HAEMONETICS CORPORATION
Notice of Annual Meeting of Stockholders
July 22, 2003
To the Stockholders:
The Annual Meeting of the Stockholders of Haemonetics Corporation
will be held on Tuesday, July 22, 2003 at 9:00 a.m. at the State Street
Bank Building, 225 Franklin Street, Boston, Massachusetts for the following
purposes:
1. To elect three Directors to serve for a term of three years and
until their successors shall be elected and qualified, as more
fully described in the accompanying Proxy Statement.
2. To ratify the selection by the Board of Directors of Ernst &
Young LLP as independent public accountants for the current
fiscal year.
3. To consider and act upon any other business which may properly
come before the meeting.
The Board of Directors has fixed the close of business on June 3,
2003 as the record date for the meeting. All stockholders of record on that
date are entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN
PERSON.
By Order of the Board of Directors
/s/ Alicia R. Lopez
Alicia R. Lopez
Clerk
Braintree, Massachusetts
June 23, 2003
HAEMONETICS CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Haemonetics Corporation (the
"Company") for use at the Annual Meeting of Stockholders to be held on
Tuesday, July 22, 2003, at the time and place set forth in the notice of
meeting, and at any adjournment thereof. The approximate date on which this
Proxy Statement and form of proxy are first being sent to stockholders is
June 23, 2003.
If the enclosed proxy is properly executed and returned, it will be
voted in the manner directed by the stockholder. If no instructions are
specified with respect to any particular matter to be acted upon, the proxy
will be voted in favor thereof. Any person giving the enclosed form of
proxy has the power to revoke it by voting in person at the meeting or by
giving written notice of revocation to the Clerk of the Company at any time
before the proxy is exercised.
The holders of a majority in interest of all Common Stock issued,
outstanding and entitled to vote are required to be present in person or be
represented by proxy at the Meeting in order to constitute a quorum for
transaction of business. The election of the nominees for Director will be
decided by plurality vote. The affirmative vote of the holders of at least
a majority of the shares of Common Stock voting thereon in person or by
proxy at the meeting is required to approve item 2 listed in the notice of
meeting. Abstentions and "non-votes" are counted as present in determining
whether the quorum requirement is satisfied. A "non-vote" occurs when a
nominee holding shares for a beneficial owner votes on one proposal, but
does not vote on another proposal because the nominee does not have
discretionary voting power and has not received instructions from the
beneficial owner. Abstentions and broker non-votes will not be taken into
account in determining the outcome of the election of directors.
Abstentions will be counted in the tabulation of votes cast in item 2
presented to stockholders while broker non-votes will not be counted.
The Company will bear the cost of this solicitation. It is expected
that the solicitation will be made primarily by mail, but regular employees
or representatives of the Company (none of whom will receive any extra
compensation for their activities) may also solicit proxies by telephone,
telegraph or in person and arrange for brokerage houses and their
custodians, nominees and fiduciaries to send proxies and proxy materials to
their principals at the expense of the Company.
The Company's principal executive offices are located at 400 Wood
Road, Braintree, Massachusetts, USA 02184-9114, telephone number (781) 848-
7100.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on June 3, 2003
are entitled to notice of and to vote at the meeting. On that date, the
Company had outstanding and entitled to vote 24,071,289 shares of Common
Stock with a par value of $.01 per share. Each outstanding share entitles
the record holder to one vote.
ELECTION OF DIRECTORS
Pursuant to the Articles of Organization of the Company, the Board of
Directors is divided into three classes, with each class being as nearly
equal in number as possible. One class is elected each year for a term of
three years. It is proposed that Ronald G. Gelbman, Ronald A. Matricaria
and Brad Nutter be elected to serve terms of three years, and in each case
until their successors shall be duly elected and qualified or until their
death, resignation or removal. The persons named in the accompanying proxy
will vote, unless authority is withheld, for the election of the nominees
named below. If any such nominees should become unavailable for election,
which is not anticipated, the persons named in the accompanying proxy will
vote for such substitutes as management may recommend. Should management
not recommend a substitute for any nominee, the proxy will be voted for the
election of the remaining nominees. The nominees are not related to each
other or to any executive officer of the Company or its subsidiaries.
Year First
Elected Position with the Company or Principal
Name Age Director Occupation During the Past Five Years
- ---------------------------------------------------------------------------------------------------
Nominated for a term ending in 2006:
Ronald G. Gelbman 56 2000 From 1998 to 2000, Johnson & Johnson Worldwide
Chairman of the Health Systems and Diagnostics Group
and member of the Executive Committee. His worldwide
responsibilities included Health Care Systems,
LifeScan, Ortho-Clinical Diagnostics and Therakos.
Mr. Gelbman began his Johnson & Johnson career in
1972 where he held senior level positions throughout
the organization. Member of the Board of Directors
for Serologicals Corp.; the Board of Trustees at
Rollins College, the Ringling School of Art & Design,
Sarasota YMCA and ODA College Preparatory School, and
member of the Board of Advisors at privately-held
CareGain, a healthcare management company.
Ronald A. Matricaria 60 2002 Since April 2003 non-executive Chairman of the
Company. From 1993 to 1999, Mr. Matricaria served as
President and Chief Executive Officer of St. Jude
Medical Inc. and served as Chairman of its Board from
1995 until May 2002. Prior to joining St. Jude
Medical, Mr. Matricaria served for over 23 years with
Eli Lilly and Company, Inc. His last position had
been executive vice president of the Pharmaceutical
Division of Eli Lilly and Company and president of
its North American operations. He also served as
president of Eli Lilly International Corporation. Mr.
Matricaria currently serves on the Board of Directors
of
2
Year First
Elected Position with the Company or Principal
Name Age Director Occupation During the Past Five Years
- ---------------------------------------------------------------------------------------------------
Cyberonics, Endocare, Vistacare, Inc. and
Cardiodynamics, as well as a Trustee emeritus of the
University of Minnesota Foundation. In 2002, Mr.
Matricaria earned a Life Time Achievement award for
his significant contributions to the healthcare
industry.
Brad Nutter 51 2003 Since April 2003, President and CEO of the Company.
During 2000, President and Chief Executive Officer,
Gambro Healthcare, a $1.3 billion international
dialysis provider business. From 1997 to 2000,
Executive Vice President and Chief Operating Officer
of Syncor International, a $520 million international
provider of radiopharmaceuticals and medical imaging.
Mr. Nutter also held senior positions for American
Hospital Supply and Baxter International.
Serving a term ending in 2004:
Yutaka Sakurada 70 1991 Since 2001, Vice President of the Company and
Chairman and Chief Executive Officer of Haemonetics
Japan. From 1991 to 2001, Vice President of the
Company and President of Haemonetics Japan. From 1989
to 1991, Managing Director of Kuraray Plastics Co.,
Ltd. From 1985 to 1989, Board of Directors of Kuraray
Co., Ltd., a diversified synthetic fiber manufacturer
and a distributor of the Company's products. From
1988 to 1996, Vice Chairman of the Japanese Society
for Biomaterials.
