HYCOR BIOMEDICAL INC /DE/, DEF 14A, 2000-04-24

HYCOR BIOMEDICAL INC /DE/
DEF 14A, 2000-04-24
IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES

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<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 Under Rule 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:

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(2) Aggregate number of securities to which transaction applies:

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(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):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] 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:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE> 2
HYCOR BIOMEDICAL INC.
7272 Chapman Avenue
[HYCOR LOGO] Garden Grove, CA 92841
- --------------------------------------------------------------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2000

Dear Stockholder:

You are invited to attend the Annual Meeting of Stockholders of Hycor Biomedical
Inc. to be held at its corporate offices located at 7272 Chapman Avenue, Garden
Grove, California 92841 on June 14, 2000 at 9 a.m., for the following purposes:

1. To elect the seven nominees as directors to serve for the ensuing
year and until their successors are duly elected and qualified;

2. To approve the 2000 Employee Stock Purchase Plan; and

3. 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 20, 2000
are 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.

Your attention is directed to the proxy statement submitted with this
notice.

By order of the Board of Directors

Reginald P. Jones
Secretary

Garden Grove, California
April 25, 2000

YOUR VOTE IS IMPORTANT. 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.
7272 CHAPMAN AVENUE
GARDEN GROVE, CALIFORNIA 92841-2103

PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2000

This Proxy is solicited by the Board of Directors of Hycor Biomedical
Inc. ("Hycor") for use at the Annual Meeting of Stockholders. The Annual Meeting
will be held on June 14, 2000, at Hycor's corporate offices located at 7272
Chapman Avenue, Garden Grove, California 92841-2103 at 9 a.m. and at any
adjournments thereof. The Annual Meeting is held for the following purposes: (1)
to elect seven directors; (2) to approve the 2000 Employee Stock Purchase Plan;
and (3) to transact such other business as may properly come before the meeting.
This Proxy Statement and the enclosed proxy are being sent or given to
stockholders on or about April 25, 2000.

Hycor will bear the cost of making solicitations from its stockholders
and will reimburse banks and brokerage firms for out-of-pocket expenses incurred
in connection with this solicitation. Proxies may be solicited by mail or in
person by directors, officers or employees of Hycor. The Annual Report of Hycor,
including financial statements for the year ended December 31, 1999, is enclosed
with this Proxy Statement.

Information About the Annual Meeting

RECORD DATE AND VOTING

The Board of Directors of Hycor fixed April 20, 2000, as the Record Date
for the determination of stockholders entitled to receive notice of, and to vote
at, the Annual Meeting. At the Record Date, Hycor had outstanding 7,387,628
shares of Common Stock. Each share of Common Stock entitles the record holder to
one vote on all matters.

VOTING BY PROXY

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; (ii) "FOR"
approval of the 2000 Employee Stock Purchase Plan; and (iii) at the discretion
of the persons named as proxies on all other matters which may properly come
before the Annual Meeting, although Hycor does not presently know of any other
such business.

REVOKING A PROXY

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 Hycor 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.

QUORUM AND VOTING

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. 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 (other than the election of directors)
is required for the adoption or ratification for each proposal.

<PAGE> 4

EFFECT OF BROKER NON-VOTES AND ABSTENTIONS

Abstentions and non-votes will be counted for purposes of determining
the existence of a quorum at the Annual Meeting. 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.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF DIRECTORS
AND FOR THE PROPOSAL TO APPROVE THE 2000 EMPLOYEE STOCK PURCHASE PLAN.

ELECTION OF DIRECTORS
(Proposal 1)

Seven directors are to be elected 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 UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL SEVEN NOMINEES.

Nominees for Election as Directors

Year
First Principal Occupation and Other
Name Elected Information Concerning Nominee
- ---- ------- ------------------------------
<S> <C> <C>
Samuel D. Anderson 1987 Chairman of the Board since July 1998, Hycor
Age 64 Biomedical Inc.; general business consultant since
May 1991; 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).

J. David Tholen 1998 President and Chief Executive Officer since July
Age 55 1998, Executive Vice President from January 1998
until July 1998, Hycor Biomedical Inc.; general
business consultant from December 1996 until
January 1998; President and Chief Executive
Officer, Murex International (a medical diagnostic
company) from June 1994 until December 1996.
</TABLE>

<PAGE> 5

Year
First Principal Occupation and Other
Name Elected Information Concerning Nominee
- ---- ------- ------------------------------
<S> <C> <C>
David S. Gordon 1981 General business consultant since March 1999;
Age 58 Senior Vice President, Medical Affairs, from April
1997 to March 1999, Aronex Pharmaceuticals, Inc.
(a pharmaceutical company); Vice President,
Business Development, Physician 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 (a
pharmaceutical company) 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 53 Financial Officer since May 1985, Secretary since
June 1985, Treasurer since January 1982, Hycor
Biomedical Inc.

James R. Phelps 1984 Partner, Hyman, Phelps and McNamara, P.C. (a law
Age 61 firm) since January 1980.

Richard E. Schmidt 1996 Chairman from September 1991 to February 1998,
Age 68 Chief Executive Officer and President from
September 1991 until June 1996, Newport
Corporation (a precision research equipment
company).

David A. Thompson 1995 Chief Executive Officer, Diagnostics Marketing
Age 58 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. Mr. Thompson is a
director of NABI (a biopharmaceutical company),
Tripath Inc. (an automated imaging company) and
Lifecell Corporation (an automated imaging
company).
</TABLE>

<PAGE> 6

Board Meeting Attendance and Committees

The Board of Directors held a total of four meetings during 1999. All
directors attended at least 75% of the meetings of the Board and of 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 Hycor's stock option plans. This
committee met once during 1999.

