SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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|_| Preliminary Proxy Statement |_| Soliciting Material Under Rule
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
Haemonetics Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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|X| No fee required.
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HAEMONETICS CORPORATION
Notice of Annual Meeting of Stockholders
July 27, 2004
To the Stockholders:
The Annual Meeting of our Stockholders will be held on Tuesday, July 27, 2004 at
9:00 a.m. at our Corporate Offices located at 400 Wood Road, Braintree,
Massachusetts for the following purposes:
1. To elect two Directors as more fully described in the accompanying
Proxy Statement.
2. To ratify the selection of Ernst & Young LLP as independent public
accountants for fiscal year 2005.
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 10, 2004 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 18, 2004
HAEMONETICS CORPORATION
PROXY STATEMENT
Table of Contents
Page Number
General Information .................................................. 2
Board of Directors ................................................... 4
Election of Board of Directors ....................................... 7
Security Ownership of Certain Beneficial Owners and Directors
and Executive Officers ............................................... 10
Compensation and Management Development Committee Report
Report on Executive Compensation ..................................... 12
Compensation and Management Development Committee Interlocks
And Insider Participation ............................................ 14
Comparative Performance Graph ........................................ 18
Ratification of the Appointment of Independent Public
Accountants .......................................................... 18
Audit Committee Report ............................................... 19
Additional Information ............................................... 21
Exhibit A- Audit Committee Charter
1
HAEMONETICS CORPORATION
PROXY STATEMENT
GENERAL INFORMATION
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 (the "Meeting") to be held on Tuesday, July
27, 2004 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 18, 2004.
Voting
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.
Quorum
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.
Solicitation of Proxies
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.
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Record Date and Voting Securities
Only stockholders of record at the close of business on June 10, 2004 are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding and entitled to vote 25,173,834 shares of Common Stock with a par
value of $.01 per share. Each outstanding share entitles the record holder to
one vote.
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BOARD OF DIRECTORS
During the last fiscal year, there were five regular meetings 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. All directors are
strongly encouraged to attend the annual meeting of stockholders. All directors
except one attended the 2003 annual meeting of stockholders.
Directors, who are not employees of the Company, with the exception of the
Chairman of the Board, receive an annual cash fee of $24,000, as well as a fee
of $1,000 for each Board meeting attended($500 if a telephone meeting)and a fee
of $500 for each Committee meeting attended($300 if a telephone meeting). In
addition, Directors other than the Chairman of the Board who Chair Board
Committees receive an annual retainer of $4,000. Directors also receive an
annual grant of options to purchase 6,000 shares of Common Stock of the Company.
Upon their initial election to the Board, Directors receive, in addition, an
option to purchase 20,000 shares of the Company's Common Stock. Prior to July,
2003, the annual fee received by Directors was $20,000, no fees were paid for
attendance at meetings or for serving as Chair of committees, and directors
received an initial grant of options to purchase 6,000 shares of Common Stock
upon joining the Board. The options for the purchase of 6,000 shares of common
stock of the Company granted to Directors during fiscal 2004 were at an exercise
price of $22.56 per share. Upon his initial election as a director in August
2003, Lawrence C. Best received a grant of options to purchase 20,000 shares of
Common Stock of the Company at an exercise price of $20.47 per share. During
fiscal 2004, Ronald Matricaria received an annual fee as Chairman of the Board
in the amount of $200,000 and was granted an option to purchase 100,000 shares
of Common Stock of the Company at an exercise price of $21.91 per share. Options
granted to the directors and to the Chairman vest immediately. Harvey G. Klein,
M.D., received a cash fee of $22,500 for service on the Company's
Scientific/Medical Advisory Committee, which updates management on important
issues in transfusion medicine. Dr. Klein's membership on the
Scientific/Advisory Committee ended at the end of fiscal year 2004.
Executive Sessions
Executive sessions of the non-management directors (all of whom are independent)
are generally held at the end of the board meetings. Ronald A. Matricaria,
Chairman of the Board of Directors, presides over all such executive sessions.
Communications with the Board of Directors
Stockholders may communicate with the Board of Directors or any individual
director by sending such communications to the attention of the Clerk of the
Board of Directors, Alicia R. Lopez, who will forward all such communications to
the Board. Communication may also be sent via the Company's website:
www.haemonetics.com/site/content/investor/investor.asp
Corporate Governance Principles and Board Matters
The Company's Code of Business Conduct, Governance Guidelines and the charters
of the Audit, Compensation and the Nominating and Governance committees may be
viewed on the Company's website under the Investors Section at
www.haemonetics.com/site/content/investor/investor.asp and printed copies can be
obtained by contacting the Company's Clerk at the Company's headquarters.
