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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Material
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
HEMACARE CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14a.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transactions 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>
LOGO
HEMACARE CORPORATION
____________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 5, 1996
9:30 a.m.
_________________
The 1996 Annual Meeting of Shareholders of HemaCare Corporation (the
"Company") will be held at the Sportsmen's Lodge Hotel, 12825 Ventura
Boulevard, Studio City, California 91604, on Wednesday, June 5, 1996 at
9:30 a.m.(Pacific Daylight Time), for the following purposes:
1. To elect six directors for the ensuing year;
2. To consider and vote upon a proposal to approve the Company's 1996
Stock Incentive Plan;
3. To transact such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
Only holders of Common Stock of the Company of record at the close of
business on April 17, 1995 will be entitled to notice of and to vote at the
Meeting.
In order that your shares may be represented at the Meeting and to assure a
quorum, please complete, date and sign the enclosed Proxy and return it
promptly in the self-addressed, stamped envelope enclosed for that purpose,
whether or not you expect to attend the Meeting in person.
/s/ JoAnn R. Stover
---------------------
JoAnn R. Stover
Secretary
Sherman Oaks, California
April 22, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
<PAGE> 1
HEMACARE CORPORATION
4954 Van Nuys Boulevard
Sherman Oaks, California 91403
April 22, 1996
__________________________
PROXY STATEMENT
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of HemaCare Corporation (the "Company"), for use only at the Annual
Meeting of Shareholders to be held on June 5, 1996 and at any and all
adjournments or postponements thereof (the "Meeting"). Unless the
accompanying Proxy has been previously revoked, the shares represented by the
Proxy will, unless otherwise directed, be voted at the Meeting for the
nominees for election as directors named below, the adoption of the Company's
1996 Stock Incentive Plan and, with discretion, on all such other matters as
may properly come before the Meeting. A shareholder of record may revoke the
Proxy at will at any time prior to the voting of shares by voting in person
at the Meeting or by filing with the Secretary of the Company a duly executed
Proxy bearing a later date or an instrument revoking the Proxy. Shareholders
whose shares are held in street name should consult with their brokers or
other nominees concerning procedures of revocation.
In addition to soliciting Proxies by mail, the Company's officers, directors
and other regular employees, without additional compensation, may solicit
Proxies personally or by other appropriate means. The total cost of
solicitation of Proxies will be borne by the Company. Although there are no
formal agreements to do so, it is anticipated that the Company will reimburse
banks, brokerage houses and other custodians, nominees and fiduciaries for
their reasonable expenses in forwarding any Proxy soliciting materials to
their principals.
It is anticipated that this Proxy Statement and accompanying Proxy will first
be mailed to shareholders on or about April 23, 1996.
VOTING RIGHTS
Holders of the Company's common stock, without par value (the "Common Stock"),
of record as of the close of business on April 17, 1996, will be entitled to
vote on all matters presented to the Meeting. On April 17, 1996, there were
outstanding 5,941,765 shares of Common Stock, which constituted all of the
outstanding voting securities of the Company. Each holder of Common Stock is
entitled to one vote for each share held, except that in the election of
directors, each shareholder has cumulative voting rights and is entitled to
as many votes as equal the number of shares held multiplied by the number of
directors to be elected (six). All such votes may be cast for a single
candidate or distributed among any or all the candidates as the shareholder
sees fit. However, no shareholder shall be entitled to cumulate votes unless
the candidate's name has been placed in nomination prior to the voting and
the shareholder, or any other shareholder, has given notice at the Meeting
prior to the voting of their intention to cumulate their votes. The Company
is soliciting authority to cumulate votes in the election of directors, and
the enclosed Proxy grants discretionary authority for such purpose. The
election of directors requires the affirmative vote for each candidate of a
plurality of the votes cast. The approval of the adoption of the Company's
1996 Stock Incentive Plan requires the affirmative vote of a majority of the
shares of Common Stock represented and voting at the Meeting. Typically, any
other matters that may be presented at the Meeting will require the
affirmative vote of a majority of the shares represented and voting at the
Meeting.
Abstentions, and any shares as to which a broker or nominee has indicated
that it does not have discretionary authority to vote ("broker non-votes"),
on a particular matter generally will be treated as shares that are present
and are entitled to vote for purposes of determining the presence of a quorum
(so long as any broker non-vote shares are voted on at least one matter at
the Meeting) but as unvoted for purposes of determining whether approval of
the shareholders has been obtained with respect to any such matter. Under
California law and the Company's Bylaws, a quorum consists of the presence in
person or by proxy of the holders of a majority of the shares entitled to
vote at the Meeting, and a matter (other than the election of directors)
voted on by shareholders will be approved if it receives the vote of a
majority of the shares both present and voting, which shares also constitute
a majority of the required quorum, unless the vote of a greater number of
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shares is required. Accordingly, abstentions and broker non-votes will have
no effect on such a vote; provided, however, that in the event the number of
shares voted affirmatively does not represent a majority of the required
quorum, abstentions and broker non-votes will have the effect of a "no" vote.
Under California law and the Company's Bylaws, abstentions from voting,
broker non-votes and votes otherwise withheld in the election of directors,
which is by plurality, have no effect. The approval of the Company's 1996
Stock Incentive Plan is subject to the requirements of Rule 16b-3 of the
Securities and Exchange Commission rather than California law. Rule 16b-3
requires the affirmative vote of the holders of a majority of the shares
present, or represented, and entitled to vote at the Meeting, and the staff
of the Securities and Exchange Commission has indicated that under such a
voting requirement, an abstention has the effect of a "no" vote, and a broker
non-vote has no effect on such vote.
ELECTION OF DIRECTORS
Information Concerning the Nominees
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The Company's Bylaws provide for seven directors. Currently, there are six
directors, five of whom have been previously elected by the shareholders and
one newly appointed to fill a vacancy in 1995. One vacancy remains on
the Board of Directors. The Company has not identified a person to fill the
vacancy on the Board of Directors, and Proxies may be voted for not more than
six nominees for director. Each director will hold office until the next
Annual Meeting of Shareholders and until the election of his successor. All
Proxies received by the Board of Directors will be voted for the election, as
directors, of the nominees listed below if no direction to the contrary is
given. In the event that any nominee is unable or declines to serve, an
event that is not anticipated, the Proxies will be voted for the election of
any nominee who may be designated by the Board of Directors.
The information set forth below is submitted with respect to the nominees for
whom it is intended that Proxies will be voted.
Thomas M. Asher, Ph.D. (69), has served as Chairman of the Board of Directors
since August 1986 and has been member of the Board of Directors since co-
founding the Company in 1978. Mr. Asher served as President of the Company
from 1978 to August 1986 and as Secretary from 1978 to May 1995. Since
receiving his Ph.D. degree in Microbiology from the University of London in
1950, he has spent approximately 46 years in the biomedical field, including
academic research, service as a U.S. Public Health Service Officer, business
and technical experience within the biomedical industry and operating
experience as co-founder and president of Immuno-Science Corporation, a then
publicly held company which was sold to Johnson & Johnson in 1977.
Hal I. Lieberman (46), has been President, Chief Executive Officer and member
of the Board of Directors since September 1988. He received his Masters
degree in Health Care Administration from The George Washington University
in 1974. Mr. Lieberman has more than 25 years of experience in the health
care industry, including administrative positions in hospitals. From 1981 to
September 1988, he was Vice President of MEDIQ Mobile Services, Inc., a
national shared medical service company. Mr. Lieberman has been a member of
the American College of Healthcare Executives since 1980.
Joshua Levy, M.D. (56), has been Senior Vice President since October 1988,
Medical Director and a member of the Board of Directors since co-founding the
Company in 1978. Dr. Levy received his M.D. degree from Albert Einstein
College of Medicine in 1964. He is certified by the American Board of
Internal Medicine and was Adjunct Associate Professor of Medicine at UCLA
from 1967 to 1982. He has published numerous scientific articles in the
fields of rheumatology and immunology and is a national authority and
frequent lecturer on therapeutic hemapheresis. Dr. Levy maintains a private
medical practice and works approximately 100 hours per month for the Company.
Glenn W. Bartlett, Ph.D. (63), has been a member of the Board of Directors
since February 1991. Since April 1995, Dr. Bartlett has been employed as an
independent consultant, specializing in business development in the field of
healthcare. From 1983 to his retirement in 1995, Dr. Bartlett served as
Manager of Business Development for Beckman Instruments, an international
manufacturer of laboratory equipment and diagnostic reagents. From 1979 to
1983, Dr. Bartlett was Vice President, Research of SmithKline Diagnostics
Division of SmithKline Corporation, and from 1966 to 1979, he was employed at
American Hospital Supply Company, a major hospital supply company, where he
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served as Director of Scientific Planning and later as Vice President,
Research and Technology, Science Business. Dr. Bartlett received his Ph.D.
in Physical Chemistry at Oxford University. While at Oxford, he held an ICE
Research Fellowship. He then taught microbiology for eight years at Memorial
University of Newfoundland and at McGill University Faculty of Medicine,
Montreal. Dr. Bartlett is a member of the Company's Audit Committee and is
Chairman of the Compensation Committee.
Willis L. Warner, M.D. (66), has been a member of the Board of Directors since
July 1994. Since 1979, Dr. Warner has served as president of Consultants for
Health Care, a consulting firm specializing in the health care industry in San
Francisco, California and since 1990, as president of a publishing company in
San Francisco, California. From February 1994 until January 1995, Dr. Warner
provided periodic consulting services to the Company concerning regulatory and
clinical issues relating to the Company's research and development activities.
From 1975 through 1979, he served as director of medical operations and
director of clinical research at Cutter Laboratories, Inc. and from 1963-1975,
he held various clinical research positions with Baxter Travenol Laboratories
and Hoechst Pharmaceuticals, Inc. Dr. Warner received his M.D. degree from
the State University of New York, College of Medicine in 1960. He has
published numerous scientific articles in the field of AIDS research and
hematology and has experience in direct dealings with the U.S. Food and Drug
Administration. Dr. Warner is a member of the Company's Audit and Compensation
Committees.
Jon B. Victor (43), has been a member of the Board of Directors since June
1995. In March 1996, Mr. Victor co-founded Greenwich Ventures, LLC, an
institutional investment manager, and serves as president. In 1983, Mr.
Victor founded Security Capital Management, Inc., an institutional investment
manager, and served as president until March 1996, at which time the company
was sold. In 1992, Mr. Victor co-founded and is a principal shareholder of
Gordon Management, Inc., the general partner of Edgewater Private Equity Fund,
L.P., a significant shareholder of the Company. Mr. Victor has more than 17
years of investment management experience. Mr. Victor is a graduate of
Washington University, St. Louis, Missouri and earned a law degree and
completed MBA course work at The George Washington University in Washington,
D.C. Mr. Victor serves on the Board of Directors of several private
investment firms and on the Board of Advanced Photonics, Inc., a publicly
held company engaged in the manufacture of light detection devices. Mr.
