HAEMONETICS CORPORATION
Notice of Annual Meeting of Stockholders
July 22, 1998
To the Stockholders:
The Annual Meeting of the Stockholders of Haemonetics Corporation will be
held on Wednesday, July 22, 1998 at 9:00 a.m. at the State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts for the following
purposes:
1. To elect two 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 consider and act upon a proposal to approve the Haemonetics
Corporation 1998 Stock Option Plan for Non-Employee Directors as
described in the accompanying Proxy Statement.
3. To consider and act upon a proposal to approve the Haemonetics
Corporation 1998 Employee Stock Purchase Plan as described in the
accompanying Proxy Statement.
4. To ratify the selection by the Board of Directors of Arthur
Andersen LLP as independent public accountants for the current
fiscal year.
5. 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 May 28, 1998 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 22, 1998
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 Wednesday, July 22,
1998, 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 22, 1998.
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 in person or by proxy at the
meeting is required to approve the other matters listed in the notice of
meeting. Abstentions and "non-votes" are counted as present in determining
whether the quorum requirement is satisfied. Abstentions and "non-votes" have
the same effect as votes against proposals presented to stockholders other than
election of directors. 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.
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 02184-9114, telephone number (781) 848-7100.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on May 28, 1998 are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding and entitled to vote 26,584,679 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. Dr. Yutaka Sakurada and Donna C.E. Williamson are currently serving in
the class of directors whose terms expire at this Annual Meeting. It is
proposed that Dr. Sakurada and Ms. Williamson 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.
<TABLE>
<CAPTION>
Year First
Elected a Position with the Company or Principal
Name Age Director Occupation During the Past Five Years
- -------------------------------------------------------------------------------------------------------------
Nominated for a term ending in 2001:
<S> <C> <C> <S>
Yutaka Sakurada...................... 65 1991 Since April, 1995, Senior Vice President of
the Company and President of Haemonetics
Japan. From October, 1991, Vice President of
the Company and President of Haemonetics
Japan. Previously, from 1989 to 1991,
Managing Director, Kuraray Plastics Co.,
Ltd., a diversified synthetic fiber
manufacturer and a distributor of the
Company's products. From 1988 to 1996, Vice
Chairman, Japanese Society for Biomaterials.
Donna C.E. Williamson................ 45 1993 Since 1996, independent consultant. From 1993
to 1996 Corporate Senior Vice President of
Caremark International, Inc., a leading
provider of diversified health care services
throughout the United States and in other
countries. Previously, Corporate Vice
President at Caremark International since
1992 and Corporate Vice President at Baxter
International from 1983 to 1992 responsible
for strategy and business development and
health cost management businesses. Director
of PSS World Medical, Inc.
Serving a term ending in 2000:
Sir Stuart Burgess................... 69 1992 Since January, 1998, Chairman of the Company.
Since 1995, Chairman of Finsbury Worldwide
Pharmaceutical Trust plc, an investment trust
specializing in the pharmaceutical industry.
From 1990 to 1997 Chairman of the Anglia &
Oxford Region of the U.K. National Health
Service. From 1993 to 1997, Director of
Anagen plc and from 1990 to 1996, Director
Immuno UK Ltd. From 1979 to 1989, Chief
Executive Officer, and from 1973 to 1989
director of Amersham International plc, a
world leader in nuclear medicine.
Jerry E. Robertson, Ph.D............. 65 1993 Retired. From 1984 to 1994, Executive Vice
President, 3M Life Sciences Sector and
Corporate Services. Minnesota Mining and
Manufacturing (3M) is a worldwide producer of
a diverse variety of industrial and consumer
products. Director of Choice Hotels
International, Project HOPE, Allianz of North
America, Manor Care, Inc., Cardinal Health,
Inc., Coherent Inc., Steris Corp., and
Medwave Inc.
Serving a term ending in 1999:
James L. Peterson.................... 55 1985 Since January, 1998, President and Chief
Executive Officer of the Company. From May
1994, President, International Operations,
and Vice Chairman of the Board of Directors
of the Company. From 1988 to 1994, Executive
Vice President of the Company. Previously,
Vice President, with responsibility for all
international activities of the Company and
its predecessor. Director of Tillotson
Healthcare, Inc.
Benjamin L. Holmes................... 63 1998 Since December 1994, President of the Holmes
Co., specializing in Health Care with a focus
on the device industry. Chairman of the Board
of Directors at Laserscope Surgical Systems.
Previously, from 1985 to 1994, General
Manager and Vice President Hewlett-Packard
Medical Products Groups. From 1983 to 1985,
General Manager Hewlett-Packard Medical
Products Groups. Co-Chairman, Steering
Committee for Affiliated Health Information
Networks of New England and Massachusetts
Health Data Consortium. Director of Project
HOPE, Massachusetts' Governor's Council on
Economic Growth and Technology and UCLA
Foundation.
</TABLE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND DIRECTOR COMPENSATION
During the last fiscal year, there were six 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. The Board of
Directors does not have a Nominating Committee. The Directors of the Company
who are not employees of the Company receive an annual fee of $20,000. In
addition to this fee, each outside director, except Benjamin L. Holmes, was
granted, during the last fiscal year, an option to purchase up to 6,000 shares
of Common Stock of the Company. If the shareholders approve the 1998 Stock
Option Plan for Non-Employee Directors, Mr. Holmes will be granted an option to
purchase up to 6,000 shares of Common Stock of the Company.
The Board of Directors has a Compensation Committee composed of the
independent directors who are not employees of the Company. The members of the
Compensation Committee during the last fiscal year were Sir Stuart Burgess,
Jerry E. Robertson, Donna C.E. Williamson and effective February 1998, Benjamin
L. Holmes. 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 Long-term Incentive Plan. The Committee met twice during the
past fiscal year and on other occasions took action by written consent.
The Board of Directors also has an Audit Committee, comprised of Jerry E.
Robertson, Donna C.E. Williamson, and, effective February 1998, Benjamin L.
Holmes. The Audit 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 various matters related to its internal accounting controls. Sir
Stuart Burgess was a member of the Audit Committee until his January 30, 1998
election to Chairman of the Board. During the last fiscal year, there were two
meetings of the Audit Committee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 20, 1998, 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.
