settle options upon termination of employment, upon
such terms as the Administrator (subject to Sections
7, 8 and 10) deems appropriate.
4.3 DECISIONS IN GOOD FAITH; RELIANCE ON EXPERTS. In making any
determination or in taking or not taking any action under this
Plan, the Administrator may obtain and may rely upon the
advice of experts, including employees of and professional
advisors to the Company. No director, officer or agent of the
Company shall be liable for any such action or determination
taken or made or omitted under this Plan in good faith. Any
action taken by, or inaction of, the Administrator relating to
or pursuant to this Plan shall be within the absolute
discretion of that entity or body and shall be conclusive and
binding on all persons.
4.4 COMMITTEE ACTION; DELEGATION. A majority of the members of the
Committee shall constitute a quorum. The vote of a majority of
the members present assuming the presence of a quorum or the
unanimous written consent of the Committee shall constitute
action by the Committee. The Administrator may delegate
ministerial, non-discretionary functions to individuals who
are officers or employees of the Company or to third parties.
4.5 BIFURCATION. Notwithstanding anything to the contrary in this
Plan, the provisions of this Plan may at any time be
bifurcated by the Board or the Administrator in any manner so
that provisions of any option agreement (or this Plan)
intended or required in order to satisfy the applicable
requirements of Rule 16b-3 or Section 162(m), to the extent
permitted thereby, are applicable only to persons subject to
those provisions and to those options to those persons
intended to satisfy the requirements of the applicable legal
restriction.
5. OPTIONS.
5.1 TYPE AND FORM OF OPTIONS. Only options to acquire Common
Shares may be granted under this Plan. All options shall be
evidenced in writing, substantially in the form approved by
the Administrator, and executed on behalf of the Company and,
if required by the Administrator, by the recipient of the
option. The Administrator may authorize any officer (other
than the particular recipient) to execute any or all
agreements memorializing any grant of an option by the
Administrator under this Plan.
5.2 CONSIDERATION FOR SHARES. Common Shares may be issued pursuant
to the exercise of an option for any lawful consideration as
determined by the
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Administrator consistent with Section 4.3(a), but shall not
be issued for less than the minimum lawful consideration.
5.3 OPTION PRICING LIMITS. The purchase price per share of the
Common Shares covered by any option shall be determined by the
Administrator at the time of the grant[, but shall not be less
than 100% of the fair market value of the Common Shares on the
date of grant].
5.4 TERM LIMITS. Each option shall expire not more than 10 years
after its date of grant.
5.5 TRANSFER RESTRICTIONS. Unless otherwise expressly provided in
(or pursuant to) this Section 5.5, by applicable law or by the
option agreement, as the same may be amended, (a) all options
are non-transferable and shall not be subject in any manner to
sale, transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; (b) options shall be exercised only by
the holder; and (c) amounts payable or shares issuable
pursuant to an option shall be delivered only to (or for the
account of) the holder.
5.5.1 EXCEPTIONS BY ADMINISTRATOR ACTION. The
Administrator by express provision in the option
agreement or an amendment thereto may permit an
option to be transferred to, exercised by and paid
to certain persons or entities related to the
participant, including but not limited to members of
the participant's family, charitable institutions,
or trusts or other entities whose beneficiaries or
beneficial owners are members of the participant's
family and/or charitable institutions, or to such
other persons or entities as may be expressly
approved by the Administrator, pursuant to such
conditions and procedures as the Administrator may
establish. Any permitted transfer shall be subject
to the condition that the Administrator receive
evidence satisfactory to it that the transfer is
being made for estate and/or tax planning purposes
and on a basis consistent with the Company's lawful
issue of securities and the incentive purposes of
the option and this Plan. Notwithstanding the
foregoing, options intended as ISOs shall be subject
to any and all additional transfer restrictions
necessary to preserve their status as ISOs under the
Code.