Victor is Chairman of the Company's Audit Committee and a member of the
Compensation Committee.
The Board of Directors recommends a vote FOR each director nominated.
Directors and Executive Officers
- --------------------------------
The Board of Directors consists of the nominees described above. Such
nominees also include all of the executive officers of the Company other than
the Company's Chief Financial Officer, Sharon C. Kaiser.
Sharon C. Kaiser (51), was appointed Vice President of Finance and Chief
Financial Officer in May 1995. From 1991 until joining the Company, Ms.
Kaiser acted as an independent financial consultant to various businesses.
Prior to that time, Ms. Kaiser held senior financial positions at
Weyerhaeuser Mortgage Company and the Koll Company. Ms. Kaiser was with
Arthur Andersen & Co. from 1979 to 1987, serving as a senior manager of that
firm for the last four years. Ms. Kaiser is a graduate of the University of
Southern California and has been a Certified Public Accountant since 1981.
All officers serve at the pleasure of the Board of Directors.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
Committees of the Board
- -----------------------
The Board of Directors has had an Audit Committee and a Compensation
Committee since January 1989 but does not have a nominating committee or any
committee performing similar functions. The members of the Audit Committee
and the Compensation Committee for 1995 were Messrs. Bartlett, Victor and
Warner. The Audit Committee held one meeting, and the Compensation Committee
held two meetings in 1995.
The functions of the Audit Committee include reviewing and making
recommendations to the Board of Directors with respect to: the engagement or
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re-engagement of an independent public accounting firm to audit the Company's
financial statements for the then current fiscal year, and the terms of the
engagement; the policies and procedures of the Company with respect to
maintaining the Company's books and records and furnishing any necessary
information to the independent auditors; the procedures to encourage access
to the Audit Committee and to facilitate the timely reporting during the year
by authorized representatives of the Company's independent auditors to the
Audit Committee of their recommendations and advice; the implementation by
management of the recommendations made by the independent auditors in their
annual management letter; the adequacy and implementation of the Company's
internal audit controls and the adequacy and competency of the related
personnel; and such other matters relating to the Company's financial affairs
and accounts as the Audit Committee may in its discretion deem desirable.
The functions of the Compensation Committee include reviewing and making
recommendations to the Board of Directors with respect to the compensation
package to be offered to all Company officers and the incentive programs to
be offered to all employees in the effort to attract and retain qualified
personnel. The Compensation Committee will also administer the Company's
1996 Stock Incentive Plan.
Meetings and Attendance
- -----------------------
The Board of Directors held four meetings and took action by unanimous
written consent (as permitted by California law) on nine occasions during
1995. During this period, five directors attended 100% and two directors
attended 75% of the aggregate number of meetings of the Board. In 1995, the
Audit Committee held one meeting, and the Compensation Committee met twice.
Members of the Audit and Compensation Committees attended 100% of the
meetings.
APPROVAL OF 1996 STOCK INCENTIVE PLAN
In April 1996, the Board of Directors unanimously approved, subject to
shareholder approval at the Meeting, the HemaCare 1996 Stock Incentive Plan
(the "Plan"). The purposes of the Plan are to (i) enable the Company and
Related Companies (as defined below) to attract, motivate and retain top-
quality officers, employees, consultants, advisers and independent
contractors, (ii) provide substantial incentives for such persons to act
in the best interests of the shareholders of the Company, (iii) reward
extraordinary effort by such persons on behalf of the Company or a Related
Company and (iv) enable the Company to pay part of the compensation of its
Outside Directors (as defined below) in options to purchase the Company's
Common Stock, thereby increasing such directors' proprietary interest in the
Company. The Plan provides for awards in the form of stock options, which
may be either "incentive stock options" within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or non-
qualified stock options, or restricted stock. The Company's 1986 Stock
Option Plan (the "1986 Plan") expires on July 9, 1996, and it is the
intention of the Board of Directors not to make any additional awards under
the 1986 Plan upon the approval of the Plan by the shareholders. As of April
17, 1996, there were options outstanding under the 1986 Plan exercisable for
362,800 shares of Common Stock with exercise prices ranging from $1.125 to
$6.125 and with expiration dates ranging from August 28, 1996 to November
16, 2000. As of April 17, 1996, 289,751 shares of Common Stock had been
issued upon the exercise of stock options granted under the 1986 Plan. The
Board of Directors believes that the 1986 Plan has aided the Company in
attracting, motivating and retaining quality employees and management
personnel. With the expiration of the 1986 Plan, the Board of Directors
believes it is important to establish a new stock incentive plan.
The Board of Directors recommends a vote FOR the approval of the Plan.
Principal Provisions of the Plan
- --------------------------------
The following summary of the Plan is qualified in its entirety by reference
to the full text of the Plan, which is attached as Appendix A to this Proxy
Statement.
Shares. The total number of shares of Common Stock available for
distribution under the Plan is 750,000; provided, however, that no award
may be made at any time if, after giving effect to such award, the total
number of shares of Common Stock issuable upon exercise of all outstanding
options and warrants of the Company (whether or not under the Plan) plus the
total number of shares of Common Stock called for under any stock bonus or
similar plan of the Company (including shares of Common Stock underlying
awards under the Plan) would exceed 30% of the total number of shares of
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Common Stock outstanding at the time of such award. For purposes of the
foregoing: (i) those shares issuable upon exercise of rights, options or
warrants, or under a stock purchase plan, meeting certain requirements
specified in the Rules of the California Commissioner of Corporations are
not counted against the 30% limitation; (ii) any outstanding preferred or
senior common shares of the Company convertible into Common Stock are to be
deemed converted in determining the total number of outstanding shares of
Common Stock at any time; and (iii) any shares of Stock subject to promotional
waivers under the Rules of the California Commissioner of Corporations are
not be deemed to be outstanding. As of April 17, 1996, the total number of
shares of Common Stock with respect to which awards under the Plan could
be made was 617,230.
Shares awarded under the Plan may be authorized and unissued shares or
treasury shares. If shares subject to an option under the Plan cease to be
subject to such option, or shares under the Plan are forfeited, such shares
will again be available for future distribution under the Plan, unless the
forfeiting participant received any benefits of ownership such as dividends
from the forfeited award.
Administration. The Plan will be administered by the Compensation
Committee of the Board of Directors of the Company (the "Board") or such
other committee of directors as the Board shall designate, which committee
shall consist of not less than two disinterested persons (as such term is
defined in Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act") or any successor rule ("Rule 16b-3")) who shall serve at
the pleasure of the Board, each of whom shall also be an "outside director"
within the meaning of Section 162(m) of the Internal Revenue Code and Section
1.162-27 of the Treasury Regulations or any successor provision(s) thereto
("Section 162(m)"); provided, however, that for so long as the version of
Rule 16b-3 in effect prior to May 1, 1991 is applicable with respect to the
Company, such committee shall consist of not less than three persons meeting
the foregoing qualifications; and provided, further, that if there are not
two or three persons, as the case may be, on the Board who meet the foregoing
qualifications, any such committee may be comprised of two or more Outside
Directors of the Company. An Outside Director is defined under the Plan as
a director other than one who is an officer (other than a non-employee
Chairman of the Board of the Company) or employee of the Company. If no such
committee has been appointed by the Board, the Plan will be administered by
the Board. Such committee as shall be designated to administer the Plan or
the Board is hereinafter referred to as the "Committee."
Initially, the Plan will be administered by the Compensation Committee,
which is currently comprised of the Company's three Outside Directors.
Because of the eligibility of the Outside Directors to receive discretionary
awards under the expiring 1986 Plan, none of the members of the Compensation
Committee currently meets the conditions for being a disinterested person
under the version of Rule 16b-3 currently applicable with respect to the
Company. The Company believes that each of the members of the Compensation
Committee meets the conditions for being an "outside director" under Section
162(m).
The Committee is authorized to, among other things, set the terms of
awards to participants, other than Outside Directors, and waive compliance
with the terms of such awards. The provisions attendant to the grant of an
award under the Plan may vary from participant to participant. The Committee
has the authority to interpret the Plan and adopt administrative regulations,
but it may not vary the amount or terms of awards to Outside Directors from
those set forth in the Plan. The Committee may from time to time delegate to
one or more officers of the Company any or all of its authorities under the
Plan, except with respect to awards granted to persons subject to Section 16
of the Exchange Act. The Committee must specify the maximum number of shares
that the officer or officers to whom such authority is delegated may award,
and the Committee may in its discretion specify any other limitations or
restrictions on the authority delegated to such officer or officers.
Participation. The Committee may make awards to officers, employees,
consultants, advisers and independent contractors of the Company or a Related
Company. A "Related Company" is any corporation, partnership, joint venture
or other entity in which the Company owns, directly or indirectly, at least a
20% beneficial ownership interest. The participants in the Plan, other than
Outside Directors, are selected from among those eligible in the sole
discretion of the Committee.
The Plan also provides for each person who has not previously served
as a director of the Company and who is initially elected or appointed as an
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Outside Director on or after the effective date of the Plan to be granted, as
of the date of such initial election or appointment, a stock option to
purchase 15,000 shares of Common Stock. The terms of stock options to
Outside Directors are described below.
Awards to Participants Other Than Outside Directors.
1. Stock Options.
Incentive stock options ("ISOs") and non-qualified stock options may be
granted for such number of shares of Common Stock as the Committee
determines, provided that no participant may be granted stock options in
any calendar year on more than 250,000 shares of Common Stock. A stock
option will be exercisable at such times, over such term and subject to
such terms and conditions as the Committee determines, provided that in
the case of participants other than officers, consultants or independent
contractors stock options must become exercisable at the rate of at least
20% per year over five years from the date the stock option is granted.
The exercise price of stock options is determined by the Committee, but
may not be less than the per share fair market value of the Common Stock
on the date of grant, or 110% of such fair market value if the recipient
owns, or would be considered to own by reason of Section 424(d) of the
Code, more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary of the Company. (ISOs
are subject to restrictions as to exercise period and exercise price as
required by the Code.)
Payment of the exercise price may be made in such manner as the Committee
may provide, including cash, delivery of shares of Common Stock already
owned or subject to award under the Plan. The Committee may provide that
all or part of the shares received upon exercise of an option using
restricted stock will be restricted stock.