<TABLE>
<CAPTION>
Title Amount & Nature Percent
Name of Beneficial Owner of Class Beneficial Ownership Of Class
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sir Stuart Burgess(1)................................... Common Stock 31,500 .12%
James L. Peterson(2).................................... Common Stock 1,301,996 4.90%
John F. White(3)........................................ Common Stock 217,569 .82%
Michael P. Mathews(4)................................... Common Stock 136,814 .51%
Bruno Deglaire(5)....................................... Common Stock 74,623 .28%
Yutaka Sakurada(6)...................................... Common Stock 81,435 .31%
Robert B. Ebbeling(7)................................... Common Stock 79,915 .30%
Jerry E. Robertson(8)................................... Common Stock 42,500 .16%
Donna C.E. Williamson(9)................................ Common Stock 17,800 .07%
Benjamin L. Holmes...................................... Common Stock 1,000 --%
State of Wisconsin Investment Board (10)................ Common Stock 2,618,900 9.85%
Wellington Management (11).............................. Common Stock 2,373,050 8.93%
Richard C. Blum & Associates, L.P.(12).................. Common Stock 2,083,000 7.84%
Vanguard Specialized Portfolios, Inc.(13)............... Common Stock 1,647,500 6.20%
Royce & Associates, Inc.(14)............................ Common Stock 1,417,500 5.33%
Neuberger & Berman(15).................................. Common Stock 1,399,700 5.27%
All executive officers and directors as a group
(10 persons)(16)....................................... Common Stock 1,985,152 7.47%
<FN>
- -------------------
<F1> Includes 24,500 shares which Sir Stuart has the right to acquire upon the
exercise of options currently exercisable or exercisable within 60 days
of May 20, 1998.
<F2> Does not include 48,150 shares held in trust for the benefit of Mr.
Peterson's children, 6,300 shares held by the Peterson Foundation and
21,000 shares held in trust for the benefit of Mr. Peterson's parents.
Mr.Peterson disclaims beneficial ownership of such shares. Includes
187,569 shares which Mr.Peterson has the right to acquire upon exercise
of options currently exercisable or exercisable within 60 days of May 20,
1998.
<F3> Includes 187,569 shares which Mr. White has the right to acquire upon
exercise of options currently exercisable or exercisable within 60 days
of May 20, 1998.
<F4> Includes 87,556 shares which Mr. Mathews has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60
days of May 20, 1998.
<F5> Includes 74,623 shares which Mr. Deglaire has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60
days of May 20, 1998.
<F6> Includes 80,200 shares which Mr. Sakurada has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60
days of May 20, 1998.
<F7> Includes 33,935 shares which Mr. Ebbeling has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60
days of May 20, 1998.
<F8> Includes 22,500 shares which Mr. Robertson has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60
days of May 20, 1998. All shares owned directly by Mr. Robertson are held
in the JJ Robertson LTD. Partnership, of which he and his wife are
general partners.
<F9> Includes 16,500 shares which Ms. Williamson has the right to acquire upon
the exercise of options currently exercisable or exercisable within 60
days of May 20, 1998.
<F10> This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission as of January 22, 1998. The reporting
entity's address is 121 East Wilson Street, Madison, WI 53707.
<F11> This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission as of February 10, 1998. The reporting
entity's address is 75 State Street, Boston, MA 02109.
<F12> This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission as of February 17, 1998. The reporting
entity's address is 909 Montgomery Street, #400, San Francisco, CA 94133.
<F13> This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission as of February 10, 1998. The reporting
entity's address is 100 Vanguard Boulevard, VM #V34, Malvern PA 19355.
<F14> This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission as of February 5, 1998. The reporting
entity's address is 1414 Avenue of the Americas, New York, NY 10019.
<F15> This information has been derived from a Schedule 13G filed with the
Securities and Exchange Commission as of February 12, 1998. The reporting
entity's address is 605 Third Avenue, New York, NY 10158-3698.
<F16> Includes 714,952 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 20, 1998.
</FN>
</TABLE>
-------------------
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 STOCK OPTION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
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. The program utilizes a combination of salary, stock options and
cash bonuses awarded based on the achievement of 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 and their past achievements with the
Company, as well as the Company's performance.
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. The Compensation
Committee's determinations with respect to compensation for the fiscal year
ended March 28, 1998 were made early in the fiscal year.
In arriving at the base salaries paid to the Company's executive officers
for the year ended March 28, 1998, the Committee considered their individual
contributions to the performance of the Company and of their particular
business units during the fiscal year ended March 29, 1997, their levels of
responsibility, salary increases awarded in the past, 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. In light of the Company's performance during the fiscal year ended
March 29, 1997, none of the executive officers listed in the Compensation table
or members of the CEO's staff, received salary increases during the fiscal year
1998.
The Company has a bonus program which is tied to the achievement by the
Company of predetermined goals relating to revenue and net earnings after
taxes. Under the program, increases in revenue or net earnings after taxes
beyond the required thresholds would result in payment of bonuses. Bonuses are
determined after the close of the fiscal year. No cash bonuses were received
during the 1998 fiscal year by persons who were members of the CEO staff when
the Compensation committee met in April 1997, because predetermined goals were
not met during the prior fiscal year ended March 29, 1997. Bruno Deglaire,
Robert Ebbeling and Dr. Sakurada were not members of the CEO staff when the
determination was made not to pay cash bonuses and accordingly, they did
receive bonuses during the 1998 fiscal year based upon the achievement of
predetermined goals and objectives outlined as part of a quarterly bonus
program.
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 loyalty through stock ownership. Information with
respect to stock options held by executive officers (including options granted
during the year ended March 28, 1998) is included in the tables following this
report. In determining the number of options granted to executive officers
during the last fiscal year, the Committee made a subjective assessment of the
past and potential contributions of particular executive officers to the
financial and operational performance of the business unit directed by the
executive, and of such officer's potential for advancement. The Committee, in
arriving at the number of options to be granted to particular executive
officers, was aware of whether or not such officers had been granted options in
the past. The vesting of options granted 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.
On April 1, 1997, the Committee amended options for the purchase of
387,876 shares of common stock held by optionees other than members of the CEO
staff, so as to reduce the exercise price to $18 per share. The market price at
the time of the amendments was $17.44 per share. The Committee's objective in
amending the options was to provide incentives to retain valued employees.
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 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.
Compensation of Chief Executive Officer
John F. White served as President, Chief Executive Officer and Chairman
of the Board of Directors of the Company until January 30, 1998. James L.
Peterson, who previously served as President, International Operations and Vice
Chairman of the Board of Directors of the Company became President and Chief
Executive Officer on January 30, 1998 and Sir Stuart Burgess became Chairman of
the Board of Directors.
In April 1997, the Committee established the compensation of John F.