The Audit Committee of the Board, composed of Messrs. Schmidt and
Gordon, acts for the Board in overseeing Hycor'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 1999.

The Nominating Committee, composed of Messrs. Gordon and Phelps,
considers and makes recommendations to the full Board of Directors 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 1999.

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 Hycor. Non-employee directors are reimbursed for reasonable
travel expenses incurred in connection with each meeting attended.

Each non-employee director is eligible to receive stock options under
Hycor'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 Hycor'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 Hycor enters into a merger (other than a
merger in which Hycor 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 thirty 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> 7

APPROVAL OF THE HYCOR BIOMEDICAL INC.
2000 EMPLOYEE STOCK PURCHASE PLAN

(Proposal 2)

On February 25, 2000, the Board of Directors adopted the Hycor Biomedical Inc.
2000 Employee Stock Purchase Plan. The Board believes that the Plan will be an
important employee recruitment and retention tool and will further align the
interests of employees with stockholders. If approved by stockholders, the Plan
will authorize the issuance and the purchase by employees of up to 300,000
shares of Hycor's Common Stock through payroll deductions, subject to adjustment
as provided in the Plan. The following summary of the Plan is qualified by
reference to the Plan, a copy of which is attached to this Proxy Statement as
Exhibit A and incorporated herein by reference. All capitalized or quoted terms
have the meanings set forth in the Plan.

Eligibility. Generally, all regularly employed Employees are eligible to
participate in the Plan, although Hycor may impose an eligibility period of up
to two years of employment before an Employee is eligible to participate and may
exclude part-time Employees. Hycor also may impose other eligibility
requirements consistent with Section 423(b) of the U.S. Internal Revenue Code.

Administration. The Plan will be administered by the Plan Committee, whose
members are appointed by the Board of Directors. The Committee is authorized to
establish rules for the administration of the Plan, to interpret the Plan and
supervise its administration, to make determinations about Plan entitlements, to
adopt sub-plans and to take other actions consistent with the delegation from
the Board. The Board of Directors may, however, act in lieu of the Plan
Committee on any matter.

Participation. Employees will enroll in the Plan by completing a payroll
deduction form. The maximum payroll deduction allowed is generally 10% of an
Employee's base cash pay, with any modifications determined by the Committee. No
Employee is allowed to buy more than $25,000 of Common Stock in any calendar
year, based on the Fair Market Value at the beginning of the Purchase Period in
which the shares are purchased. An Employee may discontinue participation in the
Plan at any time. An Employee's eligibility to participate in the Plan ends at
termination of employment.

Offering. The Plan will be implemented by establishing Offering Periods of three
months (or other periods as determined by the Committee), with the initial
Offering Period anticipated to begin July 1, 2000. The Plan will terminate
February 25, 2010.

Purchase Price. Employees who choose to participate in the Plan will receive an
option to acquire Common Stock at a discount. Under the option, the purchase
price of Common Stock is the lower of: (i) 85% of the Fair Market Value of the
Common Stock on the first day of a Offering Period, or (ii) 85% on the last day
of the Offering Period. The Fair Market Value will be determined by the Common
Stock's closing price on the principal exchange where it is listed or traded.

Purchase of Stock. At the end of an Offering Period, a participant's option will
be exercised automatically to purchase the number of shares of Common Stock that
the Employee's accumulated payroll deductions will buy at the Purchase Price.

Payment and Delivery. Promptly after the exercise of an option, Hycor will
deliver to the participant a record of the Common Stock purchased. The Committee
may require that shares be held on deposit with a particular broker or agent.

Recapitalization. In the event any change is made in Hycor's capitalization,
such as a recapitalization, stock split, or stock dividend, which results in an
increase or decrease in the number of outstanding shares of Common Stock without
Hycor's receipt of consideration, appropriate adjustments will be made to the
shares available in the Plan, the maximum number of shares and the price of the
option.

<PAGE> 8

Transferability. Options under the Plan cannot be voluntarily or involuntarily
assigned. The shares of Common Stock acquired under the Plan will be freely
transferable, except as otherwise determined by the Committee.

Amendment and Termination. The Board of Directors may amend or terminate the
Plan, except that (i) any amendment shall be conditioned upon the approval of
stockholders to the extent required under SEC Rule 16b-3 or Internal Revenue
Code section 423, and (ii) material amendments or changes to existing grants
must receive the consent of adversely affected participants, subject to
exceptions listed in the Plan.

U.S. Federal Income Tax Consequences. Employees generally have tax consequences
associated with participation in the Plan. In the U.S., no taxable income will
be recognized by a participant until the sale or other disposition of the shares
of Common Stock acquired under the Plan. At that time, a participant generally
will recognize ordinary income and capital gains. When the shares are disposed
of by a participant two years or more after the beginning of the Purchase Period
in which the shares were purchased, he or she will recognize ordinary income
equal to the lesser of (i) the excess of the Fair Market Value of the shares on
the purchase date over the Purchase Price (the "Discount") or (ii) the excess of
the Fair Market Value of the shares at disposition over the Purchase Price. When
shares are disposed of within two years of the beginning of the Purchase Price
(in what is known as a "disqualifying disposition"), the participant must
recognize ordinary income in the amount of the Discount, even if the disposition
is a gift or is at a loss. In the event of a participant's death while owning
shares acquired under the Plan, ordinary income must be recognized in the year
of death as though the shares had been sold.

