<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
[X] Definitive Proxy Statement Only (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] Fee not required.
[ ] 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.
[HYCOR LOGO] 18800 Von Karman Ave.
Irvine, CA 92612-1517
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1997
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 92612-1517 on
May 29, 1997 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; and
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 9, 1997
will be entitled to notice of and to vote at the meeting. A list of
stockholders will be available for inspection at the meeting and, for ten days
prior thereto, at Hycor's 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 20, 1997
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 92612-1517
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1997
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 29, 1997, at the Company's principal executive offices, located at 18800
Von Karman Avenue, Irvine, California 92612-1517 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 20, 1997.
Voting Rights and Solicitation of Proxies
- -----------------------------------------
The Board of Directors of the Company has fixed the close of business
on April 9, 1997, 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 7,088,558 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 58 Executive Officer since February 1985, President
since August 1983, Hycor Biomedical Inc.
Samuel D. Anderson 1987 General business consultant since May 1991;
Age 61 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 55 Reliance Network, Inc. (a physician practice
management company) from October 1995 until December
1996. Vice President, U.S. Clinical Research, The
Liposome Company (a pharmaceutical company) from
March 1993 until September 1995; 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.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
Year
First Principal Occupation and Other
Name Elected Information Concerning Nominee
- ---- ------- ------------------------------
<S> <C> <C>
Reginald P. Jones 1986 Senior Vice President since January 1988, Chief
Age 50 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 firm)
Age 58 since January 1980.
Richard E. Schmidt 1996 Chairman since September 1991, Chief Executive Officer
Age 65 and President, Newport Corporation (a precision
research equipment company) from September 1991 until
June 1996; Chairman, Chief Executive Officer and
President of Milton Roy Corporation (an analytical
instrument company) since 1984.
David A. Thompson 1995 Chief Executive Officer, Diagnostics Marketing
Age 55 Strategy, Inc. (a marketing consulting firm) since
October 1996; President, Diagnostics Division, and
Senior Vice President, Diagnostic Operations, Abbott
Laboratories, Inc. (a pharmaceutical and diagnostic
company) from 1990 until June 1995; various other
executive positions with Abbott Laboratories since
1964.
</TABLE>
Board Meeting Attendance and Committees
- ---------------------------------------
The Board of Directors held a total of four meetings during 1996. 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. Thompson,
Anderson and Phelps, 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 1996.
The Audit Committee of the Board, composed of Messrs. Schmidt and Gordon,
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 1996.
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 1996.
3
<PAGE> 6
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.
Compensation of Directors
- -------------------------
All non-employee directors receive an annual retainer of $9,000 and a fee
of $500 for each Board, Audit and Compensation Meeting attended for services as
directors of the Company and are reimbursed for reasonable travel expenses
incurred in connection with each 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.
4
<PAGE> 7
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 in the footnotes. 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 13, 1997 (1)(12) Class (1)
- ---- ------------------------- -----------
<S> <C> <C>
Fenimore Asset Mgmt, Inc. 1,337,000 (2) 18.9
Brinson Partners, Inc. 632,086 (3) 8.9
Dimensional Fund Advisors, Inc. 472,414 (4) 6.7
The TCW Group, Inc. 372,493 (5) 5.3
Richard D. Hamill 374,866 (6) 5.2
Samuel D. Anderson 76,000 1.1
David S. Gordon 248,864 (7) 3.5
Reginald P. Jones 309,855 (8) 4.3
James R. Phelps 63,400 *
Richard E. Schmidt 0 *
David A. Thompson 11,333 *
Nelson F. Thune 177,990 (9) 2.5
Thomas M. Li 8,255 *
W. Barry McDonald 50,289 (10) *
All executive officers and 1,320,852 (11) 17.3
directors as a group
(10 persons)
</TABLE>
Footnotes
- -----------------------------------------
* Indicates less than one percent.
(1) Includes shares subject to stock options which the following have the
right to acquire within sixty days of March 13, 1997; Dr. Hamill,
145,333 shares; Mr. Anderson, 63,000 shares; Dr. Gordon, 18,000
shares; Mr. Jones, 129,492 shares; Mr. Phelps, 28,000 shares; Mr.
Thompson, 1,333 shares, Mr. Thune, 127,991 shares; Dr. Li, 3,750
shares; Mr. McDonald, 48,000 shares; and all executive officers and
directors as a group, 564,899 shares.
(2) Fenimore Asset Management, Inc. ("FAM"), 118 N. Grand St., Cobleskill,
NY 12043, filed an amended Schedule 13G on or about January 22, 1997,
on behalf of itself, an investment advisor, registered under Section
203 of the Investment Advisors Act of 1940. FAM has shared voting and
disposition power over 1,337,000 shares.
(3) Brinson Partners, Inc. ("BPI"), 209 South LaSalle, Chicago, Illinois
60604, filed a joint amended Schedule 13G with the Securities and
Exchange Commission on or about February 12, 1997, on behalf of (i)
itself, an investment adviser registered under Section 203 of the
Investment Advisors 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
5
<PAGE> 8
Footnotes for preceding page
- -----------------------------------
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 632,086 shares and
BTC has shared voting and dispositive power over 184,254 shares.