White, the President, Chief Executive Officer and Chairman of the Board of
Directors of the Company for the fiscal year ended March 28, 1998 using the
same criteria that were used to determine the compensation of other executive
officers as described above. Mr. White's salary was not increased during the
fiscal year ended March 28, 1998 in light of the Company's performance for the
fiscal year ended March 29, 1997. In April 1997, the Committee did grant Mr.
White options to purchase 121,574 shares of the Company's Common Stock at an
exercise price of $17.438 per share. In determining the number of shares
subject to the options granted to Mr. White during the fiscal year ended March
28, 1998, the Committee considered his past and potential contributions to the
Company's performance, the options previously granted to him, as well as the
potential appreciation in the market price of the Company's Common Stock over
the term of the options.
In connection with his resignation as President and Chief Executive
Officer, Mr. White received a lump sum payment of salary, vacation pay and
anticipated cost of office space and secretarial assistance in an aggregate
amount of $521,578. In addition, the period within which options for the
purchase of 138,397 shares held by Mr. White may be exercised was extended to
April 30, 1999 and options to purchase 49,162 shares of the Company's Common
Stock which would otherwise have vested between January 31, 1998 and February
1, 1999 were deemed to have vested January 30, 1998. Mr. White has agreed to
provide advisory consulting services to the Company during the period ending
February 1, 1999.
Upon assuming his new role as President and CEO of the Company on January
30, 1998, the Committee granted Mr. Peterson options to purchase 208,426 shares
of the Company's Common Stock at an exercise price of $15.625 per share. The
options are exercisable commencing one year from the date of grant and vest at
the rate of 25% per year over the four years following the grant. Vesting can
be accelerated beginning one year from the date of grant given the attainment
of certain stock fair market values. The options expire on January 30, 2008.
(See the option grant table and related notes for a further discussion of
options granted during fiscal year 1998.) Earlier in the year, in recognition
of his contributions as President, International Operations and Vice Chairman,
Mr. Peterson was granted by the Committee options to purchase 121,574 shares of
the Company's Common Stock at an exercise price of $17.438 per share. The
options are exercisable commencing one year from the date of grant and vest at
the rate of 25% per year over the four years following the grant. The options
expire on April 1, 2007. In determining the number of shares subject to the
options granted to Mr. Peterson during the fiscal year ended March 28, 1998,
the Committee considered his past and potential contributions to the Company's
performance, the options previously granted to him, as well as the potential
appreciation in the market price of the Company's Common Stock over the term of
the options. The Committee views the determination as to the size of stock
option grants to executive officers, including Mr. Peterson, to be an exercise
of subjective judgment by the Committee. In exercising such judgment, the
Committee took into account the factors mentioned above, but did not assign
relative weights to any of such factors.
Mr. Peterson's salary was not increased during the fiscal year ended
March 28, 1998 in light of the Company's performance for the fiscal year ended
March 29, 1997. Following his assumption of the duties of President and Chief
Executive Officer of the Company, the Committee, in May 1998, in recognition of
his increased responsibilities, established Mr. Peterson's compensation for the
fiscal year which will end April 3, 1999 at $400,000.
COMPENSATION COMMITTEE
Sir Stuart Burgess
Jerry E. Robertson
Donna C.E. Williamson
Benjamin L. Holmes
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During the fiscal year ended March 28, 1998 the members of the
Compensation Committee were Sir Stuart Burgess, Jerry E. Robertson, Donna C.E.
Williamson and, effective February, 1998, Benjamin L. Holmes. No member of the
Compensation Committee was an officer or employee of the Company or any of its
subsidiaries during fiscal 1998.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, or earned by
or paid to the Company's Chief Executive Officer and each of the Company's
executive officers (other than the Chief 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 28, 1998, March 29, 1997, and March 30, 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------------------------------------------
Other
Annual Stock All Other
Name and Principal Position Year Salary(l) Bonus(l) Compensation Options Compensation(2)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James L. Peterson............. 1998 $369,945(4) -- $ 91,085(3)(4)(5) 330,000 --
President & CEO 1997 $420,120(4) -- $ 74,721(3)(4)(5) 35,000 --
1996 $445,203(4) -- $104,398(3)(4)(5) 15,000 --
John F. White(6).............. 1998 $346,154 -- $ 2,592 121,574 $521,578
Former Chairman, President 1997 $397,404 -- $ 20,938(3) 35,000 --
& CEO 1996 $373,558 -- $ 27,244(3) 15,000 $ 1,800
Michael P. Mathews............ 1998 $220,080 -- $230,293(5) 69,177 $ 3,000
President, Blood Bank 1997 $219,033 -- $182,019(3)(5) 25,350 $ 1,000
Division
Bruno Deglaire................ 1998 $263,362(4) $30,476 $ 28,461(3)(4)(5) 46,640 --
President, European and
Asian Field Operations
Dr. Yutaka Sakurada........... 1998 $173,219(4) $54,137 $ 55,143(3)(4)(5) 54,600 --
President, Japan Operations 1997 $188,695(4) $70,038 $ 58,615(3)(4)(5) 10,000 --
1996 $213,763(4) $45,456 $ 75,697(3)(4)(5) 20,000 --
Robert B. Ebbeling............ 1998 $199,512 $56,950 $ 1,218 26,660 $ 3,000
Senior Vice President,
Manufacturing
Kenneth P. Fallon(7).......... 1998 $276,936 -- $ 7,685(3) 150,000 --
Former President,
Surgical Division
John R. Barr(8)............... 1998 $225,531 -- $ 53,158(3) 64,083 $ 1,000
Former President, North 1997 $334,029 -- $ 24,788(3) 30,000 $ 1,000
American Operations 1996 $297,596 -- $ 27,993(3) 50,000 $ 2,800
<FN>
- -------------------
<F1> Salary and bonus amounts are presented in the year earned. The payment of
such amounts may have occurred in other years.
<F2> Includes, in the case of Mr. White, amounts paid in connection with
severance arrangements. See "Compensation and Stock Option Committee
Report on Executive Compensation." Includes discretionary contributions
paid by the Company with respect to the Company's 401(k) Plan: i) in
1998: Mr. Mathews $2,000 and Mr. Ebbeling $2,000, ii) in 1996: Mr. Barr
$1,800 and Mr. White $1,800. No discretionary contribution was made by
the Company with respect to the Savings Plus Plan in 1997. Also includes
matching contributions by the Company under its 401(k) plan: (i) in 1998:
for Mr. Mathews $1,000, Mr. Ebbeling $1,000 and Mr. Barr $1,000, (ii) in
1997: Mr. Mathews $1,000 and Mr. Barr $1,000, (iii) in 1996: Mr. Barr
$1,000.
