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
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transactions applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
---------------------------------------------------------------
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:
- ------------------------------------------------------------
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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[LOGO]
HEMACARE CORPORATION
___________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 25, 2004
___________________
The 2004 annual meeting of the shareholders (the "Meeting") of HemaCare
Corporation (the "Company") will be held on Tuesday, May 25, 2004, at
9:00 a.m. (local time), at the Company's corporate headquarters located at
21101 Oxnard Street, Woodland Hills, California 91367, 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 2005, or until their respective
successors have been elected and qualified. The following
persons are the Board of Directors' nominees: Julian L.
Steffenhagen, Steven B. Gerber, M.D., Judi Irving, Robert L.
Johnson and Terry Van Der Tuuk.
2. Other Business. To transact such other business as properly may
come before the Meeting or any continuation, adjournment or
postponement thereof.
Only holders of record of Common Stock of the Company at the close of
business on April 7, 2004 (the "Shareholders") will be entitled to notice of
and to vote, in person or by proxy, at the Meeting or any continuation,
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 Board of Directors. It is expected that
these material will be first mailed to Shareholders on or about April 8,
2004.
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
April 8, 2004
IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, 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.
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 Company's corporate
headquarters, 21101 Oxnard Street, Woodland Hills, California 91367, on
Tuesday, May 25, 2004, at 9:00 a.m. (local time) and at any continuation,
adjournment or postponement thereof, for the purposes set forth herein
and in the attached Notice of Annual Meeting of Shareholders.
Only holders of record of the Company's Common Stock (the "Shareholders")
at the close of business on April 7, 2004 (the "Record Date") are
entitled to notice of and to vote, in person or by proxy, at the Meeting
and any continuation, adjournment or postponement thereof.
The Notice of Annual Meeting, this Proxy Statement and the accompanying
proxy card will first be mailed to Shareholders on or about April 8,
2004.
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 to serve until the annual meeting of
shareholders to be held in 2005, or until their respective
successors have been elected and qualified. The following
persons are the Board of Directors' nominees:
Julian L. Steffenhagen
Steven B. Gerber, M.D.
Judi Irving
Robert L. Johnson
Terry Van Der Tuuk
2. Other Business. To transact such other business as properly
may come before the Meeting or any continuation, adjournment
or postponement thereof.
Method of Voting
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Shareholders can vote by proxy or by attending the Meeting and voting in
person. A proxy card (the "Proxy") is enclosed. If you vote by means of
the Proxy, the Proxy must be completed, signed and dated by you or your
authorized representative. The completed Proxy may be returned in the
postage-paid envelope provided or by facsimile to U.S. Stock Transfer
Corporation at 818.246.5607. Judi Irving, the designated proxyholder
(the "Proxyholder"), is a member of the Company's management. If you
hold Common Stock in "street name," you must either instruct your broker
or nominee as to how to vote such shares or obtain a proxy, executed in
your favor by your broker or nominee, to be able to vote at the Meeting.
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If a Proxy is properly signed, dated and returned and is not revoked, the
Proxy will be voted at the Meeting in accordance with the Shareholder's
instructions indicated on the Proxy. If no instructions are indicated on
the Proxy, the Proxy will be voted "FOR" the election of the Board of
Directors' nominees and in accordance with the recommendations of the
Board of Directors as to any other matter that may properly be brought
before the Meeting or any continuation, adjournment or postponement
thereof.
Revocability of Proxies
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Any Shareholder giving a Proxy has the power to revoke it at any time
before it is exercised. A Shareholder may revoke a proxy by filing an
instrument of revocation, or a duly executed proxy bearing a later date,
with the Company's Secretary at our principal executive offices located
at 21101 Oxnard Street, Woodland Hills, California 91367 prior to the
commencement of the Meeting. A Shareholder may also revoke the Proxy by
attending the Meeting and voting in person. Shareholders whose shares
are held in "street name" should consult with their broker or nominee
concerning the method for revoking their Proxy.
Voting Rights
- --------------
At the close of business on the Record Date, there were 7,756,060 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 of Common Stock standing in his or her name on the books of the
Company at the close of business on the Record Date, on each matter
presented to the Shareholders at the Meeting, 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 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 Board of Directors is soliciting authority to cumulate votes in
the election of directors, and the enclosed Proxy grants discretionary
authority for such purpose.
A majority of the shares of Common Stock entitled to vote at the Meeting,
represented in person or by proxy, will constitute a quorum for the
transaction of business at the Meeting. Votes withheld, abstentions and
"broker non-votes" (as defined below) will be counted for purposes of
determining the presence of a quorum.
In the election of directors, the candidates receiving the highest number
of votes, up to the number of directors to be elected, will be elected.
Each matter presented to the Shareholders other than the election of
directors, requires the affirmative vote of a majority of the outstanding
shares of Common Stock present, in person or by proxy, and entitled to
vote at the Meeting, unless otherwise required by law. Abstentions with
respect to any matter presented to the Shareholders, other than the
election of directors, and broker non-votes with respect to any matter
presented to the Shareholders, will not be included in the number of
shares counted as being present for the purposes of voting on such
proposal and, accordingly, will have the effect of reducing the number of
affirmative votes required to approve the proposal.
Of the shares of Common Stock outstanding at the close of business 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.
Brokers holding Common Stock in "street name" who are members of a stock
exchange are required by the rules of the exchange to transmit this Proxy
Statement to the beneficial owner of the Common Stock and to solicit
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voting instructions with respect to the matters submitted to the
Shareholders. If any such broker has not received instructions from the
beneficial owner by the date specified in the statement accompanying such
material, the broker may give or authorize the giving of a Proxy to vote
such Common Stock in his discretion in the election of directors.
However brokers or nominees do not have discretion to vote on certain
other proposals without specific instructions from the beneficial owner.
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." If
you hold Common Stock in "street name" and you fail to instruct your
broker or nominee as to how to vote such shares, your broker or nominee
may, in its discretion, vote such shares "FOR" the election of the Board
of Directors' nominees.
The rules of the Securities and Exchange Commission (the "SEC") provide
that in the event a shareholder proposal was not submitted to the Company
within a reasonable time before the mailing of this Proxy Statement, the
enclosed Proxy would confer authority on the Proxyholder to vote the
shares in accordance with her 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, including
a proposal to adjourn the Meeting to another time or place to solicit
additional proxies to support the recommendations of the Board of
Directors, the Proxies 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
circumstances arise which prevent such nominee from serving in such
position and to vote such Proxy for such substitute nominee.
Shareholder Proposals
- ---------------------
For a description of the procedures by which a Shareholder may nominate a
person for election as a director, see "Proposal 1 - ELECTION OF
DIRECTORS - Procedures for Shareholders Nominations." For a description
of the procedures by which a Shareholder may present any other proposal
at the Meeting, see "GENERAL INFORMATION - Other Business."
Solicitation of Proxies
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This Proxy solicitation is made by the Board of Directors of the Company,
and the Company will bear the costs of this solicitation, including the
expense of preparing, printing, assembling and mailing this Proxy
Statement and any other material used in this solicitation of Proxies.
If it appears desirable to do so to ensure adequate representation at the
Meeting, officers and regular employees may communicate with
Shareholders, banks, brokerage houses, custodians, nominees and others by
telephone, facsimile, e-mail or in person to request that Proxies be
furnished. No additional compensation will be paid for these services.
