<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
HYCOR BIOMEDICAL 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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> 2
HYCOR BIOMEDICAL INC.
18800 Von Karman Ave.
Irvine, CA 92715-1517
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Hycor Biomedical Inc. (the "Company") will be held at its principal executive
offices, located at 18800 Von Karman Avenue, Irvine, California 92715-1517 on
May 30, 1996 at 9:00 a.m., for the following purposes:
1. To elect the 7 nominees named in the accompanying Proxy
Statement as directors to serve for the ensuing year and until
their successors are elected and qualified.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 10, 1996
will be entitled to notice of and to vote at the meeting. A list of
stockholders will be available at the meeting and, for ten days prior thereto,
at the corporate offices at the address set forth above.
Your attention is directed to the proxy statement submitted with this
notice.
By order of the Board of Directors
Reginald P. Jones
Secretary
Irvine, California
April 24, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE,
WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
HYCOR BIOMEDICAL INC.
18800 VON KARMAN AVENUE
IRVINE, CALIFORNIA 92715-1517
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 1996
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Hycor Biomedical Inc. (the "Company")
to be voted at the Annual Meeting of Stockholders of the Company to be held on
May 30, 1996, at the Company's principal executive offices, located at 18800
Von Karman Avenue, Irvine, California 92715-1517 at 9:00 a.m. and at any
adjournments thereof (the "Annual Meeting"), for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders and described herein.
The approximate date on which this Proxy Statement and the enclosed form of
proxy are first being sent or given to stockholders is April 24, 1996.
Voting Rights and Solicitation of Proxies
- -----------------------------------------
The Board of Directors of the Company has fixed the close of business
on April 10, 1996, as the record date for the determination of stockholders
entitled to receive notice of, and to vote at, the Annual Meeting (the "Record
Date"). At the Record Date, the Company had outstanding 7,734,291 shares of
common stock, par value $.01 per share (the "Common Stock"). Each share of
Common Stock entitles the record holder on the Record Date to one vote on all
matters. With respect to the election of directors only, stockholders may vote
in favor of all nominees or withhold their votes as to all nominees or withhold
their votes as to specific nominees.
Any stockholder giving a proxy has the power to revoke it at any time
before it is voted. Revocation of a proxy is effective upon receipt by the
Secretary of the Company of either (i) an instrument revoking it or (ii) a duly
executed proxy bearing a later date. A stockholder who is present at the
Annual Meeting may revoke his proxy and vote in person if he so desires.
All shares represented by a properly executed proxy received in time
for the Annual Meeting and not revoked will be voted as directed. If no
directions are specified, the shares represented by such proxy will be voted
(i) "FOR" the election of the Board of Directors' seven nominees for director
and (ii) at the discretion of the persons named as proxies on all other matters
which may properly come before the Annual Meeting.
A majority of the outstanding shares of Common Stock entitled to vote
must be represented in person or by proxy at the Annual Meeting in order to
constitute a quorum for the transaction of business. Abstentions and non-votes
will be counted for purposes of determining the existence of a quorum at the
Annual Meeting. The candidates for election as directors will be elected by
the affirmative vote of a plurality of the shares of Common Stock present in
person or by proxy, entitled to vote and actually voting at the Annual Meeting.
The affirmative vote of a majority of the shares of Common Stock present in
person or by proxy, entitled to vote and actually voting on each of the
proposals is required for the adoption or ratification for each proposal.
Abstentions will be counted as votes against any of the proposals as to which a
stockholder abstains, but non-votes will have no effect on the voting with
respect to any proposal as to which there is a non-vote. A non-vote may occur
when a nominee holding shares of Common Stock for a beneficial owner does not
vote on a proposal because such nominee does not have discretionary voting
power and has not received instructions from the beneficial owner.
<PAGE> 4
ELECTION OF DIRECTORS
The Board of Directors has set at seven (7) the number of directors
constituting the Board of Directors for the ensuing year, and has nominated the
seven (7) individuals named in the table below to serve as members of the Board
of Directors until the next annual meeting and until their successors are
elected and qualified or until their earlier resignation or removal. All of
the nominees have consented to being named herein and have indicated their
intention to serve if elected. If at the time of the Annual Meeting of
Stockholders any of such nominees should be unable to serve, the persons named
in the Proxy will vote for the election of such person or persons as may be
designated by the present Board of Directors; alternatively, the Board of
Directors may reduce the number of authorized directors. The Board of Directors
has no reason to believe that any substitute nominee or nominees will be
required. A plurality of the votes of the shares present in person or
represented by proxy at the meeting, entitled to vote and actually voting is
required to elect the nominees.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR ALL SEVEN NOMINEES.