Donna C. E. Williamson 51 1993 Since 2001, an independent consultant strategic
advisor and private equity investor. From 1999 to
2001, Managing Director and Senior Vice President,
BN Amro Private Equity, the private equity group for
ABN AMRO North America. From 1996 to 1999, a
strategic advisor and venture capital independent
consultant. From 1993 to 1996, Corporate Senior Vice
President of Caremark International, Inc., a multi-
global provider of diversified health care services.
From 1992 to 1993, Corporate Vice President, Caremark
International. From 1983 to 1992, Corporate Vice
President at Baxter International, responsible for
corporate strategy, business development, surgical
and health cost management businesses. Director of
PSS World Medical, Inc. and the American Red Cross of
Greater Chicago.
3
Year First
Elected Position with the Company or Principal
Name Age Director Occupation During the Past Five Years
- ---------------------------------------------------------------------------------------------------
Harvey G. Klein, M.D. 61 1998 Since 1983, Chief of the Department of Transfusion
Medicine at the Warren G. Magnuson Clinical Center of
the National Institutes of Health. Previously held
other senior level positions with NIH. Currently
serves on several boards: Past President, American
Association of Blood Banks; Chairman of the Panel for
Blood and Blood Products of the US Pharmacopeia; U.S.
Health and Human Services Advisory Committee on Blood
Safety and Availability; and, the Blood Products
Advisory Committee of the U.S. Food and Drug
Administration. Previously, President of the American
Society for Apheresis and Director of the World
Apheresis Association.
Serving a term ending in 2005:
Benjamin L. Holmes 68 1998 Since December 1994, President of the Holmes Co.,
specializing in health care consulting with a focus
on the device industry. From 1985 to 1994, Vice
President of the Hewlett-Packard Company. From 1983
to 1994, General Manager of the Medical Products
Group of Hewlett-Packard. Serves as Director for PLC
Medical Systems, a publicly traded company. Director
of not-for-profit organizations UCLA Foundation, and
St. Luke's Wood River Medical Center Foundation.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND DIRECTOR COMPENSATION
During the last fiscal year, there were four regular meetings and one
special meeting of the Board of Directors of the Company. All of the
Directors attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors held while he or she was a director, and
(ii) the total number of meetings held by Committees of the Board of
Directors on which they served. N. Colin Lind, Managing Partner of Blum
Capital Partners, has decided not to stand for re-election as Director due
to other commitments and his continuing confidence in the Company's new
leadership put in place while Mr. Lind served on the Company's Nominating
and Governance Committee.
During fiscal year 2003, the Directors of the Company who were not
employees of the Company, except Sir Stuart Burgess and Ronald A.
Matricaria, received an annual cash fee of $20,000 and an option to
purchase up to 6,000 shares of Common Stock of the Company. Sir Stuart
Burgess, as compensation for his duties performed as Chairman of the Board,
was paid a cash fee of $45,000 for 20 days of formal meetings throughout
fiscal year 2002 and was also granted options to purchase up to
4
12,000 shares of Common Stock of the Company. The options granted to both
the directors and to the Chairman vested immediately. Sir Stuart also
received a fee of $2,250 per day for each additional day devoted to
Chairman responsibilities, amounting to $130,500, for the fiscal year ended
March 29, 2003. Ronald Matricaria joined the Board in October 2002 and as
compensation for his service he was paid a cash fee of $51,500 and was
granted options to purchase up to 6,000 shares of Common Stock of the
Company. Upon assuming the role of Chairman effective April 1, 2003, his
compensation was increased to a cash fee of $200,000 and he was granted an
option to purchase up to 100,000 shares of Common Stock of the Company.
Harvey G. Klein, M.D. received a cash fee of $12,500 for serving on the
Scientific/Medical Advisory Committee which updates the Company on
important issues in transfusion medicine.
The Board of Directors has a Management Development and Compensation
Committee (the "Compensation Committee") composed of independent directors
who are not employees of the Company. The members of the Compensation
Committee are Sir Stuart Burgess, Chairman, Ronald G. Gelbman, Benjamin L.
Holmes, N. Colin Lind and Donna C.E. Williamson. The Compensation Committee
determines the compensation to be paid to the key officers of the Company
and administers the Company's 1990 Stock Option Plan and its 1992 and 2000
Long-term Incentive Plans. During the last fiscal year, there were four
meetings of the Compensation Committee.
The Board of Directors has an Audit Committee composed of independent
directors who are not employees of the Company. The members of the Audit
Committee are Benjamin L. Holmes, Chairman, Sir Stuart Burgess, Ronald G.
Gelbman, Ronald A. Matricaria (since April 2003) and Donna C.E. Williamson.
The Audit Committee provides general oversight of the Company's financial
reporting and disclosure practices, system of internal controls, and the
Company's processes for monitoring compliance by the Company with Company
policies. The Committee reviews with the Company's independent auditors the
scope of the audit for the year, the results of the audit when completed
and the independent auditor's fee for services performed. The Audit
Committee also recommends independent auditors to the Board of Directors
and reviews with management, and internal audit, various matters related to
its internal accounting controls. During the last fiscal year, there were
four regular meetings and two special meetings of the Audit Committee.
The Board of Directors has a Nominating and Governance Committee
composed of independent directors who are not employees of the Company. The
members of the Nominating and Governance Committee are Sir Stuart Burgess,
Ronald G. Gelbman, Benjamin L. Holmes and, N. Colin Lind. The Nominating
and Governance Committee recommends nominees for election as directors to
the full Board of Directors. The Nominating and Governance Committee
considers recommendations for nominees for directorships submitted by
stockholders, directors and members of management. During the last fiscal
year, there were two regular meetings and one special meeting of the
Nominating and Governance Committee.
Stockholders who wish to submit candidates for consideration as
nominees may submit an appropriate letter and resume to the Secretary of
the Company at the Company's executive offices in Braintree, Massachusetts.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 15, 2003(15), certain
information with respect to beneficial ownership of the Company's Common
Stock by: (i) each person known by the Company to own beneficially more
than five percent of the Company's Common Stock; (ii) each of the Company's
directors and each of the executive officers named in the Summary
Compensation Table elsewhere in this Proxy Statement; and (iii) all
directors and executive officers as a group.