We will furnish copies of solicitation materials to banks, brokerage
houses, custodians, nominees, and others to be forwarded to the
beneficial owners of Common Stock held in their names. We will reimburse
banks, brokerage firms and other persons representing beneficial owners
of Common Stock for their reasonable expenses in forwarding solicitation
materials to the beneficial owners. The cost of soliciting proxies for
the Meeting is estimated at $8,500.
Other Business
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As of the date of this Proxy Statement, the Board of Directors knows of
no business to be presented for consideration at the Meeting other than
as stated in the Notice of Annual Meeting. If, however, other matters
are properly brought before the Meeting, including a motion to adjourn
the Meeting to another time or place in order 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 on such
matters in accordance with the recommendation of the Board of Directors,
and the authority to do so is included in the Proxy.
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The Company's Bylaws provide that a shareholder who wishes to present a
proposal at a shareholders' meeting must, among other things, (i) give
written notice of the proposal to the Secretary of the Company not less
than 90 days before the meeting or, if later, the seventh day following
the first public announcement of the date of the meeting, (ii) a brief
description of the proposal and the reasons for conducting such business
at the meeting, (iii) the name and address as they appear on the
Company's books of the shareholder proposing such business, (iv) the
class and number of shares of the Company which are beneficially owned by
the shareholders, and (v) any material interest of the shareholder in
such business. In addition, the shareholder making such proposal shall
promptly provide any other information reasonably required by the
Company.
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 Chief Executive Officer during 2003, the four most
highly compensated executive officers (in terms of salary and bonus)
serving at the end of 2003 whose annual salary and bonus exceeded
$100,0000, and up to two other persons who were not serving on the last
day of 2003 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)(3) Owned (3)
---------------------- ---------------- -----------
John W. Egan 775,497 (4) 9.99%
Kudu Partners, LP 455,000 (5) 5.87%
Julian L. Steffenhagen 200,000 (6) 2.52%
Terry Van Der Tuuk 150,000 (7) 1.93%
Robert L. Johnson 130,000 (8) 1.65%
Judi Irving 120,000 (9) 1.53%
Dana E. Belisle (10) 100,000 (8) 1.27%
Steven B. Gerber, M.D. 35,000 (8) *
Robert S. Chilton 20,000 (8) *
All executive officers 655,000 (11) 7.94%
and directors as a group
(6 persons)
________________
* Less than 1%
(1) The address for Mr. Egan is 4612 Pine Valley Drive, Frisco,
TX. The address for Kudu Partners, LP is 1900 C.R. 124,
Hesperus, CO 81326. The address for Ms. Irving, Messrs.
Steffenhagen, Johnson, Van Der Tuuk, Belisle and Chilton and
Dr. Gerber 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 26, 2004, Mr. Egan has sole
voting and investment power with respect to the shares listed.
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(5) According to a Schedule 13D filed with the Securities and
Exchange Commission on February 6, 2003, Kudo Partners, LP has
sole voting and investment power with respect to the shares
listed.
(6) Includes 185,000 shares of Common Stock issuable upon exercise
of currently exercisable stock options.
(7) Consists of 125,000 shares held in a trust of 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) Consists of shares of Common Stock issuable upon exercise of
currently exercisable stock options.
(9) Includes 100,000 shares of Common Stock issuable upon exercise
of stock options exercisable within 60 days of the Record
Date.
(10) Mr. Belisle ceased to be the Company's Chief Operating officer
in October 2003.
(11) Excludes an aggregate of 280,000 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
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, but shall not be less than five nor more than nine. Each
director elected at the Meeting will hold office until the annual meeting
of shareholders to be held in 2005, or until his or her respective
successor has been elected and qualified. All nominees have indicated
their willingness to serve and, unless otherwise instructed, the
Proxyholder will vote the Proxies in such a way as to elect as many of
these nominees as possible under applicable voting rules. If any nominee
is unable to serve as a director at the time of the Meeting, 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 annual
meeting of shareholders to be held in 2005, or until his or her
respective successor has been elected and qualified.
Julian L. Steffenhagen
Steve B. Gerber, M.D.
Judi Irving
Robert L. Johnson
Terry Van Der Tuuk
None of the directors, nominees for director or executive officers were
selected pursuant to any arrangement 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.
Procedures of Shareholder Nominations
- -------------------------------------
Nominations for the election of directors may be made by 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
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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 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 Company 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 shareholders, (4) such
other information regarding each nominee proposed by such shareholder as
would be required to be included in the proxy statement filed pursuant to
the proxy rules of the SEC, 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE BOARD OF DIRECTORS' NOMINEES.
Directors, Executive Officers and Key Employees
- -----------------------------------------------
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)(4) 60 Chairman and Director
Steven B. Gerber, M.D.
(1)(3)(4) 50 Director
Judi Irving (3) 46 President, Chief Executive Officer and Director
Robert L. Johnson (2)(3)(4) 65 Director
Terry Van Der Tuuck (1)(2) 63 Director
Robert S. Chilton 46 Executive Vice President and Chief Financial Officer
Joshua Levy, M.D. 63 National Medical Director
________________
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Quality Committee
(4) Member of the Nominating and Governance 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. 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. In
October 2002, Mr. Steffenhagen completed the National Association of
Corporate Directors Director Professionalism course. Mr. Steffenhagen is
a member of the Audit Committee and the Nominating and Governance
Committee and is Chairman of the Compensation Committee.
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Steven B. Gerber, M.D. has been a director of the Company since
October 2003. Since November 2003, Dr. Gerber has been Director of
Research at Wedbush Morgan Securities, and from 1990 through 2002, was
Head of Healthcare Research and Pharmaceutical Research Analyst at CIBC
World Markets, a national investment banking firm. Dr. Gerber received
his Master of Business Degree in Finance at the University of California,
Los Angeles, his M.D. degree at Tufts University in Boston, Massachusetts
and his Bachelor of Arts degree in Psychology at Brandeis University in
Waltham, Massachusetts. Dr. Gerber serves on the Board of Directors for
Hypertension Diagnostics, Inc. and is a member of their audit committee.
Dr. Gerber is Chairman of the Audit Committee and a member of the Quality
Committee and the Nominating and Governance Committee.
Judi Irving was appointed President and Chief Executive Officer and
elected to the Board of Directors 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. Ms. Irving is a member
of the Quality 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. Mr. Johnson is a member of
the Compensation Committee, Chairman of the Nominating and Governance
Committee, and Chairman of the Quality Committee.
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 Masters of Business Administration degree from The Wharton
School, University of Pennsylvania. Mr. Van Der Tuuk is a member of the
Audit and Compensation Committees.
Officers
Robert S. Chilton has been Executive Vice President and Chief Financial
Officer since October 2003. Since 1999, Mr. Chilton was Executive Vice
President, Chief Financial Officer for Preferred Health Management, Inc,
a workers' compensation specialty heath care services company. From 1997
through 1999, he was Chief Financial Officer for OrthAlliance, Inc., a
publicly traded management services organization for orthodontic
practices. In addition, Mr. Chilton previously was with KPMG Peat
Marwick. Mr. Chilton received his Masters in Business Administration and
Bachelor of Arts degrees from the University of California, Los Angeles
and is a Certified Public Accountant.
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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. 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 four standing committees. Each member of the
Audit Committee, the Compensation Committee, and the Nominating and
Governance Committee is an "independent director" as defined in
Rule 4200(a)(15)of the Marketplace Rules of the National Association of
Securities Dealers, Inc.
