SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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 Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Hemagen Diagnostics, Inc.
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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 the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date Filed:
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HEMAGEN DIAGNOSTICS, INC.
40 Bear Hill Road
Waltham, Massachusetts 02451
DEAR STOCKHOLDER:
You are cordially invited to attend the Annual Meeting of
Stockholders of Hemagen Diagnostics, Inc. (the "Corporation") to be held on
Tuesday, March 16, 1999 at 10:00 a.m. at the DoubleTree Guest Suites, 550
Winter Street, Waltham, Massachusetts 02451.
At the Annual Meeting, you will be asked to elect two Directors of the
Corporation and to ratify the selection of the Corporation's independent
accountants.
Details of the matters to be considered at the Annual Meeting are
contained in the Proxy Statement that we urge you to consider carefully.
Whether or not you plan to attend the Annual Meeting, please complete,
date, sign and return your Proxy promptly in the enclosed envelope, which
requires no postage if mailed in the United States. If you attend the Annual
Meeting, you may vote in person if you wish, even if you have previously
returned your Proxy.
Sincerely,
CARL FRANZBLAU
Chairman of the Board of Directors
Waltham, Massachusetts
January 21, 1999
HEMAGEN DIAGNOSTICS, INC.
40 Bear Hill Road
Waltham, Massachusetts 02451
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Hemagen Diagnostics, Inc. (the "Corporation"), a Delaware corporation, will
be held on Tuesday, March 16, 1999 at 10:00 a.m. at the DoubleTree Guest
Suites, 550 Winter Street, Waltham, Massachusetts 02451 for the following
purposes:
1. To elect two members of the Board of Directors for three-year terms
expiring at the 2002 Annual Meeting of Stockholders, or until their
successors are elected and qualified;
2. To ratify the selection of BDO Seidman, LLP as independent accountants
for the Corporation for the fiscal year ending September 30, 1999;
3. To consider and act upon any matters incidental to the foregoing and any
other matters that may properly come before the meeting or any adjournment
or adjournments thereof.
The Board of Directors has fixed the close of business on January 15,
1999, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting and any adjournment or adjournments
thereof.
We hope that all stockholders will be able to attend the meeting in
person. In order to assure that a quorum is present at the March 16th
meeting, please date, sign and promptly return the enclosed Proxy whether or
not you expect to attend the meeting. A postage-prepaid envelope, addressed
to the Corporation's Transfer Agent, has been enclosed for your convenience.
If you attend the meeting, your Proxy will, at your request, be returned to
you and you may vote your shares in person.
By Order of the Board of Directors
Carl Franzblau
Secretary
Waltham, Massachusetts
January 21, 1999
HEMAGEN DIAGNOSTICS, INC.
40 Bear Hill Road
Waltham, Massachusetts 02451
January 21, 1999
_______________________
PROXY STATEMENT
________________________
The enclosed Proxy is solicited by the Board of Directors of HEMAGEN
DIAGNOSTICS, INC. (the "Corporation") for use at the Annual Meeting of
Stockholders. This meeting will be held at the DoubleTree Guest Suites, 550
Winter Street, Waltham, Massachusetts 02451, at 10:00 a.m. on Tuesday, March
16, 1999, and at any adjournment or adjournments thereof.
Stockholders of record at the close of business on January 15, 1999,
will be entitled to vote at the meeting or any adjournment thereof. On that
date, 7,851,890 shares of Common Stock, $.01 par value per share, ("Common
Stock") of the Corporation were issued and outstanding. There are no other
outstanding voting securities of the Corporation.
Each share of Common Stock entitles the holder to one vote with
respect to all matters submitted to stockholders at the meeting. A quorum
for the meeting is a majority of the shares outstanding. The election of
Directors will be determined by a plurality of the votes cast. The other
proposals to be voted upon by the stockholders of the Corporation require
the votes of a majority of the Common Stock present at the meeting for
passage. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum at the meeting. Abstentions
are counted in tabulation of the votes cast on proposals presented to
stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
The Directors and officers of the Corporation as a group own or may be
deemed to control approximately 19.7% of the outstanding shares of Common
Stock of the Corporation. Each of the Directors and officers has indicated
his intent to vote all shares of Common Stock owned or controlled by him in
favor of each item set forth herein.
