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
- --------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / $500 per each party to the controversy pursuant to Exchange
Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-
6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
-----------------------------------------------------------
2) Aggregate number of securities to which transactions
applies:
-----------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
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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, 1997
10:00 a.m.
_________________
The 1997 Annual Meeting of Shareholders of HemaCare Corporation (the
"Company") will be held at the Warner Center Marriott Hotel, 21850 Oxnard
Street, Woodland Hills, California 91367, on Thursday, June 5, 1997 at
10:00 a.m. (Pacific Daylight Time), for the following purposes:
1. To elect five directors for the ensuing year;
2. 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, 1997 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.
By Order of the Board of Directors
/s/ JoAnn R. Stover
------------------------
JoAnn R. Stover
Secretary
Sherman Oaks, California
April 22, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK, DATE,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
<PAGE>
HEMACARE CORPORATION
4954 Van Nuys Boulevard
Sherman Oaks, California 91403
April 22, 1997
__________________________
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 (the "Meeting") to be held at the Warner
Center Marriott Hotel, 21850 Oxnard Street, Woodland Hills, CA 91367, on
June 5, 1997 and at any and all adjournments or postponements thereof.
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 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 and
upon Company approval, 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, 1997.
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, 1997, will be
entitled to vote on all matters presented to the Meeting. On April 17,
1997, there were outstanding 7,190,710 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 (five). 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. 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
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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 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.
ELECTION OF DIRECTORS
Information Concerning the Nominees
- -----------------------------------
The Company's Bylaws provide for seven directors. Currently, there are
five directors, three of whom have been previously elected by the
shareholders and two newly appointed to fill vacancies in 1996 and 1997.
Two vacancies remain on the Board of Directors. The Company has not
identified individuals to fill the vacancies on the Board of Directors, and
Proxies may be voted for not more than five nominees for director. Each
director will hold office until the next Annual Meeting of Shareholders and
until the election of his or her 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.
Glenn W. Bartlett, Ph.D. (64), has been a Director since February 1991 and
was appointed Chairman of the Board in August 1996. Since April 1995, Dr.
Bartlett has worked on a part-time basis as an independent consultant,
specializing in business development in the field of healthcare. From 1983
to April 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 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. 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 and Compensation Committees.
Hal I. Lieberman (47), has been President, Chief Executive Officer and a
Director 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.
Jon B. Victor (44), has been a Director since June 1995. In March 1996,
Mr. Victor co-founded Greenwich Ventures, LLC, an institutional investment
management firm, and serves as president. In 1983, Mr. Victor founded
Security Capital Management, Inc., an institutional investment management
firm, and served as president until March 1996, at which time the company
was sold. From 1992 until October 1996, Mr. Victor co-founded and served
as a principal shareholder of Gordon Management, Inc., the general partner
of Edgewater Private Equity Fund, L.P. Mr. Victor has more than 17 years
of investment management experience. He 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.
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Victor serves on the Board of Directors of several private investment firms
and Advanced Photonics, Inc., a publicly held company engaged in the
manufacture of light detection devices. Mr. Victor was elected Chairman
of the Company's Compensation Committee in January 1997 and is a member of
the Audit Committee.
Sharon C. Kaiser (52), has been Vice President of Finance and Chief
Financial Officer since May 1995 and a Director since August 1996. 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 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.
Alan C. Darlington (46), has been a Director since January 1997. Mr.
Darlington is President of Timpe & Darlington, Inc., a healthcare
management consulting firm, which he founded in 1991. Prior to the
formation of Timpe & Darlington, he was with Arthur Andersen & Co. from
1976 to 1991, serving as an audit partner for the last four years. Mr.
Darlington received his Business Administration degree from the School of
Business at California State University at Los Angeles in 1976 and has
been a Certified Public Accountant since 1978. Mr. Darlington was elected
Chairman of the Audit Committee in January 1997 and is 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. Mr.
Lieberman and Ms. Kaiser are the only executive officers of the Company.
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. Since the Board of Directors does not have
a nominating committee or any committee performing similar functions, the
functions of that committee are performed by the entire Board of Directors.
Both the Audit and Compensation Committees are comprised of non-employee
board members. However, due to various vacancies and changes in
composition of the Board of Directors, the functions of the Audit Committee
and the Compensation Committee were performed by the entire Board of
Directors from May 1996 until January 1997. As of January 1997, members
of the Audit Committee include Mr. Alan Darlington, Chairman, Jon B. Victor
and Glenn W. Bartlett, Ph.D. and the Compensation Committee is comprised of
Mr. Jon B. Victor, Chairman, Alan C. Darlington and Glenn W. Bartlett,
Ph.D. The Audit Committee and the Compensation Committee did not meet in
1996.