Title Amount & Nature Percent
Name of Beneficial Owner of Class Beneficial Ownership Of
Class
Sir Stuart Burgess(1) Common Stock 159,232 0.66%
Ronald A. Matricaria(2) Common Stock 56,000 0.23%
Brad Nutter(3) Common Stock - 0.00%
James L. Peterson(4) Common Stock 1,285,480 5.15%
Ronald J. Ryan(5) Common Stock 178,336 0.74%
Stephen C. Swenson(6) Common Stock 57,968 0.24%
Timothy Surgenor(7) Common Stock - 0.00%
Thomas D. Headley(8) Common Stock 84,422 0.35%
Robert Ebbeling(9) Common Stock 113,519 0.47%
Yutaka Sakurada(10) Common Stock 76,885 0.32%
Ronald G. Gelbman(11) Common Stock 33,000 0.14%
Donna C.E. Williamson(12) Common Stock 67,300 0.28%
Benjamin L. Holmes(13) Common Stock 49,000 0.20%
Harvey G. Klein M.D.(14) Common Stock 43,000 0.18%
N. Colin Lind(15) Common Stock 3,372,400 13.99%
Sterling Capital Management LLC(16) Common Stock 2,608,698 10.84%
Wellington Management(17) Common Stock 2,983,950 12.40%
Blum Capital Partners, L.P.(15) Common Stock 3,372,400 13.99%
Neuberger & Berman Inc.(18) Common Stock 2,893,838 12.02%
Vanguard Specialized Funds(19) Common Stock 1,983,900 8.24%
All executive officers and directors
as a group (15 persons)(20) Common Stock 5,576,542 21.56%
(1) Includes 155,732 shares that Sir Stuart has the right to acquire upon
the exercise of options currently exercisable or exercisable within
60 days of May 15, 2003. Does not include 3,500 shares held in trust
for the benefit of Sir Stuart's children. Sir Stuart disclaims
beneficial ownership of such shares.
(2) Includes 31,000 shares that Mr. Matricaria has the right to acquire
upon the exercise of options currently exercisable or exercisable
within 60 days of May 15, 2003.
(3) Hired effective April 1, 2003. Upon his appointment to President and
CEO, Mr. Nutter was awarded 300,000 options which will vest ratably
over four years beginning on March 31, 2004.
(footnotes continued on following page)
6
(4) Does not include 23,150 shares held in trust for the benefit of
Mr. Peterson's children, 3,300 shares held by the Peterson Foundation
and 15,000 shares held in trust for the benefit of Mr. Peterson's
parents. Mr. Peterson disclaims beneficial ownership of such shares.
Includes 891,687 shares which Mr. Peterson has the right to acquire
upon exercise of options currently exercisable or exercisable within
60 days of May 15, 2003. The reporting person's address is 400 Wood
Road Braintree, MA 02184.
(5) Includes 177,942 shares which Mr. Ryan has the right to acquire upon
exercise of options currently exercisable or exercisable within 60
days of May 15, 2003.
(6) Includes 56,250 shares which Mr. Swenson has the right to acquire
upon exercise of options currently exercisable or exercisable within
60 days of May 15, 2003.
(7) Effective December 31, 2002, Mr. Surgenor resigned as Executive Vice
President.
(8) Includes 82,110 shares which Mr. Headley has the right to acquire
upon the exercise of options currently exercisable or exercisable
within 60 days of May 15, 2003.
(9) Includes 92,631 shares which Mr. Ebbeling has the right to acquire
upon the exercise of options currently exercisable or exercisable
within 60 days of May 15, 2003.
(10) Includes 74,858 shares which Dr. Sakurada has the right to acquire
upon the exercise of options currently exercisable or exercisable
within 60 days of May 15, 2003.
(11) Consists of 33,000 shares which Mr. Gelbman has the right to acquire
upon the exercise of options currently exercisable or exercisable
within 60 days of May 15, 2003.
(12) Includes 66,000 shares which Ms. Williamson has the right to acquire
upon the exercise of options currently exercisable or exercisable
within 60 days of May 15, 2003.
(13) Includes 48,000 shares which Mr. Holmes has the right to acquire upon
the exercise of options currently exercisable or exercisable within
60 days of May 15, 2003.
(14) Includes 42,000 shares which Dr. Klein has the right to acquire upon
the exercise of options currently exercisable or exercisable within
60 days of May 15, 2003.
(15) Includes 42,000 shares which Mr. Lind has the right to acquire upon
the exercise of options currently exercisable or exercisable within
60 days of May 15, 2003. Includes 1,192,100 shares that were owned or
controlled (as more fully described below) by Blum Capital Partners,
LP on May 15, 2003, and that have been disposed of by June 12, 2003.
Also includes, 2,138,300 shares owned directly by four investment
advisory clients for which Blum Capital Partners, L.P. ("Blum L.P.")
is the investment adviser with voting and investment discretion, four
limited partnerships for which Blum L.P. is the general partner, and
one limited partnership for which Blum Strategic GP, L.L.C. ("Blum
GP") is the general partner. Mr. Lind is a director and officer of
Richard C. Blum & Associates, Inc., (the general partner of Blum
L.P.), an officer and managing partner of Blum L.P., and a managing
member of Blum GP. Mr. Lind disclaims beneficial ownership of these
shares except to the extent of any pecuniary interest therein. Blum
L.P.'s reporting address is 909 Montgomery Street, #400, San
Francisco, CA 94133.
(16) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 4, 2003 reporting
aggregate ownership and shared voting and dispositive power over
2,608,698 shares. The reporting entity's address is 301 S. College
Street, Suite 3200, Charlotte, NC 28202.
(17) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 12, 2003 reporting
aggregate ownership of and shared dispositive power
(footnotes continued on following page)
7
over 2,983,950 shares and shared voting power over 805,950 shares.
The reporting entity's address is 75 State Street, Boston, MA 02109.
(18) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 13, 2003 reporting
aggregate ownership of and shared dispositive power over 2,893,838
shares, sole voting power over 69,731 shares and shared voting power
over 2,054,700 shares. The reporting entity's address is 605 Third
Avenue, New York, NY 10158-3698.
(19) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 12, 2003 reporting
aggregate ownership of and shared dispositive and sole voting power
over 1,983,900 shares. The reporting entity's address is 100 Vanguard
Boulevard, VM #V34, Malvern, PA 19355.
(20) Includes 1,793,210 shares which executive officers and directors have
the right to acquire upon the exercise of options currently
exercisable or exercisable within 60 days of May 15, 2003.
-------------------
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Act")
requires the Company's directors and executive officers and persons who own
more than 10% of the Company's Common Stock to file with the Securities and
Exchange Commission and the New York Stock Exchange reports concerning
their ownership of the Company's Common Stock and changes in such
ownership. Copies of such reports are required to be furnished to the
Company. To the Company's knowledge, based solely on a review of copies of
such reports furnished to the Company during or with respect to the
Company's most recent fiscal year, all Section 16(a) filing requirements
applicable to persons who were, during the most recent fiscal year,
officers or directors of the Company or greater than 10% beneficial owners
of its Common Stock were complied with.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE REPORT
ON EXECUTIVE COMPENSATION 1
The Compensation Committee determines the compensation to be paid to
the key executives of the Company and administers the Company's 1990 Stock
Option Plan and its 1992 and 2000 Long-Term Incentive Plans. The
Compensation Committee's determinations with respect to compensation for
the fiscal year ended March 29, 2003 were made early in the fiscal year.