4
Board Independence
The Board has determined that each of the directors, other than Mr. Nutter and
Dr. Sakurada, has no material relationship with the Company and are independent
within the meaning of the Securities and Exchange Commission and the New York
Stock Exchange director independence standards currently in effect.
Committees of the Board
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. Currently, the members of the Compensation Committee
are Ronald G. Gelbman, Chairman, Harvey Klein 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. Currently, the members of the Audit
Committee are Benjamin L. Holmes, Chairman, Lawrence C. Best, Ronald G. Gelbman,
Ronald A. Matricaria 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 Audit Committee is directly
responsible for the appointment and termination (subject to shareholder
ratification) and the compensation of the independent auditors. The Committee
reviews with the Company's independent auditors the scope of the audit for the
year and the results of the audit when completed. The Audit Committee also
reviews with internal audit various matters relating to internal accounting
controls. During the last fiscal year, there were eight 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. Currently, the
members of the Nominating and Governance Committee are Ronald A. Matricaria,
Chairman, Benjamin L. Holmes and, Harvey Klein. 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. Other responsibilities of the Nominating and Governance Committee
include recommending to the Board a set of corporate governance principles
applicable to the Company and periodically reviewing such guidelines and
recommending appropriate changes as applicable. During the last fiscal year,
there were two regular meetings of the Nominating and Governance Committee.
The Nominating and Governance Committee will review and evaluate all Director
nominations in the same manner. Stockholders who wish to submit candidates for
consideration as nominees may submit an appropriate letter and resume to the
Clerk of the Company at the Company's executive offices in Braintree,
Massachusetts.
When identifying Director nominees, the Nominating and Governance Committee will
consider the following minimum criteria:
o The nominee's reputation, integrity, independence of thought and
judgment, financial sophistication, leadership and (for NYSE and SEC
purposes) independence;
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o The nominee's skills and business, personal and professional
accomplishments, government or other professional experience and
acumen, bearing in mind the composition of the Board and the current
state of the Company and the markets in which the Company is active
at the time;
o The number of other public companies for which the nominee serves as
a director;
o The extent to which the nominee is prepared to participate fully in
Board activities, including at least one Board committee and
attendance at, and active participation in, meetings of the Board
and the committee(s) of which he or she is a member, and not have
other personal or professional commitments that would, in the
judgment of the Nominating and Governance Committee, interfere with
or limit his or her ability to do so;
o The extent to which the nominee helps the Board reflect the
diversity and interests of the Company's stockholders, employees,
customers and communities;
o The willingness of the nominee to meet the Company's stock ownership
requirements for Directors;
o The nominee's knowledge of one or more segments of the Company's
business; and
o The nominee's commitment to increasing stockholder value in the
Company.
In the case of current Directors being considered for re-nomination, the
Nominating and Governance Committee will also take into consideration the
Director's history of attendance at Board and committee meetings, the Director's
tenure as a member of the Board and the Director's preparation for and
participation in such meetings.
Director Nomination Process
The Company's nomination process for new Board members is as follows:
o The Nominating and Governance Committee, the Chairman of the Board,
the Chief Executive Officer, or other Board member identifies a need
to add a new Board member who meets specific criteria or to fill a
vacancy on the Board.
o The Nominating and Governance Committee initiates a search seeking
input from Board members and senior management and hiring a search
firm, if necessary.
o The Nominating and Governance Committee considers recommendations
for nominees for directorships submitted by stockholders.
o The initial slate of candidates that will satisfy specific criteria
and otherwise qualify for membership on the Board, are identified
and presented to the Nominating and Governance Committee, or its
delegate, which ranks the candidates.
o The Chairman of the Board and at least one member of the Nominating
and Governance Committee interviews top candidates.
o The full Board is kept informed of progress.
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o The Nominating and Governance Committee may offer other Board
members the opportunity to interview the candidates and then meets
to consider and approve the final candidates.
o The Nominating and Governance Committee seeks full Board endorsement
of the final candidates.
o The final candidates are nominated by the Board or elected to fill a
vacancy.
Item 1. Election of Board 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 and until
their successors shall be duly elected and qualified or until their death,
resignation or removal. The terms of Yutaka Sakurada, Harvey G. Klein, M.D. and
Donna C. E. Williamson are expiring at this annual meeting. It is proposed that
Dr. Klein be elected to serve a term of 3 years, ending in 2007 and that Dr.