<TABLE>
<CAPTION>
Year
First Principal Occupation and Other
Name Elected Information Concerning Nominee
---- ------- ------------------------------
<S> <C> <C>
Richard D. Hamill 1983 Chairman of the Board since September 1990, Chief
Age 57 Executive Officer since February 1985, President
since August 1983, Hycor Biomedical Inc.
Samuel D. Anderson 1987 General business consultant since May 1991;
Age 60 President, Trancel Corporation (a pharmaceutical
company) from March 1990 until April 1991; Director
from March 1984 until December 1991, Chairman of the
Board from October 1988 to March 1990, President and
Chief Executive Officer from March 1984 to October
1988, Alpha Therapeutics Corporation (a
pharmaceutical company).
David S. Gordon 1981 Vice President, Business Development, Physician
Age 54 Reliance Network, Inc. (a physician practice
management company) since October 1995. Vice
President, U.S. Clinical Research, The Liposome
Company (a pharmaceutical company) since March 1993;
Director, Clinical Research-Hematologics, R. W.
Johnson Pharmaceutical Research Institute from
November 1990 until February 1993; Chairman of the
Board from April 1981 to September 1990, Chief
Scientific Officer from February 1985 to November
1990, Chief Executive Officer from April 1981 to
February 1985, Hycor Biomedical Inc.
Reginald P. Jones 1986 Senior Vice President since January 1988, Chief
Age 49 Financial Officer and Secretary since 1985, Treasurer
since 1982, Hycor Biomedical Inc.
James R. Phelps 1984 Partner, Hyman, Phelps and McNamara, P.C. (a law
Age 57 firm) since January 1980.
</TABLE>
Page 2
<PAGE> 5
<TABLE>
<CAPTION>
Year
First Principal Occupation and Other
Name Elected Information Concerning Nominee
---- ------- ------------------------------
<S> <C> <C>
Richard E. Schmidt Chairman, Chief Executive Officer and President,
Age 64 Newport Corporation (a precision research equipment
company) since September 1991; Chairman, Chief
Executive Officer and President of Milton Roy
Corporation (an analytical instrument company) since
1984.
David A. Thompson 1995 President, Diagnostics Division, and Senior Vice
Age 54 President, Diagnostic Operations, Abbott
Laboratories, Inc. (a pharmaceutical and diagnostic
company) since 1990; Various other executive
positions with Abbott Laboratories since 1964.
</TABLE>
Board Meeting Attendance and Committees
- ---------------------------------------
The Board of Directors held a total of five meetings during 1995. All
directors attended at least 75% of all meetings of the Board and the committees
of the Board on which they served.
The Compensation Committee of the Board, composed of Messrs. Dick
Allen (who is not standing for reelection in 1996), Anderson, Phelps and
Thompson acts for the Board in determining the executive compensation program
with respect to salary, bonuses, benefits and other compensation matters. It
also administers the Company's stock option plans. This committee met once
during 1995.
The Audit Committee of the Board, composed of Messrs. Allen, Gordon
and Thomas Witmer (who is not standing for reelection in 1996), acts for the
Board in overseeing the Company's accounting practices, recommending the
independent public accountants for appointment by the Board, monitoring the
adequacy of internal accounting practices and reviewing significant changes in
accounting policies. This committee met twice in 1995.
The Nominating Committee, composed of Messrs. Gordon, Hamill and
Phelps, considers and makes recommendations to the full Board of Directors for
its approval of individual candidates to be nominated by management for
election to the Board of Directors at the Annual Meeting of Stockholders. This
committee met once in 1995.
The Nominating Committee will consider proposals for nominees for the
Board of Directors suggested by stockholders. Such recommendations should be
submitted in writing to the Corporate Secretary at the address set forth on the
first page of this proxy statement and must be received not less than 120
calendar days in advance of the date of the Company's proxy statement released
to stockholders in connection with the previous year's annual meeting of
stockholders. The stockholder should specify the name of each proposed nominee
and should set forth detailed biographical information. A person to be
considered for nomination to the Board of Directors should, among other things,
have the ability to exercise sound business judgment, have had such broad
personal and professional experience as to enable him or her to make productive
contributions to the deliberation of the Board of Directors, and be a
recognized leader in his or her profession.
