LOGO
HEMACARE CORPORATION
____________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 13, 2002
9:30 a.m.
_________________
Notice is hereby given that the 2002 annual meeting of
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
Thursday, June 13, 2002 at 9:30 a.m. (California time), for the
following purposes:
1. Election of Directors: To elect five persons to the Board
of Directors of the Company to serve until the annual meeting of
shareholders to be held in 2003. The following persons are the
Board of Directors' nominees: Alan C. Darlington, Robert L.
Johnson, Julian L. Steffenhagen, Stephen P. Wallace and Dana
E. Belisle; and
2. Other Business: To transact such other business as properly
may come before the Meeting or any adjournment or postponement
thereof.
Only holders of record of Common Stock of the Company at the
close of business on April 19, 2002 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 May 6, 2002.
In order ensure that your shares may be represented at the
Meeting and to assure a quorum, please complete, date and sign
the enclosed Proxy and return it promptly in the self-addressed,
stamped envelope enclosed for that purpose, whether or not you
expect to attend the Meeting in person.
By Order of the Board of Directors
/s/ JoAnn R. Stover
----------------------------------
JoAnn R. Stover,
Secretary
Sherman Oaks, California
May 6, 2002
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.
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HEMACARE CORPORATION
21101 Oxnard Street
Woodland Hills, California 91367
April 30, 2002
818-226-1968
__________________________
PROXY STATEMENT
__________________________
GENERAL INFORMATION
The accompanying proxy card (the "Proxy") is solicited by and on
behalf of the Board of Directors of HemaCare Corporation (the
"Company"), for use only at the annual meeting of shareholders
(the "Meeting") to be held at the Warner Center Marriott Hotel,
21850 Oxnard Street, Woodland Hills, CA 91367, on Thursday, June
13, 2002 at 9:30 a.m. (California time) and at any and all
adjournments or postponements thereof. Only holders of the
Company's common stock (the "Shareholders"), without par value
(the "Common Stock"), of record as of the close of business on
April 19, 2002 (the "Record Date") are entitled to notice of and
to vote on all matters presented to the Meeting. Unless the
accompanying Proxy has been previously revoked, the shares
represented by the Proxy will, unless otherwise directed, be
voted at the Meeting for the nominees for election as directors
named below and, with discretion, on all such other matters as
may properly come before the Meeting. Alan C. Darlington, the
designated proxy holder (the "Proxyholder"), is a member of the
Company's management. A Shareholder may withdraw 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 withdrawing
the Proxy. Shareholders whose shares are held in street name
should consult with their brokers or other nominees concerning
procedures of withdrawing their Proxy.
It is anticipated that this Proxy Statement and accompanying
Proxy will first be mailed to shareholders on or about May 3,
2001.
Matters to be Considered
- ------------------------
The matters to be considered and voted upon at the Meeting
will be:
1. Election of Directors. To elect five persons to the Board
of Directors of the Company and 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:
Alan C. Darlington
Robert L. Johnson
Julian L. Steffenhagen
Stephen P. Wallace
Dana E. Belisle
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 April 19, 2002, there were 7,595,175 shares of Common Stock
outstanding, which constitutes all of the outstanding voting
securities of the Company. Each Shareholder is entitled to one
vote, in person or by proxy, for each share as of the Record
Date, except that in the election of directors, each Shareholder
has the right to cumulate votes provided that the candidates'
names have been properly placed in nomination prior to
commencement of voting and a Shareholder has given notice prior
to commencement of voting of his or her intention to cumulate
votes. Cumulative voting entitles a Shareholder to give one candidate
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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, or to 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,
35,000 shares of Common Stock (approximately 0.5% of the issued
and outstanding shares of Common Stock) were owned by directors
and executive officers of the Company. Such persons have
informed the Company that they will vote "FOR" the election of
the nominees to the Board of Directors identified herein.
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, and a matter (other than the
election of directors) voted on by Shareholders will be approved
if it receives the vote of a majority of the shares both present
and voting, which shares also constitute a majority of the
required quorum, unless the vote of a greater number of 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.
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 its discretion, vote such
Common Stock "FOR" the election of the Board of Directors'
nominees.