In the cases discussed above (other than death), the amount of ordinary income
recognized by a participant is added to the purchase price paid by the
participant, and this amount becomes the tax basis for determining the amount of
the capital gain or loss from the disposition of the shares. Additional gain, if
any, will be short-term or long-term capital gain depending on whether the
holding period is 12 months or less, or more than 12 months.

Net capital gains from the disposition of capital stock held more than 12 months
are currently taxed at a maximum federal income tax rate of 20% and net capital
gains from the disposition of stock held less than 12 months is taxed as
ordinary income (maximum rate of 39.6%). However, limitations on itemized
deductions and the phase-out of personal exemptions may result in effective
marginal tax rates higher than 20% for net capital gains and 39.6% for ordinary
income.

Hycor is entitled to tax deductions in the U.S. for shares issued under the Plan
only in the event of disqualifying dispositions. For disqualifying dispositions
in the U.S., Hycor is allowed a deduction to the extent of the amount of
ordinary income includable in gross income by such participant for the taxable
year as a result of the premature disposition of the shares. The Plan will not
meet the requirements in Section 162(m) of the Internal Revenue Code of 1986,
which means that there will be no deductions for disqualifying dispositions by
Hycor's Chief Executive Officer and four most highly paid other executive
officers.

Stockholder Approval. Approval of the Plan requires the affirmative vote of the
holders of a majority of the shares of Common Stock represented at the Annual
Meeting. Broker non-votes will not be treated as shares present or represented
and entitled to vote at the Annual Meeting. The Board of Directors believes that
approval of the Plan is in Hycor's best interests since it will facilitate
Hycor's ability to attract, motivate, and retain employees, while aligning their
interests with those of stockholders.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PLAN'S APPROVAL.

<PAGE> 9

STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information with respect to
shares of Common Stock of Hycor beneficially owned by (1) all persons known to
Hycor to own beneficially more than 5% of Hycor's Common Stock; (2) each person
who is a director or a nominee for director; (3) the chief executive officer and
the four other most highly paid executive officers (the "named officers"); and
(4) all directors and executive officers of Hycor 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.

Shares of Common Stock
Beneficially Owned as Percent of
Name of March 16, 2000(1)(10) Class(1)
- ---- ------------------------ ----------

Brinson Partners, Inc. 528,300(2) 7.2
Dimensional Fund Advisors, Inc. 451,114(3) 6.1
Samuel D. Anderson 84,000 1.1
J. David Tholen 165,742 2.2
David S. Gordon 255,964(4) 3.5
Reginald P. Jones 317,963(5) 4.3
James R. Phelps 72,215 *
Richard E. Schmidt 16,000 *
David A. Thompson 26,000 *
Nelson F. Thune 183,671(6) 2.5
Mary Jo Deal 19,931(7) *
Thomas M. Li 15,455(8) *
All executive officers and 1,156,941(9) 14.8
directors as a group
(10 persons)

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 16, 2000; Mr. Anderson,
46,000 shares; Mr. Tholen, 51,525 shares; Dr. Gordon, 36,000 shares; Mr.
Jones, 110,250 shares; Mr. Phelps, 36,000 shares; Mr. Schmidt, 16,000
shares; Mr. Thompson, 16,000 shares; Mr. Thune, 102,850 shares; Ms.
Deal, 10,750 shares; Dr. Li, 15,000 shares; and all executive officers
and directors as a group, 440,375 shares.

(2) Brinson Partners, Inc. ("BPI"), 209 South LaSalle, Chicago, Illinois
60604, filed a joint amended Schedule 13G on or about February 4, 2000,
on behalf of (i) itself, an investment adviser registered under Section
203 of the Investment Advisors Act of 1940; (ii) UBS Inc., a parent
holding company of BPI; and (iii) UBS AG, a bank as defined in Section
3(a)(6) of the Securities Exchange Act of 1934, and a parent holding
company of which UBS Inc. is a wholly owned subsidiary. All such
companies have shared voting and dispositive power over all shares.

<PAGE> 10

Footnotes (continued)
- -------------------------
(3) Dimensional Fund Advisors, Inc. ("DFA"), 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401, filed an amended schedule 13G on or
about February 4, 2000, on behalf of itself, an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940. DFA
has sole voting power over all shares.

(4) Includes 11,400 shares held by Dr. Gordon's wife and dependent children.

(5) Includes 203,918 shares held by R. P. Jones and J. Jones as Trustees for
the Jones Family Trust; and 3,795 shares held by Hycor's 401(k) Plan.

(6) Includes 3,452 shares held by Hycor's 401(k) Plan.

(7) Includes 245 shares held by Hycor's 401(k) Plan.

(8) Includes 455 shares held by Hycor's 401(k) Plan.

(9) Includes 7,947 shares held by Hycor's 401(k) Plan.

(10) Under the terms of Hycor'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.

EXECUTIVE OFFICERS

The following table identifies, and contains certain information
concerning, Hycor's chief executive officer and the four most highly compensated
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, subject to
the relevant terms of their employment agreements. See "Executive Compensation -
Employment Agreements."

Name Age Information Concerning Officer
- ---- --- ------------------------------
<S> <C> <C>
J. David Tholen 55 President and Chief Executive Officer since July 1998,
Executive Vice President from January 1998 until
July 1998, Hycor Biomedical Inc.; general business
consultant from December 1996 until January 1998;
President and Chief Executive Officer, Murex
International (a medical diagnostic company) from
June 1994 until December 1996.