Upon an optionee's termination of employment or other qualifying
relationship, the option will be exercisable to the extent determined by
the Committee; provided, however, that unless employment or such other
qualifying relationship is terminated for cause (as may be defined by the
Committee in connection with the grant of any stock option), the Stock
Option shall remain exercisable (to the extent that it was otherwise
exercisable on the date of termination) for at least six months from the
date of termination if termination was caused by death or disability or at
least 90 days from the date of termination if termination was caused by
other than death or disability. The Committee may provide that an option
that is outstanding on the date of an optionee's death will remain
outstanding for an additional period after the date of such death,
notwithstanding that such option would expire earlier under its terms.
A stock option agreement may permit an optionee to transfer the stock
option to his or her children, grandchildren or spouse ("Immediate
amily"), to one or more trusts for the benefit of such Immediate Family
members, or to one or more partnerships in which such Immediate Family
members are the only partners if (i) the agreement setting forth the
stock option expressly provides that the option may be transferred only
with the express written consent of the Committee, and (ii) the optionee
does not receive any consideration in any form whatsoever for such
transfer. Any stock option so transferred will continue to be subject
to the same terms and conditions as were applicable to the option
immediately prior to its transfer. Except as described above, stock
options are not transferable by the optionee otherwise than by will or
by the laws of descent and distribution.
2. Restricted Stock.
In making an award of restricted stock, the Committee will determine the
periods, if any, during which the stock is subject to forfeiture, and the
purchase price, if any, for the stock. The vesting of restricted stock
may be unconditional or may be conditioned upon the completion of a
specified period of service with the Company or a Related Company, the
attainment of specific performance goals or such other criteria as the
Committee may determine.
During the restricted period, the award holder may not sell, transfer,
pledge or assign the restricted stock, except as may be permitted by the
Committee. The certificate evidencing the restricted stock will be
registered in the award holder's name, although the Committee may direct
that it remain in the possession of the Company until the restrictions have
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lapsed. Except as may otherwise be provided by the Committee, upon the
termination of the award holder's service with the Company or a Related
Company for any reason during the period before all restricted stock has
vested, or in the event the conditions to vesting are not satisfied, all
restricted stock that has not vested will be subject to forfeiture and
the Committee may provide that any purchase price paid by the award
holder, or an amount equal to the restricted stock's fair market value on
the date of forfeiture, if lower, will be paid to the award holder.
During the restricted period, the award holder will have the right to
vote the restricted stock and to receive any cash dividends, if so
provided by the Committee. Stock dividends will be treated as additional
shares of restricted stock and will be subject to the same terms and
conditions as the initial grant, unless otherwise provided by the
Committee.
Awards to Outside Directors. As decribed above, upon initial election or
appointment as a director of the Company, each Outside Director will be
granted a stock option to purchase 15,000 shares of Common Stock. The exercise
price for each stock option granted to an Outside Director will be equal
to the closing per share bid price of the Common Stock on the date of
grant, and may be paid in cash or shares of Common Stock that have been
owned by the optionee for a period of at least six months (with such
shares valued at the closing per share bid price of the Common Stock on
the date of delivery). Options granted to Outside Directors are
immediately exercisable and expire 10 years from the date of grant,
subject to earlier termination upon termination of the optionee's
service as a director. If an optionee's status as a director of the
Company is terminated for cause (as defined in the Plan), such
director's options will terminate on the date of such termination of
service. If an optionee's status as a director is terminated for any
reason other than death or termination for cause, such director's
options may be exercised only within 90 days of such termination of
service. If an optionee's status as a director of the Company is
terminated by reason of the optionee's death, such director's options
may be exercised by his or her legal representatives only within one
year following the director's death. Stock options granted to Outside
Directors are not transferable except by will or by the laws of descent
and distribution.
Change of Control Provisions. If there is a Change of Control of the
Company (as defined below), all stock options which are not then
exercisable will become fully exercisable and vested, and the restrictions
applicable to restricted stock will lapse and such shares and awards will be
deemed fully vested, unless otherwise determined by the Committee at the time
of grant. A Change of Control occurs on the date that any person or group
(other than the Company or certain of its affiliates) becomes a beneficial
owner of 40% or more of the Company's voting securities, the date on which a
majority of the Board of Directors consists of persons other than Incumbent
Directors (as defined in the Plan) or the date of approval by the
shareholders of certain agreements providing for the merger, consolidation or
disposition of all or substantially all the assets of the Company.
Amendment and Termination. No awards may be granted under the Plan more
than 10 years after the date of approval of the Plan by the shareholders of
the Company. The Board may discontinue the Plan at any earlier time and may
amend it from time to time, except that no amendment or discontinuation may
adversely affect any outstanding award without the holder's written consent.
Amendments to provisions governing awards to Outside Directors may not be
made more than once every six months, except as required by law. Amendments
may be made without shareholder approval except as required to satisfy any
applicable mandatory legal or regulatory requirements, or as required for the
Plan to satisfy the requirements of Rule 16b-3, Section 162(m), Section 422
of the Code or any other non-mandatory legal or regulatory requirements if
the Board of Directors deems it desirable for the Plan to satisfy any such
requirements.
Adjustment. In the event of any merger, reorganization, consolidation,
sale of substantially all assets, recapitalization, stock dividend, stock
split, spin-off, split-up, split-off, distribution of assets or other change
in corporate structure affecting the Common Stock, a substitution or
adjustment, as may be determined to be appropriate by the Committee in its
sole discretion, will be made in the aggregate number of shares reserved for
issuance under the Plan, the maximum number of shares with respect to which
stock options may be granted to any participant during any calendar year, the
number of shares subject to outstanding awards and the amounts to be paid by
award holders or the Company, as the case may be, with respect to outstanding
awards. No such adjustment may increase the aggregate value of any
outstanding award. If the Committee makes any adjustment under this
provision to outstanding stock options, a similar adjustment will
automatically be made with respect to stock options granted and to be granted
to Outside Directors.
Substitute Options in Business Combinations. If the Company succeeds to
the business of another corporation through a merger or consolidation, or
through the acquisition of stock or assets of such corporation, stock options
7
<PAGE> 8
may be granted under the Plan to those employees of such corporation or its
related companies who become employees of the Company or a Related Company in
substitution for options to purchase stock of the acquired corporation held
by them at the time of such succession. The Committee, in its sole
discretion, will determine the extent to which and the terms on which any
such substitute stock options will be granted. The exercise price of each
substitute stock option will be an amount such that, in the sole judgment of
the Committee (and if the stock options to be granted are intended to be ISOs,
in compliance with the Code), the economic benefit provided by such
substitute stock option is not greater than the economic benefit represented
by the stock option of the acquired corporation as of the date of the
acquisition. Any substitute stock option will expire upon the expiration
date of such other stock option or, if earlier, 10 years after the date of
grant of the substitute stock option, and will be exercisable during the
period(s) in which the other stock option would have been exercisable.
Certain Federal Income Tax Consequences. The following is a summary of
certain federal income tax aspects of awards made under the Plan based upon
the laws in effect on April 1, 1996.
1. Incentive Stock Options.
Generally, no taxable income is recognized by the participant upon the
grant of an ISO or upon the exercise of an ISO during the period of the
participant's employment with the Company or one of its subsidiaries or
within three months (12 months, in the event of permanent and total
disability, or the term of the option, in the event of death) after
termination. However, the exercise of an ISO may result in an
alternative minimum tax liability to the participant. If the
participant continues to hold the shares acquired upon the exercise of
an ISO for at least two years from the date of grant and one year from
the transfer of the shares to the participant, then generally: (a) upon
the sale of the shares, any amount realized in excess of the option
price will be taxed as long-term capital gain; and (b) no deduction will
be allowed to the employer corporation for federal income tax purposes.
If Common Stock acquired upon the exercise of an ISO is disposed of prior
to the expiration of the one-year and two-year holding periods described
above (a "disqualifying disposition"), then generally: (a) the
participant will recognize ordinary income in an amount equal to the
excess, if any, of the fair market value of the shares on the date of
exercise (or, if less, the amount realized on disposition of the shares)
over the option exercise price; and (b) the employer corporation will be
entitled to deduct any such recognized amount. Any further gain
recognized by the participant on such disposition generally will be
taxed as short-term or long-term capital gain, depending on whether the
shares were held by the participant for more than one year, but such
additional amounts will not be deductible by the employer corporation.
According to proposed Treasury Regulations, in general, no gain or loss
will be recognized by a participant who uses shares of Common Stock
rather than cash to exercise an ISO. A number of new shares of Common
Stock acquired equal to the number of shares surrendered will have a
basis and capital gain holding period equal to those of the shares
surrendered (although such shares will be subject to new holding periods
for disqualifying disposition purposes beginning on the acquisition
date). To the extent new shares of Common Stock acquired pursuant to
the exercise of the ISO exceed the number of shares surrendered, such
additional shares will have a zero basis and will have a holding period
beginning on the date the ISO is exercised. The use of Common Stock
acquired through exercise of an ISO to exercise an ISO will constitute
a disqualifying disposition with respect to such Common Stock if the
applicable holding period requirement has not been satisfied.
2. Non-Qualified Stock Options.
Except as noted below with respect to officers and directors subject to
Section 16 of the Exchange Act ("Insiders"), with respect to non-
qualified stock options: (a) no income is recognized by the participant
at the time the option is granted; (b) generally upon exercise of the
option, the participant recognizes ordinary income in an amount equal to
the difference between the option exercise price and the fair market
value of the shares on the date of exercise and the employer corporation
will be entitled to a tax deduction in the same amount, to the extent
that such income is considered reasonable compensation; and (c) at
disposition, any appreciation after the date of exercise generally is
treated either as short-term or long-term capital gain, depending on
8
<PAGE> 9
whether the shares were held by the participant for more than one year,
and such appreciation is not deductible by the employer corporation.
No gain or loss will be recognized by a participant with respect to
shares of Common Stock surrendered to exercise a non-qualified stock
option. A number of new shares acquired equal to the number of shares
surrendered will have a tax basis and capital gain holding period equal
to those of the shares surrendered. The participant will recognize
ordinary income in an amount equal to the fair market value of the
additional shares acquired at the time of exercise (except as noted
below with respect to Insiders). Such additional shares will be deemed
to have been acquired on the date of such recognition of income and will
have a tax basis equal to their fair market value on such date.
3. Restricted Stock.
A participant receiving restricted stock generally will recognize income
in the amount of the fair market value of the restricted stock at the
time the stock is no longer either non-transferable or subject to a
substantial risk of forfeiture, whichever comes first, less the
consideration, if any, paid for the stock. However, a participant may
elect, under Section 83(b) of the Code, to recognize ordinary income on
the date of grant in an amount equal to the excess of the fair market
value of the shares on such date (determined without regard to the
restrictions other than restrictions which by their terms will never
lapse) over their purchase price. The holding period to determine
whether the participant has long-term or short-term capital gain on a
subsequent disposition of the shares generally begins when income was
recognized, and the tax basis for such shares generally will be the
amount of income that was recognized (i.e., the fair market value of
such shares on such date).
