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-12
HEMACARE CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ 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:
---------------------------------------------------------------
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:
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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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1
[LOGO]
HEMACARE CORPORATION
____________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 13, 2003
9:30 a.m.
_________________
Notice is hereby given that the 2003 annual meeting of the
shareholders (the "Meeting") of HemaCare Corporation (the
"Company") will be held at the Warner Center Marriott Hotel,
21850 Oxnard Street, Woodland Hills, California 91367,
on Wednesday, August 13, 2002 at 9:30 a.m. (PDT), for the
following purposes:
1. Election of Directors. To elect six persons to the
Board of Directors of the Company to serve until the
annual meeting of shareholders to be held in 2004. The
following persons are the Board of Directors' nominees:
Julian L. Steffenhagen, Wm. Andrew L. Heaton, MD, Judi
Irving, Robert L. Johnson, Terry Van Der Tuuk and Stephen
P. Wallace.
2. Other Business. To transact such other business as
properly may come before the Meeting or any adjournments
or postponements thereof.
Only holders of record of Common Stock of the Company at the
close of business on June 16, 2003 (the "Shareholders") will
be entitled to notice of and to vote in person or by proxy at
the Meeting or any adjournment or postponement thereof.
The Proxy Statement, which accompanies this Notice, contains
additional information regarding the proposals to be considered
at the Meeting, and Shareholders are encouraged to read it in
its entirety.
As set forth in the enclosed Proxy Statement, proxies are being
solicited by and on behalf of the Board of Directors of the
Company. All proposals set forth above are proposals of the
Company. It is expected that these materials first will be
mailed to Shareholders on or about June 18, 2003.
To ensure that your shares may be represented at the Meeting
and to assure the presence of 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. Mannise
-----------------------------
JoAnn R. Mannise, Secretary
Woodland Hills, California
June 16, 2003
IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE. IF YOU DO ATTEND THE MEETING, YOU MAY THEN WITHDRAW
YOUR PROXY AND VOTE IN PERSON. THE PROXY MAY BE REVOKED AT
ANY TIME PRIOR TO ITS EXERCISE.
1
HEMACARE CORPORATION
21101 Oxnard Street
Woodland Hills, California 91367
818-226-1968
PROXY STATEMENT
__________________________
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of HemaCare
Corporation (the "Company"), for use at the annual meeting of
the shareholders of the Company (the "Meeting") to be held at
the Warner Center Marriott Hotel, 21850 Oxnard Street, Woodland
Hills, CA 91367, on Wednesday, August 13, 2003 at 9:30 a.m.(PDT)
and at any and all adjournments or postponements thereof for the
purposes set forth herein and in the attached Notice of Annual
Meeting of Shareholders. Accompanying this Proxy Statement is a
proxy card (the "Proxy"), which you may use to indicate your vote
on the proposals described in this Proxy Statement. Only holders
of record of the Company's Common Stock (the "Shareholders") as
of the close of business on June 16, 2003 (the "Record Date")
are entitled to notice of and to vote, in person or by proxy, on
all matters presented to the Meeting and any adjournments or
postponements thereof. You may revoke the Proxy 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 for
withdrawing their Proxies.
It is anticipated that this Proxy Statement and accompanying
Proxy will first be mailed to shareholders on or about June
18, 2003.
Matters to be Considered
-------------------------
The matters to be considered and voted upon at the Meeting will
be:
1. Election of Directors. To elect six persons to the Board of
Directors of the Company to serve until the next annual
meeting of shareholders and until their successors have been
elected and qualified. The following persons are the Board of
Directors' nominees:
Julian L. Steffenhagen
Wm. Andrew L. Heaton, MD
Judi Irving
Robert L. Johnson
Terry Van Der Tuuk
Stephen P. Wallace
2. Other Business. To transact such other business as properly
may come before the Meeting or any adjournments or
postponements thereof.
Voting Rights and Broker Non-Votes
----------------------------------
On June 16, 2003, there were 7,751,060 shares of Common Stock
outstanding, which constitute all of the outstanding voting
securities of the Company. Each Shareholder is entitled to one
vote, in person or by proxy, for each share standing in his or
her name on the books of the Company as of the Record Date, except
that in the election of directors, each Shareholder has the right
to cumulate votes. Shareholders may cumulate votes only if the
candidates' names have been properly placed in nomination prior
to commencement of voting and a Shareholder has given notice prior
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to commencement of voting of his or her intention to cumulate votes,
in which case all shareholders may cumulate their votes. Cumulative
voting entitles every Shareholder to a number of votes equal to the
number of directors to be elected multiplied by the number of
shares of Common Stock held by such Shareholder. The Shareholder may
cast all of such votes for one candidate or may distribute such
votes among as many candidates as the Shareholder thinks fit. The
Company is soliciting authority to cumulate votes in the election
of directors, and the enclosed Proxy grants discretionary authority
for such purpose. The candidates receiving the highest number of votes,
up to the number of directors to be elected, will be elected.
Of the shares of Common Stock outstanding on the Record Date,
160,000 shares of Common Stock (approximately 2.1% of the
issued and outstanding shares of Common Stock) were owned by
directors and executive officers of the Company. These persons
have informed the Company that they will vote "FOR" the election
of the nominees to the Board of Directors identified herein.
If you hold Common Stock in "street name" and you fail to
instruct your broker or nominee as to how to vote such Common
Stock, your broker or nominee may, in his/her discretion, vote
such Common Stock "FOR" the election of the Board of Directors'
nominees, but not for certain other matters presented to the
Shareholders. When a broker or nominee votes a client's shares
on some but not all proposals, the missing votes are referred
to as "broker non-votes."
Under California law and the Company's Bylaws, a quorum consists
of the presence in person or by proxy of a majority of the
shares entitled to vote at the Meeting. A matter (other
than the election of directors) voted on by Shareholders will
be approved if it receives the affirmative vote of a majority of
the shares both present and voting, provided the affirmatively voted
shares also constitute a majority of the required quorum, unless
the vote of a greater number of shares is required. Abstentions
and broker non-votes will be included in the number of shares
present at the meeting and entitled to vote for the purpose of
determining the presence of a quorum. Accordingly, 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.
Unless revoked, the shares of Common Stock represented by
Proxies will be voted in accordance with the instructions given
thereon. If a signed Proxy does not have voting instructions,
the subject shares of Common stock will be voted "FOR" the election
of the Board of Directors' nominees. Ms. Judi Irving, the designated
proxy holder (the "Proxyholder"), is a member of the Company's
management.