Audit Committee
Dr. Gerber chairs the Audit Committee, and its members are Messrs.
Steffenhagen and Van Der Tuuk. The purpose of the Audit Committee is to
assist the Board of Directors in fulfilling its oversight
responsibilities regarding (i) the Company's accounting and system of
internal controls, (ii) the quality and integrity of the Company's
financial reports and (iii) the independence and performance of the
Company's outside auditors. In 2001, the Audit Committee recommended,
and the Board of Directors of the Company adopted, a written charter for
the Audit Committee. In March 2004, the Audit Committee recommended, and
the Board of Directors adopted, a revised charter for the Audit
Committee, a copy of which is attached as Appendix A to this Proxy
Statement.
Compensation Committee
Mr. Steffenhagen chairs the Compensation Committee, and its members are
Messrs. Johnson and Van Der Tuuk. The purpose of the Compensation
Committee is to help to ensure that (i) the executive officers of the
Company and its subsidiaries are compensated in a manner consistent with
the compensation strategy of the Company determined by the Board of
Directors, (ii) the treatment of all executive officers is in an
equitable and consistent manner, (iii) the Company maintains the ability
to recruit and retain qualified executive officers, and (iv) the
requirements of the appropriate regulatory bodies are upheld. In
March 2004, the Compensation Committee recommended, and the Board of
Directors adopted, a written charter for the Compensation Committee, a
copy of which is attached as Appendix B to this Proxy Statement.
Nominating and Governance Committee
In March 2004, the Board of Directors established a Nominating and
Governance Committee. Mr. Johnson chairs this committee, and its members
are Dr. Gerber and Mr. Steffenhagen. The Committee has recommended, and
the Board of Directors has adopted, a written charter for the committee,
a copy of which is attached as Appendix C to this Proxy Statement.
The principal purposes of Nominating and Governance Committee are to help
ensure that (i) the Board of Directors is appropriately constituted to
meet its fiduciary obligations to stockholders and the Company, and
(ii) the Company has and follows appropriate governance standards. To
carry out its purposes, the Committee (i) identifies individuals
qualified to become members of the Board of Directors, consistent with
criteria approved by the Board, (ii) recommends the director nominees to
be selected by the Board of Directors for the next annual meeting of
shareholders, (iii) develops and recommends to the Board of Directors
corporate governance principles applicable to the Company, and
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(iv) oversees the evaluation of the Board of Directors and management.
Director candidates are considered based on various criteria, such as
relevant business and industry experience and personal integrity and
judgment. The Nominating and Governance Committee believes it is
important that at least one director have the requisite experience and
expertise to be designated as an "audit committee financial expert," as
defined in the SEC's rules. There are no differences in the manner in
which the committee evaluates nominees for director based on whether the
nominee is recommended by a shareholder. In addition, the Committee
believes that the following specific qualities and skills are necessary
for all directors to possess:
- A director should be highly accomplished in his or her respective
field.
- A director should have expertise and experience relevant to the
Company's business and be able to offer advice and guidance to
the Chief Executive Officer based on that expertise and
experience.
- A director must have time available to devote to board
activities.
- A director should have demonstrated the ability to work well with
others.
The Committee considers suggestions from many sources, including
shareholders, regarding possible candidates. Such suggestions, together
with appropriate biographical information, should be submitted to the
Secretary of the Company. The Company's Bylaws also set forth certain
requirements for shareholders wishing to nominate director candidates
directly for consideration by the shareholders. See "Procedures for
Shareholder Nominations" above. The Company does not pay any third party
to assist in the process of identifying and evaluating candidates.
The Committee reviews and reports to the Board of Directors on a periodic
basis with regard to matters of corporate governance. Each director
nominee named in this Proxy Statement was recommended for election by the
committee and the Board of Directors. The Board of Directors has not
received any notice of a proposed director nominee in connection with
this Meeting from any shareholder.
Quality Committee
Mr. Johnson chairs the Quality Committee, and its members are Ms. Irving
and Dr. Gerber. The primary purpose of the Committee is to provide
assistance to the Board of Directors in fulfilling its oversight
responsibilities regarding the Company's quality assurance system of
internal audits and error management and the performance of the Company
with external inspections. In March 2004, the Quality Committee
recommended, and the Board of Directors adopted, a written charter for
the Quality Committee, a copy of which is attached as Appendix D to this
Proxy Statement.
Charters of the Committees
Each committee has recommended, and the Board of Directors has adopted,
and may amend from time to time, written charters for the Audit
Committee, the Compensation Committee, the Nominating and Governance
Committee and the Quality Committee, copies of which are attached to this
Proxy Statement. Each charter is also available on the Company's website
at www.hemacare.com.
Communications with the Board
- -----------------------------
Shareholders may send communications to the Board of Directors to the
attention of our Corporate Secretary at 21101 Oxnard Street, Woodland
Hills, CA 91367. Each such communication must be marked care of the
Board of Directors or care of a specific director. The Corporate
Secretary will ensure that these communications are delivered to the
Board of Directors or the specified director.
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Meetings and Attendance
- -----------------------
The Board of Directors met thirteen times during 2003 and took action by
unanimous written consent on six occasions during 2003. All the Board of
Directors, with the exception of Mr. Van Der Tuuk, attended at least 75%
of the aggregate number of Board of Director and committee meetings held
during 2003, or the period in which such individual was a director of the
Company and served on such committee. Due to extraordinary personal
circumstances that were considered and approved by the Board of
Directors, Mr. Van Der Tuuk attended 56% of the meetings for the period
of time which he was a director. In 2003, the Audit Committee met seven
times, the Compensation Committee met twice and the Quality Committee met
once.
In addition to regularly scheduled meetings, in the third and fourth
quarter of 2003, the Board of Directors convened seven times on an
informal basis to discuss the status of the closures of several of the
Company's donor centers.
It is the policy of the Company to require members of its Board of
Directors to attend the annual meeting of shareholders, with the
exception of medical emergencies.
Compensation of Directors
- -------------------------
Directors who are not employees of the Company receive $1,500 for each
meeting of the Board of Directors attended and reimbursement of
reasonable travel expenses for each meeting of the Board of Directors
attended. The Chairman of the Board receives $3,000 for each meeting of
the Board of Directors attended. In December 2003, the Board of
Directors reduced the Chairman's fee, effective March 2004, to $2,400 for
each meeting attended and, effective March 2004, authorized the Chairman
of the Audit Committee to receive $2,100 for each meeting attended.
Board members are generally not compensated for brief telephonic meetings
of the Board of Directors, and committee members are not compensated for
meetings attended.
Each person who has not previously served as a director of the Company
and who is initially elected or appointed as a non-employee director is
granted a vested option to purchase 25,000 shares of the Company's Common
Stock at an exercise price equal to the closing price on the date of
grant. Additionally, non-employee directors receive a vested stock
option to purchase 25,000 shares of Common Stock for each year of service
at an exercise price equal to the closing price on the date of grant.
The Chairman of the Board receives an annual, vested stock option to
purchase 50,000 shares of Common Stock at an exercise price equal to the
closing price on the date of grant. In December 2003, the Board of
Directors reduced the annual option grant to the Chairman of the Board
from 50,000 shares to 40,000 effective March 2004, and authorized the
grant of an annual, vested stock option to purchase 35,000 shares of
Common Stock to the Chairman of the Audit Committee effective March 2004.
The Board of Directors can change the compensation of directors at any
time.