4. Special Rules Applicable to Insiders.
If an Insider exercises a non-qualified stock option within six months
of its grant, the income recognition date is generally the date six
months after the date of grant, unless the Insider makes an election
under Section 83(b) of the Code to recognize income as of the date of
exercise. The Insider recognizes ordinary income equal to the excess of
the fair market value of the shares on the income recognition date over
the option exercise price, and the holding period for treating any
subsequent gain as long-term capital gain begins on the income
recognition date.
5. Dividends.
Dividends paid on restricted stock prior to the date on which the
forfeiture restrictions lapse generally will be treated as compensation
that is taxable as ordinary income to the participant and will be
deductible by the employer corporation. If, however, the participant
makes a Section 83(b) election with respect to the restricted stock, the
dividends will be taxable as ordinary dividend income to the participant
and will not be deductible by the employer corporation.
6. Withholding Taxes.
A participant in the Plan may be required to pay the employer corporation
an amount necessary to satisfy the applicable federal and state law
requirements with respect to the withholding of taxes on wages, or to
make some other arrangements to comply with such requirements. The
employer has the right to withhold from salary or otherwise to cause a
participant (or the executor or administrator of the participant's estate
or the participant's distributee or transferee) to make payment of any
federal, state, local or other taxes required to be withheld with respect
to any award under the Plan. The Plan authorizes the Committee to permit
participants to use the shares payable under the Plan to satisfy
withholding obligations.
7. Company Deductions.
As a general rule, the Company or one of its subsidiaries will be
entitled to a deduction for federal income tax purposes at the same time
and in the same amount that an Outside Director or other participant in
the Plan recognizes ordinary income from awards under the Plan, to the
extent that such income is considered reasonable compensation and
9
<PAGE> 10
currently deductible (and not capitalized) under the Code. However,
Section 162(m) of the Code limits to $1 million the annual tax deduction
that the Company and its subsidiaries can take with respect to the
compensation of each of certain executive officers unless the
compensation qualifies as "performance based" or certain other exemptions
apply.
Benefits Under the Plan
No awards have been granted under the Plan, and no awards will be granted
unless the Plan is approved by the shareholders. As of April 17, 1996, there
were approximately 50 employees of the Company and Related Companies eligible
to participate in the Plan. The benefits that will be received by or
allocated to various participants in the Plan is not currently determinable.
On April 17, 1996, the closing per share bid price of the Common Stock was
$3.50.
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth information concerning the annual and long-
term compensation earned by the Named Executive Officers for services
rendered in all capacities to the Company for the fiscal years ended December
31, 1995, 1994 and 1993. The "Named Executive Officers" include (i) each
person who served as Chief Executive Officer during fiscal 1995 (one person),
(ii) each person who served as an executive officer at December 31, 1995 and
was among the four most highly paid executive officers of the Company, not
including the Chief Executive Officer, during fiscal 1995 (three persons) and
(iii) up to two persons who would be included under clause (ii) above had
they served as an executive officer at December 31, 1995 (no persons).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation
------------------------------------- ------------------
Other Securities All Other
Name and Salary Bonus Annual Underlying Compensation
Principal Position Year ($) ($) Compensation(1) Options/SARS(#)(2) ($)(3)
- ------------------ ---- -------- -------- --------------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Hal I. Lieberman,
President & CEO 1995 $150,000 $ 0 -- 0 $ 2,347
1994 $150,000 $ 0 -- 25,000 $ 3,033
1993 $150,000 $ 0 -- 0 $ 524
Thomas M. Asher,
Chairman of the Board 1995 $ 75,000 $ 0 -- 0 $ 0
1994 $ 75,000 $ 0 -- 0 $ 0
1993 $ 75,000 $ 0 -- 0 $ 0
Joshua Levy,
Sr. Vice President 1995 $140,000 $ 0 -- 0 $ 3,460
1994 $140,000 $ 0 -- 0 $ 3,114
1993 $135,061 $ 0 -- 0 $ 2,562
Sharon C. Kaiser (4)
Vice President, Finance
and CFO 1995 $ 56,174 $ 0 -- 2,800 $ 0
1994 $ 0 $ 0 -- 0 $ 0
1993 $ 0 $ 0 -- 0 $ 0
</TABLE>
10
<PAGE> 11
_____________
(1) During fiscal 1993, 1994 and 1995, the Named Executive Officers received
personal benefits, the aggregate amounts of which for each Named
Executive Officer did not exceed the lesser of $50,000 or 10% of the
total of the annual salary and bonus reported for such Named Executive
Officer in such years.
(2) The Company has no plans pursuant to which stock appreciation rights
("SARs") may be granted.
(3) "All Other Compensation" consists of Company contributions to its
Employee Salary Deferral Plan (401(k)). In the case of Mr. Lieberman,
it also includes $617 and $581 in term life insurance premiums paid by
the Company on Mr. Lieberman's behalf in 1995 and 1994, respectively.
(4) From April 1995 to December 1995, Ms. Kaiser was an independent
consultant to the Company. In January 1996, Ms. Kaiser became a full-time
employee of the Company with an annual salary of $125,000.
All stock options granted in the fiscal year ending December 31, 1995 were
granted under the Company's 1986 Stock Option Plan (the "1986 Plan"). The
following two tables set forth information concerning stock options granted
to, exercised by and owned by the Named Executive Officers.
OPTION/SAR GRANTS IN FISCAL 1995
<TABLE>
<CAPTION>
Individual Grants
- -------------------------------------------------------------------
Potential Realized
Number of % of Total Value at
Securities Options/SARs Market Assumed Annual
Underlying Granted to Exercise Price on Rates of Stock
Options/ Employees in or Base Date of Expira- Price Appreciation for
SARs Granted in Fiscal Price Grant tion Option Term (1)
Name (#)(2) Year ($/Sh) ($/Sh) Date (3) 0%($) 5%($) 10%($)
- --------- ----------- ------------ -------- ------- -------- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sharon C.
Kaiser 2,800 12.28% $3.50 $4.125 11/16/00 $1,750 $4,941 $8,801
</TABLE>
______________
(1) The dollar amounts under these columns are the result of calculations at
the 0%, 5% and 10% annual rates of stock appreciation as required by
rules of the Securities and Exchange Commission and are not intended to
forecast possible future appreciation, if any, of the Company's stock
price. The amount of gain, if any, to the optionee is dependent upon
the increase in the price of the Company's Common Stock, which will
benefit all shareholders commensurately.
(2) The Company has no plans pursuant to which SARs may be granted.
(3) With respect to options granted to Ms. Kaiser, all options were vested
immediately upon the date of grant. Ms. Kaiser's options were granted
for a term of five years but are subject to earlier termination under
certain circumstances relating to the termination of employment or a
change in control of the Company. The 1986 Plan provides that if the
number of outstanding shares of the Company's Common Stock are increased,
decreased or exchanged for different securities as a result of a
reorganization, merger, consolidation, recapitalization,
reclassification, stock dividend, stock split, or other similar
transaction, the Board shall make appropriate adjustment in the number
and kind of securities authorized by the 1986 Plan and to which
outstanding options relate and the exercise price per share. In the
event of the dissolution or liquidation of the Company, a merger,
consolidation, sale of assets or other business combination in which the
Company is not the surviving corporation, or a sale of substantially all
the assets or of more than 80% of the outstanding stock of the Company
to another corporation, either (i) the surviving corporation shall
assume the options on such terms as shall substantially preserve the
rights and benefits of outstanding options or (ii) the options shall
become exercisable in full prior to such dissolution, liquidation,
merger, consolidation, sale of assets or stock or other business
combination.
11
<PAGE> 12
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1995
AND FISCAL 1995 YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options/SARs at Money Options/SARs at
Fiscal Year-End (#) Fiscal Year/End ($)(1)
------------------------------- ----------------------------
Shares
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexerciable
- ------------------- ----------- -------- ----------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Hal I. Lieberman -0- $ 0 180,000 -0- $ 310,000 $ 0
Thomas M. Asher -0- $ 0 5,000 -0- $ 0 $ 0
Joshua Levy -0- $ 0 5,000 -0- $ 0 $ 0
Sharon C. Kaiser -0- $ 0 2,800 -0- $ 0 $ 0
</TABLE>
___________
(1) Based on a price per share of $3.50, which was the closing bid price of
the Common Stock on NASDAQ at the close of business on December 29, 1995.
Compensation of Directors
- -------------------------
Directors who are not employees of the Company receive $750 and reimbursement
of travel expenses for each Board meeting attended. From February 1994 until
January 1995, Dr. Warner provided periodic consulting services to the Company
concerning regulatory and clinical issues relating to the Company's research
and development activities. Dr. Warner provided these services on an as
needed basis for an hourly rate of $100.00. Dr. Warner received an aggregate
of $400 for consulting services rendered in 1995.
Employment Agreement and Arrangements
- -------------------------------------
The Company has an Executive Employment Agreement with Hal I. Lieberman,
president and chief executive officer of the Company. The Agreement entitles
Mr. Lieberman to a minimum of one years' notice prior to termination or
payment of one year's salary in lieu of such notice. If Mr. Lieberman elects
to terminate his employment with the Company upon a merger or acquisition,
the Company must pay him a lump sum within 30 days of such termination equal
to 1.5 times his then current annual salary plus a bonus equal to any bonus
payments actually made to him during the most recent twelve-month period.
Mr. Lieberman's current compensation under the agreement entitles him to
$150,000 in annual salary. No other officers of the Company have employment
agreements.
Sharon C. Kaiser, the Company's vice president of finance and chief financial
officer since May 1995, became a full-time employee of the Company in January
1996. At that time, the Company agreed to grant her stock options
exercisable for 48,000 shares of Common Stock, vesting ratably over a four-
year period commencing on January 1, 1996. As of the date of this Proxy
Statement, these stock options had not yet been granted. In addition, the
Company has agreed to give Ms. Kaiser six months' advance notice of
termination of her employment by the Company unless the termination is for
cause (which is not defined) or, if shorter notice is given, to make a
severance payment to Ms. Kaiser equal to her salary for the remainder of the
six-month period.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee reviews and recommends to the Board of Directors
the compensation and other terms and conditions of employment of the
executive officers of the Company, as well as incentive plan guidelines for
HemaCare employees generally.
The policies underlying the Committee's compensation decisions are designed
to attract and retain the best qualified management personnel available.
The Company compensates its executive officers primarily through salaries.
