SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities and Exchange Act of 1934
(Amendment No. )
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Filed by a Party other than the Registrant [ ]
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14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Hemagen Diagnostics, Inc.
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(Name of Registrant as Specified In Its Charter)
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<PAGE>
HEMAGEN DIAGNOSTICS, INC.
34-40 Bear Hill Road
Waltham, Massachusetts 02451
March 24, 2000
To our Stockholders
Your are cordially invited to attend the annual shareholders' meeting to be
held at 10:00 a.m. on Tuesday, April 25, 2000 at Summerfield Suites Hotel, 54
Fourth Avenue, Waltham, Massachusetts 02451. This will be the first annual
shareholders' meeting under new management.
At the Annual Meeting you will be asked to elect two Directors of the
Corporation and approve the Director's Stock Option Plan.
Details of the matters to be considered at the Annual Meeting are contained
in the proxy statement.
Whether you plan to attend or not, please, sign, date and return the
enclosed proxy card.
Sincerely,
Jerry L. Ruyan
Chairman of the Board
<PAGE>
NOTICE OF ANNUAL MEETING
OF
STOCKHOLDERS OF HEMAGEN DIAGNOSTICS, INC.
Time:
10:00 a.m., Eastern Time
Date:
April 25, 2000
Place:
Summerfield Suites Hotel
54 Fourth Avenue
Waltham, Massachusetts 02451
Purpose:
. Elect directors
. Approve Directors' Stock Option Plan
Shareholders of record on March 10, 2000 are entitled to vote at this
meeting. The approximate mailing date of this Proxy Statement and accompanying
Proxy Card is March 24, 2000.
Your vote is important. Please complete, sign, date, and return your proxy
card promptly in the enclosed envelope.
Thomas A. Donelan
Secretary
March 24, 2000
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TABLE OF CONTENTS
Page
----
GENERAL INFORMATION.......................................................... 3
ELECTION OF DIRECTORS........................................................ 3
BOARD COMMITTEES............................................................. 4
APPROVAL OF A DIRECTORS' STOCK OPTION PLAN................................... 5
INDEPENDENT OF PUBLIC ACCOUNTANTS............................................ 6
DIRECTOR COMPENSATION........................................................ 6
PRINCIPAL SHAREHOLDERS....................................................... 6
SUMMARY COMPENSATION TABLE................................................... 7
OPTION GRANTS IN LAST FISCAL YEAR............................................ 7
FISCAL 1999 OPTION EXERCISESAND FISCAL YEAR-END OPTION VALUES................ 8
SHAREHOLDER PROPOSALS FOR NEXT YEAR.......................................... 9
QUESTIONS?................................................................... 9
SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE......................... 9
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GENERAL INFORMATION
Who may vote
Shareholders of Hemagen, as recorded in our stock register on March 10, 2000,
may vote at the meeting. As of that date, Hemagen had 7,780,390 shares of Common
Stock outstanding.
How to vote
You may vote in person at the meeting or by proxy. We recommend you vote by
proxy even if you plan to attend the meeting. You can always change your vote at
the meeting.
How proxies work
We are asking for your proxy. If you give us your proxy this means that you are
authorizing us to vote your shares at the meeting as you direct. You may vote
for all, some, or none of our director candidates. You may also vote for or
against the other proposals or abstain from voting.
If you sign and return the enclosed proxy card without specifying how to vote,
we will vote your shares in favor of all of the proposals listed.
If you hold shares through a stockbroker or other party, you may receive
materials from them asking how you want them to vote your shares. You may
receive more than one proxy card depending on how your shares are held.
Shares registered in your name will be covered by one card.
Revoking a proxy
You may revoke your proxy before it is voted by submitting a new proxy with a
later date, by voting in person at the meeting, or by notifying Hemagen's
Secretary in writing at the address under "Questions?" on page 10.