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Executive Compensation
- ----------------------
The following table sets forth all cash and non-cash compensation
awarded, earned or paid to the Named Executive Officers for services to
the Company in all capacities for the fiscal years ended December 31,
2003, 2002 and 2001.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
-------------------------------------- -----------
Other Annual Securities All Other
Name and Salary Bonus Compensation Underlying Compensation
Principal Position Year ($) ($) ($) Options ($)(2)
- ------------------- ----- -------- ------- --------------- ---------- ------------
Judi Irving, 2003 200,000 65,000 - - -
President and Chief 2002 7,700 - - 200,000 -
Executive Officer (3) 2001 - - - - -
Robert S. Chilton, 2003 34,500 10,000 - 100,000 -
Chief Financial 2002 - - - - -
Officer (4) 2001 - - - - -
Dana E. Belisle, 2003 151,900 - - - 24,166
Chief Operating Officer 2002 141,200 - - 50,000 3,500
Officer (5) 2001 122,000 - - 50,000 3,500
Joshua Levy, 2003 200,000 - - - -
Nat'l Medical Doctor 2002 200,000 - - - 2,800
2001 200,000 29,000 - - 4,300
__________
(1) During fiscal 2001, 2002 and 2003, 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, with the exception of Mr. Belisle who
received a severance payment in 2003 (See Footnote 5).
(3) Ms. Irving was appointed President and Chief Executive Officer in
December 2002.
(4) Mr. Chilton was appointed Chief Financial Officer in October 2003.
(5) Mr. Belisle ceased to be Chief Operating Officer in October 2003.
In October 2003, Mr. Belisle received a severance payment in the
amount of $24,166.
Employment Agreements
- ---------------------
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 the Company and has been
the National 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" (as defined in the Levy Agreement) 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
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after the change in control, 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.
Dr. Levy receives 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.
Additionally, the Irving Agreement provides that Ms. Irving receive a
minimum bonus of $45,000, in 2003, with a potential to earn up to 40% of
her base salary based on achieving profit targets and other objectives.
Ms. Irving was also granted a 10-year stock option to purchase up to
200,000 shares of the Company's Common Stock, vesting over four years, at
an exercise price of $0.32, the closing price of the Company's Common
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. For 2003,
Ms. Irving received a bonus of $65,000. Additionally, in March 2004,
Ms. Irving was granted a 10-year stock option to purchase up to 100,000
shares of the Company's Common Stock, vesting over four years, at an
exercise price of $0.46, the closing price of the Company's Common Stock
on the day of grant. In addition, Ms. Irving's 2004 bonus potential
will increase to 50% of her base salary based on achieving profit targets
and other objectives.
Pursuant to a Letter Agreement dated October 2, 2003 (the "Chilton
Agreement"), Robert Chilton is employed as the Company's Chief Financial
Officer. The Chilton Agreement provides that Mr. Chilton receive an
annual salary of $160,000 and a $600 per month car allowance. The
Chilton Agreement provides that Mr. Chilton receive up to 30% of his base
salary (starting in 2004) for achieving specified goals determined by the
Chief Executive Officer. Additionally, the Chilton Agreement provides
that Mr. Chilton receive a bonus of $10,000 in March 2004 based on
achieving profit targets and other objectives in 2003. Mr. Chilton was
also granted a 10-year stock option to purchase up to 100,000 shares of
the Company's Common Stock, vesting over four years, at an exercise price
of $0.80, the closing price of the Company's Common Stock on the day of
grant. In the event Mr. Chilton's employment is terminated by the
Company for any reason, he will receive a severance package equal to
three months' salary, which increases to six months' salary upon six
months of employment; unless it is determined his termination is for
negligence or illegal activities.
Employee Benefit Plans
- -----------------------
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. 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. The Company has elected
not to match the employee contribution in 2003.
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
12
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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;
provided, however, that 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 1,524,000 of Common Stock
with exercise prices ranging from $0.32 to $2.44 and with expiration
dates ranging from March 20, 2007 to March 22, 2014. As of the Record
Date, 256,000 shares of Common Stock had been issued upon exercise of
stock options granted under the 1996 Plan.
Employee Stock Purchase Plan
In March 2004, the Board of Directors adopted the Company's Employee
Stock Purchase Plan (the "ESPP") pursuant to which directors, officers
and employees can purchase from the Company shares of the Company's
Common Stock. Purchases under the ESPP may be made during each of the
five business day periods (a "Purchase Period") commencing on the
thirteenth business day following the Company's public announcement of
its results of operations for the previous quarterly period. The
purchase price is equal to the average closing price of the Common Stock
during the ten trading days immediately preceding the Purchase Period.
The total number of shares of Common Stock reserved for sale under the
ESPP is 1,000,000.
Stock Option Grants, Exercises and Holdings
- -------------------------------------------
The following two tables set forth information concerning stock options
granted to or exercised by the Named Executive Officers during fiscal
2003 and the unexercised stock options held by them as of December 31,
2003.
OPTION/SAR GRANTS IN FISCAL 2003
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%
- ----------- ----------- ------------- -------- ----------- ------- -------
Robert S. Chilton 100,000 64.5% $0.80 11/24/13 $50,312 $127,499
- -----------
(1) The stock options granted to Mr. Chilton vest at a rate of 20%
per year starting March 1, 2004.
(2) Options to purchase 155,000 shares were granted during 2003.
(3) The exercise price is equal to the closing price of the
Company's Common Stock on the date of grant.
(4) The "Potential Realizable Value" is the product of (a) the
difference between (i) the product of the closing sale price
per share at the date of grant and the sum of (A) 1 plus (B)
the assumed rate of appreciation of the Common Stock
compounded annually over the term of the option and (ii) the
13
14
per share exercise price of the option and (b) the number of
shares of Common Stock underlying the option at December 31,
2003. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option
exercises are dependent on a variety of factors, including
market conditions and the price performance of the Common
Stock. There can be no assurance that the rate of
appreciation presented in this table can be achieved.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 2003
AND FISCAL 2003 YEAR-END OPTION/SAR VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Year-end Fiscal Year-end(1)
----------------- ------------------
Shares Value
Acquired on Realized Exer- Unexer- Exer- Unexer-
Name Exercise (#) ($) ciseable cisable cisable cisable
- ----------- ------------- --------- -------- ------- ------- -------
Judi Irving - - 50,000 150,000 $ 23,000 $ 69,000
Robert S.
Chilton - - - 100,000 - -
Joshua Levy - - 130,000 20,000 - -
Dana E.
Belisle - - 73,000 77,000 - -
___________________
(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, 2003 ($0.78
per share) and the exercise price of the option, multiplied by the
number of shares subject to the option.
EQUITY COMPENSATION PLAN INFORMATION IN FISCAL 2003
Number of Securities
Remaining available
Number of Securities for Future Issuance
to be Issued Upon Under Equity
Exercise of Compensation Plans
Outstanding Options, Weighted Average (excluding Securities
Warrants and Rights Exercise Price reflected in column (a))
-------------------- ---------------- ------------------------
Plan Category (a) (b) (c)
- --------------------------
Plans Approved by
Shareholders 1,649,000 $0.85 365,000
Plans Not Approved by
Shareholders - - -
---------- ------ --------
Total 1,649,000 $0.85 365,000
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. Julian L.
Steffenhagen, Robert L. Johnson and Terry Van Der Tuuk are currently
members of the Compensation Committee.