Sakurada be elected to serve in the class of directors whose terms will expire
at the 2005 annual meeting. Ms. Williamson is leaving the Board after 11 years
of dedicated service as a Director of the Company. 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
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Nominated for a term ending in 2005:
Yutaka Sakurada 71(1) 1991 Since 2003, President Japan/Asia and Chief Executive
Officer of Haemonetics Japan. From 2001 to 2002 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.
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(1) Recognizing the unique contribution to the Haemonetics Board of Directors
and current role of Dr. Yutaka Sakurada, Chairman and CEO of Haemonetics
Japan, the Board voted to waive the retirement age for Dr. Yutaka Sakurada
(currently age 71) to allow him to serve on the Board in the class of
directors whose term will expire in 2005.
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Nominated for a term ending in 2007;
Harvey G. Klein, M.D. 62 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 69 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.
Lawrence C. Best 54 2003 Since 1992, Senior Vice President and Chief Financial
Officer for Boston Scientific Corporation. From 1981 to
1992, partner at Ernst & Young specializing in serving
multinational companies in the high technology and life
sciences fields. From 1979 to 1981, Securities and
Exchange Commission Fellow. Previously served one-year
term as a White House-appointed Presidential Exchange
Executive. Director of Biogen Idec Inc., a publicly
traded biotechnology company.
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8
- --------------------------------------------------------------------------------------------------------------------------------
Serving a term ending in 2006:
Ronald G. Gelbman 57 2000 From 1998 to 2000, Johnson & Johnson Worldwide Chairman
of the Health Systems and Diagnostics Group and member
of the Executive Committee. Since 1972 various senior
level positions throughout the Johnson and Johnson
organization. Director of Serologicals Corporation, a
publicly traded company which provides biologics and
technology to life science companies. Also Director of
southwest Florida local Board of SunTrust Banks Inc.
Trustee at Rollins College, the Ringling School of Art &
Design, Sarasota YMCA and ODA College Preparatory
School. Member, Board of Advisors at privately-held
CareGain, a healthcare management company.
Ronald A. Matricaria 61 2002 Since April 2003 non-executive Chairman of the Company.
From 1995 to 2002, Chairman and from 1993 to 1999,
President and CEO of St. Jude Medical Inc. Previously,
Executive Vice President of the Pharmaceutical Division
and President of North American Operations for Eli Lilly
and Company, Inc. Director of the following publicly
traded companies: Cyberonics, Inc., a medical device
company; Endocare, Inc., a medical device company;
VistaCare, Inc., a provider of hospice services; and
Cardiodynamics, a medical technology company. Trustee
emeritus of the University of Minnesota Foundation. In
2002, Life Time Achievement award for significant
contributions to the healthcare industry.
Brad Nutter 52 2003 Since April 2003, President and CEO of the Company. In
2000, President and Chief Executive Officer, Gambro
Healthcare, an international dialysis services company,
a division of Gambro AB. From 1997 to 2000, Executive
Vice President and Chief Operating Officer of Syncor
International, Inc. a radiopharmaceuticals and medical
imaging company. Previously, senior positions at
American Hospital Supply and Baxter International, Inc.
9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 14, 2004, 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
- ------------------------ -------- -------------------- --------
Ronald A. Matricaria (1) ........................ Common Stock 87,000 0.34%
Brad Nutter (2) ................................. Common Stock 80,000 0.32%
Ronald J. Ryan (3) .............................. Common Stock 187,914 0.74%
Robert Ebbeling(4) .............................. Common Stock 122,785 0.49%
Alicia R. Lopez (5) ............................. Common Stock 141,901 0.56%
Yutaka Sakurada (6) ............................. Common Stock 82,074 0.33%
Ronald G. Gelbman (7) ........................... Common Stock 39,000 0.15%
Donna C.E. Williamson (8) ....................... Common Stock 61,300 0.24%
Benjamin L. Holmes (9) .......................... Common Stock 55,000 0.22%
Harvey G. Klein M.D. (10) ....................... Common Stock 49,000 0.19%
Lawrence C. Best (11) ........................... Common Stock 26,000 0.10%
Sterling Capital Management LLC (12) ............ Common Stock 1,725,116 6.86%
Wellington Management (13) ...................... Common Stock 2,632,150 10.46%
Cooke & Bieler LP. (14) ......................... Common Stock 1,884,651 7.49%
Neuberger & Berman Inc. (15) .................... Common Stock 2,877,267 11.44%
Vanguard Specialized Funds (16) ................. Common Stock 1,983,900 7.89%
All executive officers and directors
as a group (11 persons) (17) .................... Common Stock 931,974 3.59%
(1) Includes 62,000 shares that Mr. Matricaria has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
(2) Includes 75,000 shares that Mr. Nutter has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
(3) Includes 186,822 shares which Mr. Ryan has the right to acquire upon
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
(4) Includes 100,631 shares which Mr. Ebbeling has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
(5) Does not include 2,750 shares held in trust for the benefit of Ms. Lopez's
children. Ms.Lopez disclaims beneficial ownership of such shares. Includes
107,950 shares which Ms. Lopez has the right to acquire upon exercise of options
currently exercisable or exercisable within 60 days of May 14, 2004.