Quorum
In order to carry on the business of the meeting, we must have a quorum. This
means at least a majority of the outstanding shares eligible to vote must be
represented at the meeting, either by proxy or in person.
Votes needed
The two director candidates receiving the most votes will be elected to fill the
seats on the Board. Approval of the other proposal requires the favorable vote
of a majority of the votes cast. Only votes for or against a proposal count.
Abstentions and broker non-votes count for quorum purposes but not for voting
purposes. Broker non-votes occur when a broker returns a proxy card but does not
have authority to vote on a particular proposal.
Other Matters
Any other matters considered at the meeting, including adjournment, will require
the affirmative vote of a majority of shares voting.
Voting by Proxy
All proxies properly signed will, unless a different choice is indicated, be
voted "FOR" the election of the two nominees for Director proposed by the Board
of Directors and "FOR" the other proposal.
If any other matters come before the meeting or any adjournment, each proxy will
be voted in the discretion of the individuals named as proxies on the card.
ELECTION OF DIRECTORS
(Item 1 on the Proxy Card)
The Board of Directors oversees the management of the Company on your behalf.
The Board reviews Hemagen's long-term strategic plans and exercises direct
decision-making authority in key areas, such as, choosing the Chief Executive
Officer, setting the scope of his authority to manage the company's business day
to day, and evaluating management's performance.
The Board has nominated for election for terms expiring at the Annual Meeting in
2003 Dr. Alan S. Cohen and Jerry L. Ruyan. The terms of Dr. Ricardo M. de
Oliveira and Christopher P. Hendy expire in 2001 and those of Thomas A. Donelan
and William P. Hales in 2002. The election of directors is determined by a
plurality of votes cast. Cumulative voting is not provided for in the election
of directors of Hemagen.
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If a director nominee becomes unavailable before the election, your proxy card
authorizes us to vote for a replacement nominee if the Board names one.
The Board of Directors was reorganized following a consent solicitation by
Thomas A. Donelan, William P. Hales, Christopher P. Hendy and Jerry L. Ruyan.
Among other things, the solicitation sought to remove all directors and replace
them with Messrs. Donelan, Hales, Hendy and Ruyan. Following delivery of
consents, the consent solicitation was settled pursuant to a Settlement
Agreement entered into on September 30, 1999. Under that Agreement, four of
Hemagen's then directors, namely, Carl Franzblau, Lawrence Gilbert, Charles W.
Smith and Paul N. Fruitt resigned and were replaced by Messrs. Donelan, Hales,
Hendy and Ruyan. Drs. Cohen and de Oliveira, who were previously elected by
shareholders, remained as directors.
Thomas A. Donelan, William P. Hales and Christopher P. Hendy were elected to the
Audit Committee and Alan S. Cohen, Thomas A. Donelan, William P. Hales and Jerry
L. Ruyan were elected to the Compensation Committee.
Since September 30, 1999 was also the close of Hemagen's fiscal year, all
information relating to fiscal 1999 will describe the officers and directors in
place until September 30, 1999.
BOARD COMMITTEES
The Board appoints committees to help carry out its duties. In particular, Board
committees work on key issues in greater detail than would be possible at full
Board meetings. Each committee reviews the results of its meetings with the full
Board. The Board of Directors does not have a nominating committee or executive
committee.
The Audit Committee is responsible for reviewing the Company's internal
accounting operations. It also recommends the employment of independent
accountants and reviews the relationship between the Company and its outside
accountants.
The Compensation Committee is responsible for establishing compensation for
management and administering the Company's stock option plans.
The Company's present officers and directors are as follows:
Alan S. Cohen Dr. Cohen has served as a Director of the Corporation
Age 73 since its inception. Dr. Cohen has been employed by
Director since 1993 the Boston University School of Medicine as a Professor
Term expires 2000 of Medicine since 1968 and 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 1973 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.