The functions of the Audit Committee include reviewing and making
recommendations to the Board of Directors with respect to: the engagement
or 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.
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<PAGE>
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.
Meetings and Attendance
- -----------------------
The Board of Directors held thirteen meetings and took action by unanimous
written consent (as permitted by California law) on 15 occasions during
1996. During 1996, each Director attended more than 75% of the total
number of meetings of the Board of Directors held during the period for
which he or she was a Director. Three of the four incumbent Directors at
December 31, 1996 attended 100% of such meetings, and the fourth Director
attended 92% of such meetings. In 1996, the Audit Committee and the
Compensation Committee did not meet.
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, 1996, 1995 and 1994. The "Named Executive Officers" include
(i) each person who served as Chief Executive Officer during fiscal 1996
(one person), (ii) each person who served as an executive officer at
December 31, 1996 and was among the four most highly paid executive
officers of the Company, not including the Chief Executive Officer, during
fiscal 1996 with total annual salary and bonus of more than $100,000 (one
person) and (iii) up to two persons who would be included under clause (ii)
above had they served as an executive officer at December 31, 1996 (one
person).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation
----------------------------------------------- -----------
Name and Other Securities All Other
Principal Salary Bonus Annual Underlying Compensation
Position Year ($) ($) Compensation (1) Options ($) (2)
- ------------------ ------ ------- ------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Hal I. Lieberman
President & CEO 1996 $134,515(3) $ 0 -- 0 $ 2,530
1995 $150,000 $ 0 -- 0 $ 2,347
1994 $150,000 $ 0 -- 25,000 $ 3,033
Joshua Levy (4)
Sr. Vice President 1996 $130,155 $ 0 -- 0 $ 3,254
1995 $140,000 $ 0 -- 0 $ 3,460
1994 $140,000 $ 0 -- 0 $ 3,114
Sharon C. Kaiser (5)
Vice President,
Finance and CFO 1996 $125,000 $ 0 -- 48,000 $ 0
1995 $ 56,174 $ 0 -- 2,800 $ 0
1994 $ 0 $ 0 -- 0 $ 0
</TABLE>
____________
(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) "All Other Compensation" consists of Company contributions to its
Employee Salary Deferral Plan (401(k)). In the case of Mr.
Lieberman, it also includes $655 and $617 in term life insurance
premiums paid by the Company on Mr. Lieberman's behalf in 1996 and
1995, respectively.
(3) From July 1996 through January 12, 1997, Mr. Lieberman voluntarily
deferred 20% of his salary. As of the date hereof, his deferred
salary has not been paid.
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<PAGE>
(4) Dr. Levy resigned from the Board of Directors in May 1996 and
resigned from his position as Sr. Vice President, Medical Affairs in
July, 1996. Dr. Levy continues to serve as the Company's medical
director.
(5) From April 1995 to December 1995, Ms. Kaiser was an independent
consultant to the Company. Ms. Kaiser became a full-time employee
January 1, 1996.
All stock options granted in the fiscal year ending December 31, 1996 were
granted under the Company's 1986 Stock Option Plan (the "1986 Plan"). The
following two tables set forth information concerning stock options granted
to, exercised by and owned by the Named Executive Officers.
OPTION/SAR GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
Individual Grants
- -----------------------------------------------------------------------------
Potential Realizable
Value At Assumed
Annual Rates of
Number of % of Total Market Stock Price
Securities Options Price on Appreciation for
Underlying Granted to Exercise Date of Option Term (1)
Options Employees in Price Grant Expiration --------------------
Name Granted (#) Fiscal Year ($/Sh) ($/Sh) Date (2) 5%($) 10%($)
- ---------------- ----------- ----------- -------- ------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Sharon C. Kaiser 48,000 100.00% $3.50 $3.50 7/1/06 $46,415 $102,566
</TABLE>
______________
(1) The dollar amounts under these columns are the result of calculations
at the 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) With respect to options granted to Ms. Kaiser, 12,000 options were
vested November 1996 with the remaining balance vesting annually on
a ratable basis over three years from the date of grant. Ms.
Kaiser's options were granted for a term of ten 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.
AGGREGATED OPTION EXERCISES IN FISCAL 1996
AND FISCAL 1996 YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Under- Value of Unexercised
lying Unexercised Options In-the-Money Options
At Fiscal Year-End (#) At Fiscal Year-End ($) (1)
--------------------------- --------------------------
Shares Value
Acquired on Realized
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------ ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Hal I.
Lieberman 15,000 $ 22,570 25,000 -0- $ 0 $ 0
Sharon C.