(6) Includes 79,858 shares which Dr. Sakurada has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
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(7) Consists of 39,000 shares which Mr. Gelbman has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60 days of
May 14, 2004.
(8) Includes 60,000 shares which Ms. Williamson has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60 days of
May 14, 2004.
(9) Includes 54,000 shares which Mr. Holmes has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
(10) Includes 48,000 shares which Dr. Klein has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
(11) Consists of 26,000 shares which Mr. Best has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days of May
14, 2004.
(12) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on January 9, 2004 reporting aggregate
ownership and shared voting and dispositive power over 1,725,116 shares. The
reporting entity's address is 4064 Colony Road, Suite 300, Charlotte, NC 28211.
(13) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 12,2004 reporting aggregate
ownership of and shared dispositive power over 2,632,150 shares and shared
voting power over 487,250 shares. The reporting entity's address is 75 State
Street, Boston, MA 02109.
(14) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 11, 2004 reporting aggregate
ownership of 1,884,651 shares, sole voting power and sole dispositive power over
669,120 shares, shared voting power over 784,091 shares and shared dispositive
power over 1,200,631 shares. The reporting entity's address is 1700 Market
Street, Philadelphia, PA 19103
(15) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 13, 2004 reporting aggregate
ownership of and shared dispositive power over 2,877,267 shares, sole voting
power over 118,076 shares and shared voting power over 2,054,700 shares. The
reporting entity's address is 605 Third Avenue, New York, NY 10158-3698.
(16) This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 5, 2004 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.
(17) Includes 839,261 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 14, 2004.
11
Compliance with Section 16(a) of the Securities Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires the
Company's directors, 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 except that a report of the acquisition on December 3,
2003 of 5,000 shares of the Company's common stock by Brian Concannon, an
executive of the Company,(which was brought to the Company's attention by Mr.
Concannon) was not timely filed.
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.
In its deliberations, the Committee takes into account the recommendations of
appropriate Company officials.
Compensation Program
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 stockholder interests and company
performance, the program utilizes a combination of salary, stock options and
cash bonuses awarded primarily for 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.
Base Salaries
In arriving at the base salaries paid to the Company's executives for the year
ended April 3, 2004, 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.
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(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.
12
Bonus Program
During the fiscal year ended April 3, 2004, the Company's executive bonus
program was tied primarily to the achievement by the Company of predetermined
earnings per share, operating income and revenue objectives. The Committee
determined to pay partial bonuses to executive management because although the
Company failed to reach the revenue and operating income targets, the Company
reached its earnings per share objective. The Committee considered that
management had achieved the earnings per share performance despite the mid-year
acquisition by a competitor of the Company's largest plasma customer that cost
the Company $7 million in revenue. For the fiscal year 2005, pre-determined
earnings per share, revenue and operating income objectives will continue to be
the primary bases for the payment of executive bonuses.
Incentive Plans
The Company's stock option program is intended to provide additional incentive
to build shareholder value, to reward long-term corporate performance, and to
promote employee commitment through stock ownership. Information with respect to
stock options held by executive officers is included in the tables following
this report.
The view of investors generally regarding the design and size and accounting for
long-term incentives for senior executives is changing. In FY03, the Company
began a comprehensive review of its practices in this area to bring them more in
line with developing shareholder expectations. The review is continuing, with
the assistance of outside consultants, as the regulatory and investment
community dynamics continue to be refined. In 2004, as a result of the review,
the Company adopted a program to better manage the number of options granted to
senior executives and other employees in any one year. In addition, in FY04 the
Committee decided not to grant stock options to employees until corporate
performance justified the reward of long term incentive compensation. As a
result, the total options granted this year as a percentage of total shares
outstanding decreased from 3.31% in 2003 to 2.43% in 2004, and the total
outstanding options and options available for grant as a percentage of net
shares outstanding decreased from 24.8% in 2003 to 19.0% in 2004. Stock options
have been granted to individual executives for FY05. In determining the number
of options granted to individual executives, the Committee reviewed competitive
market data and the nature and scope of each executive position. The vesting of
options granted for FY05 is time vested over four years rather than dependent
upon the achievement of predetermined performance goals, which is a design
feature being considered by the Committee. 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 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.