The Securities and Exchange Commission (the "SEC") has amended
its rule governing a company's ability to use discretionary
proxy authority with respect to shareholder proposals that
were not submitted by the shareholders in time to be included
in the proxy statement. As a result of that rule change, in the
event a shareholder proposal was not submitted to the Company
prior to April 2, 2003, the enclosed Proxy would confer authority
on the Proxyholder to vote the shares in accordance with their
best judgment and discretion if the proposal is presented at
the Meeting. As of the date hereof, no shareholder proposal
has been submitted to the Company, and management is not aware
of any other matters to be presented for action at the Meeting.
However, if any other matters properly come before the Meeting,
the Proxies solicited hereby will be voted by the Proxyholder
in accordance with the recommendations of the Board of Directors.
Such authorization includes authority to appoint a substitute
nominee for any Board of Directors' nominee identified herein where
death, illness or other circumstance arise which prevents such
nominee from serving in such position and to vote such Proxy for
such substitute nominee.
Procedures for Shareholder Nominations
--------------------------------------
The Board of Directors does not have a standing nominating
committee. Nominations for the election of directors may be
made by the directors or any shareholder entitled to vote in the
election of directors. However, a shareholder may nominate a
person for election as a director at a meeting only if written
notice of such shareholder's intent to make such nomination
has been given to the secretary of the Company no later than
the latter to occur of either (a) 90 days in advance of such
meeting, or (b) the seventh day following the first public
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announcement of the date of such meeting. Each such notice
must include: (1) the name and address of the shareholder
who intends to make the nomination and the name and address
of the person or persons to be nominated; (2) a representation
that the shareholder is a beneficial owner of stock of the
corporation entitled to vote at the meeting, and that the
shareholder intends to appear in person or by proxy at the
meeting and to nominate the person or persons specified in
the notice; (3) a description of all arrangements or
understandings between the shareholder and each nominee
and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations
are to be made by the shareholder;(4) such other information
regarding each nominee proposed by such shareholder as would
be required to be included in a proxy statement filed pursuant
to the proxy rules of the United States Securities and Exchange
Commission, had the nominee been nominated,or intended to be
nominated, by the Board of Directors; and (5) the consent of
each intended nominee named in the notice to serve as a
director of the Company if so elected. In addition, the
shareholder making such nomination shall promptly provide any
other information reasonably requested by the Company. The
chairman of any meeting of shareholders shall direct that any
nomination not made in accordance with the foregoing procedures
will be disregarded.
Cost and Method of Solicitation
-------------------------------
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, including the expense of preparing,
assembling, printing and mailing this Proxy Statement and any
other materials used in this 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. The total
estimated cost of the solicitation of Proxies is $2,500.
Security Ownership of Principal Shareholders and Management
-----------------------------------------------------------
The following table sets forth the beneficial ownership of the
Company's Common Stock as of the Record Date by (i) all persons
known to the Company to own beneficially more than 5% of the
outstanding Common Stock (other than depositories), (ii) each
director of the Company, (iii) each person serving as CEO during
the 2002 fiscal year, the four most highly compensated executive
officers (in terms of salary and bonus) serving at the end of the
2002 fiscal year whose annual salary and bonus exceeded $100,000,
and up to two other persons who were not serving on the last day
of the 2002 fiscal year but would have been among the four most highly
compensated executive officers had they been serving at that time
(the "Named Executive Officers) and (iv) all executive officers and
directors of the Company as a group.
Amount and
Nature of
Name and Address of Beneficial Percentage
Beneficial Owner (1) Ownership (2) Owned (3)
---------------------- -------------- -----------
Kudu Partners, LP 455,000 (4) 5.9%
Alan C. Darlington 290,000 (5) 3.6%
Julian L. Steffenhagen 160,000 (6) 2.0%
Terry Van Der Tuuk 150,000 (7) 2.0%
Robert L. Johnson 105,000 (8) 1.3%
Stephen P. Wallace 75,000 (8) 1.0%
Dana E. Belisle 70,000 (9) *
Judi Irving 70,000 (10) *
David E. Fractor 36,000 (9) *
Wm. Andrew L. Heaton, MD 25,000 (8) *
All executive officers 691,000 (11) 8.1%
and directors as a group (8 persons)
____________________
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* Less than 1%
(1) The address for Kudu Partners, LP is 1900 C.R. 124,
Hesperus, CO 81326. The address for Ms. Irving and Messrs.
Steffenhagen, Heaton, Johnson, Van Der Tuuk, Wallace,
Belisle, Fractor and Darlington is 21101 Oxnard Street,
Woodland Hills, CA 91367.
(2) Except as set forth below, the named shareholder has sole
voting power and investment power with respect to the
shares listed, subject to community property laws where
applicable.
(3) Shares of Common Stock, which the person (or group) has
the right to acquire within 60 days after the Record Date,
are deemed to be outstanding in calculating the beneficial
ownership and the percentage ownership of the person
(or group), but are not deemed to be outstanding as to any
other person or group.
(4) According to a Schedule 13D filed with the Securities and
Exchange Commission on February 18, 2003, Kudu Partners, LP
has sole voting power and investment power.
(5) Includes 270,000 shares of Common Stock issuable upon
exercise of currently exercisable warrants.
(6) Includes 145,000 shares of Common Stock issuable upon
exercise of currently exercisable stock options.
(7) Includes 125,000 shares held in a trust in which Mr. Van
Der Tuuk is trustee and has sole voting power and 25,000
shares of Common Stock issuable upon exercise of currently
exercisable stock options.
(8) Represents shares of Common Stock issuable upon exercise
of currently exercisable stock options.
(9) Represents shares of Common Stock issuable upon exercise
of stock options exercisable within 60 days of the Record
Date.
(10) Represents 50,000 shares of Common Stock issuable upon
exercise of stock options exercisable within 60 days of
the Record Date.
(11) Excludes an aggregate of 264,000 shares, which certain
directors and executive officers will have the right
to purchase upon the exercise of stock options exercisable
in various installments commencing 60 days from the Record
Date.
PROPOSAL 1
ELECTION OF DIRECTORS
Directors, Executive Officers and Key Employees
-----------------------------------------------
The Company's Bylaws provide that the number of directors
of the Company shall be six until changed by a bylaw duly
adopted by the Board of Directors, but shall not be less than
five nor more than nine. Each director elected at the
Meeting will hold office until the next annual meeting of
shareholders and until the election of his or her successor.