<F3> Includes the following amounts paid by the Company with respect to
vacation hours: (i) accrued in 1998 but not used: for Mr. Fallon $4,102
and Mr. Barr $43,582, (ii) accrued in 1997 but not used: for Mr. White
$3,096, Mr. Mathews $13,383, and Mr. Barr $11,099, and (iii) accrued in
1996 but not used: for Mr. White $9,402 and Mr. Barr $12,147.
Additionally, includes the following amounts paid by the Company with
respect to company-owned vehicles or auto allowances: (i) in 1998: for
Mr. Peterson $17,741, Mr. Deglaire $17,741, Dr. Sakurada $7,766 and Mr.
Barr $9,104, (ii) in 1997: for Mr. Peterson $20,209, Mr. White $15,250,
Dr. Sakurada $14,054 and Mr. Barr $10,507, (iii) in 1996: for Mr.
Peterson $22,241, Mr. White $15,520, Dr. Sakurada $17,478 and Mr. Barr
$10,713.
<F4> All amounts are translated into U.S. dollars at the average rate of
exchange during that year.
<F5> Includes the following amounts for additional payments relating to living
abroad: (i) in 1998: for Mr. Peterson $64,352, Mr. Mathews $228,936, (ii)
in 1997: for Mr. Peterson $54,512 and Mr. Mathews $164,788, (iii) in
1996: for Mr. Peterson $56,431. Includes the following amounts for
housing allowances for Dr. Sakurada: in 1998 $47,377, in 1997 $44,561 and
in 1996 $58,219. Includes $8,252 for a travel allowance in 1998 for Mr.
Deglaire.
<F6> Mr. White served as President and Chief Executive Officer and Chairman of
the Board of Directors until January 30, 1998.
<F7> In January, 1998 Mr. Fallon resigned as President, N.A, Surgical
Operations and was retained as a surgical consultant for the Company.
<F8> Mr. Barr left the Company in November, 1997.
</FN>
</TABLE>
Option Grants in Fiscal Year Ended March 28, 1998
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 28, 1998. 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.
<TABLE>
<CAPTION>
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(5)
Options in the Fiscal Price Expiration ------------------------
Granted Year 1998 Per Share Date 5% 10%
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James L. Peterson 208,426(1) 10.86 $15.625 1/30/08 $2,048,093 $5,190,027
121,574(2) 6.34 $17.438 4/1/07 $1,333,223 $3,378,649
John F. White 121,574(2) 6.34 $17.438 4/30/99 $ 56,592 $ 116,170
Michael P. Mathews 62,577(2) 3.26 $17.438 4/1/07 $ 686,241 $1,739,070
6,600(2) 0.34 $17.000 4/18/07 $ 70,562 $ 178,818
Bruno Deglaire 4,000(2) 0.21 $17.000 4/18/07 $ 42,765 $ 108,374
10,000(3) 0.52 $17.000 4/18/07 $ 106,912 $ 270,936
7,680(4) 0.40 $18.000 6/30/03 $ 43,398 $ 104,649
19,200(4) 1.00 $18.000 9/10/02 $ 91,053 $ 216,897
5,760(4) 0.30 $18.000 4/23/03 $ 31,316 $ 130,609
Yutaka Sakurada 6,000(2) 0.31 $17.000 4/18/07 $ 64,147 $ 162,562
7,000(3) 0.36 $17.000 4/18/07 $ 74,838 $ 189,655
9,600(4) 0.50 $18.000 6/30/03 $ 54,247 $ 130,812
19,200(4) 1.00 $18.000 9/10/02 $ 91,053 $ 216,897
12,800(4) 0.67 $18.000 4/23/03 $ 69,590 $ 167,290
Robert B. Ebbeling 2,300(2) 0.12 $17.000 4/18/07 $ 24,590 $ 62,315
10,000(3) 0.52 $17.000 4/18/07 $ 106,912 $ 270,936
7,800(4) 0.41 $18.000 9/10/02 $ 36,990 $ 88,115
1,560(4) 0.08 $18.000 4/23/03 $ 8,481 $ 20,389
5,000(4) 0.26 $18.000 6/30/03 $ 28,253 $ 68,131
Kenneth P. Fallon 150,000(2) 7.82 $17.4375 -- $ 0 $ 0
John R. Barr 64,083(2) 3.34 $17.4375 -- $ 0 $ 0
<FN>
- -------------------
<F1> Options vest beginning one year from the grant date at a rate of 25% per
year over the four years following the grant (except in the case of
death, termination or retirement). Years 2, 3 and 4 of the vesting
schedule can be accelerated effective one year from the grant date based
upon the attainment of certain stock fair market values as follows: 25%
upon stock value appreciation to $21.00 per share, 25% upon stock value
appreciation to $26.00 per share and 25% upon stock value appreciation to
$31.00 per share.
<F2> Options are exercisable upon completion of one full year of employment
following the grant date (except in the case of death, termination or
retirement) and vest at the rate of 25% per year over the four years
following the grant date.
<F3> Options vest beginning four years from the grant date at a rate of 25%
per year in years four through seven (except in the case of death,
termination or retirement). Years 4, 5, 6 and 7 of the vesting schedule
can be accelerated effective one year from the grant date based upon the
attainment of certain stock fair market values as follows: 25% upon stock
value appreciation to $20.375 per share, 25% upon stock value
appreciation to $24.50 per share, 25% upon stock value appreciation to
$29.375 per share and 25% upon stock value appreciation to $29.375 per
share.
<F4> These options were repriced on April 1, 1997 and do not represent new
grants. Options are exercisable upon completion of one full year of
employment following the grant date (except in the case of death or
retirement) and vest at the rate of 25% per year over the four years
following the original grant date.
<F5> 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 28, 1998 the closing price of the Company's Common Stock on the New
York Stock Exchange was 15 7/16.
</FN>
</TABLE>
-------------------
Aggregated Option Exercises in Fiscal Year
Ended March 28, 1998 and Option Values at March 28, 1998
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, 1998.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at March 28, 1998 Options at March 28, 1998(1)
Acquired Value ----------------------------------------------------------
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James L. Peterson 0 $ 0 138,397 370,029 $36,773 $452,391
John F. White 0 $ 0 187,569 0 $56,477 $ 0
Michael P. Mathews 0 $ 0 54,807 102,793 $35,571 $ 41,328
Bruno Deglaire 0 $ 0 59,416 44,051 $36,236 $ 37,194
Yutaka Sakurada 0 $ 0 66,925 34,775 $35,591 $ 33,958
Robert Ebbeling 0 $ 0 26,485 27,675 $15,961 $ 20,531
Kenneth P. Fallon 0 $ 0 0 0 $ 0 $ 0
John R. Barr 25,000 $7,783 0 0 $ 0 $ 0
<FN>
- -------------------
<F1> 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, 1998.