Reginald P. Jones 53 Senior Vice President since January 1988, Chief Financial
Officer since May 1985, Secretary since June 1985,
Treasurer since January 1982. Mr. Jones is also a
director of Hycor, a position which he has held
since 1986.

Nelson F. Thune 54 Senior Vice President, Operations and Planning since
February 1991, Vice President, Operations from
January 1985 to February 1991.

Mary Jo Deal 44 Vice President, Marketing since September 1997, Director of
Marketing from September 1995 to August 1997;
Marketing Manager from July 1993 to August 1995,
Technical Assistance Manager from July 1991 to
June 1993, Dade International, Inc. (a medical
products company).

Thomas M. Li 53 Vice President, Research and Development since April 1995;
Senior Development Manager, Syva Company (a
medical diagnostic company) from January 1991 to
March 1995.
</TABLE>

<PAGE> 11

EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

The following table sets forth information concerning compensation paid or
accrued by Hycor to or on behalf of the named executive officers for services in
all capacities to Hycor during Hycor's last completed fiscal year.

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>
J. David Tholen (4) 1999 210,018 31,503 -0- 2,421
President and CEO 1998 180,637 -0- 206,100 783

Reginald P. Jones 1999 195,146 29,272 -0- 2,876
Senior Vice President, 1998 191,182 -0- 71,000 3,610
CFO 1997 182,736 -0- -0- 4,805

Nelson F. Thune 1999 171,392 25,709 -0- 3,148
Senior Vice President, 1998 167,918 -0- 49,400 3,333
Operations & Planning 1997 160,507 -0- -0- 4,673

Mary Jo Deal (5) 1999 155,168 23,275 -0- 3,011
Vice President, 1998 135,210 -0- 35,000 2,256
Marketing & Sales 1997 107,118 -0- -0- 2,744

Thomas M. Li 1999 162,630 24,395 -0- 2,597
Vice President 1998 168,700 -0- -0- 3,951
Research & Development 1997 157,140 -0- -0- 3,968
</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 Hycor's Incentive Profit Sharing Plan, a
deferred compensation plan under Section 401(k) of the Internal Revenue
Code (the "401(k) Plan").

(3) Hycor contributions under the 401(k) Plan.

(4) Mr. Tholen became employed by Hycor in January 1998 as Executive Vice
President and was promoted to President and Chief Executive Officer in
July 1998.

(5) Ms. Deal became employed by Hycor in September 1995 and was promoted to an
executive officer in September 1997.

<PAGE> 12

Employment Agreements

Hycor is a party to employment agreements with Messrs. Tholen, Jones,
Thune, and Li and Ms. Deal, described below.

Mr. Tholen is employed as President and Chief Executive Officer of Hycor
pursuant to an employment agreement which commenced June 17, 1998, and provides
for an annual base salary of $185,000. The term of the agreement is for two
years and may be renewed upon mutually agreeable terms. In addition, under the
terms of the agreement, in the event of the termination of Mr. Tholen's
employment (other than on account of death or for cause as defined in the
agreement), or Mr. Tholen's election to resign with good cause (as defined in
the agreement), within two years after a change in control of Hycor, Mr. Tholen
will be entitled to receive severance pay in an amount equal to 200% of the
average of the annual base salary plus bonuses paid to Tholen since his start of
employment or for the prior three years. Such amount would be in addition to any
other amounts otherwise payable to Mr. Tholen under any benefit plans of Hycor.
A change in control of Hycor would be deemed to occur if any person is or
becomes the beneficial owner, directly or indirectly, of securities of Hycor
representing 25% or more of the combined voting power of Hycor's then
outstanding securities or if specified changes in the composition of Hycor's
Board of Directors occurs. Hycor can also terminate the agreement at any time
"without cause" by paying Mr. Tholen a lump severance benefit equal to twelve
months base salary or the remaining term of the agreement at the time of
termination, whichever is less. The agreement also provides for certain payments
upon Mr. Tholen's death or incapacity.

Hycor also has entered into three-year employment agreements with
Messrs. Jones, Thune, and Li and Ms. Deal under which each is employed as a Vice
President of Hycor. These agreements, which commenced June 20, 1997 for Messrs.
Jones, Thune and Li, and commenced September 1, 1997 for Ms. Deal, provide for
base salaries of $184,100, $161,700, $158,600 and $120,000 per annum,
respectively. Each agreement automatically renews 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. In addition, under the terms of
the agreement, in the event of the termination of employment (other than on
account of death or for cause as defined in the agreement), or election to
resign with good cause (as defined in the agreement), within two years after a
change in control of Hycor, Messrs. Jones, Thune, or Li or Ms. Deal will be
entitled to receive severance pay in an amount equal to 200% of the average of
the annual base salary plus bonuses paid the prior three years. Such amount
would be in addition to any other amounts otherwise payable under any benefit
plans of Hycor. A change in control of Hycor would be deemed to occur if any
person is or becomes the beneficial owner, directly or indirectly, of securities
of Hycor representing 25% or more of the combined voting power of Hycor's then
outstanding securities or if specified changes in the composition of Hycor's
Board of Directors occurs. Hycor can also terminate the agreement at any time
"without cause" by paying a lump severance benefit equal to twelve months base
salary at the time of termination. The agreement also provides for certain
payments upon death or incapacity.

<PAGE> 13

Stock Options

The following table sets forth information, with respect to the named
executive officers, concerning the grant of stock options under Hycor's stock
option plans during the last fiscal year.

OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

NONE

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.

OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

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 ($)(1)
Exercise Realized ------------------------------- ---------------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J.D.Tholen -0- -0- 51,525 154,575 3,183 9,549

R.P.Jones -0- -0- 110,250 149,250 2,130 6,390

N.F.Thune -0- -0- 102,850 98,550 1,482 4,446

M.J.Deal -0- -0- 8,750 41,250 810 2,430

T.M.Li -0- 0- 15,000 70,500 -0- -0-
</TABLE>

- --------------

(1) Calculated based upon the closing price of Common Stock at December 31,
1999, minus the option exercise price.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Notwithstanding anything to the contrary set forth in any of Hycor'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 Hycor's Board of Directors (the "Committee"), which is comprised of
the outside directors of Hycor listed below. The Committee is responsible for
all compensation matters applicable to Hycor's executive officers including
developing, administering, and monitoring the compensation policies.

In the past, the Committee has retained the services of an independent
compensation-consulting firm to assist in its evaluation of the key elements of
Hycor's compensation program. 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 Hycor
and each executive's performance.

<PAGE> 14

Compensation and Overall Objectives. The general goals and objectives of
Hycor's compensation program are to:

o Provide incentives for Hycor's management to create value for
Hycor's stockholders;

o To attract, retain, and motivate a quality, performance-oriented
management team;

o Position executive compensation at the median levels when compared
to companies with similar size, organization structure, product
cycle, and industry; and

o Create long-term incentives which are tied to Hycor'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 Hycor's 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) Hycor'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. Salary increases awarded in 1999 to executive officers, excluding the
Chief Executive Officer, averaged 5%.

Annual Incentive Compensation Program. Awards may be earned under
Hycor'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 Hycor, including the Chief Executive Officer, under
the Annual Incentive Plan are 20% of earned 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. Bonus awards of
15% of earned salary were made for fiscal 1999.

Long-Term Incentive Program. The long-term incentive program for senior
management consists of a stock-based compensation plan, the 1992 Incentive Stock
Plan (the "Plan"). The Committee believes that by providing those persons who
have substantial responsibility for the management and growth of Hycor with an
opportunity to increase their ownership of Hycor stock, the interests of the
stockholders and executives will be closely aligned. The Committee, which

12
<PAGE> 15

administers the Plans, may make grants under the Plans based on a number of
factors, including (i) the executive officer's position in Hycor, (ii) the
executive officer's performance and responsibilities, (iii) the extent to which
the executive officer already holds an equity stake in Hycor, (iv) equity
participation levels of comparable executives at other companies in the
compensation peer group, and (v) individual contribution to the success of
Hycor's financial performance. Generally, stock options are granted each year at
100% of current fair market value of Hycor's stock. Stock options have a
ten-year term and typically become exercisable over a four-year period, as
determined by the Committee. No options were granted in 1999.

Chief Executive Officer Compensation. J. David Tholen was employed in
January 1998 as Executive Vice President and was promoted to President and Chief
Executive Officer in July. His salary was not increased at that time but was
increased in January 1999 to $210,000. Mr. Tholen's salary is determined on the
same factors discussed above for the executive officers. During 1999 Mr. Tholen
received a bonus of $31,503 which was 75% of the target award opportunity. The
goal for the bonus program in 1999 was to return Hycor to profitability. Mr.
Tholen does not participate in or otherwise influence deliberation of the
Committee relating to his compensation.

COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS

Samuel D. Anderson David A. Thompson James R. Phelps
(Chairman)

<PAGE> 16

STOCK PRICE PERFORMANCE GRAPH

Set forth below is a graph comparing cumulative total stockholder
return on Hycor's Common Stock, the NASDAQ US Index, and the NASDAQ
Pharmaceutical Index for the period commencing December 31, 1994 and ended
December 31, 1999. The graph assumes that the value of the investment in Hycor's
Common Stock and each index as $100 at December 31, 1994, 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

[PERFORMANCE GRAPH]

Cumulative Total Return

<TABLE>
<CAPTION>
12/94 12/95 12/96 12/97 12/98 12/99
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Hycor 100 109 75 39 27 44
Nasdaq US 100 141 174 213 300 542
Nasdaq Pharmaceutical 100 183 184 190 242 452
</TABLE>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires Hycor's
directors and executive officers, and persons who own more than 10% of a
registered class of Hycor'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 Hycor. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish Hycor with copies of all
Section 16(a) forms they file.

To Hycor's knowledge, based solely on review of the copies of such
reports furnished to Hycor and written representations that no other reports
were required during the fiscal year ended December 31, 1999, Hycor's officers,
directors, and greater than 10% beneficial owners complied with all Section
16(a) filing requirements.

<PAGE> 17

INDEPENDENT AUDITORS

Deloitte & Touche LLP served as Hycor's independent auditors for the
fiscal year ended December 31, 1999. Representatives of Deloitte & Touche LLP
are expected to be present at the Annual Meeting and 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 2000.

STOCKHOLDER NOMINATIONS

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 Hycor and must be received
not less than 120 calendar days in advance of the date of Hycor'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 be accompanied by a statement of qualifications and
confirmation of the person's willingness to serve. 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.

STOCKHOLDER PROPOSALS

Stockholders who intend to submit proposals to Hycor's stockholders at
the 2001 Annual Meeting must submit such proposals to Hycor no later than
December 20, 2000, and must otherwise comply with the applicable requirements of
the Securities Exchange Community to be considered for inclusion in the proxy
statement and proxy for the 2001 Annual Meeting.