14
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Report of the Compensation Committee of the Board of Directors shall
not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933 (the "Securities Act") or under the Securities
Exchange Act of 1934 (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.
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. Each member of the
Compensation Committee meets the independence requirements of the Nasdaq
Stock Market. In addition, the Committee oversees the administration of
the Company's Employee Stock Incentive Plan.
The policies underlying the Committee's compensation decisions are
designed to attract and retain the best-qualified management personnel
available. The Company routinely compensates its executive officers
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. 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.
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. Ms. Irving received a bonus of $65,000 for fiscal 2003. In
March 2004, Ms. Irving was granted a 10-year stock option to purchase up
to 100,000 shares of the Company's Common Stock, vesting over four years,
at an exercise price of $0.46, the closing price of the Company's Common
Stock on the day of grant. In addition, Ms. Irving's 2004 bonus potential
will increase to 50% of her base salary based on achieving profit targets
and other objectives.
Mr. Chilton, pursuant to a letter of employment receives an annual salary
of $160,000 and, starting in 2004, will have the potential to earn up to
30% of his base annual salary based on achieving specified goals
determined by the Chief Executive Officer. Mr. Chilton received a bonus
of $10,000 based on satisfactory performance in fiscal 2003.
Dr. Levy, pursuant to his employment agreement, receives an annual salary
of $200,000 and a bonus equal to 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 did not receive a bonus for fiscal 2003.
15
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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 March 22, 2004
Julian L. Steffenhagen, Chairman
Robert L. Johnson
Terry Van Der Tuuk
REPORT OF AUDIT COMMITTEE
The Report of the Audit Committee of the Board of Directors 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.
The Board of Directors maintains an Audit Committee comprised of three of
the Company's directors. Each member of the Audit Committee meets the
independence requirements of the Nasdaq Stock Market. 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 2003 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 principles;
and
- - 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 of Directors 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, as
amended ("Communication with Audit Committees"), and
- - Received and discussed with the independent auditors the
written disclosures and the letter from the independent
auditors required by Independent Standards Board Standard No.
1 ("Independence Discussions with Audit Committees"), and
16
17
whether the rendering of the non-audit services provided by
them to the Company during fiscal 2003 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 seven meetings during fiscal
2003. The Audit Committee evaluates its charter at least once each year
and submits any recommended changes to the Board of Directors. In
March 2004, the Audit Committee recommended, and the Board of Directors
amended, the charter of the Audit Committee, a copy of which is attached
as Appendix A hereto.
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, 2003, for filing with
the Securities and Exchange Commission.
Audit Committee March 22, 2004
Steven Gerber, M.D., Chairman
Julian L. Steffenhagen
Terry Van Der Tuuk
Code of Ethics
- --------------
The Company has adopted a Code of Ethics that applies to its directors,
principal executive officers and senior financial officers as required by
the rules promulgated by the SEC. A copy of the Code of Ethics is
available free of charge by writing to HemaCare Corporation, attention
Corporate Secretary, 21101 Oxnard Street, Woodland Hills, CA 91367 or can
be found on our Company website at www.hemacare.com.
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 (i) the Nasdaq Stock Market (U.S. Companies)
Index and (ii) the Nasdaq Health Services Stock Index. The graph assumes
$100 was invested on December 31, 1998 in each of the Company's Common
Stock, the Nasdaq Stock Market Index and the Nasdaq Health Services
Index. The comparison assumes that all dividends are reinvested.
The comparisons in the graph below are based on historical data and are
not indicative of, or intended to forecast, the possible future
performance of the Company's Common Stock.
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.
17
18
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL OF SHAREHOLDER RETURN
12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
-------- -------- -------- -------- -------- --------
HemaCare
Corporation 100.00 143.5 217.4 347.8 97.8 169.6
Nasdaq Stock
Market 100.00 185.4 111.8 88.7 61.3 91.7
(U.S. Companies)
Nasdaq Health
Services Stocks 100.00 80.4 110.4 119.4 102.9 157.3
(US & Foreign)
Certain Relationships and Related Transactions
- ----------------------------------------------
Joshua Levy, M.D., the National Medical Director of the Company and a
shareholder, 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%, or less, of the Company's total
revenues in each of the three years ended December 31, 2003. 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 Dr. Levy's patients.
Compliance With Section 16(a) of the Exchange Act
- -------------------------------------------------
Section 16(a) of the Exchange Act, and the SEC's rules thereunder,
require the Company's directors, executive officers and persons who own
more than ten percent of the Company's Common Stock, to file reports of
ownership and changes in ownership with the SEC and to furnish the
Company with copies of all reports they file. The SEC has established
specific due dates for these reports and requires the Company to report
in this Proxy Statement any failure by these persons to file or failure
to file on a timely basis. To our knowledge, based solely upon a review
of the copies of such reports filed with the SEC, each person subject to
the reporting requirements of Section 16(a) has timely filed all reports
required to be filed in fiscal 2003.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has audited the Company's financial statements for the
fiscal year ended December 31, 2003. A representative of Ernst & Young
LLP is expected to be present at the 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 Company has not selected its principal accountant for the fiscal year
ending December 31, 2004.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Company paid the following fees to Ernst & Young LLP, during fiscal
years 2002 and 2003:
Year ended December 31,
2003 2002
------------ -----------
Audit Fees and Expenses
Year-End Audit $ 75,000 $ 50,000
Quarterly Reviews 35,000 16,000
------------ ----------
Total Audit 110,000 66,700
Tax Fees and Expenses 57,034 55,337
------------- ----------
Total $ 167,034 $ 122,037
============= ==========
The Audit Committee administers the Company's engagement of Ernst & Young
LLP and pre-approves all audit and permissible non-audit services on a
case-by-case basis. In approving non-audit services, the Audit Committee
considers whether the engagement could compromise the independence of
Ernst & Young LLP, and whether for reasons of efficiency or convenience
it is in the best interest of the Company to engage its independent
auditor to perform the services. The Audit Committee has determined that
performance by Ernst & Young LLP of the non-audit services related to the
fees on the table above did not affect their independence.
Prior to engagement, the Audit Committee pre-approves all independent
auditor services. The fees are budgeted, and the Audit Committee
requires the independent auditor and management to report actual fees
versus the budget periodically throughout the year by category of
service. During the year, circumstances may arise in which it may become
necessary to engage the independent auditor for additional services not
contemplated in the original pre-approval categories. In those instances,
the Audit Committee requires specific pre-approval before engaging the
independent auditor.
The Audit Committee may delegate pre-approval authority to one or more of
its members. The member to whom such authority is delegated must report,
for informational purposes only, any pre-approval decisions to the Audit
Committee at its next scheduled meeting.
PROPOSALS OF SHAREHOLDERS FOR 2005 ANNUAL MEETING
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. The 2005 annual meeting of
shareholders is presently expected to be held on or about May 25, 2005.
SEC rules provide that any shareholder proposal to be included in the
proxy statement for the Company's 2005 annual meeting must be received by
the Secretary of the Company at the Company's offices at 21101 Oxnard
Street, Woodland Hills, California 91367 prior to December 9, 2004, in a
form that complies with applicable regulations. If the date of the 2005
annual meeting is advanced or delayed more than 30 days from the date of
the 2004 annual meeting, shareholder proposals intended to be included in
the proxy statement for the 2005 annual meeting must be received by us
within a reasonable time before the Company begins to print and mail the
proxy statement for the 2005 annual meeting. Upon any determination that
the date of the 2005 annual meeting will be advanced or delayed by more
than 30 days from the date of the 2004 annual meeting, the Company will
disclose the change in the earliest practicable Quarterly Report on Form
10-Q.