Execution of a Proxy will not in any way affect a stockholder's right
to attend the Annual Meeting and vote in person. The Proxy may be revoked at
any time before it is exercised by written notice to the Corporation's
Secretary prior to the Annual Meeting, or by giving to the Corporation's
Secretary a duly executed Proxy bearing a later date than the Proxy being
revoked at any time before such Proxy is voted, or by appearing at the
Annual Meeting and voting in person. The shares of Common Stock represented
by all properly executed Proxies received in time for the Annual Meeting
will be voted as specified therein. In the absence of a special notice,
shares of Common Stock will be voted in favor of the election of Directors
of those persons named in the Proxy Statement and in favor of all other
items set forth herein.
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter should be presented at the Annual
Meeting upon which a vote may be taken, such shares of Common Stock
represented by all Proxies received by the Board of Directors will be voted
with respect thereto in accordance with the judgment of the persons named as
attorneys in the Proxies. The Board of Directors knows of no matter to be
acted upon at the Annual Meeting that would give rise to appraisal rights
for dissenting security-holders.
An annual report containing financial statements for the Corporation's
fiscal year ended September 30, 1998 is being mailed herewith to all
stockholders entitled to vote. This Proxy Statement and the accompanying
Proxy were first mailed to stockholders on or about January 21, 1999.
ITEM NO. 1
ELECTION OF DIRECTORS
The Corporation's Board of Directors is divided into three classes.
Directors constituting approximately one-third of the Board of Directors are
elected annually for a period of three years at the Corporation's Annual
Meeting of Stockholders to serve until their successors are duly elected by
the stockholders. Due to the death of Dr. Sandson, Mr. Paul N. Fruitt was
duly voted to take Dr. Sandson's seat on the Board of Directors on December
9, 1998. The terms of Mr. Fruitt and Mr. Smith expire in 1999 and the terms
of Dr. Cohen and Mr. Gilbert expire in 2000 and the terms of Dr. Franzblau
and Dr. de Oliveira expire in 2001 A classified Board of Directors could
discourage, delay or prevent a takeover or change of control of the
Corporation. Vacancies and newly created directorships resulting from any
increase in the number of authorized Directors may be filled by a majority
vote of Directors then in office. Officers are elected by and serve at the
pleasure of the Board of Directors. Proxies cannot be voted for a greater
number of persons than the number of nominees named.
Shares represented by all Proxies received by the Board of Directors
and not so marked as to withhold authority to vote for Mr. Fruitt and Mr.
Smith will be voted (unless either Mr. Fruitt or Mr. Smith is unable or
unwilling to serve) for the election of Mr. Fruitt and Mr. Smith. The Board
of Directors knows of no reason why Mr. Fruitt and Mr. Smith should be
unwilling to serve, but if such should be the case, Proxies will be voted
for the election of some other person or for fixing the number of Directors
at a lesser number.
The following table sets forth the ages of and positions and offices
presently held by each Director and nominee with the Corporation.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Carl Franzblau, Ph.D. 64 Chairman of the Board of Directors,
President,
CEO and Secretary
Ricardo M. de Oliveira, M.D. 47 Vice President of Research and
Development, and Director
Alan S. Cohen, M.D. 72 Director
Lawrence Gilbert 66 Director
Charles W. Smith 67 Director
Paul N. Fruitt 67 Director
</TABLE>
Each of the Corporation's Directors has served in such capacity since
the Corporation's inception except for Mr. Paul N. Fruitt who was duly voted
by the Board to take Dr. Sandson's seat.
The Corporation established an Executive Committee, an Audit Committee
and a Compensation Committee of the Board of Directors on March 16, 1993. On
December 9, 1998 Dr. Cohen was duly voted into office as a member of the
Executive Committee. Other members of the Executive Committee are Dr.
Franzblau and Dr. de Oliveira. The Executive Committee is authorized to take
any action that the Board of Directors is authorized to act upon with the
exception of the issuance of stock, the sale of all or substantially all of
the Corporation's assets and any other significant corporate transactions.
Members of the Audit Committee are Mr. Smith and Mr. Gilbert. The
Audit Committee is concerned primarily with recommending the selection of
the Corporation's independent accountants and reviewing the effectiveness of
the Corporation's accounting policies and practices, financial reporting and
internal controls. The Audit Committee reviews the scope of audit coverage,
the fees charged by the accountants, and internal control systems.