Internal Revenue Code Limits on Deductibility of Certain Compensation
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 tax law, certain requirements must be met, including approval of the
performance measures by the
13
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
In recognition of Mr. Nutter's leadership and the Company's performance during
the fiscal year ended April 3, 2004, the Compensation and Management Development
Committee in May 2004 awarded Mr.Nutter a merit increase of 5%(which he declined
to accept) and a cash bonus of $225,000. The Committee also increased Mr.
Nutter's target bonus for the 2005 fiscal year to $350,000, tying payment of the
bonus primarily to pre-determined revenue, operating income and earnings per
share objectives.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
Ronald G. Gelbman, Chairman
Dr. Harvey Klein
Donna C.E. Williamson
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
During the fiscal year ended April 3, 2004 the members of the Compensation and
Management Development Committee were Sir Stuart Burgess (Chairman, who retired
effective July 22, 2003), Ronald G. Gelbman (who succeeded Sir Stuart as
Committee Chairman), Dr. Harvey Klein, Donna C.E. Williamson, Ronald A.
Matricaria (until July 2003) and Benjamin L. Holmes (until July 2003) and N.
Colin Lind (until July 2003). No member of the Compensation Committee was an
executive officer or employee of the Company or any of its subsidiaries during
fiscal year 2004.
EXECUTIVE COMPENSATION
The following table sets forth all compensation earned by the Company's Chief
Executive Officer and the Company's four most highly compensated executive
officers (other than the Chief Executive Officer for all services rendered as
executive officers to the Company and its subsidiaries for the Company's fiscal
years ended April 3, 2004, March 29, 2003 and March 30, 2002.
14
Summary Compensation Table
Annual Compensation Long-Term
------------------- Compensation
---------------------------
Other Awards
Annual Stock All Other
Name and Principal Position Year Salary (1) Bonus (1) Compensation Options Compensation (4)
- -------------------------------- ---------- --------- ------------ ------- ----------------
Brad Nutter (2) .............. 2004 $500,000 $225,000 $123,965(3) 300,000 $ -0-
President & CEO
Ronald J. Ryan ............... 2004 $306,014 $129,600 $ 12,171(5) -0- $ 6,000
CFO & Vice 2003 $296,373 $ -0- $ 12,126(5) 22,000 $ 6,000
President 2002 $287,717 $184,114 $ 11,964(5) 13,520 $ 6,000
Robert Ebbeling .............. 2004 $277,296 $103,400 $ 9,891(6) -0- $ 6,000
Vice President, Operations 2003 $257,599 $ -0- $ 9,787(6) 22,000 $ 6,000
2002 $242,083 $133,686 $ 9,586(6) 10,000 $ 6,000
Alicia R. Lopez .............. 2004 $291,490 $ 71,100 $ 9,310(7) -0- $ 6,000
General Counsel and Vice 2003 $282,070 $ -0- $ 6,572(7) 20,000 $ 6,000
President of Administration 2002 $288,515 $ 92,546 $ 10,107(7) 17,000 $ 6,000
Dr. Yutaka Sakurada (8) ...... 2004 $251,938 $124,611 $ 53,328(9) -0- $ 91,055
President Japan/Asia, 2003 $201,550 $ 82,834 $ 58,811(9) 10,000 $106,891
Chairman and CEO of 2002 $218,022 $130,124 $ 56,471(9) 10,000 $ 25,293
Haemonetics Japan
(1) Salary and bonus amounts are presented in the year earned. The payment of
such amounts may have occurred in other years.
(2) Mr. Nutter was hired effective April 1, 2003. During the fiscal year ended
March 29, 2003, no compensation was paid to Mr. Nutter.
(3) Includes relocation expenses of $116,555 paid on behalf of Mr. Nutter and an
automobile allowance of $6,167 paid to Mr. Nutter in 2004.
(4) Consists of $6,000 in matching contributions made by the Company under its
401(k) Plan for the years 2004, 2003 and 2002 for each Mr. Ryan, Mr. Ebbeling
and Ms. Lopez and consists of retirement contributions made by the Company on
behalf of Dr. Sakurada as follows: $91,055 in 2004, $106,891 in 2003 and $25,293
in 2002.