(4) Dimensional Fund Advisors, Inc. ("DFA"), 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401, filed a 13G with the Securities
and Exchange Commission on or about February 5, 1997 on behalf of (i)
itself, an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940; (ii) Investment Dimension Group, Inc.
("Group"), a registered open-end investment company; and (iii) DFA
Investment Trust Company ("Trust"), a Delaware business trust. DFA
has sole voting power on 325,198 shares, shared voting power over
147,216 shares and sole dispositive power over 472,414 shares; Group
and Trust have shared voting power over 69,916 and 77,300,
respectively.
(5) The TCW Group, Inc. ("TCW") 865 South Figueroa Street, Los Angeles,
California 90017, filed a Schedule 13G with the Securities and
Exchange Commission on or about February 12, 1997, on behalf of itself
as the Parent Holding Company of Trust Company of the West, a bank as
defined in Section 3(a)(6) of the Securities Exchange Act of 1934.
TCW has sole voting and dispositive power over 372,943 shares.
(6) Includes 183,180 shares held by R.D. Hamill and M.L. Hamill as
trustees for The Hamill Trust, 1996; 42,000 shares held by Dr.
Hamill's father-in-law's trust that his spouse is a trustee; and 4,353
shares held by 401(k) Plan.
(7) Includes 11,400 shares held by Dr. Gordon's wife and dependent
children.
(8) Includes 171,026 shares held by R. P. Jones and J. Jones as Trustees
for the Jones Family Trust; 6,000 shares held by dependent children;
and 3,337 shares held by 401(k) Plan.
(9) Includes 2,944 shares held by 401(k) Plan.
(10) Includes 1,135 shares held by 401(k) Plan.
(11) Includes 11,769 shares held by 401(k) Plan.
(12) 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.
6
<PAGE> 9
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 58 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 50 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 49 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 51 Senior Vice President, Operations and Planning
since February 1991, Vice President,
Operations from January 1985 to February 1991.
Thomas M. Li 50 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, 1996, 1995 and 1994.
7
<PAGE> 10
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 1996 237,667 -0- 174,000 12,102
Chairman, President, 1995 228,275 61,634 20,000 10,233
Chief Executive 1994 219,771 76,447 20,000 8,353
Officer
Reginald P. Jones 1996 176,236 -0- 96,000 5,744
Senior Vice President, 1995 171,611 36,038 13,000 4,393
Chief Financial 1994 164,833 44,596 -0- 2,422
Officer
Thomas M. Li (4) 1996 149,852 -0- 58,500 1,500
Vice President, 1995 105,959 22,251 15,000 -0-
Research & Development 1994 -0- -0- -0- -0-
W. Barry McDonald 1996 154,829 -0- 61,500 6,182
Senior Vice President, 1995 150,793 31,667 12,000 3,111
Marketing & Business 1994 144,808 39,178 -0- 2,297
Development
Nelson F. Thune 1996 154,829 -0- 61,500 5,522
Senior Vice President, 1995 150,793 31,667 12,000 4,601
Operations & Planning 1994 144,868 39,194 -0- 2,169
</TABLE>
Footnotes
- ---------------------
(1) 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 annual 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 1996 include:
(a) Company contributions of cash and common stock under the
401(k) Plan made on behalf of Messrs. Hamill, Jones, Li,
McDonald and Thune in the amounts of $4,935, $4,996, $1,500,
$5,434 and $4,774, respectively, and 171, 171, 0, 171 and 171
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 Dr. Hamill in the amount of $6,419.
(4) Dr. Li became an executive officer in April 1995, and accordingly no
executive compensation is reported for 1994.
8
<PAGE> 11
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 1997. 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 1996. 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 $130,000 per annum. The agreement will be
automatically renewed for successive one-year terms unless written notice of
either party's intention not to renew is given at least three months prior to
expiration of the term. This agreement was automatically renewed in 1996. In
addition, in the event the Company terminates his employment (other than on
account of death or for cause), Mr. McDonald will be entitled to receive
severance pay in the amount equal to nine times his then monthly salary. The
agreement also provides for certain payments upon Mr. McDonald's death or
incapacity.
9
<PAGE> 12
Stock Options
- -------------
The following table sets forth information, with respect to the named
executive officers, concerning the grant of stock options under the Company's
stock option plans during the last fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed Rates
of Stock Price
Appreciation for
Individual Grants Option Term (4)
- ---------------------------------------------------------------------------------- ----------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees or Base
Granted in Fiscal Price
Name (#)(1)(3) Year ($/Sh) Expiration Date 5% 10%
- ---------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
R. D. Hamill 174,000(2) 28.9 $4.63 2/28/06 $506,650 $1,283,951
R. P. Jones 96,000(2) 16.0 4.63 2/28/06 279,531 708,387
T. M. Li 58,500(2) 9.7 4.63 2/28/06 170,339 431,673
W. B. McDonald 61,500(2) 10.2 4.63 2/28/06 179,075 453,810
N. F. Thune 61,500(2) 10.2 4.63 2/28/06 179,075 453,810
</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 and the 1988 Long-Term Incentive Plan and vest 50% in year 6 and
100% in year 7. Earlier vesting is possible, based on increases in
the market price of the Company's common stock as follows: 25% vests
at $5.79, 50% vests at $6.95, 75% vests at $8.10 and 100% vests at
$9.26.