Page 3
<PAGE> 6
Compensation of Directors
- -------------------------
All non-employee directors receive an annual retainer of $3,000 and a
fee of $500 for each Board Meeting attended for services as directors of the
Company and are reimbursed for reasonable travel expenses incurred in
connection with each meeting attended. In addition, members of the Compensation
Committee receive an additional annual retainer of $1,000 and no fee for each
committee meeting attended.
Each non-employee director is eligible to receive stock options under
the Company's Nonqualified Stock Option Plan for Non-Employee Directors (the
"Plan"), a non-discretionary formula stock option plan. Each director who is a
non-employee director and who holds office immediately after the Company's
annual meeting of stockholders receives an option to purchase 6,000 shares of
Common Stock. The Plan also provides an automatic one-time only grant of an
option to purchase 4,000 shares of Common Stock to new non-employee directors
on the date such director first assumes the duties of a director. The price
per share at which an option may be exercised is the fair market value per
share on the date the option is granted and each option granted shall vest pro
rata over a three-year period. In the event that the Company enters into a
merger (other than a merger in which the Company is the surviving corporation
and under the terms of which the Common Stock is unchanged), consolidation,
sale or transfer of substantially all of its assets, or liquidation during the
term of an option, the option shall become exercisable with respect to the full
number of shares subject thereto during the period of 30 days prior to the
closing date of such transaction; provided, however, the exercise of any
portion of the option that would otherwise not be exercisable at the closing
date of such transaction shall be contingent on the closing of the transaction.
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to
shares of Common Stock of the Company beneficially owned by (1) all persons
known to the Company to own beneficially more than 5% of the Company's Common
Stock; (2) each person who is a director or a nominee for director; (3) each of
the executive officers named in the Summary Compensation Table herein; and (4)
all directors and executive officers of the Company as a group. The persons
named hold sole voting and investment power with respect to the shares shown
opposite their respective names, unless otherwise indicated. The information
with respect to each person specified is as supplied or confirmed by such
person.
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned as Percent of
Name of March 17, 1996 (1)(14) Class (1)
- ---- ------------------------- ----------
<S> <C> <C>
Fenimore Asset Mgmt, Inc. 1,361,700 (2) 17.6
Brinson Partners, Inc. 637,086 (3) 8.2
Richard D. Hamill 426,000 (4) 5.4
Dick P. Allen 28,000 (5) *
Samuel D. Anderson 66,000 (6) *
David S. Gordon 242,864 (7) 3.1
Reginald P. Jones 305,684 (8) 3.9
James R. Phelps 57,400 (9) *
Richard E. Schmidt 0 *
David A. Thompson 10,000 *
Thomas H. Witmer 23,000(10) *
Nelson F. Thune 178,653(11) 2.3
Thomas M. Li 1,364 *
W. Barry McDonald 38,118(12) *
All executive officers and 1,377,083(13) 16.5
directors as a group (12 persons)
</TABLE>
(Footnotes on following page)
Page 4
<PAGE> 7
(Footnotes for preceding page)
- ------------------
* Indicates less than one percent.
(1) Assumes that shares that are subject to options held by the named
individual or group that are exercisable on March 17, 1996 or
exercisable within 60 days of March 17, 1996 are presently
outstanding.
(2) Fenimore Asset Management, Inc. ("FAM"), 118 N. Grand St., Cobleskill,
NY 12043, filed a Schedule 13G on or about February 22, 1996, on
behalf of itself, an investment advisor, registered under Section 203
of the Investment Advisor Act of 1940. FAM has shared voting and
disposition power over 1,361,700 shares.
(3) Brinson Partners, Inc. ("BPI"), 209 South LaSalle, Chicago, Illinois
60604, filed a joint Schedule 13G with the Securities and Exchange
Commission on or about February 15, 1996, on behalf of (i) itself, an
investment adviser registered under Section 203 of the Investment
Advisers Act of 1940; (ii) Brinson Trust Company ("BTC"), a bank as
defined in Section 3(a) (6) of the Securities Exchange Act of 1934,
and a wholly-owned subsidiary of BPI; (iii) Brinson Holdings, Inc.
("BHI"), a Parent Holding Company of which BPI is a wholly-owned
subsidiary; (iv) SBC Holding (USA), Inc. ("SBCUSA"), a Parent Holding
Company of which BHI is a wholly-owned subsidiary; and (v) Swiss Bank
Corporation ("SBC"), a Parent Holding Company of which SBCUSA is a
wholly-owned subsidiary. BPI has shared voting and dispositive power
over 637,086 shares and BTC has shared voting and dispositive power
over 171,854 shares.