Ricardo M. de Oliveira Dr. de Oliveira has been the Vice President of Research
Age 48 and Development and a Director of the Corporation since
Director since 1993 its inception.From 1980 through 1990, Dr. deOliveira was
Term expires 2001 a Professor at the University of Sao Paulo in Brazil.
Dr. de Oliveira was 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.
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Thomas A. Donelan Mr. Donelan has been a founding member of Redwood
Age 44 Holdings, Inc., a privately held venture capital firm,
Director since 1999 since 1995. Prior to that time he was a Vice President
Term expires 2002 of Commercial Lending at Fifth Third Bank in Cincinnati,
Ohio. He also served as a board member for Blue Chip
Venture Fund in Cincinnati, and Alpha Capital Venture
Fund in Chicago. He serves on the boards of Meritage
Hospitality Group Inc., a public company; Schonstedt
Instrument Company and the Avon Workshop Inc., private
companies; and St. Joseph Orphanage, a charitable
organization. Mr. Donelan earned a B.S. degree in
Political Science from Northern Kentucky University and
a J.D. from Chase College of Law.
William P. Hales Mr. Hales is President of Hemagen. He is a Senior
Age 37 Investment Advisor with Jesup & Lamont Securities
Director since 1999 Corporation, an investment banking and brokerage firm.
Term expires 2002 He has been a full time money manager with several
investment banking and brokerage firms since 1992.
Prior to that he was a practicing CPA with Coopers
& Lybrand and Ernst & Young. Mr. Hales earned a B.A. in
Accounting from Pace University. He is a Certified
Public Accountant.
Christopher P. Hendy Mr. Hendy has been a member of Redwood Holdings, Inc., a
Age 42 Holdings, Inc., a privately held venture capital firm,
Director since 1999 since 1996. Prior to that time he was a Vice President
Term expires 2001 and Manager of the Asset-Based Lending Department of
Fifth Third Bank in Cincinnati, Ohio. Prior to that he
was Vice President at Marine Midland Bank. He serves
on the boards of Meritage Hospitality Group Inc., a
public company; Schonstedt Instrument Company and the
Avon Workshop Inc., private companies. Mr. Hendy earned
a B.S. degree in Business Administration from Xavier
University.
Jerry L. Ruyan Mr. Ruyan is Chairman and Chief Executive Officer of
Age 53 Hemagen. He is a founding member of Redwood Holdings,
Director since 1999 Inc., a privately held venture capital firm. Prior to
Term expires 2000 that he was a Founder, Director, President and Chief
Executive Officer of Meridian Diagnostics, Inc., a
public company that develops diagnostic test products
for the global medical industry. He served as a
Director of Meridian until July 7, 1999, when he became
part of a consent solicitation to change the board of
Hemagen Diagnostics, Inc. He serves on the boards of
Meritage Hospitality Group Inc., and PopMail.com Inc.,
which are public companies; Schonstedt Instrument
Company and The Last Best Place Catalog Company, private
companies; and is a Trustee for Ashland University. Mr.
Ruyan earned a B.S. degree in Biology from Ashland
University and a Master's Degree in Microbiology from
The Ohio State University.
APPROVAL OF A DIRECTORS' STOCK OPTION PLAN
(Item 2 on the Proxy Card)
Your Board of Directors is recommending approval of a Directors' Stock Option
Plan adopted by the Board of Directors on December 16, 1999, subject to
shareholder approval. The Plan reserves 500,000 shares of Hemagen Common Stock
for issuance. The following is a summary of the Plan which appears in its
entirety as Exhibit A to this Proxy Statement.
The Plan provides that effective at the 2000 Annual Meeting of Shareholders each
director elected at that meeting and those continuing in terms expiring in later
years will be granted an option to purchase 10,000 shares of Common Stock and
that similar grants would be made at the time of each Annual Shareholders'
Meeting. Should any person become an eligible director during the year, they
shall also be granted at election, whether by shareholders or directors, an
option to purchase 10,000 shares.