Unless revoked, the shares of Common Stock represented by Proxies
will be voted in accordance with the instructions given thereon.
In the absence of any instruction in the Proxy, such shares of
Common stock will be voted "FOR" the election of the Board of
Directors' nominees.
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
March 19, 2002, 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 Proxyholders 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.
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.
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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 (and nominee for director) of the Company, (iii) each
executive officer of the Company 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)
---------------------- -------------- -----------
Alan C. Darlington 290,000 (4) 3.69
William D. Nicely 120,000 (5) 1.55
Julian L. Steffenhagen 110,000 (6) 1.43
Robert L. Johnson 80,000 (5) 1.04
Stephen P. Wallace 50,000 (5) *
Dana E. Belisle 40,000 (7) *
David E. Fractor 22,000 (7) *
All executive officers
and directors as a 712,000 (8) 8.61%
group (7 persons)
_________
* Less than 1%
(1) The address for Mr. Julian L. Steffenhagen is Beckman Coulter,
2500 Harbor Blvd., Fullerton, CA 92834. The address for Messrs.
Wallace, Johnson, Darlington, Belisle and Fractor 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 were 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) Includes 270,000 shares of Common Stock issuable upon
exercise of currently exercisable stock options.
(5) Represents shares of Common Stock issuable upon exercise of
currently exercisable stock options.
(6) Includes 95,000 shares of Common Stock issuable upon
exercise of currently exercisable stock options.
(7) Represents shares of Common Stock issuable upon exercise of
stock options exercisable within 60 days of the Record Date.
(8) Excludes an aggregate of 218,000 shares which certain
directors and executive officers will have the right to purchase
upon the exercise of stock options exercisable in various
installments commencing on or after October 23, 2002.
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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 five until changed by a bylaw duly adopted by
the board of directors or shareholders of the Company, 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 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 many not be voted for a greater number
of persons than the nominees named in this Proxy. 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.
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:
Alan C. Darlington
Robert L. Johnson
Julian L. Steffenhagen
Stephen P. Wallace
Dana E. Belisle
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE NOMINEES.
None of the directors, nominees for director or executive
officers were 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
- ---------------------- --- ------------------------------------------
Alan C. Darlington 51 Executive Chairman, Chief Executive Officer
and Director
Dana E. Belisle 38 Chief Operating Officer and Board Nominee
David E. Fractor 42 Chief Financial Officer
Julian L.
Steffenhagen (1)(2) 58 Director
Robert L. Johnson (1)(2) 63 Director
Stephen P. Wallace (1)(2) 47 Director
Joshua Levy, M.D. 61 National Medical Director
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
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Directors
- ---------
Alan C. Darlington has been a director of the Company since
January 1997 and Chairman of the Board of the Company since
December 1997. In September 1998, Mr. Darlington was appointed
Executive Chairman of the Company and, in December 1998, assumed
full time duties as Executive Chairman. Prior to joining the
Company, Mr. Darlington was President of Timpe & Darlington,
Inc., a healthcare management consulting firm specializing in
financial advisory services to physician management companies and
to other providers concerning managed care, which he founded in
1991. Previously, he was a partner of Arthur Andersen & Co.
where he was employed from 1976 to 1991. Mr. Darlington received
his Business Administration degree from the School of Business at
California State University at Los Angeles in 1976 and has been a
Certified Public Accountant since 1978.
Julian L. Steffenhagen has been a director of the Company since
December 1997. 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.
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 in 1962. Mr. Johnson is a
member of the Audit and Compensation Committees.
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.
Nominee
- -------
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.
Officer
- --------
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 at Weber, Lipshie & Co.,
a regional accounting firm. He received his Bachelor of Science
degree in Accounting from the University of Southern California
in 1982 and has been a Certified Public Accountant since 1986.
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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 in 1964. He is certified by the American Board of
Internal Medicine and was Adjunct Associate Professor of Medicine
at UCLA from 1967 to 1982. He has published numerous scientific
articles in the fields of rheumatology and immunology and is a
national authority and frequent lecturer on therapeutic
hemapheresis.
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.
The Audit Committee is chaired by Mr. Wallace, and its members
are Messrs. Johnson and Steffenhagen, all of which are considered
"independent" under Rule 4200(a)(15) of the national Association
of Securities Dealers Standards. 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.