All nominees have indicated their willingness to serve and,
unless otherwise instructed, Proxies will be voted in such a
way as to elect as many of these nominees as possible under
applicable voting rules. Proxies may not be voted for a
greater number of persons than the nominees named in this
Proxy Statement. In the event that any nominee is unable to
serve, an event that is not anticipated, the Proxies will be
voted for the election of any substitute nominee who may be
designated by the Board of Directors.
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Each of the following persons has been nominated by the Board of Directors
for election as a director to hold office until the next annual meeting of
shareholders and until the election of his or her successor:
Julian L. Steffenhagen
Wm. Andrew L. Heaton, MD
Judi Irving
Robert L. Johnson
Terry Van Der Tuuk
Stephen P. Wallace
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE NOMINEES.
None of the directors, nominees for director or executive
officers was selected pursuant to any arrangements or
understanding, other than with the directors and executive
officers of the Company acting within their capacity as such.
There are no family relationships among directors or executive
officers of the Company, and except as set forth below, as of
the date hereof, no directorships are held by any director in
a company which has a class of securities registered pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or subject to the requirements of Section
15(d) of the Exchange Act or any company registered as an
investment company under the Investment Company Act of 1940.
Officers serve at the discretion of the Board of Directors.
The following table sets forth certain information concerning
the directors, executive officers and key employees of the Company.
Name Age Position
---------------------- --- ------------------------------------------
Julian L.
Steffenhagen (1)(2) 59 Chairman and Director
Judi Irving 45 President, Chief Executive Officer
Wm. Andrew L. Heaton,MD 55 Director
Robert L. Johnson (1)(2) 64 Director
Terry Van Der Tuuck 62 Director
Stephen P. Wallace (1)(2) 48 Director
Dana E. Belisle 39 Chief Operating Officer
David E. Fractor 43 Chief Financial Officer
Joshua Levy, M.D. 62 National Medical Director
________________
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Directors
---------
Julian L. Steffenhagen has been a director of the Company
since December 1997 and Chairman of the Board since October
2002. Since 1979, Mr. Steffenhagen has held several management
positions at Beckman Coulter, Inc., an international manufacturer
of laboratory equipment and diagnostic reagents. He is currently
the Vice President, Corporate Development and Strategic Planning
and Vice President, Point of Care Operations. He earned his
Bachelor of Science and Master of Science degrees in mechanical
engineering, and his Master of Business Administration degree
from the University of Michigan. Mr. Steffenhagen is a member
of the Audit Committee and is Chairman of the Compensation
Committee.
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Wm. Andrew L Heaton, MD has been a director of the Company
since May 2003. Since 2000, Dr. Heaton has been a Vice President
of the Blood Testing Division of Chiron Corporation, an
international provider of nucleic acid and immuno testing to
the blood screening market, and is now Regulatory Affairs/
Scientific Affairs and Chief Medical Officer. Prior to joining
Chiron, from 1999 to 2000, Dr. Heaton was the Chief Medical
Officer of Blood Systems, Inc. and President of Blood Systems
Foundation, an allied foundation supporting transfusion research.
From 1993 until 1999, Dr. Heaton was President and Chief Executive
Officer of Blood Centers of the Pacific. Dr. Heaton received his
Bachelor of Arts and Bachelor of Medicine at Trinity College,
Dublin University, Dublin, Ireland and his Masters of Medical
Pathology from the University of Cape Town Medical School, Cape
Town, South Africa. He is certified by the American Board of
Pathology for Clinical Pathology and Blood Banking. Dr. Heaton
has published numerous articles in the fields of hematology and
blood banking and has been a frequent lecturer on blood banking
and blood transfusion quality assurance.
Judi Irving was appointed President and Chief Executive Officer
and elected to the Board in December 2002. Prior to joining
the Company, from 1999 to 2002, Ms. Irving was President and
Chief Executive Officer of Health Net of Arizona and Health
Net of Oregon, national health and life insurance organizations.
From 1996 to 1999, Ms. Irving was Vice President of Operations
and Chief Financial Officer for the Western Region of Prudential
Healthcare, a national health insurance provider. Ms. Irving
received her Bachelor of Science degree in Management and
Accounting from the State University of New York at Binghamton
and is a Certified Public Accountant.
Robert L. Johnson has been a director of the Company since
April 1999. From 1986 until his retirement in January 2002,
Mr. Johnson was the Senior Vice President, Legal and General
Counsel of the Catholic Healthcare West hospital system,
headquartered in San Francisco, California. Prior to joining
Catholic Healthcare West, Mr. Johnson was in the private
practice of law and is admitted to practice in the federal
and state courts of Arizona and California, as well as the
United States Supreme Court. He has been active in various
health care related organizations and, in 1995, served as
the President of the American Academy of Healthcare Attorneys.
Mr. Johnson obtained his LL.B. degree, cum laude, from the
University of Arizona. Mr. Johnson is a member of the Audit
and Compensation Committees.
Terry Van Der Tuuk has been a director of the Company since
May 2003. Since 1994, Mr. Van Der Tuuk has held the position
of Vice Chairman of Graphic Technology, a barcode label company,
which was listed on the American Stock Exchange and sold to
Nitto-Denko Corporation in 1989. He is also Chairman of
Mid-America Merchandising, Inc, a promotional products company,
and is President of VanKan, Inc, a Kansas based venture capital
firm which invests in privately held companies in the Midwest
area. Mr. Van Der Tuuk served on several educational boards,
including The Wharton School, University of Pennsylvania, and
currently serves on the boards of several privately held
companies. Mr. Van Der Tuuk received his Bachelor of Science
degree from Michigan State University and his MBA at The Wharton
School, University of Pennsylvania.
Stephen P. Wallace has been a director of the Company since
June 2001. From 1998 until August 31, 2001, Mr. Wallace
was Executive Vice President and Chief Operating Officer
of Catellus Development Corporation, a real estate operating
company with one of the largest portfolios of developable
land in the Western United States. Mr. Wallace was Catellus'
Chief Financial Officer from 1995 to 1998. Prior to his
employment with Catellus, Mr. Wallace was Chief Financial
Officer of Castle and Cooke Homes. Mr. Wallace received his
Bachelor of Science degree at the University of Colorado.
Mr. Wallace is Chairman of the Audit Committee and a member of
the Compensation Committee.
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Officers
--------
David E. Fractor has been Chief Financial Officer of the
Company since June 1999. Prior to joining the Company, Mr.
Fractor was Chief Financial Officer of the Andwin Corporation,
a manufacturer and distributor of medical devices, since 1996.