</FN>
</TABLE>
Ten-Year Option/SAR Repricings
For Period Ended March 28, 1998
The following table provides information on repriced options held by the
executive officers listed in the Summary Compensation Table above at March 28,
1998.
<TABLE>
<CAPTION>
Number of Market price
securities of stock at Exercise Length of
underlying time of price at New original option
options/SARs repricing or time of Exercise term remaining at
repriced or amendment repricing or Price date of repricing
Date amended (#) ($) amendment ($) or amendment
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bruno Deglaire 4/1/97 19,200 $17.438 $19.406 $18.000 5 years, 162 days
4/1/97 5,760 $17.438 $18.375 $18.000 6 years, 22 days
4/1/97 7,680 $17.438 $24.563 $18.000 6 years, 90 days
Yutaka Sakurada 4/1/97 19,200 $17.438 $19.406 $18.000 5 years, 162 days
4/1/97 12,800 $17.438 $18.375 $18.000 6 years, 22 days
4/1/97 9,600 $17.438 $24.563 $18.000 6 years, 90 days
Robert Ebbeling 4/1/97 7,800 $17.438 $19.406 $18.000 5 years, 162 days
4/1/97 1,560 $17.438 $18.375 $18.000 6 years, 22 days
4/1/97 5,000 $17.438 $24.563 $18.000 6 years, 90 days
</TABLE>
COMPARATIVE PERFORMANCE GRAPH
The following graph compares the cumulative total return for the five
year period commencing March 31, 1993 through March 28, 1998 among the Company,
the S&P 500 Index and the S&P Medical Products and Supplies Index. The graph
assumes one hundred dollars invested on March 31, 1993 in the Company's Common
Stock, the S&P 500 index and the S&P Medical Products and Supplies Index and
also assumes reinvestment of dividends.
<TABLE>
<CAPTION>
3/31/93 3/31/94 3/31/95 3/31/96 3/31/97 3/31/98
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Haemonetics Corporation $100 83 60 69 74 75
S&P 500 $100 101 117 155 186 275
S&P Medical Products & Supplies $100 84 122 182 199 288
</TABLE>
APPROVAL OF 1998 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
There will be presented at the meeting a proposal to approve the
Company's 1998 Stock Option Plan for Non-Employee Directors (the "Non-Employee
Plan"), which was adopted by the Board of Directors on May 1, 1998. The
Non-Employee Plan is intended to attract and retain, for the benefit of the
Company and its stockholders, the services of experienced and knowledgeable
independent directors who are not employees of the Company and provide
additional incentive for such directors to continue to work in the best
interest of the Company and its stockholders through continuing ownership of
its Common Stock.
The Board of Directors recommends that the stockholders approve the
Non-Employee Plan. The affirmative vote of the holders of at least a majority
of the Company' s Common Stock voting in person or by proxy at the meeting will
be required for such approval. Set forth below is a summary of the principal
provisions of the Non-Employee Plan. A copy of the entire plan is available
from the Clerk of the Company upon request.
The Non-Employee Plan provides for the grant by the Board of Directors of
non-qualified options not intended to meet the requirements of Section 422 of
the Code for the purchase of shares of the Company's Common Stock by each
director of the Company who is not otherwise an employee of the Company or any
subsidiary. The maximum number of shares of the Company's Common Stock
available for options granted under the Non-Employee Plan is 500,000 shares of
Common Stock. The maximum number of shares available for grants is subject to
adjustment for capital changes. Shares issued under the Plan may be authorized
but unissued shares of Common Stock or shares of Common Stock held in treasury.
The exercise price for options granted under the Non-Employee Plan is the fair
market value of the Company's Common Stock covered by the option on the date of
grant.
Options granted under the Non-Employee Plan are exercisable at such times
and during such period as is determined by the Board of Directors and set forth
in the option agreement, but no option granted under the Non-Employee Plan
shall have a term in excess of ten years from the date of grant. Stock issuable
upon the exercise of an option granted under the Non-Employee Plan may be
subject to such restrictions on transfer, repurchase rights, or other
restrictions as shall be determined by the Board of Directors.
Options granted under the Non-Employee Plan are not assignable or
transferable by the optionee other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order. The exercise
price of options granted thereunder must be paid in full upon exercise. Payment
may be made in cash, or, in whole or in part, in shares of Common Stock of the
Company already owned for a period of at least six months by the person
exercising the option.
In the event of the death or disability of an optionee, an option granted
under the Non-Employee Plan may be exercised, to the extent that the optionee
was entitled to do so on the date of death or termination of service as a
director by reason of disability, as the case may be, by (i) the estate of the
optionee, any person or persons who acquired the right to exercise such option
by bequest or inheritance or otherwise by reason of the death of the optionee
or (ii) the optionee, as applicable. The option may be exercised at any time
within one year after the date of death or termination of service on account of
disability of the optionee, or prior to the date on which the option expires by
its terms, whichever is earlier.
In the event that the optionee ceases to be a director of the Company
other than by virtue of death or disability, the option granted to such
optionee may be exercised only to the extent that the right to exercise the
option has accrued and is in effect. The option may be exercised at any time
within three months after the date the optionee ceases to be a director of the
Company, or prior to the date on which the option expires by its terms,
whichever is earlier, unless the termination as a director was by the Company
for cause, in which case the option shall terminate immediately at the time the
optionee ceases to be a director of the Company.
The Non-Employee Plan provides that the number of shares issuable
thereunder shall be adjusted to prevent dilution in the event of any
reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, combination of shares or stock dividend. In addition, unless
otherwise determined by the Board in its sole discretion, in the case of any
sale or conveyance to another entity of all or substantially all of the
property and assets of the Company or a Change in Control as defined in the
Non-Employee Plan, the purchaser of the Company's assets or stock may deliver
to the optionee the same kind of consideration that is delivered to the
shareholders of the Company as a result of such sale, conveyance, or Change in
Control, or the Board may cancel all outstanding options in exchange for
consideration in cash or in kind, which consideration shall be equal in value
to the value of those shares of stock or other securities the optionee would
have received had the option been exercised (to the extent then exercisable)
and no disposition of the shares acquired upon such exercise has been made
prior to such sale, conveyance, or Change in Control, less the option price
therefor.