On April 25, 2001, the Board of Directors of the Company
adopted a written Audit Committee Charter.
The Compensation Committee is chaired by Mr. Steffenhagen, 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 three times during fiscal 2001 and
took action by unanimous written consent on two occasions during
fiscal 2001. During fiscal 2001, each director attended 100% of
the total number of meetings of the Board of Directors and the
total number of meetings held by all committees on which they
served during fiscal 2001. In 2001, the Audit Committee met four
times and the Compensation Committee met once.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Exchange Act requires the directors and
executive officers of the Company and persons who own more than
ten percent of the Company's Common Stock to file with the SEC
reports of initial ownership and changes in ownership of the
Company's Common Stock and to furnish the Company with copies of
such reports. Specific due dates for these reports have been
established and the Company is required to report in this Proxy
Statement any failure to file on a timely basis such persons.
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
2001, except that Robert L. Johnson, a director, was delinquent
in filing a Form 5 for the year ended December 30, 2001.
Compensation of Directors
- -------------------------
Directors who are not employees of the Company receive $1,500 for
each Board meeting attended and reimbursement of reasonable
travel expenses for each Board meeting attended.
Each person who has not previously served as a director of the Company
and who is initially elected or appointed as a non-employee director
is granted a vested option to purchase 25,000 shares of the Company's
Common Stock at the market price on the date of grant. Additionally,
outside directors receive additional stock option grants of 25,000 shares
of Common Stock for each year of service.
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Executive Compensation
- ----------------------
The following table sets forth information concerning all cash
and non-cash compensation earned by, awarded to, or paid by the
Company to its executive officers (collectively, the "Named
Executive Officers") and other key employees for the fiscal years
ended December 31, 2001, 2000 and 1999.
SUMMARY COMPENSATION TABLE
Long-term
Annual Compensation Compensation
------------------------------------- -----------
Name and Securities All Other
Principal Salary Bonus Other Annual Underlying Compensation
Position Year ($) ($) Compensation(1) Options ($) (2)
- ----------------- ----- -------- ------- --------------- ---------- ------------
Alan C. Darlington, 2001 $200,000 $80,000 -- 100,000 $ -
Executive Chairman 2000 $200,000 $60,000 -- - $ -
and CEO 1999 $200,000 $ - -- 250,000 $ -
William D. Nicely, 2001 $196,000 $12,000 -- - $ 4,250
President of 2000 $200,000 $25,000 -- - $ 4,250
HemaCare 1999 $200,000 $40,000 -- - $ 4,250
Corporation (3)
Dana E. Belisle, 2001 $122,000 $20,000 -- 50,000 $ 3,500
Chief Operating 2000 $110,000 $10,000 -- - $ 3,000
Officer 1999 $103,000 $ - -- 35,000 $ 2,566
David E. Fractor, 2001 $120,000 $10,000 -- 20,000 $ 3,246
Chief Financial 2000 $110,000 $ 5,500 -- - $ 2,888
Officer (4) 1999 $ 60,000 $ - -- 30,000 $ 1,481
Joshua Levy, 2001 $201,000 $10,000 -- - $ 4,250
National Medical 2000 $187,000 $30,000 -- 50,000 $ 4,250
Director 1999 $143,000 $ - -- - $ 3,583
__________
(1) During fiscal 1999, 2000 and 2001, 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
$50,000 or 10% of the total of the annual salary and bonus
reported for such Named Executive Officer in such years.
(2) "All Other Compensation" consists of Company contributions
to its Employee Salary Deferral Plan 401(k).
(3) Mr. Nicely's employment with HemaCare ended August 31,
2001. However, under the terms of his employment agreement
he was compensated through February 28, 2002.
(4) Mr. Fractor joined the Company on June 14, 1999.
Employment Agreements and Services Agreements
- ---------------------------------------------
Pursuant to a Services Agreement effective as of March 10, 1999
(the "Darlington Agreement"), Alan C. Darlington has been engaged
as the Company's Executive Chairman. The Darlington Agreement
requires Mr. Darlington to devote substantially all his time to
the business of the Company. The Darlington Agreement provides
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 subject to certain vesting requirements.