(4) Includes 152,000 shares that are subject to stock options which are
exercisable; 227,818 shares held by R.D. Hamill and M.L. Hamill as
trustees for the R.D. Hamill and M.L. Hamill Family Trust; 42,000
shares held by Dr. Hamill's father-in-law's trust that his spouse is a
co-trustee; and 4,182 shares held by 401(k) Plan.
(5) Includes 22,000 shares that are subject to stock options which are
exercisable and 6,000 shares held by DIMA Ventures, Inc., of which Mr.
Allen is the president.
(6) Includes 57,000 shares that are subject to stock options which are
exercisable.
(7) Includes 11,400 shares held by Dr. Gordon's wife and dependent
children, and 12,000 shares that are subject to stock options which
are exercisable.
(8) Includes 165,109 shares held by R.P. Jones and J. Jones as Trustees
for the Jones Family Trust; 6,000 shares held by dependent children;
131,409 shares that are subject to stock options which are
exercisable; and 3,166 shares held by 401(k) Plan.
(9) Includes 32,000 shares that are subject to stock options which are
exercisable.
(10) Includes 22,000 shares that are subject to stock options which are
exercisable.
(11) Includes 123,491 shares that are subject to stock options which are
exercisable and 2,823 shares held by 401(k) Plan.
(12) Includes 36,000 shares that are subject to stock options which are
exercisable and 964 shares held by 401(k) Plan.
(13) Includes 587,900 shares that are subject to stock options which are
exercisable and 11,135 shares held by 401(k) Plan.
(14) Under the terms of the Company's 401(k) Plan, a committee of three
persons has the power to direct the trustee to vote all shares held
pursuant to the 401(k) Plan.
Page 5
<PAGE> 8
EXECUTIVE OFFICERS
The following table identifies, and contains certain information
concerning, the Company's executive officers as of the date of this Proxy
Statement. Executive officers are appointed by and serve at the pleasure of
the Board of Directors. Except for Dr. Li, each executive officer is currently
serving pursuant to an employment agreement. See "Executive Compensation -
Employment Agreements."
<TABLE>
<CAPTION>
Name Age Information Concerning Officer
- ---- --- ------------------------------
<S> <C> <C>
Richard D. Hamill 57 Chairman of the Board since September 1990,
Chief Executive Officer since February 1985,
President since August 1983. Dr. Hamill is
also a director of the Company, a position which
he has held since 1983.
Reginald P. Jones 49 Senior Vice President since January 1988,
Chief Financial Officer since May 1985, Secretary
since June 1985, Treasurer since August 1982.
Mr. Jones is also a director of the Company,
a position which he has held since 1986.
W. Barry McDonald 48 Senior Vice President, Marketing and Business
Development since May 1992. President and
Chief Executive Officer of Photest Diagnostics,
Inc. (a medical diagnostics company) from
January 1987 until November 1991.
Nelson F. Thune 50 Senior Vice President, Operations and Planning
since February 1991; Vice President, Operations
from January 1985 to February 1991.
Thomas M. Li 49 Vice President, Research and Development since
April 1995; Senior Development Manager, Syva
Company (a medical diagnostic company) from
January 1991 to March 1995.
</TABLE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
- ----------------------------------------------
The following table sets forth information concerning compensation paid or
accrued by the Company to or on behalf of the Company's Chief Executive Officer
and each of the four other most highly compensated executive officers for
services in all capacities to the Company for the fiscal years ended December
31, 1993, 1994 and 1995.
Page 6
<PAGE> 9
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation (1) Awards
--------------------------------- ------------
Securities
Underlying All Other
Name and Salary Bonus Options/ Compensation
Principal Position Year ($)(2) ($) SARs (#) ($)(3)
- ------------------ ---- ------- ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Richard D. Hamill 1995 228,275 61,634 20,000 10,233
Chairman, President, 1994 219,771 76,447 20,000 8,353
Chief Executive 1993 203,983 -0- 10,000 7,777
Officer
Reginald P. Jones 1995 171,611 36,038 13,000 4,393
Senior Vice President, 1994 164,833 44,596 -0- 2,422
Chief Financial 1993 154,128 -0- 20,500 2,456
Officer
W. Barry McDonald 1995 150,793 31,667 12,000 3,111
Senior Vice President, 1994 144,808 39,178 -0- 2,297
Marketing & Business 1993 132,783 -0- 27,000 1,552
Development
Nelson F. Thune 1995 150,793 31,667 12,000 4,601
Senior Vice President, 1994 144,868 39,194 -0- 2,169
Operations & Planning 1993 138,088 -0- 19,500 2,438
Thomas M. Li (4) 1995 105,959 22,251 15,000 -0-
Vice President,
Research & Development
</TABLE>
- ---------------
(1) Certain incidental personal benefits to the executive officers of the
Company may result from expenses incurred by the Company in the
interest of attracting and retaining qualified personnel. However,
none of the named individuals received perquisites or other personal
benefits in excess of the lesser of $50,000 or 10% of the total of his
reported salary and bonus.