The Compensation Committee consists of Dr. Franzblau and two
independent outside Directors, Dr. Cohen and Mr. Gilbert. Mr. Gilbert was
duly voted in on the Compensation Committee. The Compensation Committee was
established to set and administer the policies that govern annual
compensation for the Corporation's executives.
The Corporation does not have a standing nominating committee or a
committee performing similar functions.
During the year ended September 30, 1998 members of the Executive
Committee, Audit Committee and Compensation Committee did not meet as
separate committees. Instead, during such time, the Board of Directors, as a
whole, addressed the policies and issues related to the functions of the
Executive, Audit and Compensation Committees.
The Board of Directors met four times during the year ended September
30, 1998. All of the Directors attended 100% of the meetings of the Board of
Directors except for Dr. Ricardo de Oliveira who attended none of the
meetings of the Board of Directors and Dr. John Sandson who attended three
of the meetings of the Board of Directors during the year ended September
30, 1998.
In fiscal 1998, the Corporation compensated each of its four non-
management Directors six thousand dollars ($6,000.00) plus actual travel
expenses up to $500 for each Board meeting attended. As of October 1997, the
Corporation has paid its non-management Directors a cash fee of six thousand
dollars ($6,000.00) plus actual travel expenses up to $500 for each Board
meeting attended. Drs. Franzblau and de Oliveira receive no compensation for
their services as Directors.
Carl Franzblau and Myrna Franzblau, the Corporation's Treasurer, are
husband and wife. William Franzblau, Esq., Chief Financial Officer and
General Counsel, is the son of Carl Franzblau and Myrna Franzblau. Scott
Weiss, VP, Marketing and Sales, is the son-in-law of Carl Franzblau and
Myrna Franzblau. Except for Dr. and Mrs. Franzblau and William Franzblau
and Scott Weiss, no Director or executive officer is related by blood,
marriage or adoption to any other Director or executive officer.
Background
The principal occupations during the past five years of each of the
Corporation's Directors and nominees for Directors are as follows:
Carl Franzblau, Ph.D. has served as Chairman of the Board of
Directors, Chief Executive Officer and President of the Corporation since
its inception. For more than the past five years, Dr. Franzblau has served
as a Professor and Chairman of the Biochemistry Department and Associate
Dean for Graduate Affairs at the Boston University School of Medicine. Dr.
Franzblau received his Bachelor of Science degree in Chemistry from the
University of Michigan and his Ph.D. in Biochemistry from the Albert
Einstein College of Medicine. Dr. Franzblau is the husband of Myrna
Franzblau, the Corporation's Treasurer.
Ricardo M. de Oliveira, M.D. has been the Vice President of Research
and Development and a Director of the Corporation since its inception. From
1980 through 1990, Dr. de Oliveira was a Professor at the University of Sao
Paulo in Brazil. Dr. de Oliveira is also the Director of Clinical Pathology
at the Cancer Hospital of Sao Paulo, Brazil. Dr. de Oliveira received his
M.D. degree from the Faculdade de Ciencias Medicas da Santa Casa de Sao
Paulo in Brazil.
Alan S. Cohen, M.D. has served as a Director of the Corporation since
its inception. Dr. Cohen has been employed by the Boston University School
of Medicine as a Professor of Medicine since 1968 and a Professor of
Pharmacology since 1974. Dr. Cohen is Editor-in-Chief of the International
Journal of Amyloid. Dr. Cohen served as the Director of the Arthritis Center
of Boston University from 1976 to 1994. From 1972 to 1992, Dr. Cohen served
as Chief of Medicine of Boston City Hospital. Dr. Cohen is a past president
of the American College of Rheumatology. Dr. Cohen received his Bachelor of
Arts degree from Harvard College and his M.D. degree from the Boston
University School of Medicine.
Lawrence Gilbert has served as a Director of the Corporation since its
inception and served as Clerk of the Corporation from its inception until
1988. From 1987 until 1995, Mr. Gilbert served as the Director of Patent and
Technology Administration for Boston University. Since 1995, Mr. Gilbert has
been the Director of Technology Transfer for the California Institute of
Technology in Pasadena, California. Mr. Gilbert received his Bachelor of
Arts degree from Brandeis University, his Bachelor of Foreign Trade from the
American Institute of Foreign Trade and a J.D. degree from Suffolk
University Law School.