During the last fiscal year, there were four meetings of the Compensation
Committee.
The Compensation Committee is comprised of independent directors who
are not employees of the Company. In its deliberations, the Committee takes
into account the recommendations of appropriate Company officials.
- -------------------
1 The material in this report is not "soliciting material," is not
deemed filed with the Commission and is not to be incorporated by
reference in any filing of the Company under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended,
whether made before or after the date hereof and irrespective of any
general incorporation language in any such filing.
8
The Company's executive compensation program is intended to attract
and retain talented executives, and to motivate them to achieve the
Company's business goals. To align executive compensation with shareholder
interests and company performance, the program utilizes a combination of
salary, stock options and cash bonuses awarded based on the achievement of
pre-determined corporate performance objectives. The compensation received
by its executive officers is thereby linked to the Company's performance.
Within this overall policy, compensation packages for individual executive
officers are intended to reflect the responsibilities of their position,
current performance within their position, past achievements with the
Company, as well as the Company's performance.
In arriving at the base salaries paid to the Company's executives for
the year ended March 29, 2003, the Committee considered their individual
contributions to the performance of the Company, their levels of
responsibility, the executive's experience and potential, and the level of
compensation necessary, in the overall competitive environment, to retain
talented individuals. All of these factors were collectively taken into
account by the Committee in making a subjective assessment as to the
appropriate base salary for each of the Company's executive officers, and
no particular weight was assigned to any one factor.
During the fiscal year ended March 29, 2003, the Company's executive
bonus program was tied primarily to the achievement by the Company of
predetermined earnings per share and revenue targets. The company did not
reach the corporate earnings per share or revenue targets for fiscal year
2003 and accordingly no bonus was paid to executives for the fiscal year.
For the fiscal year 2004, the executive bonus plan will be heavily weighted
to the Company's earnings per share, revenue and operating income targets.
The Company's stock option program is intended to provide additional
incentive to build shareholder value, to reward for long-term corporate
performance, and to promote employee commitment through stock ownership.
Information with respect to stock options held by executive officers
(including options granted during the year ended March 29, 2003) is
included in the tables following this report. In determining the number of
options granted to individual executives during the fiscal year ended March
29, 2003, the Committee made a subjective assessment of the executive's
past and potential contributions to the financial and operational
performance of the business unit directed by the executive, and the
executive's potential for advancement. The Committee, in arriving at the
number of options to be granted to individual executives, was aware of
whether or not such executives had been granted options in the past, as
well as the compensation practices of peer group companies. The vesting of
options granted during the year ended March 29, 2003 is not dependent upon
the achievement of predetermined performance goals. Nevertheless, the
amount realized by a recipient from an option grant will depend on the
future appreciation in the price of the Company's Common Stock.
The view of investors generally regarding the form and size of long-
term incentives for senior executives is changing. During the fiscal year,
the Company undertook a comprehensive review of its practice in this area
to bring it more in line with developing shareholder expectations. As a
result, the Company has decided to make the following changes commencing
with fiscal year 2004:
9
1. While continuing to support its policy of granting stock
options broadly to employees, the Company intends to do this
more selectively and has adopted a burn-rate program to better
manage the number of options granted to senior executives and
other employees in any one year.
2. Stock option awards for senior executives will include a
performance measure in which vesting of options is tied to pre-
determined performance measures.
3. In order to align the interests of senior executives and Board
members more closely with those of shareholders, stock
ownership guidelines will be implemented in fiscal year 2004,
specifying the number of shares each executive or Board member
will be expected to own.
The use of restricted stock as a component of the Company's long-term
incentive program is not possible under existing shareholder-approved
plans. The Company will consider including this additional alternative in
any future long-term incentive plans submitted for shareholder approval.
In 1993 the Internal Revenue Code was amended to limit the deduction
a public company is permitted for compensation paid in 1994 and thereafter
to the chief executive officer and to the four most highly compensated
executive officers, other than the chief executive officer. Generally,
amounts paid in excess of $1.0 million to a covered executive, other than
performance-based compensation, cannot be deducted. In order to qualify as
performance-based compensation under the new tax law, certain requirements
must be met, including approval of the performance measures by the
stockholders. In its deliberations, the Committee considers ways to
maximize deductibility of executive compensation, but nonetheless retains
the discretion to compensate executive officers at levels the Committee
considers commensurate with their responsibilities and achievements. The
Company has not adopted a policy that all executive compensation be fully
deductible.
Compensation of Chief Executive Officer
With the approval of the Compensation Committee in May 2002, Mr.
Peterson received a salary for the fiscal year ended March 29, 2003 of
$587,152. The Committee granted Mr. Peterson new options to purchase
100,000 shares of the Company's Common Stock during the fiscal year ended
March 29, 2003. No bonus was awarded for the fiscal year ended March 29,
2003.
On March 28, 2003, Mr. Peterson retired as President and Chief
Executive Officer and resigned from the Board. He has continued as an
employee for a period which will end September 30, 2003 to assist the
Company in the transition to new leadership. The transitional arrangement
with Mr. Peterson is governed by a written employment agreement under which
Mr. Peterson will serve as a part-time employee at a rate of compensation
of $2,500 for each day worked but in no event in excess of $187,500. During
the term of his employment, Mr. Peterson will receive such benefits as are
generally made available to the Company's full-time employees including
health, life and disability insurance, reasonable travel expenses incurred
while engaged in Company business and participation to the
10
extent eligible in the defined contribution plan maintained by Haemonetics
SA. In fiscal year 2004, Mr. Peterson will be eligible for repatriation
benefits in connection with his return to Switzerland and in accordance
with the Company's Temporary International Assignment Policy.
Mr. Brad Nutter was appointed President and CEO of Haemonetics and
elected to the Board effective April 1, 2003. The terms of his appointment
include an annual base salary of $500,000, eligibility for a bonus to a
maximum of $250,000 at 100% performance against agreed Board objectives and
300,000 options vested over four years starting March 31, 2004.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
Sir Stuart Burgess, Chairman
Ronald G. Gelbman
Benjamin L. Holmes
N. Colin Lind
Donna C.E. Williamson
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During the fiscal year ended March 29, 2003 the members of the
Compensation and Management Development Committee were Sir Stuart Burgess,
Chairman, Ronald G. Gelbman, Benjamin L. Holmes, N. Colin Lind and Donna
C.E. Williamson. No member of the Compensation Committee was an officer or
employee of the Company or any of its subsidiaries during fiscal year 2003.