(5) Includes an auto allowance paid to Mr. Ryan of $8,400 in 2004, $8,561 in
2003, $8,400 in 2002.
(6) Includes an auto allowance paid to Mr. Ebbeling of $8,400 in 2004, $8,561 in
2003, and $8,400 in 2002.
(7) Includes an auto allowance paid to Ms. Lopez of $8,400 in 2004, $5,761 in
2003, and $9,250 in 2002.
(8) Dr. Sakurada is paid in Japanese Yen; therefore, we have translated his
compensation for all years presented to U.S. dollars using the average exchange
rate for fiscal year 2004.
(9) Includes the following amounts for a housing allowance for Dr. Sakurada: in
2004 $33,808, in 2003 $38,937 and in 2002 $38,937. Additionally, includes the
following amounts paid by the Company with respect to a company-owned vehicle
for Dr. Sakurada: in 2004 $14,277, in 2003 $14,374 and in 2002 $12,743.
15
----------------------------------------------------------
The Company has employment agreements with Brad Nutter, Ronald J Ryan, Robert
Ebbeling and Lisa Lopez 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; Robert Ebbeling,
$210,000 and Lisa Lopez $190,000. 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. 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 agreements a "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 agreements also
contain a non-compete provision applicable for a period of one year following
termination of employment and provisions regarding preservation of the
confidentiality of Company information.
Option Grants in Fiscal Year Ended April 3, 2004
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 April 3, 2004. 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
--------------------------------------------------------
Percentage
of
Total Potential Realizable
Options Value at Assumed
Number of Granted to Annual Rates of Stock
Securities Employees Exercise Price Appreciation
Underlying in the or Base for Option Term (3)
Options Fiscal Price Expiration
Granted Year 2004 Per Share Date 5% 10%
--------------------------------------------------------------------------------------------------
Brad Nutter 300,000 (1) 49.18 $21.91 3/31/2013 $4,133,724.38 $10,475,669.19
Ronald J. Ryan -- -- -- -- -- --
Robert B. Ebbeling -- -- -- -- -- --
Alicia R. Lopez -- -- -- -- -- --
Yutaka Sakurada -- -- -- -- -- --
(1) 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).
16
(2) 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 14, 2004 the closing
price of the Company's Common Stock on the New York Stock Exchange was $26.40.
Aggregated Option Exercises in Fiscal Year
Ended April 3, 2004 and Option Values at April 2, 2004
The following table provides information on the value of unexercised
options held by the executive officers listed in the Summary Compensation Table
above at April 2, 2004.
Number of Unexercised Value of Unexercised
Options at April 2, 2004 Options at April 2, 2004(1)
Shares
Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------------
Brad Nutter 0 $ 0 75,000 225,000 $ 709,500.00 $2,128,500.00
Ronald J. Ryan 0 $ 0 177,942 23,260 $2,330,157.69 $ 0
Robert B. Ebbeling 0 $ 0 92,631 21,500 $1,074,277.98 $ 0
Alicia R. Lopez 2,375 $8,300.62 98,700 23,500 $1,092,186.50 $ 0
Yutaka Sakurada 0 $ 0 74,858 12,500 $ 908,443.01 $ 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 April 2, 2004, which was $31.37.
17
COMPARATIVE PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholder return
for the period commencing March 31, 1999 through April 3, 2004 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, 1999 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.
[LINE GRAPH OMITTED]
Cumulative Total Return
-----------------------------------------------------------------
3/99 3/00 3/01 3/02 3/03 3/04
HAEMONETICS CORPORATION 100.00 143.43 211.00 202.33 139.28 200.48
S & P 500 100.00 117.94 92.38 92.60 69.67 94.14
S & P HEALTH CARE EQUIPMENT 100.00 105.07 107.39 117.57 107.33 150.31
Item 2. 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 32 2005. 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.
18
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
year ended March 30, 2002 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 year ended March 30, 2002 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 year; 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 year ended March 30, 2002 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 directors who meet the
applicable independence and experience requirements of the New York Stock
Exchange and the Securities and Exchange Commission as determined by the Board,
and operates under a written charter adopted by the Board (attached as Exhibit
A). The Board has determined that all audit committee members are financially
literate under the current listing standards of the NYSE. The Board also
determined that Lawrence Best qualifies as an "audit committee financial expert"
as defined by the SEC rules adopted pursuant to the Sarbanes-Oxley Act of 2002.
The primary responsibility of the Committee are to oversee the integrity of the
Company's financial statements; the Company's compliance with legal and
regulatory requirements; the independent auditor's qualifications and
independence; and the performance of the Company's internal audit function and
independent auditors. While
- ----------
(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.