From 1994 through 1996, Mr. Fractor performed consulting
services, primarily functioning as interim Chief Financial
Officer for emerging public companies. From 1986 through 1994,
he was an audit manager at both Deloitte and Touche and Weber,
Lipshie & Co., a regional accounting firm. He received his
Bachelor of Science degree in Accounting from the University
of Southern California and is a Certified Public Accountant.
Dana E. Belisle has been Chief Operating Officer of the
Company's nation-wide operations since October 2001. Prior
to that, Mr. Belisle was the Chief Operating Officer of the
Eastern United States operations. Mr. Belisle joined the
Company in connection with the Company's acquisition of the
assets of Coral Therapeutics in October 1998. From 1995 to
1998, Mr. Belisle served in various management positions
with Coral Therapeutics. From 1990 through 1995, Mr. Belisle
was a Clinical Specialist for Haemonetics Corporation, an
international manufacturer of automated blood processing
systems. Mr. Belisle received his Bachelor of Arts degree
in Medical Technology at the University of Maine and is
a registered Hemapheresis Specialist.
Key Employees
-------------
Joshua Levy, M.D. was appointed National Medical Director
of the Company in March 2000. Since co-founding the Company
in 1978, Dr. Levy has been the Company's Medical Director and
had served as a member of the Board of Directors from 1978
until 1996. Dr. Levy received his M.D. degree from Albert
Einstein College of Medicine. He is certified by the American
Board of Internal Medicine and was Adjunct Associate Professor
of Medicine at UCLA from 1967 to 1982. He has published
numerous scientific articles in the fields of rheumatology
and immunology and is a national authority and frequent
lecturer on therapeutic hemapheresis.
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons
who own more than ten percent of a registered class of the
Company's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Such officers, directors and ten-
percent stock holders are also required by SEC rules to
furnish the Company with copies of all forms that they file
pursuant to Section 16(a). Based solely upon review of
copies of reports filed with the SEC, each person subject
to the reporting requirements of Section 16(a) has filed
timely all reports required to be filed in fiscal 2002,
with the exception of Ronald Gilcher, a former director,
who was delinquent in filing a Form 3 in 2002.
Committees of the Board
-----------------------
The Board of Directors has an Audit Committee and a
Compensation Committee, each of which consists of three
directors who serve at the discretion of the Board of Directors.
Mr. Wallace chairs the Audit Committee, and its members
are Messrs. Johnson and Steffenhagen, all of whom are
considered "independent" under Rule 4200(a)(15) of the
National Association of Securities Dealers. The primary
purposes of the Audit Committee are (i) to review and
discuss the Company's audited financial statements with
management, (ii) discuss with the Company's auditors,
information relating to the auditors' judgments about the
quality of the Company's accounting principles, (iii)
recommend to the Board of Directors whether the Company
should include the audited financials in its Annual Report
on Form 10-K and (iv) oversee compliance with the SEC
requirements for disclosure of auditors' services and
activities. The Board of Directors of the Company
adopted a written Audit Committee Charter in 2001.
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Mr. Steffenhagen chairs the Compensation Committee, and
its members are Messrs. Wallace and Johnson. The purposes
of the Compensation Committee are (i) to review and
recommend to the Board of Directors the salaries, bonuses
and perquisites of the Company's executive officers and
(ii) to determine the individuals to whom, and the terms
upon which, awards under the Company's incentive programs
will be granted.
Meetings and Attendance
-----------------------
The Board of Directors met eleven times during fiscal
2002 and took action by unanimous written consent on five
occasions during fiscal 2002. During fiscal 2002, each
director attended 100% of the total number of meetings of
the Board of Directors with the exception of former Board
member, Ronald Gilcher, who attended 91% and Alan Darlington
who attended 70% of the Board meetings. Committee members
attended 100% of the meetings held by all committees on
which they served during fiscal 2002. In 2002, the Audit
Committee met five times and the Compensation Committee
met three times.
Compensation of Directors
-------------------------
Directors who are not employees of the Company receive
$1,500 for each Board meeting attended and reimbursement
of reasonable travel expenses for each Board meeting
attended. In December 2002, the Board of Directors
authorized fees of $3,000 for the Chairman of the Board
for each Board meeting attended. In December 2002, the
Board of Directors approved $10,000 in additional fees
to Mr. Julian Steffenhagen for his additional duties while
the Company was without a Chief Executive Officer. The Company
does not compensate Committee members for meetings attended.
Each person who has not previously served as a director
of the Company and who is initially elected or appointed
as a non-employee director is granted a vested option to
purchase 25,000 shares of the Company's Common Stock at
an exercise price of the closing price on the date of grant.
Additionally, outside directors receive a vested stock
option grant of 25,000 shares of Common Stock for each
year of service at an exercise price of the closing price
on the date of grant. In December 2002, the Board of
Directors approved an annual, vested stock option grant
to purchase 50,000 shares of Common Stock to the Chairman
of the Board at an exercise price of the closing price on
the date of grant.
Executive Compensation
----------------------
The following table sets forth information concerning
all cash and non-cash compensation earned by, awarded to,
or paid by the Company to its Named Executive Officers
for the fiscal years ended December 31, 2002, 2001 and 2000.
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SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
-------------------------------------- -----------
Other Annual Securities All Other
Name and Salary Bonus Compensation Underlying Compensation
Principal Position Year ($) ($) ($) Options ($)(2)
------------------- ----- -------- ------- --------------- ---------- ------------
Alan C. Darlington, 2002 $150,000 - - - $237,500
Executive Chairman and 2001 $200,000 - - 100,000 -
Chief Executive Officer 2000 $200,000 $80,000 - - -
(3)
Judi Irving, 2002 $ 7,700 - - 200,000 -
President and Chief 2001 - - - - -
Executive Officer (4) 2000 - - - - -
Dana E. Belisle, 2002 $141,155 - - 50,000 $ 3,500
Chief Operating Officer 2001 $122,000 - - 50,000 $ 3,500
2000 $110,000 $20,000 - - $ 3,000
David E> Fractor, 2002 $120,000 - - 20,000 $ 3,000
Chief Financial Officer 2001 $120,000 - - 20,000 $ 3,300
2000 $110,000 $10,000 - - $ 2,900
Joshua Levy, 2002 $200,000 - - - $ 2,800
Nat'l Medical Doctor 2001 $201,000 $29,000 - - $ 4,300
2000 $187,000 $10,000 - 50,000 $ 4,300
__________
(1) During fiscal 2000, 2001 and 2002, the Named Executive
Officers received personal benefits, including but not limited
to an automobile allowance, the aggregate amounts of which
for each Named Executive Officer did not exceed the lesser
of $50,000or 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) except for Mr.