11
EXECUTIVE COMPENSATION
The following table sets forth all compensation earned by the
Company's Chief Executive Officer, four executive officers of the Company
(other than the Chief Executive Officer), and one former executive officer
whose total annual salary and bonus exceeded $100,000 for all services
rendered as executive officers to the Company and its subsidiaries for the
Company's fiscal years ended March 29, 2003, March 30, 2002 and March 31,
2001.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
---------------------------------------------------------
Awards
Other -------
Name and Annual Stock All Other
Principal Position Year Salary(2) Bonus(2) Compensation Options Compensation(6)
Brad Nutter(1)
President & CEO
James L. Peterson(3) 2003 $587,152 $ -0- $ 182,128(4) 100,000 $70,662(5)
Former President 2002 $487,306 $421,348 $ 295,464(4) - $82,800(5)
& CEO 2001 $438,854 $301,398 $ 198,764(4) 280,000 $78,900(5)
Ronald J. Ryan 2003 $296,373 $ -0- $ 12,126(7) 22,000 $ 6,000
CFO & Sr. Vice 2002 $287,717 $184,114 $ 11,964(7) 13,520 $ 6,000
President 2001 $281,560 $ 60,475 $ 9,504(7) 19,174 $ 6,000
Stephen C. Swenson 2003 $276,660 $ -0- $ 252,525(8) 25,000 $ 6,000
Executive Vice Presi- 2002 $260,000 $129,232 $ 67,659(8) -
dent, Vice President, 2001 $ 85,000(8) $ 25,000(8) $ 33,142(8) 100,000
Worldwide Sales
Thomas Headley 2003 $246,000 $ -0- $ 189,605(9) 10,000 $ 6,000
Executive Vice Presi- 2002 $244,707 $ 73,584 $ 9,542(9) 19,220 $ 6,000
dent, Research and 2001 $230,055(9) $ 35,543(9) $1,023,422(9) 70,000 $ 3,450
Development
Robert Ebbeling 2003 $257,599 $ -0- $ 9,787(10) 22,000 $ 6,000
Executive Vice Presi- 2002 $242,083 $133,686 $ 9,586(10) 10,000 $ 6,000
dent 2001 $234,528 $ 13,141 $ 9,537(10) 19,927 $ 6,000
Timothy Surgenor(11) 2003 $222,183 $ -0- $ 16,122(11) 25,000 $ 6,000
Former Executive Vice 2002 $275,627 $139,130 $ 8,940(11) - $ 6,000
President 2001 $260,000 $ 50,000 $ 8,940(11) 19,453
(footnotes on following page)
12
(1) Hired effective April 1, 2003. During the fiscal year ended March
29, 2003, no compensation was paid to Mr. Nutter.
(2) Salary and bonus amounts are presented in the year earned. The
payment of such amounts may have occurred in other years. No bonus
payments were earned by the executive officers of the Company during
fiscal 2003.
(3) Mr. Peterson retired from his position as President and CEO effective
March 28, 2003. The foregoing table includes his compensation for the
full fiscal year ended March 29, 2003. At the time of his appointment
to the position of CEO, we agreed to pay Mr. Peterson for the
incremental tax burden that was imposed due to his required
international relocation to Massachusetts, in accordance with our
International Temporary Assignment Policy for all expatriates. We
refer to these payments as tax equalization payments, and include
them in the Other Annual Compensation column in the preceding table
in the period they are paid. These payments have not been made for
his calendar year 2002 and calendar year 2003 tax returns, but will
be made when Mr. Peterson finalizes his personal tax returns for the
respective periods. We estimate that these amounts will be
approximately $250,000 for calendar year 2003 and $600,000 for
calendar year 2002.
(4) Includes amounts paid to Mr. Peterson for tax equalization payments,
a housing allowance, reimbursement for certain home travel, and
payments for certain administrative services, including the
preparation of his personal income tax returns, which benefits were
offered to Mr. Peterson in connection with his appointment as CEO and
the resultant relocation to Massachusetts. Also included is an
automobile allowance. Tax equalization payments made or (received)
were ($13,866) in 2003, $160,974 in 2002, and $75,799 in 2001. The
housing allowances paid were $33,801 in 2003, $43,884 in 2002, and
$48,057 in 2001. Payments for home travel and final repatriation were
$64,396 in 2003, $27,478 in 2002, and $13,644 in 2001. Amounts paid
for administrative services were $64,681 in 2003, $36,630 in 2002,
and $35,915 in 2001.
(5) Amounts contributed on Mr. Peterson's behalf to a defined
contribution plan maintained by our Swiss subsidiary, Haemonetics SA,
for the benefit of all of its employees, including expatriates
currently working for the Company in other jurisdictions.
(6) Includes matching contributions made by the Company under its 401(k)
Plan: (i) in 2003: $6,000 for each Mr. Ryan, Mr. Swenson, Mr.
Headley, Mr. Ebbeling and Mr. Surgenor (ii) in 2002: $6,000 for each
Mr. Ryan, Mr. Headley, Mr. Ebbeling and Mr. Surgenor (iii) in 2001:
$6,000 for each Mr. Ryan and Mr. Ebbeling, for Mr. Headley $3,450.
(7) Includes an auto allowance paid to Mr. Ryan of $8,561 in 2003, $8,400
in 2002, and $6,850 in 2001.
(8) Mr. Swenson was hired effective December 5, 2000. Includes certain
benefits offered to Mr. Swenson at the time of his hiring and his
required relocation to Massachusetts. He relocated from an area where
the cost of living, especially the purchase of a primary residence,
was much lower than Massachusetts. The Company advanced $500,000 to
Mr. Swenson during fiscal year 2002 to assist with the purchase of a
primary residence. The loan, dated December 10, 2001, is forgivable
over five years at $100,000 per year provided Mr. Swenson is an
active employee of the Company. In the event of Mr. Swenson's
termination, the loan balance is due and payable within six months.
The loan is non-interest bearing. During fiscal 2003, the first
scheduled forgiveness of
(footnotes continued on following page)
13
$100,000 was earned. Amounts paid for relocation expenses were
$141,641 in 2003, $56,401 in 2002, and $29,494 in 2001. Also includes
auto allowances of $8,561 in 2003, $8,400 in 2002, and $2,800 in
2001.
(9) From April 2, 2000 through September 17, 2000, Mr. Headley was
compensated as an employee of Transfusion Technologies Corporation.
Effective September 18, 2000 with the acquisition of Transfusion
Technologies Corporation by the Company, Mr. Headley began receiving
his compensation as an employee of the Company. At the time of his
employment with the Company in 2001 Mr. Headley received a one-time
payment of $1,019,004 in connection with joining the Company. In
addition, after two years of continued employment in 2003, Mr.
Headley received a stay bonus, negotiated at the time of his initial
employment, of $179,824. Also includes auto allowances of $8,561 in
2003, $8,400 in 2002, and $4,200 in 2001.
(10) Includes an auto allowance paid to Mr. Ebbeling of $8,561 in 2003,
and $8,400 in 2002 and 2001.