19
the Committee has the responsibilities and powers set forth in its Charter, it
is not the duty 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. Management is
responsible for the preparation, presentation, and integrity of the Company's
financial statements and for the appropriateness of the accounting principles
and reporting policies that are used by the Company. The independent auditors
are responsible for auditing the Company's financial statements and for
reviewing the Company's unaudited interim financial statements. In so doing, it
is the responsibility of the Committee to maintain free and open communication
between the Committee, independent auditors, internal auditors and management of
the Company. The Audit Committee is also directly responsible for the
appointment and termination (subject to shareholder ratification) and the
compensation of the independent auditors.
In this context, the Audit Committee reviewed and discussed the Company's
audited financial statements for the fiscal year ended April 3, 2004 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 both management and the Company, and considered the compatibility of
non-audit services with the auditor's independence. The Audit Committee's policy
is to pre-approve all audit and permissible non-audit services provided by the
independent auditors. All audit and non-audit services performed by E&Y LLP
during the year ended April 3, 2004 were pre-approved in accordance with this
policy.
Fees paid to the Company's independent auditors for fiscal 2004 and 2003 were
comprised of the following:
------------------------------------------------
FY 2004 FY 2003
------------------------------------------------
Audit Fees $551,000 $504,000
Audit-Related Fees 24,000 19,000
Tax Fees 403,000 229,000
All other Fees -- 15,000
------------------------------------------------
Total $978,000 $767,000
================================================
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 the
audited financial statements be included in the Company's Annual Report on Form
10-K for the year ended April 3, 2004 filed with the Securities and Exchange
Commission.
AUDIT COMMITTEE
Benjamin L. Holmes, Chairman
Lawrence C. Best
Ronald G. Gelbman
Ronald Matricaria
Donna C.E. Williamson
20
ADDITIONAL INFORMATION
STOCKHOLDER PROPOSALS
Any proposal submitted for inclusion in the Company's Proxy Statement and form
of proxy relating to the 2005 Annual Meeting of Stockholders must be received at
the Company's principal executive offices in Braintree, Massachusetts on or
before February 18, 2005. 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 2005 Annual Meeting
on or before May 4, 2005, then in such event, the management proxies shall be
allowed to use their discretionary voting authority when the proposal is raised
at the 2005 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 18, 2004
21
Exhibit A
Haemonetics Corporation
Charter of the Audit Committee
Organization
This Charter governs the operations of the Audit Committee (the "Committee") of
the Board of Directors of Haemonetics Corporation (the "Company"). The Committee
shall be comprised of three or more directors, recommended by the Nominating and
Governance Committee of the Board, for appointment by the full Board of
Directors. The members of the Committee shall meet the independence and
experience requirements of applicable statutes and regulations, including the
requirements of the New York Stock Exchange, Section 10A(m)(3) of the Securities
Exchange Act of 1934 and the rules and regulations of the Securities and
Exchange Commission ("SEC"). All Committee members shall be financially
literate, and at least one member shall be an "audit committee financial
expert," as defined by SEC regulations.
Purpose
The Committee shall provide assistance to the Board in fulfilling the Board's
oversight responsibility relating to: the integrity of the Company's financial
statements; the Company's compliance with legal and regulatory requirements; the
independent auditor's qualifications and independence; and the performance of
the Company's internal audit function and independent auditors.
The Committee shall prepare the report required by the rules of the SEC to be
included in the Company's annual proxy statement.
Duties and Responsibilities
The primary responsibility of the Committee is to oversee the Company's
financial reporting process on behalf of the Board and to report the results of
their activities to the Board regularly. While the Committee has the
responsibilities and powers set forth in this Charter, it is not the duty 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. Management is responsible for the preparation,
presentation, and integrity of the Company's financial statements and for the
appropriateness of the accounting principles and reporting policies that are
used by the Company. The independent auditors are responsible for auditing the
Company's financial statements and for reviewing the Company's unaudited interim
financial statements. In so doing, it is the responsibility of the Committee to
maintain free and open communication between the Committee, independent
auditors, internal auditors and management of the Company.
The Committee shall be directly responsible for (1) the appointment and
termination (subject, if applicable, to shareholder ratification) and (2) the
compensation, and oversight of the work of the independent auditors, including
resolution of disagreements between management and the auditor regarding
financial reporting. The independent auditor shall report directly to the
Committee. In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities, and personnel of the Company and the authority
22
to engage independent counsel and other advisers as it determines necessary to
carry out its duties. The Company shall provide for appropriate funding, as
determined by the Committee, for payment of compensation to the independent
auditor and to any advisors employed by the Committee and for payment of
ordinary administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties.