With respect to any proposal that a stockholder of Hycor presents at the
Annual Meeting of Stockholders to be held in the year 2001, that is not
submitted for inclusion in Hycor's proxy materials pursuant to Rule 14a-8 under
the Securities Exchange Act of 1934, the proxy for that meeting will confer
discretionary voting authority to vote on such stockholder proposal unless Hycor
is notified of any such proposal before March 1, 2001 and the proponent complies
with the other requirements of Rule 14a-4. Stockholder proposals should be
submitted to Hycor Biomedical Inc., 7272 Chapman Avenue, Garden Grove,
California 92841, Attention: Corporate Secretary.

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
Secretary

April 25, 2000

<PAGE> 18

EXHIBIT A

HYCOR BIOMEDICAL INC.
2000 EMPLOYEE STOCK PURCHASE PLAN

The following constitute the provisions of the 2000 Employee Stock
Purchase Plan of Hycor Biomedical Inc.

1. PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "employee stock purchase plan"
under Section 423 of the Code. The provisions of the Plan, accordingly, shall be
construed so as to extend and limit participation in a manner consistent with
the requirements of that Section of the Code.

2. DEFINITIONS.

(a) "BOARD" shall mean the Board of Directors of the Company.

(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

(d) "COMMON STOCK" shall mean the common stock of the Company.

(e) "COMPANY" shall mean Hycor Biomedical Inc.

(f) "COMPENSATION" shall mean gross earnings exclusive of bonus
compensation, unless the Committee exercises its discretion to permit inclusion
of bonus compensation on a uniform and nondiscriminatory basis according to
terms and conditions dictated by the Committee.

(g) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries which have
been designated by the Board or the Committee from time to time in its sole
discretion as eligible to participate in the Plan.

(h) "EMPLOYEE" shall mean any individual whom the Company classifies
as a regular or part-time employee of the Company or a Designated Subsidiary for
purposes of tax withholding under the Code and whose customary employment with
the Company or any Designated Subsidiary is at least twenty (20) hours per week
and more than five (5) months in any calendar year. For purposes of the Plan,
the employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company.
Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the employment
relationship will be deemed to have terminated on the 91st day of such leave.

(i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

(j) "ENROLLMENT DATE" shall mean the first day of each Offering
Period.

(k) "EXERCISE DATE" shall mean the last day of each Offering Period.

<PAGE> 19

(l) "FAIR MARKET VALUE" shall mean the value of one (1) share of
Common Stock, determined as follows:

(1) If the shares are traded on a nationally recognized exchange
or the National Market System (the "NMS") of The Nasdaq Stock
Market ("NASDAQ"), the closing price as reported for
composite transactions on the date of valuation or, if no
sales occurred on that date, then the average of the highest
bid and lowest ask prices on such exchange or the NMS at the
end of the day on such date;

(2) If the shares are not traded on an exchange or the NMS but
are otherwise traded over-the-counter, the average of the
highest bid and lowest asked prices quoted in the NASDAQ
system as of the close of business on the date of valuation,
or, if on such day such security is not quoted in the NASDAQ
system, the average of the representative bid and asked
prices on such date in the domestic over-the-counter market
as reported by the National Quotation Bureau, Inc., or any
similar successor organization; and

(3) If neither (1) nor (2) applies, the fair market value as
determined by the Board in good faith. Such determination
shall be conclusive and binding on all persons.

(m) "OFFERING PERIOD" shall mean the following periods of
approximately three (3) months, commencing on the first Trading Day on or after
the first day listed here during which an option granted pursuant to the Plan
may be exercised: January 1 to March 31; April 1 to June 30; July 1 to September
30; and October 1 to December 31. The duration of Offering Periods may be
changed pursuant to Section 4 of this Plan.

(n) "PLAN" shall mean this Hycor Biomedical Inc. 2000 Employee Stock
Purchase Plan.

(o) "PURCHASE PRICE" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

(p) "RESERVES" shall mean the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

(q) "RULE 16B-3" shall have the meaning set forth in Section 13(b) of
the Plan.

(r) "SUBSIDIARY" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

(s) "TRADING DAY" shall mean a day on which national stock exchanges
and the NASDAQ are open for trading.

3. ELIGIBILITY.

(a) Any Employee who shall be employed by the Company or a Designated
Subsidiary on a given Enrollment Date shall be eligible to participate in the
Plan; subject to the Committee's discretion to condition participation in the
Plan on the completion of up to two years of employment with the Company or a
Subsidiary, with said discretion to be applied on a uniform and
nondiscriminatory basis.

<PAGE> 20

(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent such option permits his or her rights to
purchase stock under all employee stock purchase plans of the Company and its
subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the Fair Market Value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time.

4. OFFERING PERIODS. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after January 1, April 1, July 1, and October 1 of each year, or on such
other date as the Board or the Committee shall determine, and continuing
thereafter until terminated in accordance with Section 19 hereof. The Board or
the Committee shall have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future offerings.

5. PARTICIPATION.

(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's personnel office
prior to the applicable Enrollment Date.

(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated as provided in Section 10 hereof.

6. PAYROLL DEDUCTIONS.

(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each payday
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he or she receives on each payday during the Offering Period,
and the aggregate of such payroll deductions during the Offering Period shall
not exceed ten percent (10%) of the participant's Compensation during said
Offering Period.

(b) All payroll deductions made for a participant shall be credited
to his or her account under the Plan and will be withheld in whole percentages
only. A participant may not make any additional payments into such account.

(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, by completing or filing with the Company
a new subscription agreement authorizing a change in payroll deduction rate. A
participant's subscription agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 10 hereof.