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The exercise price for the options will be the last closing sale price of
Hemagen's Common Stock reported prior to the date of grant. On March 10, 2000,
the closing price of Hemagen's Common Stock was $3.13 per share. All options are
granted for a ten year term.
The options are exercisable in full at the time of grant. If a holder of an
option becomes an employee or officer or director of a competitor of Hemagen,
their option will automatically terminate.
Non-employee directors who receive options incur no federal income tax liability
at the time of grant. Non-employee directors exercising options recognize
taxable income and the Company has a tax deduction at the time of exercise to
the extent of the difference between the market price on the day of exercise and
the exercise price.
The affirmative vote of a majority of votes cast at the meeting is required to
approve the adoption of this Plan.
INDEPENDENT PUBLIC ACCOUNTANTS
Hemagen's independent public accountants for fiscal 1999 were BDO Seidman LLP.
At this time the Board does not seek ratification of an independent public
accountant for fiscal 2000 because this Company would like to entertain
competitive bids for the engagement.
Representatives of BDO Seidman LLP are expected to be present at the
Shareholders' Meeting and will be given an opportunity to comment, if they so
desire, and to respond to appropriate questions that may be asked by
shareholders.
DIRECTOR COMPENSATION
Non-employee directors of Hemagen are paid $10,000 per year plus reimbursement
of travel expenses.
The former Board of Directors met 9 times in fiscal 1999. The Audit and
Compensation Committees did not meet separately. All directors attended all
meetings of the Board of Directors except for Dr. de Oliveira who attended five
meetings.
PRINCIPAL SHAREHOLDERS
The following are the only shareholders known to beneficially own more than 5%
of Hemagen's outstanding Common Stock as of March 10, 2000:
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
--------------------------------- -------------------- --------
Thomas A. Donelan 2,787,842 28.8%
William P. Hales 2,787,842 28.8%
Christopher P. Hendy 2,787,842 28.8%
Jerry L. Ruyan 2,787,842 28.8%
Randall J. Kirk and
Clinical Chemistry Holdings, Inc. 500,000 6.45%
The business address of Mr. Hales and Mr. Ruyan is 34-40 Bear Hill Road,
Waltham, Massachusetts 02451. The business address of Messrs. Donelan and Hendy
is 9468 Montgomery Road, Cincinnati, Ohio 45242. The business address of Mr.
Kirk is the Governor Tyler, 1908 Downey Street, Radford, Virginia 24141 and the
business address of Clinical Chemistry Holdings, Inc. is 101-B Creekridge Road,
Greensboro, North Carolina 27046.
All shares and rights to acquire shares owned by each of the above individuals
are deemed to be owned by all of them. The numbers include warrants to purchase
182,227 shares and options to purchase 1,732,014 shares.
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SUMMARY COMPENSATION TABLE
The following sets forth compensation paid to executive officers during the last
three fiscal years ended September 30:
Long-Term
Compensation
Annual Compensation Awards
---------------------------------------- -------------
Securities
Name and Other Annual Underlying
Principal Position Year Salary Bonus Compensation Options
- ------------------ ---- ------ ----- ------------ ------------
Carl Franzblau 1999 $145,000 0 $7,328(1) 0
Chief Executive Officer 1998 140,000 0 7,324(1) 10,000
1997 137,187 0 7,961(1) 10,000
Ira Marks 1999 $143,900 1,369 $7,109(2) 0
Vice President, 1998 136,908 0 5,607(2) 20,000
Marketing and Sales,
RAICHEM 1997 136,908 0 4,107(3) 10,000
Ricardo de Oliveira 1999 $120,000 1,200 $ 0 0
Senior Vice President 1998 120,000 0 610(1) 10,000
1997 118,840 0 5,073 0
William Franzblau 1999 $130,000 1,300 $6,900(2) 0
Chief Financial Officer 1998 110,000 0 5,400(2) 10,000
1997 105,000 0 3,150(3) 20,500
Scott Weiss 1999 $130,000 1,300 $8,100(2) 0
Vice President, 1998 110,000 0 5,650(2) 20,000
Marketing and Sales 1997 105,000 0 4,350(2) 21,500
(1) Reflects provision of a leased car.