Kaiser -0- $ 0 14,800 36,000 $ 0 $ 0
Joshua Levy -0- $ 0 -0- -0- $ 0 $ 0
</TABLE>
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<PAGE>
___________
(1) Based on a price per share of $3.125, which was the closing bid price
of the Common Stock on NASDAQ at the close of business on December
31, 1996.
Compensation of Directors
- -------------------------
Directors who are not employees of the Company receive $750 and
reimbursement of travel expenses for each Board meeting attended. From
August through December 1996, Mr. Bartlett received $15,000 under a
consulting agreement between Glenn W. Bartlett, Inc. and the Company for
his services as Chairman of the Board. In December 1996, the Board
cancelled the consulting arrangement and effective January 1, 1996, the
Chairman of the Board receives an additional $2,500 per attended meeting.
From August 1996 through December 1996, Mr. Bartlett received a monthly
payment of $3,000 as compensation for his responsibilities as Chairman of
the Board. Mr. Bartlett received an aggregate of $15,000 in 1996 for such
responsibilities.
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 year's notice prior to
termination without cause or payment of up to 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 is entitled to
the payment of an amount equal to not more than his annual base salary in
the event he elects to terminate his employment upon the occurrence of
certain other changes in control or the liquidation of the Company. 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. 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 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.
Stock Option Plans
- ------------------
The Company's 1986 Stock Option Plan (the "1986 Plan") expired July 9,
1996. As of April 15, 1997, there were options outstanding under the 1986
Plan exercisable for 166,300 shares of Common Stock with exercise prices
ranging from $1.75 to $6.125 and with expiration dates ranging from May 19,
1997 to July 2, 2006. As of April 15, 1997, 325,501 shares of Common
Stock had been issued upon exercise of stock options granted under the 1986
Plan.
In 1996, the Board of Directors, with shareholder approval, adopted the
Company's 1996 Stock Incentive Plan (the "Plan"). The purposes of the
Plan are to (i) enable the Company to attract, motivate and retain top-
quality directors, officers, employees, consultants and advisors, (ii)
provide substantial incentives for such persons to act in the best
interests of the shareholders of the Company, and (iii) reward
extraordinary effort by such persons on behalf of 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 total number of shares of Common Stock
available for distribution under the Plan is 750,000, however, 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
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<PAGE>
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
Common Stock outstanding at the time of such award. As of April 15, 1997,
there were options outstanding under the Plan exercisable for 30,000 shares
of Common Stock with exercise prices ranging from $2.94 to $3.13 and with
expiration dates ranging from January 30, 2002 to October 7, 2006. As of
April 15, 1997, no shares of Common Stock had been issued upon exercise of
stock options granted under the 1996 Plan.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
The Compensation Committee is composed entirely of non-employee directors
none of whom are affiliates of the Company. Mr. Jon B. Victor was
appointed Chairman of the Compensation Committee in January 1997. Messrs.
Glenn W. Bartlett and Alan C. Darlington are members of the Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "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 Committee is
composed entirely of non-employee directors.
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
objectively measurable performance factors. No bonus programs were in
effect in 1996. 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. 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 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 1996. In July 1996, the
Company, as part of its efforts to achieve overall profitability, requested
a temporary, voluntary salary deferral from its employees. In response to
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<PAGE>
this appeal, Mr. Lieberman took a 20% salary deferral from July 1996
through January 1997. As of the date hereof, his deferred salary has not
been paid. Mr. Lieberman has not received a salary increase for 1997.
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 Internal Revenue Code of 1986, as amended.
Compensation Committee
- ----------------------
Jon B. Victor, Chairman
Glenn W. Bartlett, Ph.D.
Alan C. Darlington
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 31, 1991 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
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/29/95 12/29/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
HemaCare 100.0 125.0 104.5 59.1 68.2 56.8
NASDAQ Stock
Market (US
Companies) 100.0 116.4 133.6 130.6 184.7 227.2
NASDAQ Health
Svcs. 100.0 103.6 119.5 128.2 162.9 163.1
</TABLE>
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<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth the ownership of the Company's Common Stock
as of March 31, 1997 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>
Percent of
Number of Shares Outstanding
Name Beneficially Owned Common Stock
----------------------------------- ------------------ -------------
<S> <C> <C>
Mellon Bank Corporation (1) 961,000 (2) 13.36%
Charles R. Schwab, Jr. (1) 454,600 (3) 6.32
Kensington Capital Management, Inc. (1) 450,600 (4) 6.27
Medicorp Inc. (1) 400,000 (5) 5.27
Jon B. Victor 160,000 (6) 2.22
Hal I. Lieberman 40,000 (7) 0.55
Glenn W. Bartlett 30,000 (6) 0.42
Alan C. Darlington 15,000 (8) 0.21
Sharon C. Kaiser 14,800 (8) 0.21
All executive officers and
directors as a group (5 persons) 259,800 3.57%
</TABLE>
____________
(1) The address of Mellon Bank Corporation is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258. The address of Kensington Capital
Management, Inc. ("Kensington") and Charles R. Schwab, Jr. is 233
South Wacker Drive, Suite 9320, Chicago, Illinois 60606. The
address of Medicorp Inc. is 5800 Royalmount, Montreal, Quebec H4P
1K5. The foregoing information was obtained from a Schedule
13D/A dated November 19, 1996 filed by Kensington with the
Commission, a Schedule 13D dated November 19, 1996 filed by Schwab
with the Commission and a Schedule 13G dated January 24, 1997
filed by Mellon with the Commission.