The Company, at its discretion, may, as it has in other years, reward
executive officers through bonus programs based on profitability and other
12
<PAGE> 13
objectively measurable performance factors. No bonus programs were in effect
in 1995 due to slow down in the Company's core business and the costs
associated with the Company's research and development project which has had
a negative impact on the Company's profitability. The Company plans to
develop an employee profit sharing plan in 1996 since the research and
development project was discontinued in 1995, and it has adopted a new
strategic direction to expand its blood products and services business
nationally. The Company also provides incentive compensation in the form of
stock options to its executive officers to align the long-term interests of
executives with those of the Company's shareholders.
In establishing executive compensation, the Committee evaluates individual
performance as it impacts overall Company performance with particular focus
on an individual's contribution to the realization of operating profits and
achievement of strategic business goals including the timely development and
introduction of products and the creation of markets in new geographic
territories. Since the Company engaged in considerable research and
development which negatively affected profitability in the near-term, as had
been the case over the last four years, the evaluation of profitability is
made on a forward-looking as well as an historical basis. The Committee also
considers the performance of the Company relative to the performance of its
competitors and seeks to compensate executives at levels comparable to the
average compensation paid for similar positions by other companies within
the technological services industry which are of a like size (in terms of net
worth and level of business). Market data on competitive compensation levels
were obtained from proxy statements disclosing compensation paid to
executives in comparable positions in small- to medium-sized businesses
within the technological services industry. The Company has, from time to
time, gathered executive compensation information from salary surveys
conducted by outside consulting firms. The Committee further attempts to
rationalize a particular executive's compensation with that of other
executive officers of the Company in an effort to distribute compensation
fairly among the executive officers. Although the components of executive
compensation (salary and option grants) are reviewed separately, compensation
decisions are made based on a review of total compensation. The number of
shares covered by option grants is determined in the context of this review.
Because the Committee establishes the size of option grants based on its
evaluation of an individual's performance and competitive factors, as
described above, it does not consider options previously granted in
determining the size of any executive's option grant in a particular year.
As described above, the Company has a written employment agreement with its
chief executive officer which sets forth the compensation and other terms and
conditions of his employment by the Company. The agreement required the
payment of an annual salary of $150,000 in 1995. Mr. Lieberman did not
receive a salary increase in 1995.
Since the Company's historical levels of executive compensation have been
substantially less than $1,000,000 per employee annually, the Compensation
Committee has not yet established a policy with respect to qualifying
compensation to the Company's executive officers for deductibility under
Section 162(m) of the Code.
Compensation Committee
- ----------------------
Glenn W. Bartlett, Chairman
Willis L. Warner
Jon B. Victor
STOCK PERFORMANCE
Set forth below is a graph comparing the yearly cumulative total shareholder
return on the Company's Common Stock, with the yearly cumulative total return
on (a) the Nasdaq Stock Market (U.S. Companies) Index and (b) the Nasdaq
Health Services Stock Index. The graph assumes $100 invested on December 29,
1990 in each of the Company's Common Stock, the NASDAQ Stock Market Index and
the NASDAQ Health Services Index. The comparison assumes that all dividends
are reinvested.
The comparisons in the graph below are based on historical data and are not
indicative of, or intended to forecast, the possible future performance of
the Company's Common Stock.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR HEMACARE CORPORATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ Stock Market NASDAQ Health
HemaCare Corporation (U.S. Companies) Services
-------------------- ------------------- -------------
<S> <C> <C> <C>
Dec-31-90 100.0 100.0 100.0
Dec-31-91 298.4 160.6 222.6
Dec-31-92 372.9 186.9 230.6
Dec-31-93 311.9 214.5 266.0
Dec-30-94 176.3 209.7 285.6
Dec-29-95 203.4 296.3 364.9
</TABLE>
14
<PAGE> 15
PRINCIPAL SHAREHOLDERS
The following table sets forth the ownership of the Company's Common Stock as
of March 31, 1996 by (i) all persons known to the Company to own beneficially
more than 5% of the outstanding Common Stock, (ii) each director (and nominee
for director) of the Company, (iii) each Named Executive Officer and (iv) all
executive officers and directors of the Company as a group. Except as
otherwise indicated, each of the persons named below has sole voting and
investment power with respect to the shares of Common Stock owned by such
shareholder.
<TABLE>
<CAPTION>
Number of Shares Percent of Outstanding
Name Beneficially Owned Common Stock
- --------------------------------------- ------------------ ----------------------
<S> <C> <C>
Mellon Bank Corporation (1) 606,000 (2) 10.22%
Medicorp Inc. (1) 400,000 (3) 6.32
Edgewater Private Equity Fund, L.P. (1) 360,000 (4) 6.06
Jon B. Victor (1) 360,000 (5) 6.06
Thomas M. Asher (1) 346,807 (6) 5.84
Charles R. Schwab, Jr. (1) 306,500 (7) 5.17
Kensington Capital Management, Inc. (1) 302,500 (8) 5.10
Joshua Levy 269,946 (9) 4.55
Hal I. Lieberman 180,000 (10) 2.95
Glenn W. Bartlett 15,000 0.25
Willis L. Warner 15,000 (10) 0.25
Sharon C. Kaiser 2,800 (10) 0.05
All executive officers and
directors as a group (7 persons) 1,189,553 19.34%
</TABLE>
____________
(1) The address of Mellon Bank Corporation is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258. The address of Medicorp Inc.
("Medicorp") is 5800 Royalmount, Montreal, Quebec H4P 1K5. The address
of Edgewater Private Equity Fund, L.P. ("Edgewater") is 666 Grand Avenue,
Suite 200, Des Moines, Iowa 50309. The address of Mr. Victor is
Greenwich Ventures, LLC, 2 Soundview Drive, Greenwich, Connecticut 06830.
The address of Mr. Asher is c/o HemaCare Corporation, 4954 Van Nuys
oulevard, Sherman Oaks, California 91403. The address of Kensington
Capital Management ("Kensington") and Charles R. Schwab, Jr. is 233
South Wacker Drive, Suite 9320, Chicago, Illinois 60606.
(2) Includes 595,000 shares beneficially owned by The Dreyfus Corporation,
300,000 shares beneficially owned by Premier Strategic Growth Fund and
11,000 shares beneficially owned by Mellon Bank, N.A. The Dreyfus
Corporation and Mellon Bank, N.A. are subsidiaries of Mellon Bank
Corporation. Premiuer Strategic Growth Fund is an investment company
managed by The Dreyfus Corporation.
(3) Represents shares potentially issuable upon exercise of previously
issued warrants. In November 1995, the Company notified Medicorp that
it was terminating its license agreement with Medicorp due to an alleged
default by Medicorp, and that the stock purchase warrants issued under
the license agreement had terminated by their terms due to Medicorp's
default. Medicorp has denied that it has breached the license agreement
and has alleged that the warrants remain outstanding.
(4) Includes 115,000 shares held by Jon B. Victor and 15,000 shares issuable
upon exercise of currently exercisable options held by Mr. Victor. Mr.
Victor is a shareholder of Gordon Management, Inc., the general partner
of Edgewater.
(5) Includes 15,000 shares issuable upon exercise of currently exercisable
options. Includes 230,000 shares of stock owned by Edgewater. Mr.
Victor is a shareholder of Gordon Management, Inc., the general partner
of Edgewater. Mr. Victor disclaims beneficial ownership of the shares
beneficially owned by Edgewater and its general partner.
(6) Includes 5,000 shares issuable upon exercise of currently exercisable
options and 341,807 shares held in an irrevocable trust for the benefit
of members of the Asher family, as to which Mr. Asher has voting and
investment power.
(7) Includes 302,500 shares held by Kensington, of which Mr. Schwab is the
president and majority shareholder. Mr. Schwab disclaims beneficial
ownership of the shares beneficially owned by Kensington.
(8) Charles R. Schwab, Jr. is the president and majority shareholder of
Kensington. See Note 7.
15
<PAGE> 16
(9) Includes 5,000 shares issuable upon exercise of currently exercisable
options and 50,034 shares held in an irrevocable trust for the benefit
of members of the Levy family, as to which Mr. Levy has voting and
investment power.
(10) Represents shares issuable upon exercise of currently exercisable stock
options.
CERTAIN TRANSACTIONS
In 1994 and 1995, the Company made a series of personal loans to Joshua Levy,
senior vice president, which totaled $98,307. Interest accrued for the years
ended December 31, 1995 and 1994 totaled $9,571 and $1,095, respectively. The
proceeds of these loans were used to refinance existing debt which was
collateralized by HemaCare stock owned by Dr. Levy. In January 1996, these
individual notes were consolidated into a promissory note which accrues
interest at a rate equal to the rate equal to the prime rate of a commercial
bank plus 0.5%. The note is collateralized by 40,000 shares of HemaCare
stock owned by Dr. Levy. The note requires four annual installment payments
of $15,000 due on January 31, and the balance of the principal and accrued
interest is due on January 31, 2000. The Company received its first annual
installment payment of $15,000 in January 1996.
In 1995, Joshua Levy, as part of his private medical practice in the
treatment of his own patients, received professional fees from patients,
insurers or other third-party payors for supervising therapeutic hemapheresis
procedures at hospitals where the Company provided such service. Company
sales to unaffiliated customers through this related party medical practice
were approximately $802,000, or 7% of total sales, for the year ended
December 31, 1995. Dr. Levy is continuing to receive fees for similar
services in 1996.
Recent amendments to the Federal self-referral laws and related regulations
could restrict the Company's ability to provide therapeutic services to those
patients of Dr. Levy who are covered by Medicare or MediCal. It is estimated
that revenues from these patients represented approximately 3.5% of the
Company's 1995 revenues ($401,000). However, the legal requirements are
complex, and the Company has requested a clarification of their application
to its business from regulatory authorities. Dr. Levy has informed the
Company that, in the event of an adverse response, it would be his intention
to change his relationship with the Company to allow the Company to retain
revenue from services for these patients. The Company has been informed by
counsel that legislation may be introduced in Congress which, if adopted,
would exclude the services performed by the company in hospitals from self-
referral prohibitions. However, there can be no assurance that such
legislation will be introduced and, if introduced, that it will be enacted.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants appointed to audit the Company's 1995
financial statements were Arthur Andersen LLP, who continue to serve in such
capacity for the current year. A representative of Arthur Andersen LLP is
expected to be present at the Meeting with the opportunity to make a
statement if he or she so desires and to respond to appropriate questions.
FUTURE PROPOSALS OF SHAREHOLDERS
Any shareholder intending to submit to the Company a proposal for inclusion
in the Company's Proxy Statement and form of Proxy for the 1997 Annual
Meeting of Shareholders must submit such proposal sufficiently far in advance
so that it is received by the Company not later than December 26, 1996.