In the event Mr. Darlington is terminated by the Company without
"cause" (as defined in the Darlington Agreement), the Darlington
Agreement provides that the Company shall pay Mr. Darlington a
severance payment equal to (i) $200,000 and (ii) the greater of
(a) 50% of the Bonus Payment, if any, for the fiscal year ended
prior to termination, and (b) 50% of the average of the Bonus
Payment, if any, for the two years ended prior to termination.
In the event Mr. Darlington is terminated without cause within
twelve months of a "change in control" (as defined in the
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Darlington Agreement), the Company shall pay Mr. Darlington two
times the amount of severance provided for in the previous
sentence. The Darlington Agreement currently expires on December
31, 2002 and is subject to automatic one-year extensions unless
notice of termination is provided by either party within 30 days
prior to a scheduled expiration date. On March 23, 2001, Mr.
Darlington was granted a stock option to purchase 100,000 shares
of Common Stock, at market price on date of grant ($1.20),
subject to certain vesting requirements. In March 2001, the
Board granted Mr. Darlington a $600.00 per month car allowance.
Pursuant to an Employment Agreement dated as of June 1, 2000 (the
"Nicely Agreement"), William D. Nicely was employed as President
of HemaCare Corporation and Chief Executive Officer of the
Western U.S. Operations. The Nicely Agreement provided that Mr.
Nicely receive an annual salary of $200,000, a $600 per month
car allowance, and a bonus in such amounts, and on such terms and
conditions as may be determined at the discretion of the
Compensation Committee or the Board of Directors of the Company.
In the event Mr. Nicely is terminated by the Company without
"cause" (as defined in the Nicely Agreement), the Nicely
Agreement provided the Company pay Mr. Nicely his then current
base salary and provide the benefits described in the Nicely
Agreement for a period commencing at termination and expiring
six months after the termination date. The Nicely Agreement
continued for an indefinite period subject to termination
by either party, without cause, upon prior written
notice to the other party. Mr. Nicely's employment ended
August 31, 2001 and pursuant to the Nicely Agreement,
Mr. Nicely received compensation through February 28, 2002.
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 (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 March 2000, the Compensation Committee approved severance
packages for David Fractor, the Company's Chief Financial
Officer, JoAnn Stover, 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 termination of their employment, such individuals would
receive termination payments equal to 12 months of their annual
compensation.
Employee Salary Deferral Plan 401K
- ----------------------------------
In 1990, the Company adopted a Employee Salary Deferral Plan
401(k) (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 up to a maximum of 5% of
a participating employee's annual compensation. Contributions
made by the Company vest according to a schedule set forth in the
Employee Deferral Plan.
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 April 19, 2002, there were options outstanding under the 1996
Plan exercisable for 1,636,000 of Common Stock with exercise
prices ranging from $0.41 to $2.44 and with expiration dates
ranging from March 20, 2007 to March 24, 2012. As of April 19,
2002, 171,500 shares of Common Stock had been issued upon
exercise of stock options granted under the 1996 Plan.
Stock Option Grants, Exercises and Holdings
- --------------------------------------------
All stock options granted in the fiscal year ending December 31,
2001 were granted under the Company's 1996 Plan. The following
two tables set forth information concerning stock options granted
to or exercised by the Named Executive Officers and key employees
during fiscal 2001 and the unexercised stock options held by them
as of December 31, 2001.
OPTION/SAR GRANTS IN FISCAL 2001
Individual Grants
- ----------------------------------------------------------------
Potential Realizable
Value at Assumed
Number of % of Total annual Rates of Stock
Securities Options Price Appreciation
Underlying Granted to Exercise for Option Term (1)
Options Employees in Price Expiration ----------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---------- ----------- ----------- --------- ---------- ---------- ----------
Alan C.
Darlington 100,000 40.82% $1.20 3/22/11 $33,154 $73,261
Dana E.
Belisle 50,000 20.41% $1.20 3/22/11 $16,577 $36,631
David E.