Darlington who received $237,500 in severance which is payable
through September 2003. See Footnote 3.
(3) Mr. Darlington's employment with HemaCare ended as of September
28, 2002. Under the terms of his Separation Agreement, Mr.
Darlington will receive a severance amount of $237,500 payable
over a period of one year following the separation date, and
upon cancellation of vested stock options, received warrants to
purchase 270,000 shares of the Company's Common Stock (See complete
discussion under Employment Agreements and Services Agreements).
In 2002, he received $50,000 as part of his severance compensation.
(4) Ms. Irving was appointed President and Chief Executive Officer
in December 2002.
Employment Agreements and Services Agreements
---------------------------------------------
Pursuant to a Services Agreement effective as of March 10, 1999
(the "Darlington Agreement"), Alan C. Darlington was engaged as
the Company's Executive Chairman. The Darlington Agreement
required Mr. Darlington to devote substantially all his time to
the business of the Company. The Darlington Agreement provided
for an annual salary of $200,000 with an annual bonus based upon
the Company's annual net income growth (the "Bonus Payment"), as
well as an option to purchase up to 250,000 shares of the Company's
Common Stock at a price of $0.41 per share. Mr. Darlington separated
from the Company on September 28, 2002, and in accordance with the
terms of the Darlington Agreement, he is entitled to severance equal
to $237,500. Mr. Darlington's severance is being paid over a period
of one year following the separation date, of which $50,000 was paid
in 2002. On March 23, 2001, Mr. Darlington was granted stock options
to purchase 100,000 shares of the Company's Common Stock at the market
price on the date of grant ($1.20), subject to certain vesting
requirements. All of the 250,000 stock options issued pursuant to the
Darlington Agreement and 20,000 stock options from the March 23,
9
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2001 option grant were vested as of the separation date. In partial
consideration for canceling these options, Mr. Darlington received
250,000 warrants to purchase shares of the Company's Common Stock at
$0.60 per share and 20,000 warrants to purchase shares of the Company's
Common Stock at $1.20 per share. All such of warrants have four-year
lives from the date of grant. As additional consideration for the
warrants, Mr. Darlington's severance was reduced by $20,000.
Pursuant to an Employment Agreement dated March 22, 2000 (the "Levy
Agreement"), Joshua Levy has been employed as the Company's National
Medical Director. Dr. Levy is a co-founder of HemaCare Corporation
and has been the medical director of the Company since its inception.
The Levy Agreement provides that Dr. Levy receive an annual salary
of $200,000 and a bonus equal to ten percent (10%) of the increase,
if any, in the Company's net operating profits from therapeutic
apheresis services over the prior year, excluding any consideration
of therapeutic apheresis treatments rendered by the Company to patients
of Dr. Levy's medical practice. Such bonus shall be in addition to
any other bonus awarded at the discretion of the Board of Directors.
In the event Dr. Levy is terminated by the Company without "cause"
(as defined in the Levy Agreement), the Levy Agreement provides
that the Company shall pay Dr. Levy his then current salary and
provide the benefits as described in the Levy Agreement for twelve
months after termination. In the event of a Change of Control and
(i) Dr. Levy is terminated without cause or (ii) the principal place
of business of the Company is changed from Southern California within
twelve months after a "change in control" (as defined in the Levy
Agreement), Dr. Levy is entitled to receive two times the severance
provided in the previous sentence. The term of the Levy Agreement
shall be one year and shall be renewed automatically for subsequent
one year terms unless written notice of termination is given by either
party to the other not less than ninety (90) days before the end of
the initial term or any subsequent one year renewal term. In 2002,
Dr. Levy was granted a $600 per month car allowance.
Pursuant to a Letter Agreement dated December 6, 2002 (the "Irving
Agreement"), Judi Irving is employed as the Company's President
and Chief Executive Officer. The Irving Agreement provides that
Ms. Irving receive an annual salary of $200,000 and a $1,000 per
month car allowance. In 2003, Ms. Irving will receive a minimum
bonus of $45,000 with a potential of up to 40% of her base salary
based on achieving profit targets and other objectives.
Additionally, Ms. Irving was granted a 10-year stock option to
purchase up to 200,000 shares of the Company's Common Stock, vesting
over 4 years, at an exercise price of $0.32, the closing price of
the Company's stock on her day of hire. In the event Ms. Irving's
employment is terminated by the Company for any reason, she will
receive a separation payment equal to her then current annual base
salary; unless it is determined her termination is due to fraud or
illegal activities. In the event Ms. Irving elects to leave the
Company within 90 days of a change of control, she will receive
200% of her separation payment.
In March 2000, the Compensation Committee approved severance
packages for David Fractor, the Company's Chief Financial Officer,
JoAnn Mannise, the Company's Corporate Secretary, and Linda McDermott,
the Company's Human Resources Director. The Company has agreed that
upon a change in control of the Company and the subsequent termination
of their employment, such individuals would receive termination payments
equal to 12 months of their annual compensation.
Employee Salary Deferral Plan
-----------------------------
In 1990, the Company adopted an Employee Salary Deferral Plan
(the "Employee Deferral Plan"), which is intended to be qualified
under Section 401(k) of the Internal Revenue Code of 1986, as
amended. To be eligible, an employee must have been employed
by the Company for at least one year. The Employee Deferral
Plan permits employees who have completed one year of service
to defer from 1% to 15% of their annual compensation into the
Employee Deferral Plan. Additional annual contributions may
be made at the discretion of the Company and a 50% matching
contribution may be made by the Company, in cash or Company stock,
up to a maximum of 5% of a participating employee's annual
compensation. In 2002, the Company elected to make the match
contribution in cash. The Company match has a vesting period
of five years.
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Stock Option Plan
-----------------
In 1996, the Board of Directors, with shareholder approval,
adopted the Company's 1996 Stock Incentive Plan (the "1996 Plan").
The purposes of the 1996 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 1996 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 1996 Plan is 2,000,000, 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 1996 Plan) plus the total number of shares of Common
Stock called for under any stock bonus or similar plan of the
Company (including shares of Common Stock underlying awards
under the 1996 Plan) would exceed 30% of the total number of
shares of Common Stock outstanding at the time of such award. As
of the Record Date, there were options outstanding under the 1996
Plan for 1,359,000 of Common Stock with exercise prices ranging
from $0.32 to $2.44 and with expiration dates ranging from March
20, 2007 to May 8, 2013. As of June 16, 2003, 251,000 shares of
Common Stock had been issued upon exercise of stock options
granted under the 1996 Plan.