(11) Mr. Surgenor resigned as Executive Vice President effective December
31, 2002. The foregoing table includes his compensation earned
through the last day of his employment. Included in other annual
compensation are the following amounts paid for (i) auto allowances
$6,305 in 2003, and $8,400 in 2002 and 2001 and (ii) vacation payout
of $7,927 in 2003.
-------------------
The Company has employment agreements with each of its current named
executive officers which provide that they shall serve in the capacities
indicated in the executive compensation table at annual minimum base
salaries as follows: Brad Nutter, $500,000; Ronald J. Ryan, $250,000;
Steven C. Swenson, $260,000; Thomas Headley, $230,000; and Robert Ebbeling,
$210,000. Such officers also receive such fringe benefits as are generally
made available by the Company to its other full-time executive employees.
The agreements are terminable by either the Company or the officer
annually. In the event of a change in control of the Company, the
agreements provide that certain of the officers shall be entitled to lump
sum payments in varying amounts not in excess of 2.99 times the officer's
base salary plus incentive bonus, in some cases averaged over five years
preceding the calendar year in which the change in control occurs. In
addition, in the event that their employment is terminated in connection
with a change in control, the officers are entitled to certain employee
benefits during the one-year period commencing on the date such termination
occurs. In the event of the termination of their employment under certain
circumstances not involving a change in control, including termination of
their employment by the Company without cause or a material diminution of
their responsibilities, the agreements provide that the officers shall
receive a severance payment equal to their annual base salary as well as
certain employee benefits during the one-year period following such
termination. For purposes of the agreement the term change in control shall
be deemed to have occurred when any person becomes the beneficial owner
directly or indirectly of more than fifty percent of the combined voting
power of the Company's outstanding stock or the stockholders of the Company
approve a merger or consolidation of the Company with another corporation
or a plan of liquidation or an agreement for the sale or disposition of
substantially all of the Company's assets. The agreement also contains a
noncompete provision applicable for a period of one year following
termination of employment and provisions regarding preservation of the
confidentiality of Company information.
14
Option Grants in Fiscal Year Ended March 29, 2003
The following table provides information on option grants to the
executive officers of the Company listed in the Summary Compensation Table
above during the fiscal year ended March 29, 2003. Pursuant to applicable
regulations of the Securities and Exchange Commission, the table also sets
forth the hypothetical value which might be realized with respect to such
options based on assumed rates of stock appreciation of 5% and 10%
compounded annually from the date of grant to the end of the option term.
Individual Grants
---------------------------------------------------- Potential Realizable
Percentage of Value at Assumed
Number of Total Options Annual Rates of Stock
Securities Granted to Exercise Price Appreciation
Underlying Employees or Base for Option Term(3)
Options in the Fiscal Price Expiration -------------------------------
Granted Year 2003 Per Share Date 5% 10%
-----------------------------------------------------------------------------------------
James L. Peterson 100,000(1) 12.57 $31.66 4/29/2012 $1,991,080.39 $5,045,788.63
Ronald J. Ryan 22,000(2) 2.77 $31.66 4/29/2012 $ 438,037.69 $1,110,073.50
Stephen C. Swenson 25,000(2) 3.14 $31.66 4/29/2012 $ 497,770.10 $1,261,447.16
Thomas D. Headley 10,000(2) 1.26 $31.66 4/29/2012 $ 199,108.04 $ 504,578.86
Robert B. Ebbeling 22,000(2) 2.77 $31.66 4/29/2012 $ 438,037.69 $1,110,073.50
Timothy Surgenor 25,000(2) 3.14 $31.66 4/29/2012 $ 497,770.10 $1,261,447.16
- -------------------
(1) Options vested 100% on 3/31/2003.
(2) Options vest at the rate of 25% per year over the four years
following the grant date (except in the case of death, termination or
retirement).
(3) These values are based on assumed rates of appreciation only. Actual
gains, if any, on shares acquired on option exercises are dependent
on the future performance of the Company's Common Stock. There can be
no assurance that the values reflected in this table will be
achieved. On May 15, 2003 the closing price of the Company's Common
Stock on the New York Stock Exchange was $19.00.
15
Aggregated Option Exercises in Fiscal Year
Ended March 29, 2003 and Option Values at March 28, 2003
The following table provides information on the value of unexercised
options held by the executive officers listed in the Summary Compensation
Table above at March 28, 2003.
Number of Unexercised Value of Unexercised
Shares Options at March 28, 2003 Options at March 28, 2003(1)
Acquired Value ------------------------------------------------------------
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------------------------------------------------------
James L. Peterson 88,313 $664,007.81 791,687 100,000 $3,064,383.25 $ 0
Ronald J. Ryan 0 $ 0 160,937 40,265 $ 806,136.79 $54,886.56
Stephen C. Swenson 0 $ 0 50,000 75,000 $ 0 $ 0
Thomas D. Headley 0 $ 0 74,805 24,415 $ 0 $ 0
Robert B. Ebbeling 0 $ 0 82,006 32,125 $ 332,272.44 $18,489.71
Timothy Surgenor 0 $ 0 135,877 0 $ 0 $ 0
- -------------------
(1) Value of unexercised stock options represents difference between the
exercise prices of the stock options and the closing price of the
Company's Common Stock on the New York Stock Exchange on March 28,
2003, which was $22.45.
16
COMPARATIVE PERFORMANCE GRAPH
The following performance graph compares the cumulative total
shareholder return for the period commencing March 31, 1998 through March
31, 2003 among the Company, the S&P 500 Index and the S&P 500 Health Care
(Health Care Equipment) Index. The graph assumes one hundred dollars
invested on March 31, 1998 in the Company's Common stock, the S&P 500 index
and the S&P 500 Health Care (Health Care Equipment) Index and also assumes
reinvestment of dividends.
3/31/98 3/31/99 3/31/00 3/31/01 3/31/02 3/31/03
--------------------------------------------------------------
Haemonetics Corporation $100 87 125 185 177 122
S&P 500 $100 118 140 109 110 83
S&P 500 Health Care (Equipment) Index $100 129 136 139 152 138
17
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify the
selection of Ernst & Young LLP, (E&Y) as independent public accountants to
examine the consolidated financial statements of the Company and its
subsidiaries for the fiscal year ending April 3, 2004. Representatives of
E&Y are expected to be present at the annual meeting, will have the
opportunity to make a statement if they desire to do so and are expected to
be available to respond to appropriate questions.
INDEPENDENT PUBLIC ACCOUNTANTS
On June 18, 2002, the Board of Directors, on the recommendation of
the Audit Committee, terminated the engagement of Arthur Andersen LLP
("Andersen") as the Company's independent public accountants and appointed
the firm of E&Y as its independent public accountants to examine the
financial statements of the Company and its subsidiaries for the fiscal
year ending March 29, 2003.