Paul N. Fruitt had been employed by the Gillette Company until his
retirement in 1996. He has many years experience in market research as well
as in strategic business planning. Mr. Fruitt served as Vice President of
corporate planning for 27 years at the Gillette Company. He is currently a
member of the Board of the Board of Overseers of Brandeis University's
Graduate School of International Economics and Finance, and also serves on
the Board of Overseers of the Newton-Wellesley Hospital.. Mr. Fruitt is a
graduate of Harvard College.
Charles W. Smith has served as a Director of the Corporation since its
inception. From 1984 through 1989, Mr. Smith served as a Senior Vice
President of Boston University. From 1983 through June 1992, Mr. Smith also
served as the Treasurer and on the Board of Trustees of Boston University.
Mr. Smith attended Metropolitan College in England and is a fellow of the
Institute of Chartered Accountants in England and Wales.
Executive Officers
The executive officers of the Corporation, their ages and positions
held in the Corporation are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Carl Franzblau, Ph.D 64 Chairman of the Board of Directors,
Chief Executive Officer,
President and Secretary
William Franzblau, Esq. 36 Chief Financial Officer and General Counsel
Ricardo M. de Oliveira, M.D. 47 Vice President of Research and Development,
and Director
Myrna Franzblau 61 Treasurer
</TABLE>
The following is a brief summary of the background of each executive
officer of the Corporation, other than Drs. Franzblau and de Oliveira, whose
backgrounds are summarized above.
Myrna Franzblau has been the Corporation's Treasurer and Director of
Human Resources since its inception. Mrs. Franzblau received her Bachelor of
Arts from Brooklyn College and her Master's degree from Boston University.
Mrs. Franzblau is the wife of Carl Franzblau, the Corporation's President.
William Franzblau has served as the Corporation's Chief Financial
Officer since March 1996. Since 1993, Mr. Franzblau has been general counsel
for the Corporation. Mr. Franzblau received his Bachelor of Arts degree, in
1984, his J.D.degree in 1987 and his LLM degree in taxation in 1990 from
Boston University.
CERTAIN TRANSACTIONS
During 1993, the Corporation acquired a 51% interest in Hemagen
Diagnosticos, Comercio, Importacao e Exportacao, Ltda., a Brazilian limited
liability company ("HDC"), that had been 100% beneficially-owned by Dr.
Ricardo M. de Oliveira, the Corporation's Vice President of Research and
Development and a Director of the Corporation. The Corporation purchased its
interest in HDC in exchange for the forgiveness of a $25,000 advance to HDC
that was outstanding as of September 30, 1992. The Corporation loaned HDC
$185,500, $100,000 and $50,000 in August 1994, November 1993 and August
1993, respectively, to renovate, equip and operate a new manufacturing
facility in Sao Paulo, Brazil. This indebtedness is evidenced by three five-
year promissory notes, each with interest payable quarterly at the rate of
approximately 12% per annum.
On August 14, 1998, the Corporation entered into an Asset Purchase
Agreement with Dade Behring Inc. for the purchase of certain assets related
to a product line sold under the trade name Analyst(R). The transaction
closed on September 1, 1998. The Analyst(R) product line consists primarily
of the Analyst(R) benchtop clinical chemistry system and the related
consumables which are used for both human and veterinary medical diagnostic
testing. The assets included accounts receivable, inventory, equipment, and
certain intellectual property. The Company agreed to assume certain of
Dade's liabilities including accounts payable, service contracts and
warranty obligations. Pursuant to the Agreement and the related documents
executed by the parties, Dade will continue to manufacture the products
under a separate manufacturing agreement for a period of up to thirty-six
months while the Company transitions the manufacturing operations to its
facility located in Columbia, Maryland. The Company intends to have the
instruments manufactured by Dade or some other suitable third party in the
foreseeable future.