(2) Includes employee deferrals under the Company's Incentive Profit
Sharing Plan, a deferred compensation plan under Section 401(k) of the
Internal Revenue Code (the "401(k) Plan").
(3) The amounts disclosed in this column for 1995 include:
(a) Company contributions of cash and common stock under the
401(k) Plan made on behalf of Messrs. Hamill, Jones, McDonald
and Thune in the amounts of $2,620, $2,559, $2,057 and $2,829,
respectively, and 439, 439, 424 and 424 shares, respectively.
The dollar value of the shares is included in the table and
was calculated based on the fair market of such shares at the
time acquired by the Plan.
(b) Payment by the Company of premiums for term life insurance on
behalf of Mr. Hamill in the amount of $5,779.
(4) Dr. Li became an executive officer in April 1995, and accordingly no
executive compensation is reported for 1994 and 1993.
Page 7
<PAGE> 10
Employment Agreements
- ---------------------
The Company is a party to employment agreements with Messrs. Hamill,
Jones, McDonald and Thune. The principal features of such agreements are
described below.
Dr. Hamill is employed as Chairman, President and Chief Executive
Officer of the Company pursuant to an employment agreement which commenced
January 1, 1991, and which provides for an annual base salary of not less than
$180,000. The agreement automatically renews for successive one year terms
after December 31 of each year unless written notice of either party's
intention not to renew is given at least six months prior to expiration of the
term. The agreement was automatically renewed for 1996. Dr. Hamill also
receives $700,000 of term life insurance payable to a beneficiary designated by
him and is provided the use of a Company owned automobile. In addition, under
the terms of the agreement, in the event of the termination of Dr. Hamill's
employment (other than on account of death or for cause as defined in the
agreement), or Dr. Hamill's election to resign with good cause, within one year
after a change in control of the Company, Dr. Hamill will be entitled to
receive severance pay in an amount equal to twenty four times his then monthly
salary. Such amount would be in addition to any other amounts otherwise
payable to Dr. Hamill under any benefit plans of the Company. A change in
control of the Company would be deemed to occur if any person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities or if specified changes in the composition of the
Company's Board of Directors occurs. The Company can also terminate the
agreement at any time "without cause" by paying Dr. Hamill a lump severance
benefit equal to twenty months base salary at the time of termination. The
agreement also provides for certain payments upon Dr. Hamill's death or
incapacity.
The Company also has entered into a three-year employment agreement
with Messrs. Jones and Thune, under which each is employed as a Vice President
of the Company. These agreements, which commenced December 1, 1991, provide
for base salaries of not less than $136,000 and $121,500 per annum,
respectively. Each agreement provides that the termination date will be
automatically renewed for successive one-year terms unless written notice of
either party's intention not to renew is given at least three months prior to
expiration of the term. These agreements were automatically renewed in 1995.
In addition, in the event the Company terminates the employment (other than on
account of death or for cause), of Messrs. Jones or Thune, such individual will
be entitled to receive severance pay in the amount equal to twelve times his
then monthly salary. Each agreement also provides for certain payments upon
the death or incapacity of such individual.
The Company also has entered into a three-year employment agreement
with Mr. McDonald under which he is employed as a Vice President of the
Company. This agreement, which commenced May 4, 1992, provides that Mr.
McDonald shall be employed for a base salary of $130,000 per annum. The
agreement will be automatically renewed for successive one-year terms unless
written notice of either party's intention not to renew is given at least three
months prior to expiration of the term. This agreement was automatically
renewed in 1995. In addition, in the event the Company terminates his
employment (other than on account of death or for cause), Mr. McDonald will be
entitled to receive severance pay in the amount equal to nine times his then
monthly salary. The agreement also provides for certain payments upon Mr.
McDonald's death or incapacity.