Fractor 20,000 8.16% $1.20 3/22/11 $ 6,631 $14,652
_____________
(1) The "Potential Realizable Value" is the product of (a) the
difference between (i) the product of the closing sale price
per share at the date of grant and the sum of (A) 1 plus (B)
the assumed rate of appreciation of the Common Stock
compounded annually over the term of the option and (ii) the
per share exercise price of the option and (b) the number of
shares of Common Stock underlying the option at December 31,
2001 These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option
exercises are dependent on a variety of factors, including
market conditions and the price performance of the Common
Stock. There can be no assurance that the rate of
appreciation presented in this table can be achieved.
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AGGREGATED OPTION EXERCISES IN FISCAL 2001
AND FISCAL 2001YEAR-END OPTION/SAR VALUES
Number of Securities
Underlying
Unexercised Options Value of Unexercised
at Fiscal In-the-Money Options
Year-End (#) at Fiscal Year-End ($)
------------------- ----------------------
Shares Value
Acquired on Realized Exer- Unexer- Exer- Unexer-
Name Exercise (#) ($) ciseable cisable cisable cisable
- ----------- ------------- --------- -------- ------- ------- -------
Alan C.
Darlington -0- $ 0 270,000 80,000 $305,500 $ 32,000
William D.
Nicely -0- $ 0 120,000 0 $117,000 $ 0
Joshua Levy -0- $ 0 100,000 50,000 $ 62,500 $ 3,759
Dana E.
Belisle -0- $ 0 40,000 60,000 $ 29,250 $ 19,500
David E.
Fractor -0- $ 0 22,000 28,000 $ 9,016 $ 11,344
____________
(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, 2001 ($1.60 per share) and the exercise price of the option,
multiplied by the number of shares subject to the option.
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 P. Wallace, Robert L. Johnson and Julian L. Steffenhagen are
currently members of the Compensation Committee. Mr. Wallace was
appointed Chairman of the Committee in June 2001.
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 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 achievement of strategic
business goals, including the timely development and introduction
of products and the creation of markets in new geographic
territories. The Committee also considers the performance of the
Company relative to the performance of its competitors and seeks
to compensate executives at levels comparable to the average
compensation paid for similar positions by other companies within
the healthcare industry which are of a like size (in terms of net
worth and level of business). Market data on competitive
compensation levels have been obtained in past years from proxy
statements disclosing compensation paid to executives in
comparable positions in small- to medium-sized businesses within
the healthcare industry. The Company has, from time to time,
gathered executive compensation information from salary surveys
conducted by outside consulting firms. The Committee further
attempts to rationalize a particular executive's compensation
with that of other executive officers of the Company in an effort
10
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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.
As part of his employment agreement, Mr. Nicely, received an
annual salary of $200,000 and a bonus at the discretion of the
Committee or Board of Directors. Upon joining the Company, Mr.
Nicely was granted a stock option to purchase 200,000 shares
of the Company's Common Stock, subject to certain vesting
requirements as set forth in the employment agreement. In August,
2001, Mr. Nicely's employment agreement with the Company was
terminated.
Mr. Darlington, pursuant to his services agreement, receives an
annual salary of $200,000 with 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, 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 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. In March 2001, Dr. Levy
received a bonus of $10,000 as per his agreement for fiscal 2000.
In March 2002, Dr. Levy received a bonus of $29,000 for fiscal
2001.
In March 2001, Mr. Belisle, received a salary increase
to $125,000 and was awarded a bonus of $20,000. He also received
a stock option to purchase 50,000 shares of Common Stock at
market price on date of grant, subject to certain vesting
requirements. In March 2002, Mr. Belisle received a stock
option to purchase 50,000 shares of Common Stock at market price
on date of grant, subject to certain vesting requirements.
In 2001, Mr. Fractor, received a salary increase to $120,000 and
was awarded a $10,000 bonus. Mr. Fractor also received a stock
option to purchase 20,000 shares of Common Stock at market price
on date of grant, subject to certain vesting requirements. 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.
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
April 19, 2002
REPORT OF AUDIT COMMITTEE
The Report of the Audit 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 Board of Directors maintains an Audit Committee comprised of
three of the Company's directors. Each member of the Audit
11
12
Committee are considered "independent" under Rule 4200(a)(15) of
the national Association of Securities Dealers Standards.