Andersen's reports on the Company's consolidated financial statements
for the years ended March 30, 2002 and March 31, 2001 did not contain an
adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or application of accounting
principles.
During the Company's fiscal years ended March 30, 2002 and March 31,
2001 and through the date of termination of the engagement, there were no
disagreements with Andersen on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure
which, if not resolved to Andersen's satisfaction, would have caused
Andersen to make reference to the subject matter of the disagreement in
connection with Andersen's report on the Company's consolidated financial
statements for such years; and there were no reportable events as listed in
Item 304(a)(1)(v) of Regulation S-K promulgated by the Securities and
Exchange Commission.
During the Company's fiscal years ended March 30, 2002 and March 31,
2001 and through the date of engagement, the Company did not consult E&Y
with respect to the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion
that E&Y might render on the Company's consolidated financial statements.
AUDIT COMMITTEE REPORT 1
The Audit Committee is comprised of three or more independent
directors, as determined by the Board, and operates under a written charter
adopted by the Board, (attached as Exhibit A).
- -------------------
1 The material in this report, including the audit committee charter,
is not "soliciting material," is not deemed filed with the Commission
and is not to be incorporated by reference in any filing of the
Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or
after the date hereof and irrespective of any general incorporation
language in any such filing.
18
Management is responsible for the Company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and
issuing a report thereon. The Audit Committee is responsible for overseeing
and monitoring the quality of the Company's accounting and auditing
practices.
In this context, the Audit Committee reviewed and discussed the
Company's audited financial statements for the fiscal year ended March 29,
2003 with management and with the Company's independent auditors.
Management represented to the Committee that the Company's consolidated
financial statements were prepared in accordance with generally accepted
accounting principles. Discussions about the Company's audited financial
statements included the auditor's judgments about the quality, not just the
acceptability, of the accounting principles, the reasonableness of
significant judgments and the clarity of disclosures in its financial
statements. The Committee also discussed with the auditors other matters
required by Statement on Auditing Standards, ("SAS") No. 61 "Communication
with Audit Committees," as amended by SAS No. 90, "Audit Committee
Communications."
The Company's auditors provided to the Committee written disclosures
required by the Independence Standards Board Standard No. 1 "Independence
Discussion with Audit Committees." The Committee discussed with the
auditors their independence from the Company, and considered the
compatibility of non-audit services with the auditor's independence.
Fees paid to the Company's independent auditors' firm for fiscal 2003
were comprised of the following:
Aggregate Audit Fees (for annual and quarterly reviews) $504,000
Audit Related Fees $ 19,000
Tax Fees $229,000
All Other Fees $ 15,000
Based on the Committee's discussion with management and the auditors,
and the Committee's review of the representations of management and the
report of the auditors to the Committee, the Committee recommended to the
Board that that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the year ended March 29, 2003
filed with the Securities and Exchange Commission.
AUDIT COMMITTEE
Benjamin L. Holmes, Chairman
Sir Stuart Burgess
Ronald G. Gelbman
Ronald A. Matricaria
Donna C.E. Williamson
19
STOCKHOLDER PROPOSALS
Any proposal submitted for inclusion in the Company's Proxy Statement
and form of proxy relating to the 2004 Annual Meeting of Stockholders must
be received at the Company's principal executive offices in Braintree,
Massachusetts on or before February 24, 2004. In accordance with the
provisions of Rule 14a-4(c) promulgated under the Securities Exchange Act
of 1934, if the Company does not receive notice of a shareholder proposal
to be raised at its 2004 Annual Meeting on or before May 9, 2004, then in
such event, the management proxies shall be allowed to use their
discretionary voting authority when the proposal is raised at the 2004
Annual Meeting.
OTHER MATTERS
Management knows of no matters which may properly be and are likely
to be brought before the meeting other than the matters discussed herein.
However, if any other matters properly come before the meeting, the persons
named in the enclosed proxy will vote in accordance with their best
judgment.
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all
proposals specified. Proxies will be voted as specified. If signed proxies
are returned without specifying an affirmative or negative vote on any
proposal, the shares represented by such proxies will be voted in favor of
the Board of Directors' recommendations.
By Order of the Board of Directors
/s/ Alicia R. Lopez
Alicia R. Lopez
Clerk
Braintree, Massachusetts
June 23, 2003
20
Exhibit A
HAEMONETICS CORPORATION
CHARTER AND POWERS OF THE AUDIT COMMITTEE
I. PURPOSE
The Audit Committee (the "Committee") has been appointed by the Board
of Directors (the "Board") to provide general oversight of the Company's
financial reporting and disclosure practices, system of internal controls,
and the Company's processes for monitoring compliance by the Company with
Company policies. While the Committee has the powers and duties set forth
in this Charter, it is not the responsibility of the Committee to plan or
conduct audits or to determine that the Company's financial statements are
complete and accurate and are in accordance with generally accepted
accounting principles. Nor is it the duty of the Committee to conduct
investigations, to resolve disagreements, if any, between management and
the independent accountants or to assure compliance with Company policies.
In performing its functions, it is the responsibility of the Committee to
endeavor to facilitate free and open communication among the independent
accountants, the internal auditors, the Board and the Company's management.
II. COMPOSITION
The Committee shall be comprised of three or more directors, as
determined by the Board, each of whom shall be independent and financially
literate, and at least one of whom shall have accounting or related
financial management expertise, all as prescribed in the requirements
adopted from time to time by the New York Stock Exchange.
III. RESPONSIBILITIES
In carrying out its oversight responsibilities the Committee shall:
Review this Charter at least annually.
1. Meet as frequently as circumstances require (generally four
times per year). The Committee may ask members of management or
others to attend meetings and provide pertinent information as
necessary.
2. Create an agenda for the ensuing year.
A-1
3. Review the performance of the independent accountants and make
recommendations to the Board of Directors annually regarding
the appointment or termination of the independent accountants.
The independent accountants shall ultimately be accountable to
the Board and the Committee, as representatives of the
shareholders; and the Board, after considering the
recommendation of the Committee, shall have the ultimate
authority and responsibility to select, evaluate and, where
appropriate, replace the independent accountants.
4. Confer with the independent accountants and the internal
auditors concerning the scope of their examinations of the
books and records of the Company and its subsidiaries; review
and approve the independent accountants' annual engagement
letter; review and approve the Company's internal audit
charter, annual audit plans and budgets; direct the special
attention of the auditors to specific matters or areas deemed
by the Committee or the auditors to be of special significance;
and authorize the auditors to perform such supplemental reviews
or audits as the Committee may deem desirable.
5. Review with management, the independent accountants and
internal auditors significant risks and exposures (and assess
the steps management has taken to minimize such risks), audit
activities and significant audit findings.