(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year (the "Current
Offering Period") that the aggregate of all payroll deductions which were
previously used to purchase

<PAGE> 21

stock under the Plan in a prior Offering Period which ended during that calendar
year plus all payroll deductions accumulated with respect to the Current
Offering Period equal $25,000. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Offering Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.

(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
Federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but will not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to the sale or early disposition of
Common Stock by the Employee.

7. GRANT OF OPTION. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than a
number of Shares determined by dividing $25,000 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof, and
the option shall expire at the end of the day on the last day of the Offering
Period.

8. EXERCISE OF OPTION. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. Any other monies left over in a participant's account after
the Exercise Date shall be returned to the participant. During a participant's
lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.

9. DELIVERY. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.

10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.

(a) A participant may withdraw all but not less than all of the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account during such Offering Period will be
paid to such participant promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made during
such Offering Period. If a participant withdraws during any Offering Period,
payroll deductions will not resume at the beginning of the succeeding Offering
Period unless the participant delivers to the Company a new subscription
agreement.

<PAGE> 22

(b) Upon a participant's ceasing to be an Employee (as defined in
Section 2(h) hereof), for any reason, including by virtue of him or her having
failed to remain an Employee of the Company for at least twenty (20) hours per
week during an Offering Period in which the Employee is a participant, he or she
will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the then current
Offering Period but not yet used to exercise the option will be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 14 hereof, and such participant's option will be
automatically terminated.

(c) A participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.

11. INTEREST. No interest shall accrue on the payroll deductions of a
participant in the Plan.

12. STOCK.

(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 300,000 shares, subject
to adjustment upon changes in capitalization of the Company as provided in
Section 18 hereof. If on a given Exercise Date the number of shares with respect
to which options are to be exercised exceeds the number of shares then available
under the Plan, the Company shall make a pro rata allocation of the shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.

(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.

(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.

13. ADMINISTRATION.

(a) ADMINISTRATIVE BODY. The Plan shall be administered by the Board
or a committee of at least two members of the Board appointed by the Board (the
"Committee"). The Board or the Committee shall have full and exclusive
discretionary authority to construe, interpret and apply the terms of the Plan,
to determine eligibility and to adjudicate all disputed claims filed under the
Plan. Every finding, decision and determination made by the Board or the
Committee shall, to the full extent permitted by law, be final and binding upon
all parties. The Board may, however, act in lieu of the Committee on any matter
within the Committee's discretion or power.

(b) RULE 16B-3 LIMITATIONS. Notwithstanding the provisions of
Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated
under the Exchange Act, or any successor provision ("Rule 16b-3"), provides
specific requirements for the administrators of plans of this type, the Plan
shall be only administered by such a body and in such a manner as shall comply
with the applicable requirements of Rule 16b-3.

<PAGE> 23

14. DESIGNATION OF BENEFICIARY.

(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.

(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

15. TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 18 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

16. USE OF FUNDS. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

17. STATEMENTS OF ACCOUNT. Individual accounts will be maintained for
each participant in the Plan. Statements of account will be given to
participating Employees, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the Reserves as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of outstanding shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board or the Committee, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.

<PAGE> 24

(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board or the Committee.

(c) MERGER OR ASSET SALE. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation in which the Company is not the surviving
entity, each option under the Plan shall be assumed or an equivalent option
shall be substituted by the successor corporation or a parent or subsidiary of
the successor corporation, in each case with the assumed or new option
containing such terms and provisions as shall be required substantially to
preserve the rights and benefits of all options held by participating Employees
during the then current Offering Period, unless the Board or the Committee
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Period then in progress by
setting a new Exercise Date (the "New Exercise Date") or to cancel each
outstanding right to purchase and refund all sums collected from participants
during the Offering Period then in progress. If the Board or the Committee
shortens the Offering Period then in progress in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board or the
Committee shall notify each participant in writing, at least ten (10) days prior
to the New Exercise Date, that the Exercise Date for his or her option has been
changed to the New Exercise Date and that his or her option will be exercised
automatically on the New Exercise Date, unless prior to such date he or she has
withdrawn from the Offering Period as provided in Section 10 hereof. For
purposes of this Section, an option granted or assumed by a successor
corporation shall be deemed to substantially preserve the rights and benefits of
options held by participants if, following the sale of assets or merger, the
option confers the right to purchase, for each share of option stock subject to
the option immediately prior to the sale of assets or merger, the consideration
(whether stock, cash or other securities or property) received in the sale of
assets or merger by holders of Common Stock for each share of Common Stock held
on the effective date of the transaction (and if such holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock); provided, however, that if
such consideration received in the sale of assets or merger was not solely
common stock of the successor corporation or its parent (as defined in Section
424(e) of the Code), the Board or the Committee may, with the consent of the
successor corporation and the participant, provide for the consideration to be
received upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock and the sale of assets or
merger.

The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.

19. AMENDMENT OR TERMINATION.

(a) The Board may at any time and for any reason terminate or amend
the Plan. Except as provided in Section 18 hereof, no such termination may
affect options previously granted, provided that an Offering Period may be
terminated by the Board of Directors on any Exercise Date if the Board
determines that the termination of the Plan is in the best interests of the
Company and its stockholders. Except as provided in Section 18 hereof, no
amendment may make any change in any option theretofore granted which adversely
affects the rights of any participant. To the extent necessary to comply with
Rule 16b-3 or under Section 423 of the Code (or any successor rule or provision
or any other applicable law or regulation), the Company shall obtain stockholder
approval in such a manner and to such a degree as required.