Page 8
<PAGE> 11
Stock Options
- -------------
The following table sets forth information, with respect to the named
executive officers, concerning the grant of stock options under the Company's
stock option plans during the last fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed Rates
of Stock Price
Appreciation
Individual Grants for Option Term
- --------------------------------------------------------------------------------------- -------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise Market
Options/SARs Employees or Base Price
Granted in Fiscal Price on Date Expiration
Name (#)(1)(4) Year ($/Sh) of Grant Date 5% 10%
---- ---------- ----------- -------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
R. D. Hamill 20,000 (2) 15.4 $4.31 $4.31 2/23/05 $54,211 $137,381
R. P. Jones 13,000 (2) 10.0 4.31 4.31 2/23/05 35,237 89,297
W. B. McDonald 12,000 (2) 9.3 4.31 4.31 2/23/05 32,526 82,428
N. F. Thune 12,000 (2) 9.3 4.31 4.31 2/23/05 32,526 82,428
T. M. Li 15,000 (3) 11.6 4.63 4.63 4/2/06 43,677 110,685
</TABLE>
- ----------------
(1) The Company did not grant any stock appreciation rights (SARs) during
the last fiscal year.
(2) Incentive stock options were granted under the 1992 Incentive Stock
Plan on 2/24/95 and are exercisable in four annual equal installments
beginning 2/24/96.
(3) Incentive stock options were granted under the 1992 Incentive Stock
Plan on 4/3/95 and are exercisable in four annual equal installments
beginning 4/3/96.
(4) In the event that the Company enters into a merger (other than a
merger in which the Company is the surviving corporation and under the
terms of which the Common Stock is unchanged), consolidation, sale or
transfer of substantially all of its assets, or liquidation during the
term of the option, the option shall become exercisable with respect
to the full number of shares subject thereto for a period of 30 days
prior to the closing date of such transaction; provided, however, the
exercise of any portion of the option that would otherwise not be
exercisable at the closing date of such transaction shall be
contingent on the closing of the transaction.
Page 9
<PAGE> 12
The following table sets forth information, with respect to the named
executive officers, concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION> Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options/SARs In-the-Money Options/SARs
on Value at Fiscal Year-End (#) at Fiscal Year-End ($)(2)
Exercise Realized --------------------------- --------------------------
Name (#) ($) (1) Exercisable Unexercisable Exercisable Unexerciable
- ---- -------- -------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
R.D.Hamill -0- -0- 167,000 38,333 184,863 1,717
R.P.Jones -0- -0- 140,159 19,833 190,440 2,219
W.B.McDonald -0- -0- 33,000 21,000 3,210 2,385
N.F.Thune -0- -0- 129,491 18,500 141,820 2,073
T.M. Li -0- -0- -0- 15,000 -0- -0-
</TABLE>
- ------------
(1) Market value of common stock at exercise date, minus the exercise
price.
(2) Calculated based upon the closing price of common stock at 12/31/95
minus the option exercise price.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the Performance Graph which follow shall not be deemed to be
incorporated by reference into any such filings.
The executive compensation program is administered by the Compensation
Committee of the Company's Board of Directors (the "Committee") which is
comprised of the individuals listed below. All of the members of the Committee
are outside directors of the Company. The Committee is responsible for all
compensation matters applicable to the Company's executive officers including
developing, administering and monitoring the compensation policies.
The Committee has retained the services of an independent compensation
consulting firm to assist in its evaluation of the key elements of the
Company's compensation program. The compensation consultant provides advice to
the Committee with respect to competitive practices and the reasonableness of
compensation paid to the executives of the Company. The Committee reviews
surveys and other data supplied by the consultant in the course of its
deliberations relating to compensation proposals and in its evaluations of the
particular needs of the Company and each executive's performance.
Page 10
<PAGE> 13
Compensation Philosophy and Overall Objective. The general goals and
objectives of the Company's compensation program are to:
. Provide incentives for the Company's management to create
value for the Company's stockholders;
. To attract, retain and motivate a quality, performance-
oriented management team;
. Position executive compensation at the median levels when
compared to companies with similar size, organization
structure, product cycle and industry; and
. Create long-term incentives which are tied to the Company's
long-term growth financial success and stockholder value.
In designing and administering the individual elements of the
executive compensation program, the Committee strives to balance short and
long-term incentive objectives and employ prudent judgment in establishing
performance criteria, evaluating performance and determining actual incentive
payments.
Section 162(m) of the Internal Revenue Code limits the tax deduction
to $1 million in any taxable year for compensation paid to individual executive
officers, unless certain performance, disclosure, and stockholder approval
requirements are met. While the compensation program provides pay levels
unlikely to reach or exceed the limit for any of the executive officers, the
Committee believes a substantial portion of the compensation program would be
exempted from the $1 million deduction limitation. The Committee's present
intention is to qualify, to the extent reasonable, the substantial portion of
the executive officers' compensation for deductibility under applicable tax
laws.