Under the Agreement, at the closing of the transaction, the Company
paid $3,500,000 in cash and issued a non-interest bearing promissory note to
Dade in the amount of $1,250,000. Under the terms of the Note, the company
agrees to pay Dade in full, on or before September 1, 2000. The Note is
subject to adjustment due to changes in the net current asset values of the
transferred assets. The Company has also agreed to pay Dade a royalty on
the sales of certain consumables for use with the Analyst(R) Instrument.
The Company financed the acquisition using $3,500,000 in proceeds from
a $5,000,000 revolving credit line from BankBoston, N.A., which is secured
by all the assets of the Company and its Subsidiaries.
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table sets forth, as of January 15, 1999, certain
information concerning stock ownership of the Corporation by (i) each person
who is known by the Corporation to own beneficially 5% or more of the
Corporation's Common Stock, (ii) each of the Corporation's Directors, and
(iii) all Directors and officers as a group. Except as otherwise indicated,
the stockholders listed in the table have sole voting and investment powers
with respect to the shares indicated.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of Common Stock Percentage
of Beneficial Owner(1) Beneficially Owned(2) of Class (2)(3)
---------------------- --------------------- ---------------
<S> <C> <C>
Carl Franzblau, Ph.D. and Myrna Franzblau(4) 739,021 9.4%
Ricardo M. de Oliveira, M.D.(5) 385,684 4.9%
Alan S. Cohen, M.D. 148,705 1.9%
Lawrence Gilbert(6) 118,687 1.5%
Charles W. Smith 146,659 1.9%
Paul N. Fruitt 3,000 0.0%
All Directors & Officers
as a Group( 8persons)(7) 1,646,646 21.0%
<F1> The addresses for all of the named individuals is c/o Hemagen
Diagnostics, Inc., 40 Bear Hill Road, Waltham, Massachusetts 02451.
<F2> Pursuant to the rules of the Securities and Exchange Commission, shares
of Common Stock which an individual or group has a right to acquire within
60 days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person shown in the table.
<F3> Except to the extent stated in Note 7 below, the percentage ownership of
such individual or group does not include up to 1,000,000 shares of Common
Stock reserved for issuance pursuant to stock options that have been or may
be granted under the Corporation's 1992 Stock Option Plan. To date, options
to purchase 566,175 shares have been granted pursuant to this plan with an
average exercise price of $1.64 per share.
<F4> Includes 364,510 shares owned by Dr. Franzblau, 314,511 shares owned by
Mrs. Franzblau. Also includes 20,000 stock options granted to Dr. Franzblau
and 40,000 stock options granted to Myrna Franzblau under the Corporation's
1992 Stock Option Plan.
<F5> Includes 40,014 shares owned by Dr. de Oliveira's spouse and 10,000
stock options granted under the Corporation's 1992 Stock Option Plan.
<F6> Includes, 44,000 shares owned by Mr. Gilbert's spouse.
<F7> Includes the shares referenced in notes (4) through (7) above, plus
40,500 shares issuable pursuant to currently exercisable options.
</TABLE>
COMPENSATION OF OFFICERS
The following table sets forth the compensation paid to the
Corporation's Chief Executive Officer and to its highest paid executive
officers during the fiscal years ended September 30, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
- -----------------------------------------------------------------------
Long Term
Compensation
Awards
------------
(a) (b) (c) (d) (e) (f)
--- --- --- --- --- ---
Securities
Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation Options(3)
- --------------------------- ---- ------ ----- ------------ ----------
<S> <C> <C> <C> <C> <C>
Carl Franzblau 1998 $140,000 0 $7,324 (1) 10,000
Chief Executive Officer 1997 $137,187 0 $7,961 10,000
1996 $128,750 0 $5,073 0
Ira Marks 1998 $136,908 0 $4,107 (4) 20,000
Vice President, Marketing 1997 $136,908 0 $4,107 10,000
and Sales, RAICHEM
Ricardo de Oliveira 1998 $120,000 0 (2) 10,000
Senior Vice President 1997 $118,840 0 $ 610 0
1996 $118,840 0 $5,073 0
William Franzblau 1998 $110,000 0 $3,300 (4) 10,000
Chief Financial Officer 1997 $105,000 0 $3,150 20,500
Scott Weiss 1998 $110,000 0 $3,300 (4) 20,000
Vice President, Marketing 1997 $105,000 0 $3,150 21,500
and Sales
<F1> The Corporation had provided Dr. Franzblau with the use of a leased car
during the fiscal years ended September 30, 1998, 1997 and 1996, and has
recorded an annual expense for Dr. Franzblau's automobile of approximately
$7,324, $7,961and $5,073, respectively.