(2) Represents contributions in the Company's 401(k) plan and automobile
allowance.
(3) Represents contributions in the Company's 401(k) plan.
OPTION GRANTS IN LAST FISCAL YEAR
No options were granted to any of the named executive officers in fiscal 1999.
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FISCAL 1999 OPTION EXERCISESAND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at FY-End FY-End
Acquired Value
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Carl Franzblau 0 0 20,000/20,000 0/0
Ricardo de Oliveira 0 0 0/0
William Franzblau 0 0 30,500/35,500 0/0
Scott Weiss 0 0 41,500/41,500 0/0
Ira Marks 0 0 0/0
Myrna Franzblau 40,000/40,000 0/0
</TABLE>
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SHAREHOLDER PROPOSALS FOR NEXT YEAR
The deadline for shareholder proposals to be included in the Proxy Statement for
next year's meeting is November 28, 2000.
The form of Proxy for this meeting grants authority to the designated proxies to
vote in their discretion on any matters that come before the meeting except
those set forth in the Company's Proxy Statement and except for matters as to
which adequate notice is received. In order for a notice to be deemed adequate
for the 2001 Annual Shareholders' Meeting, it must be received prior to March
11, 2001. If there is a change in the anticipated date of next year's annual
meeting or these deadlines by more than 30 days, we will notify you of this
change through our Form 10-Q filings.
QUESTIONS?
If you have questions or need more information about the annual meeting, write
to:
Thomas A. Donelan, Secretary
Hemagen Diagnostics, Inc.
9468 Montgomery Road
Cincinnati, Ohio 45242
or call us at (513) 984-9730.
SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Hemagen's
executive officers, directors and persons who own more than 10% of a registered
class of Hemagen's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and to furnish Hemagen
with copies of these reports. Based on a review of the copies of such reports
received by it, and upon written representations from certain reporting persons
that no reports were required, Hemagen believes that all of its executive
officers, directors and 10% shareholders complied with Section 16 reporting
requirements during fiscal 1999, with the exception of the Forms 3 for
Christopher P. Hendy, Jerry L. Ruyan, Thomas A. Donelan and William P. Hales,
which were not filed in a timely manner.
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HEMAGEN DIAGNOSTICS, INC.
The undersigned hereby appoints JERRY L. RUYAN and WILLIAM
P. HALES, or either of them, proxies of the undersigned,
each with the power of substitution, to vote all shares of
Common Stock which the undersigned would be entitled to vote
PROXY on the matters specified below and in their discretion with
FOR respect to such other business as may properly come before
ANNUAL the Annual Meeting of Shareholders of Hemagen Diagnostics,
MEETING Inc. to be held on April 25, 2000 at 10:00 A.M. Eastern Time
at Summerfield Suites Hotel, 54 Fourth Avenue, Waltham,
Massachusetts 02451 or any adjournment of such Annual
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS:
1. Authority to elect as directors the two nominees listed below.
FOR _______ WITHHOLD AUTHORITY _______
JERRY L. RUYAN AND DR. ALAN S. COHEN
WRITE THE NAME OF ANY NOMINEE(S) FOR WHOM AUTHORITY TO VOTE IS WITHHELD
2. Approval of Directors' Stock Option Plan
FOR _______ AGAINST_______ ABSTAIN _______
THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF
DIRECTORS UNLESS A CONTRARY CHOICE IS SPECIFIED.
(This proxy is continued and is to be signed on the reverse side)
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Date
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Important: Please sign exactly as name
appears hereon indicating, where proper,
official position or representative capacity.
In the case of joint holders, all should
sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