SEC rules also govern 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. In the
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event a shareholder proposal is not submitted to the Company prior to
February 24, 2005, the proxies solicited by the Board of Directors for
the 2005 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 2005 annual meeting of
shareholders without any discussion of the proposal in the proxy
statement for such meeting.
FORM 10-K
A copy of the Company's Form 10-K for the fiscal year ended December 31,
2003 (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 Form 10-K 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 Form 10-K for the
fiscal year ended December 31, 2003 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.
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, Secretary
April 8, 2004
Woodland Hills, CA
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REVOCABLE PROXY
HEMACARE CORPORATION
Annual Meeting of Shareholders May 25, 2004
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 April 7, 2004 at the annual
meeting of shareholders to be held on May 25, 2004 or any adjournment or
postponement thereof.
(Continued, and to be signed on back)
HEMACARE CORPORATION
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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
JULIAN L. STEFFENHAGEN / / / /
STEVEN B GERBER, M.D. / / / /
JUDI IRVING / / / /
ROBERT L. JOHNSON / / / /
TERRY VAN DER TUUK / / / /
2. OTHER BUSINESS
/ / FOR / / AGAINST / / ABSTAIN
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, A PROPOSAL TO ADJOURN OR POSTPONE THE MEETING, THIS
PROXY SHALL BE VOTED BY THE PROXYHOLDER IN ACCORDANCE WITH THE
RECOMMENDATIONS OF A MAJORITY OF THE BOARD OF DIRECTORS.
The undersigned hereby ratifies and confirms all that the Proxyholder, or
her 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
ENVELOPED PROVIDED.
Dated: _____________________________, 2004
________________________________________
Signature
_________________________________________
(Signature if jointly held)
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APPENDIX A
CHARTER OF THE
AUDIT COMMITTEE OF
HEMACARE CORPORATION
As amended March 22, 2004
PURPOSE
The purpose of the Audit Committee (the "Committee") is to provide
assistance to the Board of Directors (the "Board") of HemaCare
Corporation, a California corporation (the "Company"), in fulfilling
the Board's oversight responsibilities regarding the Company's
accounting and system of internal controls, the quality and integrity
of the Company's financial reports and the independence and
performance of the Company's outside auditor. In so doing, the
Committee should endeavor to maintain free and open means of
communication between the members of the Committee, other members of
the Board, the outside auditor and the financial management of the
Company.
In the exercise of its oversight responsibilities, it is not the duty
of the Committee (i) to plan or conduct audits or (ii) to determine
that the Company's financial statements fairly present the Company's
financial position and results of operation and are in accordance with
generally accepted accounting principles. Instead, such duties remain
the responsibility of the outside auditor and management,
respectively. Nothing contained in this charter is intended to alter
or impair the operation of the "business judgment rule" as interpreted
by the courts under the California General Corporation Law (the
"CGCL"). Further, nothing contained in this charter is intended to
alter or impair the right of the members of the Committee under the
CGCL, to rely, in discharging their responsibilities, on the records
of the Company and on other information presented to the Committee,
the Board or the Company by its officers or employees or by outside
experts such as the outside auditor.
MEMBERSHIP
The Committee shall consist of three members of the Board. The
members shall be appointed by action of the Board consistent with the
Bylaws of the Company (the "Bylaws") and shall serve at the discretion
of the Board. Each Committee member shall satisfy the "independence"
requirements of the Nasdaq Stock Market and the rules promulgated by
the Securities and Exchange Commission, and shall not have
participated in the preparation of the financial statements of the
Company or any subsidiary during the past three years. Each Committee
member must be able to read and understand fundamental financial
statements, including a company's balance sheet, income statement, and
cash flow statement . At least one Committee member must have past
employment experience in financial or accounting, requisite
professional certification in accounting, or any other comparable
experience or background (including a current or past position as a
chief executive, chief financial officer or other senior officer with
financial oversight responsibilities) which results in the Committee
member's financial sophistication.
COMMITTEE ORGANIZATION AND PROCEDURES
1. The members of the Committee shall appoint a Chair of the
Committee by majority vote. The Chair (or in his or her
absence, a member designated by the Chair) shall preside at
all meetings of the Committee.
2. The Committee shall have the authority to establish its own
rules and procedures consistent with the Bylaws of the Company
for notice and conduct of its meetings, should the Committee,
in its discretion, deem it desirable to do so.
3. The Committee shall meet at least four times in each fiscal
year, and more frequently as the Committee in its discretion
deems desirable.
4. The Committee may, in its discretion, include in its meetings
members of the Company's financial management, representatives
of the outside auditor and other financial personnel employed
or retained by the Company. The Committee may meet the
outside auditor in separate executive sessions to discuss any
matters that the Committee believes should be addressed
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privately, without management's presence. The Committee may
likewise meet privately with management, as it deems
appropriate.
5. The Committee may, in its discretion, utilize the services of
the Company's regular corporate legal counsel and advisers or,
at its discretion, retain other legal counsel and other
advisers, as it determines to carry out its duties.
6. The Committee shall be entitled to appropriate funding, as
determined by the Committee, in its capacity as a committee of
the Board, for payment of (i) compensation to any registered
public accounting firm engaged for the purpose of preparing or
issuing an audit report or performing other audit, review or
attest services for the Company, (ii) compensation to any
advisers employed by the Committee under Paragraph 5 of this
section; and (iii) ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out
its duties.
RESPONSIBILITIES
Outside Auditor
7. The Committee, in its capacity as a committee of the Board,
shall be directly responsible for the appointment and
oversight of the work of any registered public accounting firm
employed by the Company (including resolution of disagreements
between management and the auditor regarding financial
reporting) for the purpose of preparing or issuing an audit
report or related work. In this regard, the Committee shall
select and periodically evaluate the performance of the
outside auditor and, if necessary, replace the outside
auditor. As appropriate, the Committee shall recommend to the
Board the nomination of the outside auditor for stockholder
approval at any meeting of stockholders. Each such registered
public accounting firm shall report directly to the Committee.
8. Before the outside auditors is engaged to render audit or non-
audit services, the Committee shall approve the engagement
including the fees to be paid to the outside auditor and any
other terms of the engagement of the outside auditor.
9. The Committee shall receive from the outside auditor, at least
annually, a written statement delineating all relationships
between the outside auditor and the Company, consistent with
the Independence Standards Board Standard 1. The committee
shall actively engage in a dialogue with the outside auditor
with respect to any disclosed relationships or services that,
in the view of the Committee, may impact the objectivity and
independence of the outside auditor. If the Committee
determines that further inquiry is advisable, the Committee
shall recommend that the Board take any appropriate action in
response to the outside auditor's report to satisfy itself of
the auditor's independence.
Annual Audit
10. The Committee shall meet with the outside auditor and
management of the Company in connection with each annual audit
to discuss the scope of the audit and the procedures to be
followed.
11. The Committee shall meet with the outside auditor and
management prior to the public release of the financial
results of operations for the year under audit and discuss
with the outside auditor any matters within the scope of the
pending audit that have not yet been completed.
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12. The Committee shall review (Footnote #1) and discuss the
audited financial statements with the management of the Company.