<F2> The Corporation had provided Dr. de Oliveira with the use of a leased
car during the fiscal years ended September 30, 1997, and 1996,
respectively, and has recorded an annual expense for Dr. de Oliveira's
automobile of approximately $610 for the beginning of 1997 and $3,496 for
1996.
<F3> In fiscal year 1998, the Corporation granted 10,000 stock options under
the Corporation's 1992 Stock Option Plan to Dr. Franzblau and Dr. de
Oliveira, and 10,000 stock options under the Corporation's 1992 Stock Option
Plan to Dr. Franzblau in the fiscal year ended September 30, 1997. No
options have been granted to Dr. de Oliveira in the fiscal year ended
September 30, 1997. No options have been granted to Dr. Franzblau or Dr. de
Oliveira in the fiscal year ended September 30, 1996. In the fiscal year
1998, the Corporation granted 10,000 stock options under the Corporation's
1992 Stock Option Plan to William Franzblau, and 20,000 stock options under
the Corporation's 1992 Stock Option Plan to Scott Weiss and Ira Marks.
<F4> William Franzblau, Scott Weiss, and Ira Marks participated in the
Company's 401k plan and received Company match of 3%.
</TABLE>
The following table sets forth the value of outstanding options held
as of September 30, 1998.
Aggregated Option Exercises in and FY-End Option Values
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
--- --- --- --- ---
Number of Securities Value of
Underlying Unexercised Unexercised
Options/SARs In-the-Money
at FY-End(#) Options/SARs at FY-End(#)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise(#) Value Realized($) Unexercisable Unexercisable(1)
---- --------------- ----------------- ---------------------- -------------------------
<S> <C> <C> <C> <C>
Carl Franzblau 0 0 10,000 0
0 0 10,000 0
Ricardo de Oliveira 0 0 10,000 0
William Franzblau 0 0 500 0
0 0 10,000 0
0 0 10,000 0
0 0 10,000 0
Scott Weiss 0 0 500 0
0 0 1,000 0
0 0 10,000 0
0 0 10,000 0
0 0 20,000 0
Ira Marks 0 0 10,000 0
0 0 20,000 0
<F1> Options listed carry an exercise price of $2.19 and $1.20 per share,
respectively for Carl Franzblau, $2.19 per share for Ricardo de Oliveira,
$2.00, $1.75, $2.19and $1.20 per share, respectively for William Franzblau,
$2.00.$1.75, $1.75, $2.19, and $1.20 per share, respectively for Scott
Weiss, and $2.19 and $1.20 per share for Ira Marks. The fair market value of
the Corporation's Common Stock underlying the options, as of September 30,
1998 was $1.06 per share (NASDAQ closing price on September 30, 1998).
</TABLE>
Compensation of Directors
In 1998, the Corporation awarded its non-management Directors
$6,000.00 each as compensation for their services. Drs. Franzblau and de
Oliveira receive no compensation for their services as Directors.
Compensation Committee Interlocks and Insider Participation
On March 16, 1993, the Board of Directors established a Compensation
Committee. Members of the Compensation Committee are Dr. Franzblau,
Mr.Gilbert, and Dr. Cohen. During the fiscal year ended September 30, 1998,
no executive officer served as a member of the compensation committee of the
board of directors of another entity.
ITEM NO. 2
ACCOUNTING MATTERS AND RATIFICATION OF ACCOUNTANTS
The persons named in the enclosed Proxy will vote to ratify the
selection of BDO Seidman, LLP as independent accountants for the fiscal year
ending September 30, 1999 unless otherwise directed by the stockholders. The
Corporation's independent accountants for the fiscal year ended September
30, 1998 were BDO Seidman, LLP. A representative of BDO Seidman, LLP is
expected to be present at the Annual Meeting of Stockholders and will have
the opportunity to make a statement and answer questions from stockholders.
VOTING AT MEETING
The Board of Directors has fixed January 15, 1999, as the record date
for the determination of stockholders entitled to vote at this meeting. At
the close of business on that date, there were outstanding and entitled to
vote 7,851,890 shares of Common Stock.