Stock Option Grants, Exercises, Holdings and Repricings
-------------------------------------------------------
The following three tables set forth information concerning
stock options granted to or exercised by the Named Executive
Officers and key employees during fiscal 2002 and the unexercised
stock options held by them as of December 31, 2002 and the repricing
of stock options during the ten years ended December 31, 2002.
OPTION/SAR GRANTS IN FISCAL 2002
Individual Grants
---------------------------------------
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options/SARs Price Appreciation for
Underlying Granted to Option Term(4)
Options/SARs Employees in Exercise Expiration
Name Granted(1) Fiscal Year(2) Price(3) Date 5% 10%
----------- ----------- ------------- -------- ------- ------- -------
Judi Irving 200,000 35.09% $0.32 12/18/12 $40,249 $102,000
Dana E.
Belisle 50,000 8.78% $1.09 3/24/12 $34,275 $ 86,859
David E.
Fractor 20,000 3.51% $1.09 3/24/12 $13,710 $ 34,744
Alan C.
Darlington (5) 270,000 47.37% $0.64 9/28/06 $37,498 $ 80,753
-----------
10
(1) The stock options issued to Judi Irving vest at a rate of 25%
per year starting on March 1, 2003. The stock options granted
to Dana E. Belisle and David E. Fractor vest at a rate of 20%
per year starting one year from the date of grant.
(2) Options to purchase 300,000 shares and warrants to purchase
270,000 shares were granted during 2002.
(3) All option grants were at the fair market value on the date of
grant, except for Alan Darlington (See Footnote 5).
(4) The "Potential Realizable Value" is the product of (a) the
difference between (i) the product of the closing sale price
per share at the date of grant and the sum of (A) 1 plus (B)
the assumed rate of appreciation of the Common Stock compounded
annually over the term of the option and (ii) the per share
exercise price of the option and (b) the number of shares of
Common Stock underlying the option at December 31, 2002. These
amounts represent certain assumed rates of appreciation only.
Actual gains, if any, on stock option exercises are dependent on
a variety of factors, including market conditions and the price
performance of the Common Stock. There can be no assurance that
the rate of appreciation presented in this table can be achieved.
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(5) In connection with Mr. Darlington's separation from the Company
on September 28, 2002, the Company cancelled 250,000 fully
vested stock options with an exercise price of $0.41 and 100,000
stock options, of which 20,000 options were vested, with an
exercise price of $1.20. The Company issued fully vested
warrants to purchase 250,000 shares of Common Stock with an
exercise price of $0.60 and warrants to purchase 20,000 shares of
Common Stock with an exercise price of $1.20. As additional
consideration for the warrants, Mr. Darlington's severance
was reduced by $20,000.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 2002
AND FISCAL 2002 YEAR-END OPTION/SAR VALUES
No options were exercised by Named Executive Officers in fiscal 2002. The
Company has no outstanding stock appreciate rights ("SARs").
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Year-end Fiscal Year-end(1)
----------------- ------------------
Shares Value
Acquired on Realized Exer- Unexer- Exer- Unexer-
Name Exercise (#) ($) ciseable cisable cisable cisable
----------- ------------- --------- -------- ------- ------- -------
Judi Irving -- -- -- 200,000 $ -- $ 26,000
Joshua Levy -- -- 100,000 50,000 $ -- $ --
Dana E.
Belisle -- -- 31,000 104,000 $ -- $ --
David E.
Fractor -- -- 22,000 48,000 $ -- $ --
____________
(1) The value of unexercised "in-the-money" options is the
difference between the closing bid price of the Common
Stock on the OTC Bulletin Board at the close of business
on December 31, 2002 ($0.45 per share) and the exercise
price of the option, multiplied by the number of shares
subject to the option.
TEN-YEAR OPTION/SAR REPRICINGS
Length of
Securities Original
Underlying Market Price Exercise Option Term
Number of of Stock at Price at Remaining at
Options/SARs Time of Time of New Date of
Repricing or Repricing or Repricing or Exercise Repricing or
Name (1) Date Amended Amending Amendment Price Amendment
------------ ------ ---------- -------- --------- ----- ----------
Sharon Kaiser 5/1/98 7,500 $0.68 $1.50 $0.68 9 years
Hal Lieberman (2) 12/2/97 125,000 $0.72 $1.50 $1.50 9 years
Alan Darlington (3) 3/10/99 55,000 $0.41 $1.69 $0.41 8 years
Alan Darlington (4) 9/28/02 250,000 $0.55 $0.41 $0.60 7 years
Alan Darlington (5) 9/28/02 100,000 $0.55 $1.20 $1.20 9 years
_________________
(1) Sharon Kaiser was the Chief Financial Officer and Hal Lieberman
was the Chief Executive Officer. Alan Darlington was an outside
director when he was awarded 55,000 options and Chairman of the
Board when the 55,000 options were repriced.
(2) Mr. Lieberman's options would have expired three months after his
May 31, 1998 separation from the Company. These options were
extended through June 30, 2001, in exchange for Mr. Lieberman
remaining as the Company's Chief Executive Officer through
May 31,1998.
(3 These options were granted while Mr. Darlington was an outside
director and were canceled when he became Chairman of the Board.
These options were replaced with 250,000 options that were priced at
$0.41 per share and had a 10-year life.
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(4) These options were canceled at the time of Mr. Darlington's separation
and were replaced with warrants to purchase 250,000 shares for a
four-year period.
(5) These options were cancelled at the time of Mr. Darlington's separation
and were replaced with warrants to purchase 20,000 shares for a four-year
period.
Compensation Committee Interlocks and Insider Participation
-----------------------------------------------------------
The Compensation Committee is composed entirely of non-employee
directors, none of whom are affiliates of the Company. Messrs.
Stephen Wallace, Robert L. Johnson and Julian L. Steffenhagen
are currently members of the Compensation Committee. Mr. Steffenhagen
was appointed Chairman of the Committee in June 2002.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Report of the Compensation Committee of the Board of Directors
shall not be deemed filed under the Securities Act of 1933 (the
"Securities Act") or under the Securities Exchange Act of 1934
(the "Exchange Act").
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 Company 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. Additionally, the Company uses stock options to compensate
its executives and other key employees.
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 the achievement of strategic
business goals, including the timely development and introduction
of products and the creation of markets in new geographic territories.