13. The Committee shall discuss with the outside auditor the
matters required to be discussed by Statement on Auditing
Standards No. 61 as then in effect including, among others (i)
the methods used to account for any significant unusual
transactions reflected in the audited financial statements,
(ii) the effect of significant accounting policies in any
controversial or emerging areas for which there is a lack of
authoritative guidance or a consensus to be followed by the
outside auditor, (iii) the process used by management in
formulating particularly sensitive accounting estimates and
the basis for the auditor's conclusions regarding the
reasonableness of those estimates; and (iv) any disagreements
with management over the application of accounting principles,
the basis for management's accounting estimates or the
disclosures in the financial statements.
14. The Committee shall, based on the review and discussions in
paragraphs 12 and 13 above, and based on the disclosures
received from the outside auditor regarding its independence
and discussions with the auditor regarding such independence
in paragraph 9 above, recommend to the Board whether the
audited financial statements should be included in the
Company's Annual Report on Form 10-K for the fiscal year
subject to the audit.
Quarterly Review
15. The outside auditor is required to review the interim
financial statements to be included in any Form 10-Q of the
Company using professional standards and procedures for
conducting such reviews, as established by generally accepted
auditing standards as modified or supplemented by the
Securities and Exchange Commission (the "SEC"), prior to the
filing of the Form 10-Q.
Internal Controls
16. The Committee shall discuss with the outside auditor and
management, at least annually, the adequacy and effectiveness
of the accounting and financial controls of the Company, and
consider any recommendations for improvement of such internal
control procedures.
17. The Committee shall discuss with the outside auditor and with
management any management letter provided by the outside
auditor and any other significant matters brought to the
attention of the Committee by the outside auditor as a result
of its annual audit. The Committee should allow management
adequate time to consider any such matters raised by the
outside auditor.
Complaints
18. The Committee shall establish procedures for (i) the receipt,
retention, and treatment of complaints received by the Company
regarding accounting, internal accounting controls, or
auditing matters; and (ii) the confidential anonymous
submission by employees of the issuer of concerns regarding
questionable accounting or auditing matters.
Footnote #1
Auditing literature, particularly, Statement of Accounting Standards
No. 71 defines the term "review" to include a particular set of
required procedures to be undertaken by independent accountants.
The members of the Committee are not independent accountants, and
the term "review" as used in this Charter is not intended to have
this meaning. Consistent with Footnote 47 of SEC Release No.
34-42266, any use in this Charter of the term "review" should not
be interpreted to suggest that the Committee members can or should
follow the procedures required of auditors performing reviews of
interim financial statements.
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Other Responsibilities
19. The Committee shall review and reassess this Charter at least
annually and submit any recommended changes to the Board for
its consideration.
20. The Committee shall provide the report for inclusion in the
Company's Annual Proxy Statement required by Item 306 of
Regulation S-K of the SEC.
21. The Committee, through its Chair, shall report periodically,
as deemed necessary or desirable by the Committee, but at
least annually, to the full Board regarding the Committee's
actions and recommendations, if any.
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APPENDIX B
CHARTER OF THE
COMPENSATION COMMITTEE OF
HEMACARE CORPORATION
1. PURPOSE
The purpose of the Compensation Committee (the "Committee")
of HemaCare Corporation (the "Company") is to help to ensure
that 1) the executive officers of the Company and its
subsidiaries are compensated in a manner consistent with the
compensation program of the Company determined by the Board of
Directors (the "Board"), 2) the treatment of all executive
officers is in an equitable and consistent manner, 3) the
Company maintains the ability to recruit and retain qualified
executive officers, and 4) the requirements of the appropriate
regulatory bodies are upheld. The Committee shall also
communicate to the stockholders the compensation policies of the
Company and the method for establishing compensation for the
Chief Executive Officer ("CEO") and the other executive officers
of the Company. To carry out this purpose, the Committee
shall:
(1) Review and approve corporate goals and
objectives relevant to compensation of the executive
officers.
(2) Evaluate the performance of the executive
officers in light of those goals and objectives.
(3) Determine and approve the compensation level
of the executive officers based on this evaluation.
(4) Make recommendations to the Board with
respect to incentive-compensation plans and equity-based
plans.
2. COMMITTEE MEMBERSHIP AND ORGANIZATION
The Committee shall be comprised of no fewer than three
members. Each member of the Committee shall be "independent" as
defined by the rules of the National Association of Securities
Dealers ("NASD") and the Securities and Exchange Commission
("SEC"). In addition, each member shall be a "Non-employee
Director" for purposes of Rule 16b-3 under the Securities
Exchange Act of 1934 and shall satisfy the requirements of an
"outside director" for purposes of Section 162(m) of the
Internal Revenue Code. Each member shall be free of any
relationship that, in the opinion of the Board, would interfere
with his or her individual exercise of independent judgment.
The members of the Committee shall be appointed and replaced by
the Board. The Board shall appoint one of the members as Chair.
This Committee shall communicate with and work closely with
the Board. To foster such communication, the CEO of the Company
may be invited to attend meetings on a non-voting basis,
provided the CEO may not be present during voting or discussion
of his or her compensation.
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3. COMMITTEE RESPONSIBILITIES AND AUTHORITY
To carry out its purposes expressed in Paragraph 1 above,
the Committee shall have the following responsibilities and
authority. Delegation by the Board of responsibilities to the
Committee shall not preclude the Board from taking any action
permitted to be taken under governing law, rules or regulations
applicable to the Company, provided that the Committee shall
have sole authority to retain and terminate any consulting firm
used to assist in the evaluation of director, CEO or senior
executive compensation, including sole authority to approve the
consulting firm's fees and other retention terms.
(1) Review from time to time and approve the
Company's compensation program to ensure that management is
rewarded appropriately for its contributions to Company
growth and profitability and that the executive
compensation supports Company objectives and stockholder
interests.
(2) Determine all elements of compensation for
the executive officers. The CEO may not be present during
voting on or discussion of his/her compensation.
(3) Determine the long-term incentive component
of compensation for the executive officers based on the
considerations adopted by the Board.
(4) Annually review the performance of the CEO
and the executive officers of the Company, and report on
the Committee's review to the Board and the CEO.
(5) Produce the annual Board Compensation
Committee Report to Stockholders on the factors and
criteria on which the compensation for the CEO and other
executive officers in the last year was based, to be
included in the Company's proxy statement for its annual
meeting or Annual Report on Form 10-K filed with the SEC.
(6) Allocate awards under the Company's
incentive compensation plans, provided that the Committee
may delegate to the CEO or another executive officer the
authority to allocate stock options among employees who are
not executive officers, subject to applicable law and the
limits and guidelines established by the Committee.
(7) Review and re-examine this Charter, as
needed, and make recommendations to the Board with respect
to any proposed changes.
4. MEETING AND MINUTES
(1) The Committee will meet, as required, in
response to the needs of the Board and as necessary to
fulfill their responsibilities.
(2) The Committee will maintain written minutes
of its meetings, which minutes will be filed with the
minutes of the meetings of the Board.
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APPENDIX C
CHARTER OF THE
CORPORATE GOVERNANCE AND
NOMINATING COMMITTEE OF
HEMACARE CORPORATION
1. PURPOSE
The purpose of the Corporate Governance and Nominating
Committee (the "Committee") of HemaCare Corporation (the
"Company") is to help to ensure that the Board of Directors (the
"Board") is appropriately constituted to meet its fiduciary
obligations to stockholders and the Company, and that the
Company has, and follows, appropriate governance standards. To
carry out this purpose, the Committee shall:
(1) Identify individuals qualified to
become Board members, consistent with criteria
approved by the Board.