The Board shall also have the power to accelerate the exercisability of
any option, notwithstanding any Limitations in the Non-Employee Plan or in the
option agreement, upon such a sale, conveyance, or Change in Control. "Change
in Control" is defined in the Non-Employee Plan as having occurred if any
person or any two or more persons acting as a group, and all affiliates of such
person or persons, who prior to such time owned less than 35% of the then
outstanding Common Stock of the Company, shall acquire such additional shares
of the Company's Common Stock in one or more transactions or series of
transactions, such that following such transaction or transactions, such person
or group and affiliates beneficially own 35% or more of the Company's Common
Stock outstanding.
Upon dissolution or liquidation of the Company, all options granted under
the Non-Employee Plan shall terminate, but each optionee shall have the right,
immediately prior to such dissolution or liquidation, to exercise his or her
option to the extent then exercisable.
The Non-Employee Plan will terminate ten years from May 1, 1998, the date
upon which it was approved by the of Directors, but the Board of Directors may
at any time terminate, modify, or amend it.
The high and low sale prices of the Company's Common Stock on the New
York Stock Exchange on June 12, 1998, were $15 3/8 and $15, respectively.
It is not possible to state which directors will receive stock options
under the Non-Employee Plan in the future or the number of options that will be
granted thereunder except that if the shareholders approve the Non-Employee
Director Plan, Benjamin L. Holmes will be granted options for the purchase of
6,000 shares of the Company's Common Stock.
Tax Consequences
Options granted under the Non-Employee Plan are nonqualified stock
options. No income is recognized by the optionee on the grant of a nonqualified
stock option. On the exercise by an optionee of a nonqualified stock option,
the excess of the fair market value of the stock when the option is exercised
over its cost to the optionee will be (a) taxable to the optionee as ordinary
income and (b) generally deductible for income tax purposes by the Company.
The Internal Revenue Service will treat the exercise of a nonqualified
stock option with already-owned stock of the Company as two transactions.
First, there will be a tax-free exchange of the old shares for a like number of
new shares under Section 1036 of the Internal Revenue Code of 1986 (the
"Code"), with the new shares retaining the basis and holding periods of the old
shares. Second, the issuance of additional new shares (representing the spread
between the fair market value of all the new shares and the option price) is
taxable to the employee as ordinary income under Section 83 of the Code, as is
the case with any nonqualified option. The new shares will have a basis equal
to the spread between the fair market value of the new shares and the option
price.
The optionee's tax basis in the stock will equal the cost of the stock
plus the amount of ordinary income the optionee had to recognize with respect
to the nonqualified stock option. Accordingly, upon a subsequent disposition of
stock acquired upon the exercise of a nonqualified option, the optionee will
recognize short-term or long-term capital gain or loss, depending upon the
holding of the period of stock equal to the difference between the amount
realized upon disposition of the stock by the optionee and the optionee's basis
in the stock.
APPROVAL OF 1998 EMPLOYEE STOCK PURCHASE PLAN
There will be presented at the meeting a proposal to approve the
Company's 1998 Employee Stock Purchase Plan,(the "Plan") adopted by the Board
of Directors on May 1, 1998. The previous Employee Stock Purchase Plan, adopted
on May 14, 1991, was terminated, effective February 1998, as there were no
shares remaining under the Plan. There are 375,000 number of shares available
for grant under the proposed Plan.
The Plan is intended to provide a means whereby eligible employees may
purchase Common Stock of the Company through payroll deductions, thereby
encouraging employee participation in the Company's economic growth through
stock ownership, and providing a further incentive for employees to promote the
best interests of the Company.
Shares of the Company's authorized but unissued Common Stock, or shares
of Common Stock reacquired by the Company and held in its treasury may be
issued under the Plan. The number of shares issuable under the Plan is subject
to appropriate adjustment in the event of a stock split, a subdivision or
consolidation of shares of Common Stock, capital adjustments or payments of
stock dividends or distributions or other increases or decreases in the
outstanding shares of Common Stock effected without receipt of consideration by
the Company.
The Board of Directors recommends that the stockholders approve the Plan.
The affirmative vote of the holders of at least a majority of the voting stock
of the Company voting in person or by proxy at the meeting will be required for
such approval. Set forth below is a summary of the principal provisions of the
Plan. A copy of the entire Plan is available from the Clerk of the Company upon
request.
Eligibility. All persons employed by the Company or one of its
subsidiaries are eligible to participate in the Plan, except (i) persons who
have been employed by the Company or its subsidiaries for less than six months
on the first day of the purchase period with the exception of persons
previously eligible; (ii) persons whose customary employment is less than
twenty hours per week or five months or less per year; and (iii) persons who
are deemed for purposes of Section 423(b)(3) of the Code to own stock
possessing 5% or more of the total combined voting power or value of all
classes of the stock of the Company or a subsidiary.
Administration. The Plan is administered by the Board of Directors or a
Stock Purchase Plan Committee appointed from time to time by the Board of
Directors. All members of the Committee serve at the discretion of the Board.
The Board of Directors or the Committee, if one has been appointed, is vested
with fully authority to make, administer and interpret such equitable rules and
regulations regarding the Plan as it may deem advisable. Determinations by the
Board of Directors, or the Committee, as to the interpretation and operation of
the Plan are final and conclusive.
Operation of the Plan. There are two "purchase periods" in each full
calendar year during which the Plan is in effect, one commencing on November 1
of each calendar year and continuing through April 30 of such calendar year and
the second commencing on May 1 of each calendar year and continuing through
October 31 of such calendar year. Eligible employees may elect to become
Participants in the Plan for a purchase period by completing a Stock Purchase
Agreement prior to the first day of the purchase period for which the election
is made. The election to participate is effective for the purchase period for
which it is made and there is no limit on the number of purchase periods for
which an eligible employee may elect to become a Participant in the Plan. In
the Stock Purchase Agreement, the participating employee authorizes regular
payroll deductions amounting to such full percentage of the Participant's basic
compensation as the Participant shall designate. Such payroll deduction cannot
amount to less than 2% nor more than 8% of the Participant's basic
compensation.