FORM 10-K
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (excluding the exhibits thereto), as filed with the
Securities and Exchange Commission, accompanies this Proxy Statement, but it
is not deemed to be a part of the proxy soliciting material. The Company
will provide a copy of the exhibits to its Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 upon the written request of any beneficial
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<PAGE> 17
owner of the Company's securities as of the record date for the Annual
Meeting and reimbursement of the Company's reasonable expenses. Such request
should be addressed to the Company c/o JoAnn Stover, Corporate Secretary, at
4954 Van Nuys Boulevard, Sherman Oaks, California 91403.
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Shareholders calls for the transaction
of such other business as may properly come before the Meeting, the Board of
Directors has no knowledge of any matters to be presented for action by the
shareholders at the Meeting, other than as set forth above. The enclosed
Proxy gives discretionary authority, however, in the event that any
additional matters should be presented.
SHAREHOLDERS ARE URGED IMMEDIATELY TO COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED, TO WHICH NO POSTAGE
NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
By the Board of Directors
/s/ JoAnn R. Stover
-----------------------
JoAnn R. Stover
Secretary
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APPENDIX A
HEMACARE CORPORATION
1996 STOCK INCENTIVE PLAN
SECTION 1. Purposes.
The purposes of the HemaCare Corporation 1996 Stock Incentive Plan (the
"Plan") are to (i) enable HemaCare Corporation (the "Company") and Related
Companies (as defined below) to attract, motivate and retain top-quality
officers, employees, consultants, advisers and independent contractors
(including without limitation dealers, distributors and other business
entities or persons providing services on behalf of the Company or a Related
Company), (ii) provide substantial incentives for such officers, employees,
consultants, advisers and independent contractors of the Company or a Related
Company ("Discretionary Participants") to act in the best interests of the
shareholders of the Company, (iii) reward extraordinary effort by
Discretionary Participants on behalf of the Company or a Related Company and
(iv) enable the Company to pay part of the compensation of its Outside
Directors (as defined in Section 5.2) in options to purchase the Company's
Common Stock, thereby increasing such directors' proprietary interest in the
Company. For purposes of the Plan, a "Related Company" means any corporation,
partnership, joint venture or other entity in which the Company owns,
directly or indirectly, at least a twenty percent (20%) beneficial ownership
interest. As used herein, the term "Participant" shall mean either a
Discretionary Participant or an Outside Director. No Outside Director shall
be deemed a Discretionary Participant.
SECTION 2. Types of Awards. Awards under the Plan may be in the form
of (i) Stock Options or (ii) Restricted Stock.
SECTION 3. Administration.
3.1 The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Board") or such other committee of
directors as the Board shall designate, which committee shall consist of not
less than two disinterested persons (as such term is defined in Rule 16b-3
under the Securities Exchange Act of 1934 (the "Exchange Act") or any
successor rule ("Rule 16b-3")) who shall serve at the pleasure of the Board,
each of whom shall also be an "outside director" within the meaning of
Section 162(m) of the Internal Revenue Code and Section 1.162-27 of the
Treasury Regulations or any successor provision(s) thereto ("Section 162(m)");
provided, however, that for so long as the version of Rule 16b-3 in effect
prior to May 1, 1991 is applicable with respect to the Company, such
committee shall consist of not less than three persons meeting the foregoing
qualifications; and provided, further, that if there are not two or three
persons, as the case may be, on the Board who meet the foregoing
qualifications, any such committee may be comprised of two or more Outside
Directors (as defined in Section 5.2) of the Company. If no such committee
has been appointed by the Board, the Plan shall be administered by the Board.
Such committee as shall be designated to administer the Plan or the Board is
referred to herein as the "Committee."
3.2 The Committee shall have the following authority with respect to
awards under the Plan to Discretionary Participants: to grant awards to
eligible Discretionary Participants under the Plan; to adopt, alter and
repeal such administrative rules, guidelines and practices governing the
Plan as it shall deem advisable; to interpret the terms and provisions of the
Plan and any award granted under the Plan; and to otherwise supervise the
administration of the Plan. In particular, and without limiting its
authority and powers, except with respect to awards to Outside Directors, the
Committee shall have the authority:
(a) to determine whether and to what extent any award or
combination of awards will be granted hereunder;
(b) to select the Discretionary Participants to whom awards
will be granted;
(c) to determine the number of shares of the common stock of
the Company (the "Stock") to be covered by each award granted
hereunder, provided that no Discretionary Participant will be
granted Stock Options on or with respect to more than 250,000
shares of Stock in any calendar year;
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(d) to determine the terms and conditions of any award
granted hereunder, including, but not limited to, any vesting or
other restrictions based on performance and such other factors as
the Committee may determine, and to determine whether the terms and
conditions of the award are satisfied;
(e) to determine the treatment of awards upon a Discretionary
Participant's retirement, disability, death, termination for cause
or other termination of employment or other qualifying relationship
with the Company or a Related Company;
(f) to determine that amounts equal to the amount of any
dividends declared with respect to the number of shares covered by
an award (i) will be paid to the Discretionary Participant
currently or (ii) will be deferred and deemed to be reinvested or
(iii) will otherwise be credited to the Discretionary Participant,
or that the Discretionary Participant has no rights with respect to
such dividends;
(g) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an
award will be deferred either automatically or at the election of a
Discretionary Participant, including providing for and determining
the amount (if any) of deemed earnings on any deferred amount
during any deferral period;
(h) to provide that the shares of Stock received as a result
of an award shall be subject to a right of first refusal, pursuant
to which the employee shall be required to offer to the Company any
shares that the employee wishes to sell, subject to such terms and
conditions as the Committee may specify;
(i) to amend the terms of any award, prospectively or retro-
actively; provided, however, that no amendment shall impair the
rights of the award holder without his or her consent; and
(j) to substitute new Stock Options for previously granted
Stock Options, or for options granted under other plans, in each
case including previously granted options having higher option
prices.
3.3 With respect to awards to Outside Directors, the Committee shall
have authority: to interpret the Plan; to adopt, amend, and rescind
administrative regulations to further the purposes of the Plan; and to take
any other action necessary to the proper operation of the Plan. However, the
Committee shall have no discretion to vary the amount or terms of awards as
set forth in Section 11, except as provided in Section 4.3.
3.4 All determinations made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company
and all Participants.
3.5 The Committee may from time to time delegate to one or more
officers of the Company any or all of its authorities granted hereunder except
with respect to awards granted to persons subject to Section 16 of the
Exchange Act. The Committee shall specify the maximum number of shares that
the officer or officers to whom such authority is delegated may award, and
the Committee may in its discretion specify any other limitations or
restrictions on the authority delegated to such officer or officers.
SECTION 4. Stock Subject to Plan.
4.1 The total number of shares of Stock reserved and available for
distribution under the Plan shall be 750,000 (subject to adjustment as
provided in Section 4.3); provided, however, that no award of a Stock Option
or Restricted Stock may be made at any time if, after giving effect to such
award, the total number of shares of Stock issuable upon exercise of all
outstanding options and warrants of the Company (whether or not under the
Plan) plus the total number of shares of Stock called for under any stock
bonus or similar plan of the Company (including shares of Stock underlying
awards of Stock Options or Restricted Stock under the Plan) would exceed
thirty percent (30%) of the total number of shares of Stock outstanding at
the time of such award. For purposes of the foregoing: (i) those shares
issuable upon exercise of rights, options or warrants, or under a stock
purchase plan, meeting the requirements for exclusion set forth at any time
and from time to time in Rule 260.140.45 of the California Commissioner of
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Corporations shall not be counted against the thirty percent (30%)
limitation; (ii) any outstanding preferred or senior common shares of the
Company convertible into Stock shall be deemed converted in determining the
total number of outstanding shares of Stock at any time; and (iii) any shares
of Stock subject to promotional waivers under Rule 260.141 of the California
Commissioner of Corporations shall not be deemed to be outstanding. Shares
of Stock issuable in connection with any award under the Plan may consist of
authorized but unissued shares or treasury shares.
4.2 To the extent a Stock Option terminates without having been
exercised, or shares awarded are forfeited, the shares subject to such award
shall again be available for distribution in connection with future awards
under the Plan, subject to the limitations set forth in Section 4.1, unless
the forfeiting Participant received any benefits of ownership such as
dividends from the forfeited award.
4.3 In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, Stock dividend, Stock split,
spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Stock, a substitution or adjustment, as
may be determined to be appropriate by the Committee in its sole discretion,
shall be made in the aggregate number of shares reserved for issuance under
the Plan, the number of shares subject to outstanding awards and the amounts
to be paid by award holders or the Company, as the case may be, with respect
to outstanding awards; provided, however, that no such adjustment shall
increase the aggregate value of any outstanding award. In the event any
change described in this Section 4.3 occurs and an adjustment is made in the
outstanding Stock Options, a similar adjustment shall be made in the maximum
number of shares covered by Stock Options that may be granted to any employee
pursuant to Section 3.2(c) and the number and terms of Stock Options to be
granted to Outside Directors under Section 11.
SECTION 5. Eligibility.
5.1 Discretionary Participants are eligible to be granted awards under
the Plan other than under Section 11. Except as provided in Section 5.2,
Outside Directors are not eligible to be granted awards under the Plan.
The Discretionary Participants under the Plan shall be selected from time to
time by the Committee, in its sole discretion, from among those eligible.
5.2 Awards under Section 11 of the Plan shall be made solely to Outside
Directors, which term shall mean any director of the Company other than one
who is an officer (other than a non-employee Chairman of the Board of the
Company) or employee of the Company or a Related Company.
SECTION 6. Stock Options.
6.1 The Stock Options awarded to officers and employees under the Plan
may be of two types: (i) Incentive Stock Options within the meaning of
Section 422 of the Internal Revenue Code or any successor provision thereto
("Section 422"); and (ii) Non-Qualified Stock Options. If any Stock Option
does not qualify as an Incentive Stock Option, or the Committee at the time
of grant determines that any Stock Option shall be a Non-Qualified Stock
Option, it shall constitute a Non-Qualified Stock Option. Stock Options
awarded to any Discretionary Participant who is not an officer or employee of
the Company or a Related Company shall be Non-Qualified Stock Options.
6.2 Subject to the following provisions, Stock Options awarded to
Discretionary Participants under the Plan shall be in such form and shall
have such terms and conditions as the Committee may determine:
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
Committee; provided, however, that the option price per share
of Stock shall be not less than one hundred percent (100%) of the
"Fair Market Value" (as defined below) of the Stock on the date of
grant of the Stock Option; and provided, further, that if at the
time of grant the Discretionary Participant owns, or would be
considered to own by reason of Section 424(d) of the Internal
Revenue Code or any successor provision thereto, more than ten
percent (10%) of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary of the Company,
the option price per share of Stock shall be not less than one
hundred ten percent (110%) of the Fair Market Value of the Stock on
the date of grant of the Stock Option. For purposes of the Plan,
"Fair Market Value" in relation to a share of the Stock means, if
the Stock is publicly traded, the closing per share bona fide bid
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price of the Stock on such date. In any situation not covered
above, the Fair Market Value shall be determined by the Committee
in accordance with one of the valuation methods described in
Section 20.2031-2 of the Federal Estate Tax Regulations or any
successor provision thereto.