(2) Recommend the director nominees to be
selected by the Board for the next annual meeting of
stockholders.
(3) Develop and recommend to the Board a
set of corporate governance principles applicable to
the Company.
(4) Oversee the evaluation of the Board and
management.
2. COMMITTEE MEMBERSHIP AND ORGANIZATION
The Committee shall be comprised of no fewer than three
members. Each member of the Committee shall be "independent" as
defined by the rules of the National Association of Securities
Dealers ("NASD") and the Securities and Exchange Commission
("SEC"). Each member shall be free of any relationship that, in
the opinion of the Board, would interfere with his or her
individual exercise of independent judgment. The members of the
Committee shall be appointed and replaced by the Board. The
Board shall appoint one of the members as Chair.
The Committee shall communicate with and work closely with
the Board.
3. COMMITTEE RESPONSIBILITIES AND AUTHORITY
To carry out its purposes expressed in Paragraph 1 above,
the Committee shall have the following responsibilities and
authority. Delegation by the Board of responsibilities to the
Committee shall not preclude the Board from taking any action
permitted to be taken under governing law, rules or regulations
applicable to the Company, provided that the Committee shall
have sole authority to retain and terminate any search firm to
be used to identify director candidates, including sole
authority to approve the search firm's fees and other retention
terms.
(1) Evaluate the current composition,
organization, size and governance of the Board and its
committees; determine future requirements; make
recommendations to the Board concerning the
appointment of directors to committees of the Board;
and recommend the selection of chairs of committees of
the Board.
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(2) Determine the desired qualifications,
expertise and characteristics for potential directors
and conduct searches for director candidates that have
corresponding attributes. Evaluate, propose and
approve nominees for election to the Board, and
consider and evaluate stockholder nominees for
election to the Board.
(3) Oversee the Board's performance
evaluation process, including conducting surveys of
director observations, suggestions and preferences.
The Committee shall also evaluate the participation of
members of the Board in continuing education
activities.
(4) Form and delegate authority to
subcommittees, or delegate authority to members, when
appropriate, provided that such subcommittees will be
composed exclusively of members of this Committee and
will operate pursuant to a published charter.
(5) Evaluate and recommend termination of
service of individual members of the Board as
appropriate, in accordance with the Board's governance
principles, for cause or for other proper reasons.
(6) Make regular reports to the Board on
the results of its meetings and action taken by the
Committee.
(7) Review and re-examine this Charter at
least annually and make recommendations to the Board
with respect to any proposed changes.
(8) Review annually the Company's corporate
governance guidelines and make recommendations to the
Board with respect to any proposed changes.
(9) Annually report to the full Board
regarding its own performance against the
responsibilities outlined in this Charter and as
otherwise established by the Board.
(10) Obtain advice, assistance, reports or
opinions from internal or external legal, accounting
or other advisors, including director search firms.
4. MEETING AND MINUTES
(1) The Committee will meet at least twice
annually and will also meet, as required, in response
to the needs of the Board and as necessary to fulfill
its responsibilities.
(2) The Committee will maintain written
minutes of its meetings, which minutes will be filed
with the minutes of the meetings of the Board.
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APPENDIX D
CHARTER OF THE
QUALITY ASSURANCE COMMITTEE OF
HEMACARE CORPORATION
PURPOSE
The Board of Directors of HemaCare Corporation acknowledges that as a
part of its fiduciary obligation to the Corporation and its
shareholders, as well as its general obligation to exercise reasonable
care to provide oversight of the quality of care aspects of the
Corporation's business, it must maintain an awareness of the quality
indicators for the Corporation's activities, the results in meeting or
exceeding those quality indicators and standards, and the systems in
place to maintain high quality, as well as systems designed to
identify any deviations from the approved standards of performance.
The Quality Assurance Committee shall, on behalf of the Board of
Directors, serve as the initial level of review and recommendation in
this regard, making regular reports to the full Board of Directors.
In the exercise of its oversight responsibilities, it is not the duty
of the Committee (i) to plan or conduct audits or (ii) to determine
that the Company's quality reports fairly present the Company's
quality position or are in accordance with federal, state and other
regulators. Instead, such duties remain the responsibility of the
management of the Company, subject, however, to the general oversight
responsibilities of the Board of Directors.
MEMBERSHIP
The Committee shall consist of at least two members of the Board. The
Chair and members shall be appointed by action of the Board consistent
with the Bylaws of the Company (the "Bylaws") and shall serve at the
discretion of the Board. Each Committee member must be able to read
and understand fundamental quality assurance reports, including the
Company's internal and external audits and error management tracking
and trending reports. It is preferable that at least one Committee
member have past experience in quality assurance in a regulated
industry or any other comparable experience or background.
COMMITTEE ORGANIZATION AND PROCEDURES
1. The Chair (or in his or her absence, a member designated by the
Chair) shall preside at all meetings of the Committee.
2. The Committee shall have the authority to establish its own rules
and procedures consistent with the Bylaws of the Company for
notice and conduct of its meetings, should the Committee, in its
discretion, deem it desirable to do so.
3. The Committee shall meet at least (four) times in each fiscal
year, and more frequently as the Committee in its discretion
deems desirable.
4. The Committee may, in its discretion, include in its meetings
members of the Company's regulatory affairs and quality assurance
management and other regulatory affairs and quality assurance
personnel employed or retained by the Company. The Committee may
meet privately with any member of management, as it deems
appropriate.
5. The Committee may, in its discretion, utilize the services of the
Company's regular corporate legal counsel with respect to legal
matters or, at its discretion, with the concurrence of the
Chairperson of the Board of Directors, retain other legal counsel
if it determines that such counsel is necessary or appropriate
under the circumstances.
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RESPONSIBILITIES
Annual Report
1. The Committee shall meet with the management of the Company in
connection with each quality assurance annual report to discuss
the report.
2. The Committee shall, based on the report and discussions in
paragraph 1 above, and based on results of external inspections,
recommend to the Board acceptance, modification or rejection of
the quality assurance report.
Quarterly Report
1. Quality assurance management may be requested to prepare reports
quarterly.
Quality Program
1. The Committee shall discuss with quality management, at least
annually, the adequacy and effectiveness of the Quality Program
of the Company, and consider any recommendations for improvement
of such program.
2. The Committee shall discuss with management any document provided
by an external inspector, such as the FDA, and any other
significant matters brought to the attention of the Committee.
All Form FDA 483 reports and the Corporation's response thereto
shall be supplied to the committee chair as soon as completed,
and shall be provided to the members of the Quality Committee at
the committee's next regular meeting. The chair of the committee
shall have the authority to convene one or more special meetings
of the committee if, in his/her judgment, matters revealed in the
483 report or the Corporation's response thereto warrant a
special meeting.
Other Responsibilities
1. The Committee shall review and reassess this Charter at least
annually and submit any recommended changes to the Board for its
consideration.
2. The Committee, through its Chair or quality assurance management,
shall report regularly to the Board of Directors concerning the
quality operations of the Corporation and no less frequently than
annually the agenda of the Board of Directors shall provide an
opportunity for a formal presentation by the Quality Assurance
and Training Management personnel and the Corporation's Medical
Director concerning the Corporation's compliance with appropriate
quality standards.
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