All sums deducted from the basic compensation of Participants are
credited to a stock purchase account established for each Participant on the
books of the Company, but prior to use of such funds for the purchase of shares
of the Company's Common Stock in accordance with the Plan, the Company may use
such funds for any valid corporate purpose. The Company is under no obligation
to pay interest on funds credited to a Participant's stock purchase account in
any event. The purchase price of shares of the Company's stock under the Plan
is the lower of (i) 85% of the fair market value of a share of Common Stock for
the first business day of the relevant purchase period or (ii) 85% of such
value on the relevant exercise date. The fair market value on a given day is
the closing price of a share of Common Stock of the Company on the New York
Stock Exchange. Each participating employee receives an option, effective on
the first day of the purchase period to purchase shares of Company stock on the
exercise date, which is the last business day of the purchase period. The
number of shares which a Participant may purchase under the option is the
quotient of the aggregate payroll deductions in the purchase period authorized
by each participant divided by the purchase price, but in no event greater than
800 shares per option. No employee can be granted an option under the Plan
which permits his or her right to purchase shares under the Plan and any other,
Code Section 423(b) employee stock purchase plan of the Company or any parent
or subsidiary to accrue at a rate which exceeds in any one calendar year
$25,000 of the fair market value of the Common Stock as of the date the option
to purchase is granted. The Plan defines basic Compensation as the regular rate
of salary or wages in effect immediately prior to a purchase period, including
sales commissions, before any deductions or withholdings, but excluding
overtime, bonuses and amounts paid in reimbursement for expenses.
Each participating employee automatically is deemed to have exercised his
or her option on the exercise date of the purchase period in which he or she is
participating, to the extent that the balance in the Participant's account
under the Plan is sufficient to purchase, at the purchase price in effect for
the purchase period, whole shares of the Company's stock subject to his or her
option. Any balance remaining in the Participant's account is carried forward
and credited for use in the next purchase period; but if the Participant
chooses not to participate in the next purchase period, such balance is
refunded to him or her in cash. A Participant has a right to cancel
participation in the Plan for a purchase period by delivering a notice of
cancellation to the Company not later than ten days before the exercise date
for such purchase period. In the event of such cancellation, the Participant
receives in cash the amount credited to his or her account. Any Participant who
so withdraws from the Plan may again become a participant at the start of the
next purchase period.
Upon dissolution or liquidation of the Company or a merger or a
consolidation in which the Company is not the surviving entity, every option
outstanding under the Plan shall terminate and each Participant would be
refunded the sums then in his or her account.
Upon the Participant's death or other termination of employment, his or
her participation in the Plan ceases and the entire balance credited to his or
her account under the Plan is automatically refunded to him or her or (in the
event of death) to the Participant's designated beneficiary, if any, under a
group insurance plan of the Company covering the Participant, or otherwise to
his or her estate. Employment is treated as continuing intact while a
Participant is on military leave, sick leave or other bona fide leave of
absence, for up to 90 days or so long as the Participant's right to
re-employment is guaranteed, either by statute or contract if longer than 90
days.
The right to purchase shares of Common Stock under the Plan is
exercisable only by the Participant during his or her lifetime and is not
transferable. The receipt of an option under the Plan does not imply any right
to continued employment with the Company for any Participant.
Termination and Amendment. The last purchase period under the Plan ends
on October 31, 2008, provided, however, that the Board of Directors has the
right to terminate the Plan at any time. In the event of the expiration of the
Plan or its termination, all options then outstanding under the Plan shall
automatically be canceled and the entire amount credited to the account of each
Participant thereunder shall be refunded to each such Participant. In addition,
the Board of Directors may amend the Plan at any time without the consent of
the Participant, but no such amendment shall adversely affect options
previously granted under the Plan and no such amendment (without the approval
of the Company's stockholders) may: (a) increase the total number of shares of
Common Stock which may be purchased by all Participants or (b) change the class
of employees eligible to receive options under the Plan.
Tax Consequences. Under the Internal Revenue Code, an employee incurs no
tax liability on the grant of an option to purchase shares under the Plan nor
on the acquisition of the shares upon automatic exercise of the option.
An employee will obtain favorable tax treatment on the disposition of
shares acquired under the Plan if the shares are held by the employee for at
least two years from the first day of the period in which the shares are
purchased (the "Purchase Period"). Dispositions of the shares after the
expiration of the two year period are called "qualifying dispositions." Upon a
qualifying disposition, if the amount realized is greater than the purchase
price of the shares, there shall be included in the employee's gross income as
compensation taxable at ordinary income rates (and not as capital gain) the
lesser of (1) fifteen percent (15%) of the fair market value of the shares on
the first day of the Purchase Period or (2) the amount by which the fair market
value of the shares at the time of disposition exceeded eighty-five percent
(85%) of the fair market value of the shares on the first day of the Purchase
Period. The basis of the employee's shares, which is initially equal to the
actual purchase price, is increased by an amount equal to the amount includable
as compensation in his gross income. The excess of the amount realized over the
employee's increased basis is long-term capital gain.
Upon a qualifying disposition, if the amount realized is less than the
purchase price, the employee recognizes no ordinary income and will have a
long-term capital loss equal to the difference between the amount realized and
the purchase price.
If an employee sells the shares before the expiration of the required
holding period, which is a disqualifying disposition, he or she realizes
ordinary income (compensation) in the year of the disposition to the extent of
the difference between the purchase price and the fair market value of the
shares on the last day of the Purchase Period. The basis of the employee's
shares, which is initially equal to the actual purchase price, is increased by
an amount equal to the amount includable as compensation in his or her gross
income.
Any amount realized upon such disqualifying disposition in excess of the
employee's increased basis in the shares will be treated as long-term or
short-term capital gain, depending upon the holding period of the shares. If
the amount realized upon such disqualifying disposition is less than the
employee's increased basis in the shares, the loss will be treated as long-term
or short-term capital loss, depending upon the holding period of the shares.
No deduction will be allowed to the Company for federal income tax
purposes at the time of the grant or exercise of an option under the Plan. At
the time of disqualifying disposition by an employee, the Company will be
entitled to a deduction for the amount taxable to the employee as ordinary
income. The Company is not entitled to a deduction for the ordinary income
realized by an employee upon a qualifying disposition.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify the
selection of Arthur Andersen LLP as independent public accountants to examine
the consolidated financial statements of the Company and its subsidiaries for
the fiscal year ending April 3, 1999. A representative of Arthur Andersen, LLP
is expected to be present at the meeting to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any proposal submitted for inclusion in the Company's Proxy Statement and
form of proxy relating to the 1999 Annual Meeting of Stockholders must be
received at the Company's principal executive offices in Braintree,
Massachusetts on or before February 22, 1999.
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
Braintree, Massachusetts Alicia R. Lopez
June 22, 1998 Clerk
[APPENDIX A]
HAEMONETICS CORPORATION
1998 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
-------
The purpose of this Haemonetics Corporation 1998 Stock Option Plan for
Non-Employee Directors (the "Plan") is to attract and retain the services of
experienced and knowledgeable independent directors who are not employees
(sometimes referred to herein collectively as "Participants") of Haemonetics
Corporation ("Haemonetics" or the "Company") or its subsidiaries for the
benefit of Haemonetics and its stockholders and to provide additional
incentive for such Participants to continue to work in the best interests of
Haemonetics and its stockholders through continuing ownership of its common
stock.