(2) Includes 950,000 shares beneficially owned by The Dreyfus
Corporation, of which 600,000 shares are 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. Premier
Strategic Growth Fund is an investment company managed by The
Dreyfus Corporation.
(3) Includes 450,600 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.
(4) Charles R. Schwab, Jr. is the president and majority shareholder
of Kensington. See Note 3.
(5) Represents shares potentially issuable upon exercise of previously
issued warrants.
(6) Includes 15,000 shares issuable upon exercise of currently
exercisable options.
(7) Includes 25,000 shares issuable upon exercise of currently
exercisable stock options.
(8) Represents shares issuable upon exercise of currently exercisable
stock options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
directors and officers of the Company and persons who own more than ten
percent of the Company's Common Stock to file with the Securities and
Exchange Commission ("SEC") reports of initial ownership and changes in
ownership of the Company's Common Stock. In October 1996, Mr. Victor
disposed of his minority equity interest in the corporate general
partner of a private equity fund which owns shares in HemaCare
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<PAGE>
Corporation. Inadvertently, Mr. Victor filed the report relating to
this disposition of ownership of these shares late.
CERTAIN TRANSACTIONS
Dr. Levy, a former director and current medical director of the Company,
receives professional fees as part of his private practice from
patients, insurers or other third-party payors for supervising
therapeutic hemapheresis procedures at hospitals where the Company
provided such service. 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% of the Company's 1996
revenues ($338,000). However, the legal requirements are complex, and
the Company has requested a clarification of their application to its
business from the Health Care Financing Administration ("HCFA"). 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's legal counsel was informed that HCFA is now discussing
new proposed rules and cannot respond to the Company's request for
clarification because of the uncertainty of the situation.
COMPANY PROPOSALS
The following proposal will be submitted for shareholder consideration
and voting at the Meeting.
Proposal 1 - Election of Directors
- ----------------------------------
Each of the following persons nominated for election as a director to hold
office until the next Annual Meeting of Shareholders and until the election
of his or her successor:
Glenn W. Bartlett, Ph.D.
Hal I. Lieberman
Jon B. Victor
Sharon C. Kaiser
Alan C. Darlington
Each nominee listed above is a member of the Board of Directors. All
proxies received by the Board of Directors will be voted for the nominee
if no directions to the contrary are 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 a nominee by the Board of
Directors, or if none are so designated, will be voted according to the
judgement of the person or persons voting the proxy.
Vote Required
- -------------
The election of directors requires the affirmative vote for each candidate
of a plurality of the votes cast. Votes withheld from any director are
counted for purposes of determining the presence or absence of a quorum for
the transaction of business, but have no other legal effect.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE NOMINEES.
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<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants appointed to audit the Company's 1996
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 1998 Annual
Meeting of Shareholders must submit such proposal sufficiently far in
advance so that it is received by the Company not later than December 23,
1997.
FORM 10-K
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (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, 1996 upon the written request
of any beneficial 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 Order of the Board of Directors
/s/ JoAnn R. Stover
----------------------
JoAnn R. Stover
Secretary
Sherman Oaks, California
April 22, 1997
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<PAGE>
HEMACARE CORPORATION
This proxy is solicited on behalf of the Board of Directors
The undersigned appoints either or both Glenn W. Bartlett 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 17,1997 at the Annual Meeting of Shareholders to
be held on June 5, 1997 or any adjournment or postponement thereof.
1. ELECTION OF DIRECTORS 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.)
/ / GLENN W. BARTLETT / / HAL I. LIEBERMAN / / JON B. VICTOR
/ / ALAN C. DARLINGTON / / SHARON C. KAISER
(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 PROPOSAL 1. 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: ___________________, 1997
_____________________________
_____________________________
(Signature if jointly held)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