7
<PAGE> 25
(b) Without stockholder consent and without regard to whether any
participant's rights may be considered to have been "adversely affected," the
Board (or the Committee) shall be entitled to change the Offering Periods
(subject to the provisions of the second sentence of Section 4), limit the
frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or the Committee) determines in its sole discretion advisable
which are consistent with the Plan.

20. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

21. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

22. TERM OF PLAN. The Plan shall become effective upon its adoption by
the Board of Directors, subject to its approval by the stockholders of the
Company within twelve months. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof. The Plan was adopted by
the Board effective February 25, 2000.

23. ADDITIONAL RESTRICTIONS OF RULE 16B-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 from
time to time to qualify for the maximum exemption from Section 16 the Exchange
Act with respect to Plan transactions.

<PAGE> 26

EXHIBIT A

HYCOR BIOMEDICAL INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

____ Original Application Enrollment Date:______
____ Change of Beneficiary(ies)

1. _____________________________________ hereby elects to participate in the
Hycor Biomedical Inc. 2000 Employee Stock Purchase Plan (the "Employee
Stock Purchase Plan") and subscribes to purchase shares of the Company's
Common Stock in accordance with this Subscription Agreement and the
Employee Stock Purchase Plan.

2. I hereby authorize payroll deductions from each paycheck in the amount of
_____% of my Compensation on each payday (not to exceed 10%) during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)

3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.

4. I have received a copy of the complete "Employee Stock Purchase Plan." I
understand that my participation in the Employee Stock Purchase Plan is in
all respects subject to the terms of the Plan. I understand that the grant
of the option by the Company under this Subscription Agreement may be
subject to obtaining stockholder approval of the Employee Stock Purchase
Plan.

5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse Only):
____________________________________________.

6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares), I will be treated
for Federal income tax purposes as having received ordinary income at the
time of such disposition in an amount equal to the excess of the fair
market value of the shares at the time such shares were purchased by me
over the price which I paid for the shares. I HEREBY AGREE TO NOTIFY THE
COMPANY IN WRITING WITHIN 30 DAYS AFTER THE DATE OF ANY DISPOSITION OF
SHARES AND I WILL MAKE ADEQUATE PROVISION FOR FEDERAL, STATE OR OTHER TAX
WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON THE DISPOSITION OF THE
COMMON STOCK. The Company may, but will not be obligated to, withhold from
my compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale or early
disposition of Common Stock by me. If I dispose of such shares at any time
after the expiration of the 2-year holding period, I understand that I
will be treated for Federal income tax purposes as having received income
only at the time of such disposition, and that such income

<PAGE> 27
will be taxed as ordinary income only to the extent of an amount equal to
the lesser of (1)the excess of the fair market value of the shares at the
time of such disposition over the purchase price which I paid for the
shares, or (2) 15% of the fair market value of the shares on the first day
of the Offering Period. The remainder of the gain, if any, recognized on
such disposition will be taxed as capital gain.

7. I hereby agree to be bound by the terms of the Hycor Biomedical Inc. 2000
Employee Stock Purchase Plan. The effectiveness of this Subscription
Agreement is dependent upon my eligibility to participate in the Employee
Stock Purchase Plan.

8. In the event of my death, I hereby designate the following as my
beneficiary to receive all payments and shares due me under the Employee
Stock Purchase Plan:

NAME:
--------------------------------------------
(First) (Middle) (Last)

Relationship:
--------------------------------------------

Address:
--------------------------------------------

--------------------------------------------

Employee's Social
Security Number:
--------------------------------------------

Employee's Address:
--------------------------------------------

--------------------------------------------

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated: ---------------------------------------------
----------------------- Signature of Employee

--------------------------------------------
Spouse's Signature
(If beneficiary other than spouse)

<PAGE> 28

EXHIBIT B

HYCOR BIOMEDICAL INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

The undersigned participant in the Offering Period of the Hycor
Biomedical Inc. 2000 Employee Stock Purchase Plan which began on ___________,
20__ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the participation in the Employee Stock Purchase Plan for the
Offering Period. He or she hereby directs the Company to pay to the undersigned
as promptly as practicable all the payroll deductions credited to his or her
account with respect to such Offering Period. The undersigned understands and
agrees that his or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement.

Name and Address of Participant:

--------------------------------

Signature:

--------------------------------

Date:
-------------------------

11
<PAGE> 29

PROXY HYCOR BIOMEDICAL INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE JUNE 14,
2000 ANNUAL MEETING OF STOCKHOLDERS AND MAY BE REVOKED PRIOR TO ITS EXERCISE

The undersigned hereby appoints J. DAVID THOLEN 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 June 14, 2000, at 9 a.m., local time, at
the Company's offices located at 7272 Chapman Avenue, Garden Grove, California
92841, 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
(except as marked to the contrary below) to vote 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.)

Samuel D. Anderson, David S. Gordon, Reginald P. Jones, James R. Phelps,
Richard E. Schmidt, J. David Tholen and David A. Thompson.

2. TO APPROVE THE 2000 EMPLOYEE STOCK PURCHASE PLAN.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. 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> 30

THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED, THIS PROXY
WILL BE VOTED "FOR" EACH NOMINEE NAMED IN PROPOSAL 1, "FOR" THE 2000 EMPLOYEE
STOCK PURCHASE PLAN IN PROPOSAL 2, AND IN ACCORDANCE WITH THE DISCRETION OF THE
PROXY HOLDER(S) ON SUCH MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.

Date: , 2000

-------------------------
(Signature)

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 the
partnership name by an
authorized person.