(b) Option Term. The term of each Stock Option shall be
fixed by the Committee, but in no event longer than one hundred
twenty (120) months after the date of grant of such Stock Option.
(c) Exercisability. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as
shall be determined by the Committee; provided, however, that in
the case of Stock Options awarded to Discretionary Participants
other than officers, consultants or independent contractors, Stock
Options under any award shall become exercisable at the rate of at
least twenty percent (20%) per year over five (5) years from the
date the Stock Option is granted. If the Committee provides that
any Stock Option is exercisable only in installments, the Committee
may waive such installment exercise provisions at any time in whole
or in part.
(d) Method of Exercise. Stock Options may be exercised in
whole or in part at any time during the option period by giving
written notice of exercise to the Company specifying the number of
shares to be purchased, accompanied by payment of the purchase
price. Payment of the purchase price shall be made in such manner
as the Committee may provide in the award, which may include cash
(including cash equivalents), delivery of shares of Stock already
owned by the optionee or subject to awards hereunder, any other
manner permitted by law as determined by the Committee, or any
combination of the foregoing. The Committee may provide that all
or part of the shares received upon the exercise of a Stock Option
which are paid for using Restricted Stock shall be restricted in
accordance with the original terms of the award in question.
(e) No Shareholder Rights. An optionee shall have no rights
to dividends or other rights of a shareholder with respect to
shares subject to a Stock Option until the optionee has given
written notice of exercise and has paid for such shares.
(f) Surrender Rights. The Committee may provide that Stock
Options may be surrendered for cash upon any terms and conditions
set by the Committee.
(g) Non-transferability; Limited Transferability. A Stock
Option Agreement may permit an optionee to transfer the Stock
Option to his or her children, grandchildren or spouse ("Immediate
Family"), to one or more trusts for the benefit of such Immediate
Family members, or to one or more partnerships in which such
Immediate Family members are the only partners if (i) the agreement
setting forth such Stock Option expressly provides that such Stock
Option may be transferred only with the express written consent of
the Committee, and (ii) the optionee does not receive any
consideration in any form whatsoever for such transfer. Any Stock
Option so transferred shall continue to be subject to the same
terms and conditions as were applicable to such Stock Option
immediately prior to the transfer thereof. Any Stock Option not
(x) granted pursuant to any agreement expressly allowing the
transfer of such Stock Option or (y) amended expressly to permit
its transfer shall not be transferable by the optionee otherwise
than by will or by the laws of descent and distribution, and such
Stock Option shall be exercisable during the optionee's lifetime
only by the optionee.
(h) Termination of Relationship. If an optionee's employment
or other qualifying relationship with the Company or a Related
Company terminates by reason of death, disability, retirement,
voluntary or involuntary termination or otherwise, the Stock Option
shall be exercisable to the extent determined by the Committee;
provided, however, that unless employment or such other qualifying
relationship is terminated for cause (as may be defined by the
Committee in connection with the grant of any Stock Option), the
Stock Option shall remain exercisable (to the extent that it was
otherwise exercisable on the date of termination) for (A) at least
six (6) months from the date of termination if termination was
caused by death or disability or (B) at least ninety (90) days
from the date of termination if termination was caused by other
than death or disability. The Committee may provide that,
notwithstanding the option term fixed pursuant to Section 6.2(b),
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a Stock Option which is outstanding on the date of an optionee's
death shall remain outstanding for an additional period after the
date of such death.
6.3 Notwithstanding the provisions of Section 6.2, no Incentive Stock
Option shall (i) have an option price which is less than one hundred percent
(100%) of the Fair Market Value of the Stock on the date of the award of the
Stock Option (or less than one hundred ten percent (110%) of the Fair Market
Value of the Stock on the date of award of the Stock Option if the
Discretionary Participant owns, or would be considered to own by reason of
Section 424(d) of the Internal Revenue Code or any successor provision
thereto, more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary of the
Company at the time of the grant of the Stock Option), (ii) be exercisable
more than ten (10) years after the date such Incentive Stock Option is
awarded (five (5) years after the date of award if the Discretionary
Participant owns, or would be considered to own by reason of Section
424(d) of the Internal Revenue Code or any successor provision thereto, more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary of the Company at the time
of the grant of the Stock Option), (iii) be awarded more than ten (10) years
after the effective date of the Plan (or the latest restatement of the Plan)
or (iv) be transferable other than by will or by the laws of descent and
distribution. In addition, the aggregate Fair Market Value (determined as
of the time a Stock Option is granted) of Stock with respect to which
Incentive Stock Options granted after December 31, 1986 are exercisable for
the first time by a Discretionary Participant in any calendar year (under
the Plan and any other plans of the Company or any subsidiary or parent
corporation) shall not exceed $100,000.
SECTION 7. Restricted Stock.
Subject to the following provisions, all awards of Restricted Stock to
Discretionary Participants shall be in such form and shall have such terms
and conditions as the Committee may determine:
(a) The Restricted Stock award shall specify the number of shares
of Restricted Stock to be awarded, the price, if any, to be paid by the
recipient of the Restricted Stock and the date or dates on which, or the
conditions upon the satisfaction of which, the Restricted Stock will
vest. The vesting of Restricted Stock may be conditioned upon the
completion of a specified period of service with the Company or a
Related Company, upon the attainment of specified performance goals or
upon such other criteria as the Committee may determine.
(b) Stock certificates representing the Restricted Stock awarded
to an employee shall be registered in the Discretionary Participant's
name, but the Committee may direct that such certificates be held by
the Company on behalf of the Discretionary Participant. Except as may
be permitted by the Committee, no share of Restricted Stock may be sold,
transferred, assigned, pledged or otherwise encumbered by the
Discretionary Participant until such share has vested in accordance
with the terms of the Restricted Stock award. At the time Restricted
Stock vests, a certificate for such vested shares shall be delivered to
the Discretionary Participant (or his or her designated beneficiary in
the event of death), free of all restrictions.
(c) The Committee may provide that the Discretionary Participant
shall have the right to vote or receive dividends, or both, on
Restricted Stock. The Committee may provide that Stock received as a
dividend on, or in connection with a stock split of, Restricted Stock
shall be subject to the same restrictions as the Restricted Stock.
(d) Except as may be provided by the Committee, in the event of
a Discretionary Participant's termination of employment or other
qualifying relationship with the Company or a Related Company before
all of his or her Restricted Stock has vested, or in the event any
conditions to the vesting of Restricted Stock have not been satisfied
prior to any deadline for the satisfaction of such conditions set forth
in the award, the shares of Restricted Stock which have not vested shall
be forfeited, and the Committee may provide that the lower of (i) any
purchase price paid by the Discretionary Participant and (ii) the
Restricted Stock's aggregate Fair Market Value on the date of forfeiture
shall be paid in cash to the Discretionary Participant.
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(e) The Committee may waive, in whole or in part, any or all of
the conditions to receipt of, or restrictions with respect to, any or
all of the Discretionary Participant's Restricted Stock.
SECTION 8. Substitute Options in Business Combinations.
If the Company at any time should succeed to the business of another
corporation through a merger or consolidation, or through the acquisition of
stock or assets of such corporation, Stock Options may be granted under the
Plan to those employees of such corporation or its related companies who,
in connection with such succession, become employees of the Company or a
Related Company in substitution for options to purchase stock of such
acquired corporation held by them at the time of such succession. The
Committee, in its sole discretion, shall determine the extent to which such
substitute Stock Options shall be granted (if at all), the persons to receive
such substitute Stock Options (who need not be all optionees of such
corporation), the number and type of Stock Options to be received by each
such person, the exercise price of such Stock Options (which may be
determined without regard to Section 6) and the terms and conditions of
such substitute Stock Options; provided, however, that the exercise price of
each substitute Stock Option shall be an amount such that, in the sole
judgment of the Committee (and if the Stock Options to be granted are
intended to be Incentive Stock Options, in compliance with Section 424(a)
of the Code), the economic benefit provided by such Stock Option is not
greater than the economic benefit represented by the stock option of the
acquired corporation as of the date of the Company's acquisition of such
corporation. Any substitute Stock Option granted under this Section 8 shall
expire upon the expiration date of such other stock option or, if earlier,
ten (10) years after the date of grant of the substitute Stock Option, and,
notwithstanding Section 6, shall be exercisable during the period(s) in which
the other stock option would have been exercisable. Any provision of this
Section 8 to the contrary notwithstanding, no Stock Option shall be granted,
nor any action taken, permitted or omitted, which would have the effect of
causing the Plan or any awards hereunder to fail to qualify for exemption
under Rule 16b-3, without the express approval of the Board.
SECTION 9. Election to Defer Awards.
The Committee may permit a Discretionary Participant to elect to defer
receipt of an award for a specified period or until a specified event, upon
such terms as are determined by the Committee.
SECTION 10. Tax Withholding.
10.1 Each Discretionary Participant shall, no later than the date as of
which the value of an award first becomes includible in such person's gross
income for applicable tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, local
or other taxes of any kind required by law to be withheld with respect to
the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company (and, where
applicable, any Related Company), shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind
otherwise due to the Discretionary Participant.
10.2 To the extent permitted by the Committee, and subject to such terms
and conditions as the Committee may provide, a Discretionary Participant may
elect to have the withholding tax obligation, or any additional tax
obligation with respect to any awards hereunder, satisfied by (i) having the
Company withhold shares of Stock otherwise deliverable to such person with
respect to the award or (ii) delivering to the Company shares of unrestricted
Stock.
SECTION 11. Stock Options for Outside Directors.
11.1 Each person who has not previously served as a director of the
Company and who is initially elected or appointed as an Outside Director on
or after the effective date of the Plan shall be granted, as of the date of
such initial election or appointment, a Stock Option to purchase 15,000
shares of Stock (subject to adjustment as provided in Section 4.3); provided,
however, that if the grant of such Stock Options is required to be qualified
under the California Corporate Securities Law of 1968, as amended, and such
qualification has not been obtained as of any such date, the date of grant
shall be delayed until the date of such qualification.
11.2 Stock Options granted under this Section 11 shall be Non-Qualified
Stock Options and shall have the following terms and conditions:
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(a) Option Price. The option price per share of Stock
purchasable under the Stock Option shall be equal to the closing
per share bona fide bid price of the Stock on the date such Stock
Option is granted.
(b) Option Term. The term of the Stock Option shall be ten
(10) years, subject to earlier termination in the event of
termination of service as a director, as set forth in paragraph
(e) below, and subject to earlier or later termination in the
event of the director's death, as set forth in paragraph (f) below.