SOLICITATION OF PROXIES
The cost of solicitation of Proxies will be borne by the Corporation.
In addition to the solicitation of Proxies by mail, officers and employees
of the Corporation may solicit in person or by telephone. The Corporation
may reimburse brokers or persons holding stock in their names, or in the
names of their nominees, for their expenses in sending Proxies and Proxy
material to beneficial owners.
REVOCATION OF PROXY
Subject to the terms and conditions set forth herein, all Proxies
received by the Corporation will be effective, notwithstanding any transfer
of the shares of Common Stock to which such Proxies relate, unless prior to
the Annual Meeting the Corporation receives a written notice of revocation
signed by the person who, as of the record date, was the registered holder
of such shares. The Notice of Revocation must indicate the certificate
number or numbers of the shares to which such revocation relates and the
aggregate number of shares represented by such certificate(s).
STOCKHOLDER PROPOSALS
In order to be included in Proxy material for the 2000 Annual
Meeting, tentatively scheduled to be held on Tuesday, March 4, 2000,
stockholders' proposed resolutions must have been received by the
Corporation on or before November 25, 1999. It is suggested that proponents
submit their proposals by certified mail, return receipt requested,
addressed to the Secretary of the Corporation.
ANNUAL REPORT ON FORM 10-KSB
The Corporation will provide to any stockholder, without charge, upon
the written request of such stockholder, a copy of the Corporation's Annual
Report on Form 10-KSB, including the financial statements for the
Corporation's most recent fiscal year ended September 30, 1998. Requests for
such report should be addressed to Shareholder Relations, Hemagen
Diagnostics, Inc., 40 Bear Hill Road, Waltham, Massachusetts 02451.
MISCELLANEOUS
The Management does not know of any other matters which may come
before this meeting. However, if any other matters are properly presented to
the meeting, it is the intention of the persons named in the accompanying
Proxy to vote, or otherwise act, in accordance with their judgment on such
matters.
By Order of the Board of Directors
Carl Franzblau
Secretary
Waltham, Massachusetts
January 21, 1999
HEMAGEN DIAGNOSTICS, INC.
Proxy for Annual Meeting
to be held on March 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED hereby appoints Carl Franzblau, Ph.D. as Proxy with
full power of substitution to vote for and on behalf of the undersigned at
the Annual Meeting of Stockholders of HEMAGEN DIAGNOSTICS, INC., to be held
at the DoubleTree Guest Suites, 550 Winter Street, Waltham, Massachusetts
02451, on Tuesday, March 16, 1999 at 10:00 a.m., and at any adjournment or
adjournments thereof, upon and with respect to all shares of the Common
Stock of the Corporation to which the undersigned would be entitled to vote
and act if personally present. The undersigned hereby directs Carl
Franzblau, Ph.D. to vote in accordance with his judgment on any matters that
may properly come before the meeting, all as indicated in the notice of the
meeting, receipt of which is hereby acknowledged, and to act on the
following matters set forth in such notice as specified by the undersigned:
If no direction is made, this Proxy will be voted FOR election of
Directors and FOR Proposal 2.
(1) Proposal to elect two (2) members of the Board of Directors of the
Corporation.
INSTRUCTION: To withhold authority for any individual nominee STRIKE
such nominee's name from the list below.
[ ] FOR ALL nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as for all marked for all nominees listed
to the contrary below). below.
Mr. Fruitt and Mr. Smith
(2) Proposal to ratify and approve the selection of BDO Seidman, LLP as
the independent accountants of the Corporation for the fiscal year
ending September 30, 1999. [ ] FOR [ ] AGAINST [ ] ABSTAIN
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1 and 2.
(3) In his discretion to transact such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR AND IN FAVOR OF
THE ITEMS SET FORTH ABOVE UNLESS A CONTRARY SPECIFICATION IS MADE.
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW.
Dated:_________________________, 1999
_____________________________________
Signature
_____________________________________
Signature if held jointly
_____________________________________
Printed Name
_____________________________________
Address
NOTE: 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 the person named on the stock certificate has died, please
submit evidence of your authority. If a corporation, please sign in full
corporate name by an authorized officer and indicate the signer's office. If
a partnership, sign in the partnership name by authorized person.