5.5.2 EXCLUSIONS. The exercise and transfer restrictions in
this Section 5.5 shall not apply to:
(a) transfers to the Company;
(b) the designation of a beneficiary to receive
benefits in the event of the participant's
death or, if the participant has died,
transfers to or exercise by the
participant's beneficiary, or, in the
absence of a validly designated beneficiary,
transfers by will or the laws of descent and
distribution;
(c) transfers pursuant to a domestic relations
order (if approved or ratified by the
Administrator), if (in the case of ISOs)
permitted by the Code;
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(d) if the participant has suffered a
disability, permitted transfers to or
exercises on behalf of the holder by his
or her legal representative; or
(e) the authorization by the Administrator of
"cashless exercise" procedures with third
parties who finance or who otherwise
facilitate the exercise of options
consistent with applicable laws and the
express authorization of the Administrator.
5.6 TAX WITHHOLDING. Upon any exercise, vesting, or payment of
any option, the Company shall have the right at its option to:
(a) require the recipient (or his or her heirs, personal
representatives or beneficiaries, as the case may be)
to pay or provide for payment of the amount of any
taxes which the Company or any subsidiary may be
required to withhold with respect to such
transaction; or
(b) deduct from any amount payable in cash the amount of
any taxes which the Company or any subsidiary may be
required to withhold with respect to such cash
amount.
5.7 POSSIBLE SHARE OFFSET. In any case where a tax is required to
be withheld in connection with the delivery of Common Shares
under this Plan, the Administrator may require or may permit
(either at the time of grant or thereafter) the holder the
right to offset, pursuant to such rules and subject to such
conditions as the Administrator may establish, the number of
shares to be delivered by (or otherwise reacquire) the
appropriate number of shares valued at their then fair market
value, to satisfy such withholding obligation.
6. TERM OF PLAN.
No option shall be granted under this Plan after the day before the
tenth anniversary of the Effective Date (as defined below). After that
date, this Plan shall continue in effect as to then outstanding
options. Any then outstanding option may be amended thereafter in any
manner that would have been permitted earlier, except that no such
amendment shall increase the number of shares subject to, comprising or
referenced in the options or reduce the exercise or base price of an
option.
7. ADJUSTMENTS; CHANGE IN CONTROL.
7.1 CHANGE IN CONTROL; ACCELERATION AND TERMINATION OF OPTIONS.
Unless prior to a Change in Control Event (as defined below)
the Administrator determines that, upon its occurrence,
benefits under any or all options will not accelerate or
determines that only certain or limited benefits under any or
all options will be accelerated and the extent to which they
will be accelerated, and/or establishes a different time in
respect of such Change in Control Event for such acceleration,
then upon the occurrence of a Change in Control Event each
option will become immediately exercisable.
The Administrator may override the limitations on acceleration
in this Section 7.1 by express provision in the option
agreement and may accord any Eligible Person a right to refuse
any acceleration, whether pursuant to the option agreement or
otherwise, in such circumstances as the Administrator may
approve. Any
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acceleration of options will comply with applicable legal and
regulatory requirements (including, without limitation,
Section 422 of the Code with respect to ISOs). Any discretion
with respect to these events shall be limited to the extent
required by applicable accounting requirements in the case of
a transaction intended to be accounted for as a pooling of
interests transaction.
If any option has been fully accelerated as required or
permitted by this Plan but is not exercised prior to (i) a
dissolution of the Company, or (ii) an event described in this
Section 7.1 that the Company does not survive, or (iii) the
consummation of an event described in Section 7.2 involving a
Change in Control Event approved by the Board, such option
will terminate, subject to any provision that has been
expressly made by the Administrator or the Board through a
plan of reorganization approved by the Board or otherwise for
the survival, substitution, assumption, exchange or other
settlement of such option.