The Committee shall pre-approve all audit and non-audit services provided by the
independent auditors (subject to the de minimis exceptions for non-audit
services provided for in Section 10A(i)(1)(B) of the Exchange Act, and the rules
promulgated thereunder, which are approved by the Committee prior to the
completion of the audit). The Committee shall not engage the independent
auditors to perform the specific non-audit services prohibited by law or
regulation. The Committee may delegate pre-approval authority to a member or
members of the Committee pursuant to policies and procedures established by the
Committee in accordance with applicable law and SEC regulations. The decisions
of any Committee member to whom pre-approval authority is delegated must be
presented to the full Committee at its next scheduled meeting.
At least annually, the Committee shall obtain and review a report by the
independent auditors describing:
o The firm's internal quality control procedures.
o Any material issues raised by the most recent internal quality
control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities, within
the preceding five years, respecting one or more independent audits
carried out by the firm, and any steps taken to deal with any such
issues.
o All relationships between the independent auditor and the Company
(to assess the auditor's independence).
The Committee shall set clear hiring policies for employees or former employees
of the independent auditors that comply with the SEC regulations and NYSE
listing standards.
The Committee shall discuss with the internal auditors and the independent
auditors the overall scope and plans for their respective audits, including the
adequacy of staffing and compensation.
The Committee shall discuss with management, the internal auditors, and the
independent auditors the adequacy and effectiveness of the accounting and
financial controls, including the Company's policies and procedures with respect
to risk assessment and risk management and the steps management has taken to
monitor and control the Company's major financial risk exposures.
The Committee shall meet separately periodically with management, the internal
auditors, and the independent auditors to discuss issues and concerns warranting
Committee attention. The Committee shall provide sufficient opportunity for the
internal auditors and the independent auditors to meet privately with the
members of the Committee. The Committee shall review with the independent
auditor any audit problems or difficulties and management's response.
The Committee shall receive regular reports from the independent auditor on (1)
the critical policies and practices of the Company, (2) all alternative
treatments of financial information within generally accepted
23
accounting principles that have been discussed with management and (3) other
material written communications between the independent auditor and management
such as any management letter or schedule of unadjusted differences.
The Committee shall review and discuss earnings press releases, as well as
financial information and earnings guidance provided to analysts and rating
agencies.
The Committee shall review the interim financial statements and disclosures
under Management's Discussion and Analysis of Financial Condition and Results of
Operations with management and the independent auditors prior to the filing of
the Company's Quarterly Report on Form 10-Q. Also, the Committee shall discuss
the results of the quarterly review and any other matters required to be
communicated to the Committee by the independent auditors under generally
accepted auditing standards. [A designated member of the Committee may represent
the entire Committee for the purposes of this review.]
The Committee shall review with management and the independent auditors the
financial statements and disclosures under Management's Discussion and Analysis
of Financial Condition and Results of Operations to be included in the Company's
Annual Report on Form 10-K, [including their judgment about the quality, not
just the acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the financial
statements.] Also, the Committee shall discuss the results of the annual audit
and any other matters required to be communicated to the Committee by the
independent auditors under generally accepted auditing standards.
The Committee shall establish procedures for the receipt, retention, and
treatment of complaints received by the Company regarding accounting, internal
accounting controls, or auditing matters, and the confidential, anonymous
submission by employees of the Company of concerns regarding questionable
accounting or auditing matters.
The Committee shall perform an evaluation of its performance at least annually
to determine whether it is functioning effectively. At least annually the
Committee shall review and reassess this charter and recommend any proposed
changes to the Board for approval.
24
|X| PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE HAEMONETICS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
JULY 27, 2004
The undersigned hereby appoints Ronald A. Matricaria and Brad Nutter, 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 27, 2004 at Haemonetics Corporate Headquarters, 400 Wood Road,
Braintree, 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.
With- For All
For hold Except
1. ELECTION OF DIRECTORS: |_| |_| |_|
Harvey G. Klein
Yutaka Sakurada
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.
- --------------------------------------------------------------------------------
For Against Abstain
2. To ratify the selection of Ernst & Young LLP |_| |_| |_|
as independent public accoutants for the
current fiscal year.
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 AND
FOR ITEM 2.
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.
-----------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- --------------------------------------------------------------------------------
- ------ Stockholder sign above ----------- Co-holder (if any) sign above --------
- --------------------------------------------------------------------------------
^ 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.
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