(c) Exercisability. Each Stock Option shall be immediately
exercisable and vested as of the date of grant.
(d) Method of Exercise. The Stock Options may be exercised
in whole or in part at any time during the option period by giving
written notice of exercise to the Company specifying the number of
shares to be purchased, accompanied by payment of the purchase
price. Payment of the purchase price shall be made in cash
(including cash equivalents) or by delivery of shares of Stock
already owned by the optionee for at least six (6) months, or any
combination of the foregoing. Shares delivered upon payment of
the exercise price shall be valued on a per share basis equal to
the closing per share bona fide bid price of the Stock on the date
of such delivery.
(e) Termination of Service as Director. If an optionee's
status as a director of the Company is terminated for cause
(as defined below), such director's Stock Options shall terminate
on the date of such termination of service. If an optionee's
status as a director is terminated for any reason other than death
or termination for cause, such director's Stock Options may be
exercised only within ninety (90) days of such termination of
service. For purposes of this paragraph, termination for cause
shall mean termination on account of any act of fraud or
intentional misrepresentation, embezzlement, misappropriation
or conversion of assets or opportunities of the Company or any
Related Company.
(f) Death of Optionee. If an optionee's status as a director
of the Company is terminated by reason of the optionee's death,
such director's Stock Options may be exercised by his or her legal
representatives only within one (1) year following the director's
death.
(g) Non-transferability. No Stock Option shall be
transferable by the optionee other than by will or by the laws of
descent and distribution. During the optionee's lifetime, all
Stock Options shall be exercisable only by the optionee.
(h) No Shareholder Rights. An optionee shall have neither
rights to dividends nor other rights of a shareholder with respect
to shares subject to a Stock Option until the optionee has given
written notice of exercise and has paid for such shares.
SECTION 12. Amendments and Termination.
No awards may be granted under the Plan more than ten (10) years after
the date of approval of the Plan by the shareholders of the Company. The
Board may discontinue the Plan at any earlier time and may amend it from time
to time. No amendment or discontinuation of the Plan shall adversely affect
any award previously granted without the award holder's written consent.
The provisions of Section 11 shall not be amended more than once every six
(6) months, other than to comport with changes in the Internal Revenue
Code, the EmployeeRetirement Income Security Act, or the rules thereunder.
Amendments may be made without shareholder approval except (i) if and to the
extent necessary to satisfy any applicable mandatory legal or regulatory
requirements (including the requirements of any stock exchange or over-the-
counter market on which the Stock is listed or qualified for trading and
any requirements imposed under any state securities laws or regulations as
a condition to the registration of securities distributable under the Plan
or otherwise), or (ii) as required for the Plan to satisfy the requirements
of Rule 16b-3, Section 162(m), Section 422 or any other non-mandatory legal
or regulatory requirements if the Board of Directors deems it desirable for
the Plan to satisfy any such requirements.
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SECTION 13. Change of Control.
13.1 In the event of a Change of Control, unless otherwise determined
by the Committee at the time of grant or by amendment (with the holder's
consent) of such grant:
(a) all outstanding Stock Options awarded under the Plan
shall become fully exercisable and vested; and
(b) the restrictions applicable to any outstanding Restricted
Stock awards under the Plan shall lapse and such shares and awards
shall be deemed fully vested.
13.2 A "Change of Control" shall be deemed to occur if:
(a) individuals who, as of June 5, 1996, constitute the
entire Board of Directors of the Company ("Incumbent Directors")
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to such date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of
at least a majority of the then Incumbent Directors (other than
an election or nomination of an individual whose assumption of
office is the result of an actual or threatened election contest
relating to the election of directors of the Company, as such
terms are used in Rule 14a-11 under the Exchange Act), also shall
be an Incumbent Director;
(b) the shareholders of the Company shall approve (i) any
merger, consolidation or recapitalization of the Company (or, if
the capital stock of the Company is affected, any subsidiary of
the Company) or any sale, lease, or other transfer (in one
transaction or a series of transactions contemplated or arranged by
any party as a single plan) of all or substantially all of the
assets of the Company (each of the foregoing being an "Acquisition
Transaction") where (1) the shareholders of the Company
immediately prior to such Acquisition Transaction would not
immediately after such Acquisition Transaction beneficially own,
directly or indirectly, shares representing in the aggregate
more than fifty percent (50%) of (A) the then outstanding common
stock of the corporation surviving or resulting from such merger,
consolidation or recapitalization or acquiring such assets of the
Company, as the case may be (the "Surviving Corporation"), (or of
its ultimate parent corporation, if any) and (B) the Combined
Voting Power (as defined below) of the then outstanding Voting
Securities (as defined below) of the Surviving Corporation (or of
its ultimate parent corporation, if any) or (2) the Incumbent
Directors at the time of the initial approval of such Acquisition
Transaction would not immediately after such Acquisition
Transaction constitute a majority of the Board of Directors of
the Surviving Corporation (or of its ultimate parent corporation,
if any) or (ii) any plan or proposal for the liquidation or
dissolution of the Company; or
(c) any Person (as defined below) shall become the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of securities of the
Company representing in the aggregate forty percent (40%) or more
of either (i) the then outstanding shares of Company Common Stock
or (ii) the Combined Voting Power of all then outstanding Voting
Securities of the Company; provided, however, that notwithstanding
the foregoing, a Change of Control of the Company shall not be
deemed to have occurred for purposes of this clause (c) solely as
the result of:
(1) an acquisition of securities by the Company which,
by reducing the number of shares of Company Common Stock or
other Voting Securities outstanding, increases (i) the
proportionate number of shares of Company Common Stock
beneficially owned by any Person to forty percent (40%) or
more of the shares of Company Common Stock then outstanding
or (ii) the proportionate voting power represented by the
Voting Securities beneficially owned by any Person to forty
percent (40%) or more of the Combined Voting Power of all
then outstanding Voting Securities; or
(2) an acquisition of securities directly from the
Company except that this paragraph (2) shall not apply to:
A-8
<PAGE> A-9
(A) any conversion of a security that was not
acquired directly from the Company; or
(B) any acquisition of securities if the Incumbent
Directors at the time of the initial approval of such
acquisition would not immediately after (or otherwise
as a result of) such acquisition constitute a majority
of the Board of the Company;
provided, however, that if any Person referred to in clauses
(1) or (2) of this clause (c) shall thereafter become the
beneficial owner of any additional shares of Company Common
Stock or other Voting Securities of the Company (other than
pursuant to a stock split, stock dividend or similar
transaction or an acquisition exempt under such clause (2)),
then a Change of Control shall be deemed to have occurred for
purposes of this clause (c).
For purposes of this Section 13.2:
(i) "Person" shall mean any individual, entity (including,
without limitation, any corporation, partnership, trust, joint
venture, association or governmental body) or group (as defined
in Sections 13(d)(3) or 14(d)(2) of the Exchange Act and the rules
and regulations thereunder); provided, however, that "Person"
shall not include the Company, any of its subsidiaries, any
employee benefit plan of the Company or any of its majority-owned
subsidiaries or any entity organized, appointed or established by
the Company or such subsidiary for or pursuant to the terms of
any such plan.
(ii) "Voting Securities" shall mean all securities of a
corporation having the right under ordinary circumstances to vote
in an election of the Board of Directors of such corporation.
(iii) "Combined Voting Power" shall mean the aggregate votes
entitled to be cast generally in the election of directors of a
corporation by holders of then outstanding Voting Securities of
such corporation.
SECTION 14. General Provisions.
14.1 If the granting of any award under the Plan or the issuance,
purchase or delivery of Stock thereunder shall require, in the determination
of the Committee from time to time and at any time, (i) the listing,
registration or qualification of the Stock subject or related thereto upon
any securities exchange or over-the-counter market or under any federal or
state law or (ii) the consent or approval of any government regulatory body,
then any such award shall not be granted or exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval shall
have been effected or obtained on conditions, if any, as shall be acceptable
to the Committee. In addition, in connection with the granting or exercising
of any award under the Plan, the Committee may require the recipient to
agree not to dispose of any Stock issuable in connection with such award,
except upon the satisfaction of specified conditions, if the Committee
determines such agreement is necessary or desirable in connection with any
requirement or interpretation of any federal or state securities law, rule
or regulation.
14.2 Nothing set forth in this Plan shall prevent the Board from
adopting other or additional compensation arrangements. Neither the
adoption of the Plan nor any award hereunder shall confer upon any employee
of the Company, or of a Related Company, any right to continued employment,
and no award under Section 11 shall confer upon any Outside Director any
right to continued service as a director.
14.3 Determinations by the Committee under the Plan relating to the
form, amount, and terms and conditions of awards need not be uniform, and
may be made selectively among persons who receive or are eligible to receive
awards under the Plan, whether or not such persons are similarly situated.
14.4 No member of the Board or the Committee, nor any officer or
employee of the Company acting on behalf of the Board or the Committee,
shall be personally liable for any action, determination or interpretation
taken or made with respect to the Plan, and all members of the Board or the
Committee and all officers or employees of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.
A-9
>PAGE> A-10
SECTION 15. Effective Date of Plan.
The Plan shall be effective upon its approval by the holders of a
majority of the shares of Stock represented and voting at a duly held
meeting of shareholders at which there is present a quorum consisting of
the presence in person or by proxy of the holders of a majority of the
outstanding shares of Stock.
<PAGE>
PROXY HEMACARE CORPORATION
This proxy is solicited on behalf of the Board of Directors
The undersigned appoints either or both Thomas M. Asher or Hal I.
Lieberman, as Proxy, with the power to appoint their respective substitutes,
and authorizes either or both of them to represent and to vote, as designated
below, all the shares of Common Stock of HemaCare Corporation held of record
by the undersigned on April 17,1996 at the Annual Meeting of Shareholders to
be held on June 5, 1996 or any adjournment or postponement thereof.
1. ELECTION OF OFFICERS For Withhold authority
/ / / /
All nominees listed below with authority to cumulate votes
(except as marked to the contrary below)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY to vote for any individual nominee,
mark the box next to the nominee's name below.)
/ / THOMAS M. ASHER / / HAL I. LIEBERMAN / / JOSHUA LEVY
/ / GLENN W. BARTLETT / / WILLIS L. WARNER / / JON B. VICTOR
2. PROPOSAL TO APPROVE THE COMPANY'S 1996 STOCK INCENTIVE PLAN
/ / FOR / / AGAINST / / ABSTAIN
In his discretion, the Proxy is authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be signed on back)
<PAGE>
This proxy, when properly executed will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2. Please sign exactly as name appears below.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: ................., 1996
--------------------------
--------------------------
(Signature if jointly held)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING
THE ENCLOSED ENVELOPE.