For purposes of this Plan, "CHANGE IN CONTROL EVENT" means any
of the following:
(a) Approval by the stockholders of the Company of the
dissolution or liquidation of the Company;
(b) Approval by the stockholders of the Company of an
agreement to merge or consolidate, or otherwise
reorganize, with or into one or more entities that
are not subsidiaries or other affiliates of the
Company, as a result of which less than 50% of the
outstanding voting securities of the surviving or
resulting entity immediately after the
reorganization (assuming for purposes of such
determination that there is no change in the record
ownership of the Company's securities from the
record date for such approval until such
reorganization and that such record owners hold no
securities of the other parties to such
reorganization), but including in such determination
any securities of the other parties to such
reorganization held by affiliates of the Company;
(c) Approval by the stockholders of the Company of the
sale of substantially all of the Company's business
and/or assets to a person or entity that is not a
subsidiary or other affiliate of the Company; or;
(d) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act but excluding any
person described in and satisfying the conditions of
Rule 13d-1(b)(1) thereunder) becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined
voting power of the Company's then outstanding
securities entitled to then vote generally in the
election of directors of the Company; or
(e) During any period not longer than two consecutive
years, individuals who at the beginning of such
period constituted the Board cease to constitute at
least a majority thereof, unless the election, or the
nomination for election by the Company's
stockholders, of each new Board member was approved
by a vote of at least three-fourths of the Board
members then
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still in office who were Board members at the
beginning of such period (including for these
purposes, new members whose election or nomination
was so approved).
7.2 ADJUSTMENTS.
The following provisions will apply if any extraordinary
dividend or other extraordinary distribution occurs in respect
of the Common Shares (whether in the form of cash, Common
Shares, other securities, or other property), or any
reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend), reverse stock
split, reorganization, merger, combination, consolidation,
split-up, spin-off, repurchase, or exchange of Common Shares
or other securities of the Company, or any similar, unusual or
extraordinary corporate transaction (or event in respect of
the Common Shares) or a sale of substantially all the assets
of the Company as an entirety occurs. The Administrator will,
in such manner and to such extent (if any) as it deems
appropriate and equitable:
(a) proportionately adjust any or all of (i) the number
and type of shares of Common Shares (or other
securities) that thereafter may be made the subject
of options (including the specific maxima and numbers
of shares set forth elsewhere in this Plan), (ii) the
number, amount and type of shares of Common Shares
(or other securities or property) subject to any or
all outstanding options, (iii) the exercise price of
any or all outstanding options, or (iv) the
securities, cash or other property deliverable upon
exercise of any outstanding options; or
(b) in the case of an extraordinary dividend or other
distribution, recapitalization, reclassification,
merger, reorganization, consolidation, combination,
sale of assets, split up, exchange, or spin off, make
provision for a cash payment or for the substitution
or exchange of any or all outstanding options or the
cash, securities or property deliverable to the
holder of any or all outstanding options based upon
the distribution or consideration payable to holders
of the Common Shares of the Company upon or in
respect of such event.
In each case, with respect to ISOs, no such adjustment will be
made that would cause this Plan to violate Section 422 or 424
of the Code or any successor provisions without the written
consent of holders materially adversely affected thereby. In
any of such events, the Administrator may take such action
sufficiently prior to such event if necessary or deemed
appropriate to permit the participant to realize the benefits
intended to be conveyed with respect to the underlying shares
in the same manner as is available to stockholders generally.
8. AMENDMENT AND TERMINATION OF PLAN AND OPTIONS.
The Board may amend or terminate this Plan at any time and in any
manner. No amendment or termination of this Plan or change in or
affecting any outstanding option shall deprive in any material respect
the holder, without the consent of the holder, of any of his or her
rights or benefits under or with respect to the option. Adjustments
contemplated by Section 7 shall not be deemed to constitute a change
requiring such
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consent. Unless required by applicable law or deemed necessary or
advisable by the Board, stockholder approval for any amendment shall
not be required.