BASE SALARIES. The base compensation levels were established to
compensate the executive officers for the functions they perform. The salary
levels are reviewed annually and may be increased by the Compensation Committee
in accordance with certain criteria determined to be relevant by the Committee,
which include (i) individual performance, (ii) the functions performed by the
executive officer, (iii) competitive base pay levels for similar functions, and
(iv) the Company's overall performance during the year. The weight given such
factors by the Committee may vary from individual to individual. With respect
to base salaries, the Committee generally intends to target base salary levels
at the median for medical device and biotechnology organizations comparable in
size and structure. Actual base salaries for 1995 were determined based on
contributions during fiscal 1994 with increases averaging 4.7%.
ANNUAL INCENTIVE COMPENSATION PROGRAM. Awards may be earned under
the Company's Annual Executive Incentive Plan (the "Annual Incentive Plan").
The objective of the Annual Incentive Plan is to deliver competitive levels of
compensation for the attainment of financial objectives that the Committee
believes are primary determinants of stock price over time. Targeted awards
for the executive officers of the Company, including the Chief Executive
Officer, under the Annual Incentive Plan range from 35% to 45% of base salary.
Minimum objectives of sales and pretax earnings must be achieved before any
awards are earned. Awards in any single year cannot exceed 150% of the target
award opportunity. In determining the awards for fiscal 1995 performance, the
Committee used the same criteria, but took into consideration the effects of
significant changes in the Company's strategic direction during the year, and
as a result set the bonus at 60% of the target award opportunity.
Page 11
<PAGE> 14
LONG-TERM INCENTIVE PROGRAM. The long-term incentive program for
senior management consists of two stock-based compensation plans, the 1988
Long-Term Incentive Plan and the 1992 Incentive Stock Plan (collectively, the
"Plans"). The Committee believes that by providing those persons who have
substantial responsibility for the management and growth of the Company with an
opportunity to increase their ownership of Company stock, the interests of the
stockholders and executives will be closely aligned. The Committee, which
administers the Plans, may make grants under the Plans based on a number of
factors including, (i) the executive officer's position in the Company, (ii)
the executive officer's performance and responsibilities, (iii) the extent to
which the executive officer already holds an equity stake in the Company, (iv)
equity participation levels of comparable executives at other companies in the
compensation peer group, and (v) individual contribution to the success of the
Company's financial performance. Generally, stock options are granted each
year at 100% of current fair market value of the Company's stock. Stock
options have a ten-year term and typically become exercisable over a three- to
four-year period, as determined by the Committee. The fiscal 1995 grant of
options vest ratably at 25% per year after one year from the date of grant. In
the event of a change in control, all options become fully vested.
CHIEF EXECUTIVE OFFICER COMPENSATION. The Compensation of Richard
D. Hamill during fiscal 1995 was determined on the same basis as discussed
above for the executive officers. In 1995 Dr. Hamill received compensation
based on the annual base salary amount of $230,000 which reflected a 4.5%
increase from his fiscal 1994 base salary. Dr. Hamill received a salary
increase in 1995 on the basis of the Committee's evaluation of his salary as
compared to competitive salary data, his performance and the Company's
performance. Dr. Hamill received an annual bonus of $61,634, which was 60% of
his target award opportunity. Based on the Compensation Committee's criteria
described above, in fiscal 1995 Dr. Hamill was awarded options to purchase
20,000 shares of Common Stock. Dr. Hamill's base salary and award levels under
the stock incentive Plans and the new short-term incentive plan will be
reviewed annually. In 1995, the Company contributed $4,454 to Dr. Hamill's
401(k) account under the terms and conditions of that plan. Dr. Hamill does
not participate in or otherwise influence deliberations of the Committees
relating to his compensation.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Samuel D. Anderson David A. Thompson James R. Phelps
(Chairman)
Page 12
<PAGE> 15
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a graph comparing cumulative total stockholder
return on the Company's Common Stock, the S&P 500 Index and the S&P Medical
Products and Supplies Index for the period commencing December 31, 1990 and
ended December 31, 1995. The graph assumes that the value of the investment in
the Company's Common Stock and each index as $100 at December 31, 1990 and that
all dividends were reinvested.