6. Review and discuss with the independent accountants their
annual written statement delineating all relationships between
the independent accountants and the Company, consistent with
Independence Standards Board Standard No. 1, including in
particular the range and cost of audit and non-audit services
performed by the independent accountants; and actively engage
in a dialogue with the independent accountants with respect to
any disclosed relationships or services, including non-audit
services, that may impact the objectivity and independence of
the independent accountants and recommend that the Board take
appropriate action in response to the independent accountants'
report to satisfy itself of the independent accountants'
independence.
7. Review, in consultation with the independent accountants, the
integrity of the Company's financial reporting processes, both
internal and external.
8. Review the Company's audited annual financial statements and
the independent accountants' opinion rendered with respect to
such financial statements. In reviewing the Company's audited
annual financial statements, the Committee shall confer with
the Company's independent accountants, management and internal
auditors and consider the following:
A-2
* The accounting policies of the Company which may be
viewed as critical; the nature and extent of any
significant changes in accounting principles or the
application thereof; significant judgment areas;
significant risks and exposures and the steps management
have taken to minimize such risks to the Company.
* The independent accountants' judgments on the quality,
appropriateness and consistent application of the
Company's accounting principles, disclosures and
underlying estimates in the financial statements.
* The nature of any off-balance sheet structures, including
financing arrangements, and their potential impact on the
Company and its financial statements.
* The effectiveness and adequacy of the Company's internal
auditing procedures and systems of internal control,
including computerized information system controls and
security and internal controls and procedures relating to
executive travel and entertainment.
* The annual report from management assessing the Company's
internal controls.
* The recommendations of the independent accountants and
internal auditors regarding internal controls and other
matters relating to the accounting procedures and the
books and records of the Company and its subsidiaries,
including review of the correction of controls deemed to
be deficient.
* Adequacy of internal controls to expose any payments,
transactions or procedures that might be deemed illegal
or otherwise improper.
* The terms and effects of any transactions with parties
related to the Company which are significant in size or
which involve terms or other aspects which differ from
those which would likely be negotiated with an
unaffiliated third party and which are material to an
understanding of the Company's financial statements.
* Any comments and recommendations of the independent
accountants, including any serious difficulties or
disputes with management encountered during the course of
the audit.
A-3
9. Prior to any public announcement, discuss with the independent
accountants and financial management quarterly financial
results and the results of the independent accountants' review,
including the independent accountants' judgments on the quality
and consistent application of the Company's accounting
principles, disclosures and underlying estimates in the
quarterly financial statements, significant adjustments,
management judgments and accounting estimates, significant new
accounting policies, and disagreements with management and
whether these factors have affected the quality of the
Company's financial reporting. Discussion may be with the
Committee as a whole or a member designated by the Chairman, in
person or by telephone conference call.
10. Discuss with the independent accountants the matters required
to be discussed by Statement on Auditing Standards No. 61
relating to the conduct of the audit.
11. Make a recommendation to the Board as to whether the audited
financial statements should be included in the Company's Annual
Report on Form 10-K.
12. Provide any recommendation, certifications and reports that may
be required by the New York Stock Exchange or the Securities
and Exchange Commission. The report required by the Securities
and Exchange Commission to be included in the Company's annual
proxy statement shall affirm that the Committee is governed by
a charter and has (i) reviewed and discussed the audited
financial statements with management, (ii) discussed with the
independent accountants the matters required to be discussed by
SAS 61, (iii) receive the written disclosures and the letter
from the independent accountants required by Independent
Standards Board Standard No. 1 and has discussed with the
independent accountants the independent accountants'
independence, including the compatibility of non-audit services
with the accountant's independence, and (iv) recommended to the
Board that the audited financial statements be included in the
Company's Annual Report on Form 10-K.
13. Review with appropriate Company personnel, including the
General Counsel, the actions taken to ensure compliance with
the Company's Code of Conduct and the results of confirmations
and violations of such Code.
14. Review the programs and policies of the Company designed to
ensure compliance with Company policies.
A-4
15. Review the procedures established by the Company that monitor
the compliance by the Company with its loan and indenture
covenants and restrictions.
16. Meet periodically with the independent auditors, the Director
of Internal Audit and management in separate executive sessions
to discuss any matters that the Committee or these groups
believe should be discussed privately with the Committee, such
as the independent auditors' evaluation of the Company's
financial, accounting, and auditing personnel, the cooperation
that the independent accountants received during the course of
the audit and time pressures the independent accountants may be
experiencing.
17. Review accounting and financial human resources and financial
succession planning within the Company.
18. Report through its Chairman to the Board of Directors following
the meeting of the Committee.
19. Maintain minutes or other records of meetings and activities of
the Committee.
20. Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities that it determines
appropriate. The Committee shall be empowered to retain
independent counsel, accountants, or others to assist it in the
conduct of any investigation.
21. Consider such other matters in relation to the financial
affairs of the Company and its accounts, and in relation to the
internal and external audit of the Company as the Committee
may, in its discretion, determine to be advisable.
Periodically self-assess the financial and other qualifications of
Committee members against those skills needed to fulfill its roles and
responsibilities. Develop and implement a plan to address any skill gaps.
A-5
REVOCABLE PROXY
HAEMONETICS CORPORATION
PLEASE MARK VOTES
AS IN THIS EXAMPLE
Annual Meeting of Stockholders
July 22, 2003
The undersigned hereby appoints Ronald A. Matricaria and Lisa Lopez, with
full power of substitution, attorneys and proxies to represent the
undersigned at the Annual Meeting of Stockholders of Haemonetics
Corporation to be held Tuesday, July 22, 2003 at State Street Bank
Building, 225 Franklin Street, Boston, Massachusetts and at any adjournment
or adjournments thereof, to vote in the name and place of the undersigned
with all the power which the undersigned would possess if personally
present, all of the stock of Haemonetics Corporation standing in the name
of the undersigned, upon such business as may properly come before the
meeting, including the following as set forth hereon.
Please be sure to sign and date this Proxy in the box below. Date
- ---------------------------------------------------------------------------
| | | |
| | | |
- ---------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
1. ELECTION OF DIRECTORS: With- For All
For hold Except
Ronald G. Gelbman [ ] [ ] [ ]
Brad Nutter [ ] [ ] [ ]
Ronald Matricaria [ ] [ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
2. To ratify the selection by the Board of Directors of Ernst & Young
LLP as independent public accountants for the current fiscal year.
[ ] For [ ] Against [ ] Abstain
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. ANY PROXY
HERETOFORE GIVEN BY THE UNDERSIGNED WITH RESPECT TO SUCH STOCK IS HEREBY
REVOKED. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AS SET FORTH IN THE
PROXY STATEMENT.
Please sign exactly as your name(s) appear(s) on the Proxy. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name
by authorized person.
Detach above card, sign, date and mail in postage paid envelope provided.
HAEMONETICS CORPORATION
PLEASE DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED ABOVE AND RETURN IT
IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON.
If your address has changed, please correct the address in the space
provided below and return this portion with the proxy in the envelope
provided.