9. EFFECTIVE DATE; STOCKHOLDER APPROVAL.
This Plan shall be effective as of the date that it is approved by the
Board (the "EFFECTIVE DATE"), subject to the approval of this Plan by
the requisite vote of stockholders within 12 months of the Effective
Date.
10. LEGAL MATTERS.
10.1 COMPLIANCE AND CHOICE OF LAW; SEVERABILITY. This Plan, the
granting and vesting of options under this Plan and the
issuance and delivery of Common Shares and/or the payment of
money under this Plan or under options granted hereunder are
subject to compliance with all applicable federal and state
laws, rules and regulations (including but not limited to
state and federal securities and banking laws) and to such
approvals by any listing, regulatory or governmental authority
as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such
restrictions as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. This
Plan, the options, all documents evidencing options and all
other related documents shall be governed by, and construed in
accordance with the laws of the state of Delaware. If any
provision shall be held by a court of competent jurisdiction
to be invalid and unenforceable, the remaining provisions of
this Plan shall continue in effect.
10.2 NON-EXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or
be deemed to limit the authority of the Board or the
Administrator to grant awards or authorize any other
compensation, with or without reference to the Common Shares,
under any other plan or authority.
10.3 NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in
any other documents relating to this Plan or to any option)
shall confer upon any Eligible Person or other participant any
right to continue in the employ or other service of the
Company or constitute any contract or agreement of employment
or other service, nor shall interfere in any way with the
right of the Company to change such person's compensation or
other benefits or to terminate the employment of such person,
with or without cause.
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PROXY
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 7, 1998
The undersigned, having received the Notice of Annual Meeting of Stockholders
and the Board of Directors' Proxy Statement (the "Proxy Statement"), hereby
appoint(s) Barry D. Plost and Jerry L. Burdick, and each of them, Proxies of the
undersigned (with full power of substitution) to attend the Annual Meeting of
Stockholders of SeraCare, Inc. to be held on October 7, 1998, and there to vote
all shares of Common Stock of SeraCare, Inc. that the undersigned would be
entitled to vote, if personally present, in regard to all matters which may come
before the meeting.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS, WHICH RECOMMENDS APPROVAL OF THE PROPOSALS
CONTAINED HEREIN.
( X ) PLEASE MARK VOTES AS IN THIS EXAMPLE
FOR WITHHOLD FOR ALL EXCEPT
( ) ( ) ( )
1. For the election of all nominees listed below (except as otherwise
indicated).
Barry D. Plost Ezzat Jallad
Jerry L. Burdick Dr. Nelson Teng
Samuel Anderson Michael F. Crowley, Sr.
Robert J. Cresci William J. Cone
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2. Proposal to approve 1998 Stock Option Plan.
FOR WITHHOLD ABSTAIN
( ) ( ) ( )
PLEASE BE SURE TO SIGN AND DATE THIS PROXY IN THE SPACE PROVIDED BELOW.
The undersigned hereby confer(s) upon the Proxies, and each of them,
discretionary authority (i) to consider and act upon such business, matters or
proposals other than the business set forth herein as may properly come before
the meeting and (ii) with respect to the election of directors in the event that
any of the nominees is unable or unwilling to serve.
- ------------------------------------------------------ -----------------
Stockholder sign above - Co-holder (if any) sign above Date
- ------------------------------------------------------ -----------------
Stockholder sign above - Co-holder (if any) sign above Date
THE PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER SPECIFIED HEREIN.
IF NO SPECIFICATION IS MADE, THE PROXIES INTEND TO VOTE FOR ALL THE NOMINEES FOR
DIRECTOR AND FOR APPROVAL OF THE PROPOSED 1998 STOCK OPTION PLAN.
In signing, please write name(s) exactly as appearing in the imprint on this
Proxy. For shares held jointly, each joint owner must sign. If signing in any
other capacity, please indicate your full title.
PLEASE SIGN, DATE AND MAIL IN THE POSTAGE PAID ENVELOPE PROVIDED.
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