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, bonus
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.
Pursuant to his services agreement, Mr. Darlington received an
annual salary of $200,000 and was eligible for an annual bonus
based upon the Company's annual net income growth (the "Bonus Payment").
In connection with his service agreement, Mr. Darlington was granted
stock options to purchase up to 250,000 shares of the Company's Common
Stock, subject to certain vesting requirements as set forth in the
Services Agreement. In March 2001, Mr. Darlington received a bonus
of $80,000 for fiscal 2000, and a stock option to purchase up to
100,000 shares of Common Stock at market price on date of grant,
subject to certain vesting requirements. Mr. Darlington did not
receive a bonus payment for fiscal 2001 or 2002 because
certain milestones described in the Darlington agreement were not met.
Dr. Levy, pursuant to his employment agreement, receives an annual
salary of $200,000 and a bonus equal to ten percent (10%) of the
increase, if any, in the Company's net operating profits from
therapeutic apheresis services over the prior year, excluding
any consideration of therapeutic apheresis treatments rendered
by the Company to patients of Dr. Levy's medical practice. Dr.
Levy received a bonus of $29,000 for fiscal 2001 and did not
receive a bonus for fiscal 2002.
13
14
In March 2002, Mr. Belisle received a salary increase to
$145,000 per year and a stock option to purchase 50,000 shares
of Common Stock at market price on date of grant, subject to
certain vesting requirements. Mr. Belisle did not receive a
bonus for fiscal 2002.
In March 2002, Mr. Fractor received a stock option to purchase
20,000 shares of Common Stock at market price on date of grant,
subject to certain vesting requirements. Mr. Fractor did not
receive a bonus in fiscal 2002.
Ms. Irving, pursuant to a letter of employment, receives an
annual salary of $200,000 and a minimum bonus of $45,000 in
2003 with a potential of up to 40% of her base salary based
on achieving profit targets and other objectives.
At the time of his separation, Mr. Darlington had 250,000
fully vested options to purchase the Company's Common Stock
with an exercise price of $0.41. The exercise price was
approximately equal to the market price of the Company's
stock at the time of separation. Additionally, Mr. Darlington
had options to purchase an additional 100,000 shares of the
Company's Common Stock with an exercise price of $1.20 per
share, of which 20,000 options were vested. All unvested
options would have terminated on the date of separation,
and all vested options would have expired 90 days from the
separation date. Since the Company's Common Stock is thinly
traded, the exercise of these options and subsequent sale of
Common Stock would most likely have a negative effect on the
price of the Company's Common Stock. Accordingly, the
Compensation Committee recommended to the Company's Board of
Directors to cancel all of Mr. Darlington's stock options and
reduce the cash portion of his compensation by $20,000 in
exchange for the issuance of warrants to purchase 250,000
shares with an exercise price $0.60 per share and an additional
20,000 shares at $1.20 per share. All such warrants will be
exercisable for four years, and the shares purchased pursuant
to the warrants, if any, will not be registered under the Securities
Act.
Since the Company's historical levels of executive compensation
have been substantially less than $1,000,000 per employee annually,
the 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
----------------------
Julian L. Steffenhagen, Chairman
Robert L. Johnson
Stephen P. Wallace
March 27, 2003
REPORT OF AUDIT COMMITTEE
The Report of the Audit Committee of the Board of Directors
shall not be deemed filed under the Securities Act or under
the Exchange Act.
The Board of Directors maintains an Audit Committee comprised of
three of the Company's directors. Each member of the Audit
Committee is considered "independent" under Rule 4200(a)(15) of
the National Association of Securities Dealers. Management is
responsible for the preparation of the Company's financial
statements and financial reporting process, including its system
of internal controls. In fulfilling its oversight responsibilities,
the Audit Committee:
- Reviewed and discussed with management the audited
financial statements contained in the Company's Annual
Report on Form 10-K for fiscal 2002 including, but not
limited to, explanations for significant trends and
variations in accounts between years, critical accounting
policies and areas of judgment, and all alternative
treatments of financial information within generally
accepted accounting principals; and
14
15
- Obtained from management their representation that the
Company's financial statements have been prepared in
accordance with accounting principles generally accepted
in the United States.
The independent auditors are responsible for performing an audit
of the Company's financial statements in accordance with the
auditing standards generally accepted in the United States and
expressing an opinion on whether the Company's financial statements
present fairly, in all material respects, the Company's financial
position and results of operations for the periods presented and
conform with accounting principles generally accepted in the
United States.
The Audit committee is responsible for selecting and periodically
evaluating the performance of the outside auditor and, if
necessary, recommending that the Board replace the outside auditor.
In fulfilling its oversight responsibilities, the Audit Committee:
- Discussed with the independent auditors the matters
required to be discussed by Statement of Auditing
Standards No. 61 ("Communication with Audit Committees"),
and
- Received and discussed with the independent auditors the
written disclosure and the letter from the independent
auditors required by Independent Standards Board Standard
No. 1 ("Independence Discussions with Audit Committees"),
and whether the rendering of the non-audit services provided
by them to the Company during fiscal 2002 was compatible
with their independence.
The Audit Committee operates under a written charter, which was
adopted by the Board of Directors and is assessed annually for
adequacy by the Audit Committee. The Audit Committee held five
meetings during fiscal 2002. The Audit Committee evaluates its
charter at least once each year and submits any recommended
changes to the Board.
In performing its functions, the Audit Committee acts only in an
oversight capacity. It is not the responsibility of the Audit
Committee to determine that the Company's financial statements
are complete and accurate, are presented in accordance with
accounting principles generally accepted in the United States
or present fairly the results of operations of the Company for
the periods presented or that the Company maintains appropriate
internal controls. Nor is it the duty of the Audit Committee
to determine that the audit of the Company's financial statements
has been carried out in accordance with generally accepted
auditing standards or that the Company's auditors are independent.
Based upon the reviews and discussions described above, and the
report of the independent auditors, the Audit Committee has
recommended to the Board of Directors, and the Board of Directors
has approved, that the audited financial statements be included
in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, for filing with the Securities and
Exchange Commission.
Audit Committee
----------------
Stephen P. Wallace, Chairman
Robert L. Johnson
Julian L. Steffenhagen
May 28, 2003
Performance Graph
-----------------
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, 1997
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.
15
16
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.
This graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act or under the Exchange Act, except to the extent
that the Company specifically incorporates this information by reference
and shall not otherwise be deemed filed under such Acts.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL OF SHAREHOLDER RETURN
12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
-------- -------- -------- -------- -------- --------
HemaCare
Corporation 100.00 96.65 139.97 306.63 351.96 89.59
Nasdaq Stock
Market 100.00 140.99 261.48 157.77 125.16 86.53
(U.S. Companies)
Nasdaq Health
Services Sotcks 100.00 84.77 68.19 93.60 101.20 87.20
Certain Relationships and Related Transactions
----------------------------------------------
Joshua Levy, M.D., the National Medical Director of the
Company, through his private practice in Sherman Oaks,
California, treats patients who require therapeutic services.
Sales by the Company to hospital customers for therapeutic
services provided to Dr. Levy's patients amounted to approximately
2% of the Company's revenues in each of the three years ended
December 31, 2002. There are no agreements between Dr. Levy and
the Company's hospital customers that require the hospitals to
select the Company to provide therapeutic services to the hospital's
patients.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has audited the Company's financial statements
for the fiscal year ended December 31, 2002. A representative of
Ernst & Young LLP is expected to be present at the Annual Meeting
and will have the opportunity to make a statement if he or she
desires to do so. Such representative is expected to be available
to respond to appropriate questions.
The Audit Committee considered whether Ernst & Young LLP's provision
of any professional services other than its audit of our annual
financial statements and reviews of quarterly financial statements
is compatible with maintaining such auditor's independence.
The Company has not selected its principal accountant for the fiscal
year ending December 31, 2003. The Audit Committee is evaluating
the performance of the Company's independent auditors and has not
reached any conclusions as of this date.
16
17
For fiscal 2002, the aggregate professional fees for the annual audit and
interim quarterly reviews performed by the Company's independent public
accountants are as follows:
Year ended
December 31,
2002
------------
Audit Fees and Expenses
Year-End Audit $ 50,700
Quarterly Reviews 16,700
------------
Total Audit Fees and Expenses 66,700
Tax Compliance Fees and Expenses 52,100
Tax Consulting Fees and Expenses 3,237
-------------
Total Fees and Expenses $122,037
During fiscal 2002, the Company did not engage its independent
public accountants to perform financial information systems
design and implementation.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. Any such proposal to be
included in the proxy statement for the Company's 2004 annual
meeting of shareholders must be submitted by a shareholder prior
to February 19, 2004, in a form that complies with applicable
regulations. Recently, the SEC amended its rule governing a
company's ability to use discretionary proxy authority with respect
to shareholder proposals that were not submitted by the shareholders
in time to be included in the proxy statement. As a result of that
rule change, in the event a shareholder proposal is not submitted
to the Company prior to April 2, 2003 the proxies solicited by the
Board of Directors for the 2003 annual meeting of shareholders will
confer authority on the proxyholder to vote the shares in accordance
with her best judgment and discretion if the proposal is presented
at the 2003 annual meeting of shareholders without any discussion of
the proposal in the proxy statement for such meeting.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2002 (excluding the exhibits thereto) as
filed with the SEC, accompanies this Proxy Statement, but it is not
deemed to be a part of the proxy soliciting material. The Annual
Report contains consolidated financial statements of the Company
and its subsidiaries and the report thereon of Ernst & Young, LLP,
the Company's independent auditors.
The Company will provide a copy of the exhibits to its Annual
Report on Form 10-K for the fiscal year ended December 31, 2002
upon the written request of any beneficial owner of the Company's
securities as of the Record Date and reimbursement of the Company's
reasonable expenses. Such request should be addressed to the Company
c/o JoAnn Mannise, Corporate Secretary, at 21101 Oxnard Street,
Woodland Hills, California 91367. Exhibits are available at no
charge on the SEC's website, www.sec.gov.
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OTHER BUSINESS
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. If, however,
other matters are properly brought before the meeting, including,
among other things, a proposal to adjourn the meeting to another
time or place to solicit additional proxies in favor of the
recommendations of the Board of Directors, the Proxyholder
intends to vote the shares represented by the Proxies in favor
of such proposals, and the authority to do so is included in the
Proxy.
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,
HEMACARE CORPORATION
/S/ JoAnn R. Mannise
-----------------------
JoAnn R. Mannise
Woodland Hills, CA
June 16, 2003
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REVOCABLE PROXY
HEMACARE CORPORATION
Annual Meeting of Shareholders August 13, 2003
The undersigned shareholder(s) of HemaCare Corporation (the "Company")
appoints Judi Irving, as proxy, with the power to appoint her respective
substitutes and authorizes her to represent and to vote, as designated
below (including, as to the election of directors, the discretionary
authority to cumulate votes), all the shares of Common Stock of the
Company held of record by the undersigned on June 16, 2003 at the
annual meeting of shareholders to be held on August 13, 2003 or any
adjournment or postponement thereof.
1. ELECTION OF DIRECTORS:
Please mark only one box per nominee. If no vote is indicated for any
nominees this Proxy will be voted for the election of such nominee.
Vote For Withhold Authority to Vote
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JULIAN L. STEFFENHAGEN / / / /
WM. ANDREW L. HEATON, MD / / / /
JUDI IRVING / / / /
ROBERT L. JOHNSON / / / /
TERRY VAN DER TUUK / / / /
STEPHEN P. WALLACE / / / /
2. OTHER BUSINESS:
In their discretion, the proxyholders are authorized to transact
such other business as properly may come before the Meeting and
any adjournment or postponement thereof.
/ / For / / Against / / Abstain
(Continued and to be signed on back)
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES LISTED ABOVE. IF ANY OTHER BUSINESS IS
PRESENTED AT THE MEETING, INCLUDING, AMONG OTHER THINGS, A PROPOSAL TO
ADJOURN OR POSTPONE THE MEETING, THIS PROXY SHALL BE VOTED BY THE
PROXYHOLDERS IN ACCORDANCE WITH THE RECOMMENDATIONS OF A
MAJORITY OF THE BOARD OF DIRECTORS.
The undersigned hereby ratifies and confirms that said attorneys
and Proxyholder, or any of them, or their substitutes, shall
lawfully do or cause to be done by virtue hereof and hereby
revokes any and all proxies heretofore given by the undersigned
to vote at the Meeting. The undersigned hereby acknowledges
receipt of the Notice of Annual Meeting and Proxy Statement
accompanying said notice.
This Proxy will be voted "FOR" the election of all nominees
whose names appear above unless authority to do so is withheld.
PLEASE SIGN, DATE AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE
IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
Dated:..............................., 2003
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(Signature if jointly held)