The stockholder return shown on the following graph is not necessarily
indicative of future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
12/90 12/91 12/92 12/93 12/94 12/95
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Hycor Biomedical Inc. HYBD 100 156 144 113 100 109
S&P 500 1500 100 130 140 155 157 215
S&P Medical Products & Supplies IMDP 100 164 140 107 127 214
</TABLE>
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
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 SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors
and greater than ten percent stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Page 13
<PAGE> 16
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1995, its
officers, directors and greater than ten percent beneficial owners complied
with all Section 16(a) filing requirements.
INDEPENDENT AUDITORS
Deloitte & Touche LLP served as the Company's independent auditors for
the fiscal year ended December 31, 1995. Representatives of Deloitte & Touche
LLP are expected to be present at the Annual Meeting, will be given the
opportunity to make a statement, if they desire, and are expected to be
available to respond to appropriate questions. Auditors for the current fiscal
year will be selected by the Board of Directors in June 1996.
ANNUAL REPORT
The Annual Report of the Company including financial statements for
the year ended December 31, 1995 is enclosed with this Proxy Statement.
STOCKHOLDER PROPOSALS
Stockholders who intend to submit proposals to the Company's
stockholders at the 1996 Annual Meeting must submit such proposals to the
Company no later than December 26, 1996 in order for them to be included in the
proxy statement and form of proxy to be distributed by the Board of Directors
in connection with that meeting. Stockholder proposals should be submitted to
Hycor Biomedical Inc., 18800 Von Karman Avenue, Irvine, California 92715-1517,
Attention: Corporate Secretary.
EXPENSES OF SOLICITATION
The expense of preparing, assembling, printing and mailing this Proxy
Statement and the materials used in the solicitation of proxies for the Annual
Meeting will be borne by the Company. Solicitation of proxies may be made by
means of personal calls upon, or telephonic or telegraphic communications with,
stockholders or their personal representatives by directors, officers and
employees of the Company who will not be specially compensated for such
services. Although there is no formal agreement to do so, the Company may
reimburse banks, brokerage houses and other custodians, nominees and
fiduciaries for their reasonable expenses in forwarding this Proxy Statement to
stockholders whose Common Stock is held of record by such entities.
OTHER MATTERS
The Board of Directors knows of no other matters which will be brought
before the Annual Meeting. However, if any other matter properly comes before
the Annual Meeting or any adjournment thereof, it is intended that the persons
named in the enclosed form of proxy will vote on such matter in accordance with
their best judgment.
Reginald P. Jones
April 24, 1996 Secretary
Page 14
<PAGE> 17
HYCOR BIOMEDICAL INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE MAY 30, 1996 ANNUAL MEETING OF STOCKHOLDERS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
The undersigned hereby appoints RICHARD HAMILL and REGINALD JONES, and
each of them, as proxy or proxies, with full power of substitution and
resubstitution, for and in the name or names of the undersigned, to vote all
shares of Common Stock of Hycor Biomedical Inc. (the "Company"), which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held on Thursday, May 30, 1996, at 9:00 a.m.,
local time, at the Company's principal executive offices, located at 18800 Von
Karman Avenue, Irvine, California 92715-1517, and at any adjournment thereof,
upon the matters described in the accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement, receipt of which is hereby acknowledged, and
upon any other business that may properly come before the meeting or any
adjournment thereof. SAID PROXIES ARE DIRECTED TO VOTE ON THE MATTERS
DESCRIBED IN THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT AS FOLLOWS, AND
OTHERWISE ARE DIRECTED TO VOTE IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT THEREOF.
<TABLE>
<S> <C> <C>
1. Election of Directors.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all nominees listed below
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Richard D. Hamill, Samuel D. Anderson, David S. Gordon, Reginald P. Jones,
James R. Phelps, Richard E. Schmidt, David A. Thompson.
2. The proxies are authorized to vote in their discretion upon such other
business as may properly come before the meeting.
(Continued and to be signed and dated on the reverse side)
<PAGE> 18
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED,
THIS PROXY WILL BE VOTED "FOR" EACH NOMINEE NAMED IN PROPOSAL 1, AND IN
ACCORDANCE WITH THE DISCRETION OF THE PROXY HOLDER(S) ON SUCH MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING.
Date: , 1996
-----------------------------
----------------------------------------
----------------------------------------
Please date this proxy and sign exactly
as your name or names appear hereon. When
more than one owner is shown above, each
should sign. When signing in a fiduciary
or representative capacity, please give
full title. If this proxy is submitted
by a corporation, it should be executed
in the full corporate name by a duly
authorized officer. If this proxy is
submitted by a partnership, it should
be executed in partnership name by an
authorized person.