(3) In the event that the Company enters into a merger (other than a
merger in which the Company is the surviving corporation and under the
terms of which the Common Stock is unchanged), consolidation, sale or
transfer of substantially all of its assets, or liquidation during the
term of the option, the option shall become exercisable with respect
to the full number of shares subject thereto for a period of 30 days
prior to the closing date of such transaction; provided, however, the
exercise of any portion of the option that would otherwise not be
exercisable at the closing date of such transaction shall be
contingent on the closing of the transaction.
(4) Potential realizable value is based on an assumption that the stock
price of the common stock appreciates at the annual rate shown
(compounded annually) from the date of grant until the end of the
ten-year option term. Such amounts are based on the assumption that
the named persons hold the options for their full term. These numbers
are calculated based on the requirements promulgated by the Securities
and Exchange Commission and do not reflect the Company's estimate of
future stock price growth.
10
<PAGE> 13
The following table sets forth information, with respect to the named executive
officers, concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the fiscal year.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised
on Value Options/SARs In-the-Money Options/SARs
Exercise Realized at Fiscal Year-End (#) at Fiscal Year-End ($)(2)
Name (#) ($) (1) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
R.D.Hamill 25,000 75,063 155,333 199,000 49,030 -0-
R.P.Jones 12,000 36,030 138,242 105,750 77,611 -0-
T.M. Li -0- -0- 3,750 69,750 -0- -0-
W.B.McDonald -0- -0- 45,000 70,500 -0- -0-
N.F.Thune 9,000 27,023 129,991 70,500 51,298 -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 12/31/96
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.
11
<PAGE> 14
Compensation and Overall Objectives. 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 1996 were determined based on
contributions during fiscal 1995 with increases averaging 2.7%.
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. No bonus awards were made for fiscal 1996.
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
12
<PAGE> 15
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 1996 grants of
options for senior management were structured differently and vest based on
stock price growth. 25% growth vests 25%, 50% growth vests 50%, 75% growth
vests 75% and 100% stock price growth vests 100%. For those persons who
received such grants it was determined that there would be no additional grants
for three years. In the event of a change of control, all options become fully
vested.
Chief Executive Officer Compensation. The Compensation of Richard D. Hamill
during fiscal 1996 was determined on the same basis as discussed above for the
executive officers. In 1996 Dr. Hamill received compensation based on the
annual base salary amount of $239,500 which reflected a 4.1% increase from his
fiscal 1995 base salary. Dr. Hamill received a salary increase in 1996 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 did not
receive any annual bonus. Based on the Compensation Committee's criteria
described above, in fiscal 1996 Dr. Hamill was awarded options to purchase
174,000 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. Because of the larger 1996 option grant it was determined that there
would be no additional option grants for three years. In 1996, the Company
contributed $5,683 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)
13
<PAGE> 16
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, 1991 and ended December
31, 1996. The graph assumes that the value of the investment in the Company's
Common Stock and each index as $100 at December 31, 1991 and that all dividends
were reinvested.
The stockholder return shown on the following graph is not necessarily
indicative of future performance.
Cumulative Total Return
<TABLE>
<CAPTION>
12/91 12/92 12/93 12/94 12/95 12/96
<S> <C> <C> <C> <C> <C> <C> <C>
Hycor Biomedical Inc. HYBD 100 92 72 64 70 48
S&P 500 I500 100 108 118 120 165 203
S&P Medical Prod.& Supply IMDP 100 86 65 77 131 150
</TABLE>
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 10% 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 10% stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
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, 1996, its
officers, directors and greater than 10% beneficial owners complied with all
Section 16(a) filing requirements.
14
<PAGE> 17
INDEPENDENT AUDITORS
Deloitte & Touche LLP served as the Company's independent auditors for the
fiscal year ended December 31, 1996. 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 1997.
ANNUAL REPORT
The Annual Report of the Company including financial statements for the
year ended December 31, 1996 is enclosed with this Proxy Statement.
STOCKHOLDER PROPOSALS
Stockholders who intend to submit proposals to the Company's stockholders
at the 1997 Annual Meeting must submit such proposals to the Company no later
than December 26, 1997 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 92612-1517, 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 20, 1997 Secretary
15
<PAGE> 18
HYCOR BIOMEDICAL INC.
PROXY
This Proxy is Solicited on Behalf of the Board of Directors
for the May 29, 1997 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 29, 1997, at 9:00 a.m.,
local time, at the Company's principal executive offices, located at 18800 Von
Karman Avenue, Irvine, California 92612-1517, 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.
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
(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> 19
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: _____________________, 1997
____________________________________________________
____________________________________________________
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.