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 2001;
- Obtained from management their representation that this
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. 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
(Communications with Audit Committees"), and
- Received and discussed with the independent auditors this
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 2001 was compatible with their
independence.
The Audit Committee operates under a written charter, which was
adopted by the Board of Directors and is assessed annual for
adequacy by the Audit Committee. The Audit Committee held four
meetings during fiscal 2001. 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, 2001, for filing
with the Securities and Exchange Commission.
For fiscal 2001, the aggregate professional fees for the annual audit
and interim quarterly reviews performed by the company's independent
public accounts were approximately $76,000. During fiscal 2001, the
Company did not engage its independent public accountants to perform
financial information systems design and implementation. During fiscal
2001, all other fees of the Company's independent public accountants
amounted to $53,000, which primarily related to tax compliance services.
The Audit Committee considered whether the provision of non-audit
services is consistent with maintaining the auditor's independence.
The Company has not selected an independent accountant for the fiscal
year ending December 31, 2002 because of uncertainty regarding the
outcome of government proceedings that could affect the ability
of Arthur Andersen to provide necessary audit services.
Representatives of Arthur Andersen are expected to attend the Annual
Meeting of Shareholders. The Company will afford the representatives
the opportunity to make a statement, should they desire to do so,
and expect that the representatives will be available to respond
to appropriate questions.
Audit Committee
- ---------------
Stephen P. Wallace, Chairman
Robert L. Johnson
Julian L. Steffenhagen.
April 19, 2002
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, 1996 in each of
the Company's Common Stock, the NASDAQ Stock Market Index and the
NASDAQ Health Services Index. The comparison assumes that all
dividends are reinvested. The graph is not necessarily indicative
of the future price performance.
12
13
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.
The 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.
12/31/96 12/30/97 12/29/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------
HemaCare
Corporation 100.0 15.0 14.5 21.0 46.0 52.8
Nasdaq Stock
Market 100.0 122.5 172.7 320.9 193.0 153.2
(U.S. Companies)
Nasdaq Health
Services Stocks 100.0 102.6 87.0 70.0 96.0 103.8
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%, 2%, and 3% of the Company's total revenues for 2001, 2000 and 1999,
respectively. There are no agreements between Dr. Levy, or the Company or
the Company's hospital customers that require the hospitals to select the
Company to provide therapeutic services to the hospital's patients.
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 2003 annual meeting of shareholders must be
submitted by a shareholder prior to December 28, 2002, in a form that
complies with applicable regulations. Recently, the SEC amended its rule
governing a company's ability to usediscretionary proxy authority with
respect to shareholder proposals, which 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 March 19, 2002 the proxies solicited by the
Board of Directors for the 2003 annual meeting of shareholders will confer
authority on the proxyholders to vote the shares in accordance with their
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.
13
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ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 (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 Arthur Andersen 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, 2001 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 Stover, Corporate Secretary, at 21101
Oxnard Street, Woodland Hills, California 91367.
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. The enclosed Proxy gives discretionary authority, however, in
the event that any additional matters should be presented.
SHAREHOLDERS ARE URGED IMMEDIATELY TO COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED, TO WHICH NO
POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
HEMACARE CORPORATION
/s/ JoAnn R. Stover
-------------------------------
JoAnn R. Stover, Secretary
Sherman Oaks, California
April 30, 2002
14
REVOCABLE PROXY
HEMACARE CORPORATION
Annual Meeting of Shareholders June 13, 2002
The undersigned shareholder(s) of HemaCare Corporation (the "Company")
appoints Alan C. Darlington, as proxy, with the power to appoint his
respective substitutes and authorizes any of them 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 April
19, 2002 at the annual meeting of shareholders to be held on June 13,
2002 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
-------- --------------------------
ALAN C. DARLINGTON / / / /
JULIEN L. STEFFENHAGEN / / / /
ROBERT L. JOHNSON / / / /
STEPHEN P. WALLACE / / / /
DANA E. BELISLE / / / /
2. OTHER BUSINESS:
In their discretion, the proxyholders is 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)
---------------------------------------------
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, 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:...................., 2002
_______________________________
_______________________________
(Signature if jointly held)