2. SHARES SUBJECT TO THE PLAN
--------------------------
The total number of shares of common stock, par value $.01 per share
of Haemonetics ("Common Stock") available for stock options granted under
this Plan shall not exceed 500,000 shares in the aggregate, subject to
adjustment in accordance with Section 12 hereof. Shares issued under the
Plan may be authorized but unissued shares of Common Stock or shares of
Common Stock held in treasury. Options granted pursuant to the Plan shall
be authorized by action of the Board of Directors. Stock issuable upon the
exercise of an option granted under the Plan may be subject to such
restrictions on transfer, repurchase rights or other restrictions as shall
be determined by the Board of Directors.
3. ADMINISTRATION OF THE PLAN
--------------------------
The Plan shall be administered by the Board of Directors. The Board
shall, subject to the provisions of this Plan, have the power to construe
this Plan, to determine all questions of interpretation and application of
the Plan and to adopt and amend such rules and regulations for the
administration of the Plan as the Board may deem desirable. No member of
the Board shall be liable for any action or determination made in good faith
with respect to this Plan or any option granted under it.
4. ELIGIBILITY
-----------
Members of the Board of Directors of Haemonetics who are not employees
of Haemonetics or its subsidiaries are eligible to be granted options under
the Plan.
5. OPTION AGREEMENT
----------------
Each option granted under the Plan shall be evidenced by an option
agreement (the "Agreement") duly executed on behalf of Haemonetics and by
the director to whom such option is granted, which Agreements shall (i)
comply with and be subject to the terms and conditions of the Plan and (ii)
provide that the optionee agrees to continue to serve as a director of
Haemonetics, during the term for which he or she was elected.
6. OPTION EXERCISE PRICE
---------------------
Subject to the provisions of Section 10 hereof, the option exercise
price for an option granted under the Plan shall be the fair market value of
the shares of the Common Stock of Haemonetics covered by the option on the
date of grant of the option. For the purposes hereof and Section 7, the
fair market value of the Common Stock of Haemonetics shall be the mean
between the high and low sales prices of the Common Stock of Haemonetics on
the New York Stock Exchange ("NYSE") on the date of grant, or (if the Common
Stock of Haemonetics did not trade on such date) on the most recent date
prior to the date of grant on which such trading occurred.
7. TIME AND MANNER OF EXERCISE OF OPTIONS
--------------------------------------
Each option granted under the Plan shall, subject to Section 8 and
Section 10 hereof, be exercisable at such time or times and during such
period as is determined by the Board of Directors and set forth in the
Agreement; provided, however, that no option granted under the Plan shall
have a term in excess of ten (10) years from the date of grant. To the
extent that the right to exercise an option has accrued and is in effect,
the option may be exercised in full at one time or in part from time to time
by giving written notice, signed by the person or persons exercising the
option, to Haemonetics, stating the number of shares with respect to which
the option is being exercised, accompanied by payment in full for such
shares, which payment may be in cash or in whole or in part in shares of the
Common Stock of Haemonetics already owned for a period of at least six
months by the person or persons exercising the option, valued at fair market
value, as determined under Section 6 hereof, on the date of exercise. Upon
such exercise, delivery of a certificate for paid-up non-assessable shares
shall be made as promptly as practicable at the principal office of
Haemonetics to the person or persons exercising the option.
8. TERM OF OPTIONS
---------------
(a) Each option shall expire ten (10) years from the date of the
granting thereof, but shall be subject to earlier termination as herein
provided.
(b) In the event of the death of an optionee, the option granted to
such optionee may be exercised, to the extent the optionee was entitled to
do so on the date of such optionee's death, by the estate of such optionee
or by any person or persons who acquired the right to exercise such option
by bequest or inheritance or otherwise by reason of the death of such
optionee. Such option may be exercised at any time within one (1) year
after the date of death of such optionee, at which time the option shall
terminate, or prior to the date on which the option otherwise expires by its
terms, whichever is earlier.
(c) In the event that an optionee ceases to be a director of
Haemonetics, the option granted to such optionee may be exercised by him or
her, but only to the extent that under Section 7 hereof the right to
exercise the option has accrued and is in effect. Such option may be
exercised at any time within three (3) months after the date such optionee
ceases to be a director of Haemonetics, at which time the option shall
terminate, but in any event prior to the date on which the option expires by
its terms, whichever is earlier, unless termination as a director, (a) was
by Haemonetics for cause, in which case the option shall terminate
immediately at the time the optionee ceases to be a director of Haemonetics,
(b) was because the optionee has become disabled (within the meaning of
Section 22(e)(3) of the Code), or (c) was by reason of the death of the
optionee. In the case of death, see Section 8(b) above. In the case of
disability, the option may be exercised, to the extent then exercisable
under Section 7 hereof, at any time within one (1) year after the date of
termination of the optionee's directorship with Haemonetics, at which time
the option shall terminate, but in any event prior to the date on which the
option otherwise expires by its terms, whichever is earlier.
9. OPTIONS NOT TRANSFERABLE
------------------------
The right of any optionee to exercise an option granted to him or her
under the Plan shall not be assignable or transferable by such optionee
otherwise than by will or the laws of descent and distribution, or pursuant
to a qualified domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act, or the rules thereunder. Any
option granted under the Plan shall be exercisable during the lifetime of
such optionee only by him or her. Any option granted under the Plan shall
be null and void and without effect upon any attempted assignment or
transfer, except as herein provided, including without limitation any
purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition, attachment, trustee process or similar
process, whether legal or equitable, upon such option.
10. RECAPITALIZATIONS, REORGANIZATIONS AND THE LIKE
-----------------------------------------------
(a) In the event that the outstanding shares of the Common Stock of
the Company are changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation by
reason of any reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, or dividends
payable in capital stock, appropriate adjustment shall be made in the number
and kind of shares as to which options may be granted under the Plan and as
to which outstanding options or portions thereof then unexercised shall be
exercisable, to the end that the proportionate interest of the optionee
shall be maintained as before the occurrence of such event; such adjustment
in outstanding options shall be made without change in the total price
applicable to the unexercised portion of such options and with a
corresponding adjustment in the option price per share.
(b) In addition, unless otherwise determined by the Board in its sole
discretion, in the case of any (i) sale or conveyance to another entity of
all or substantially all of the property and assets of the Company or (ii)
Change in Control (as hereinafter defined) of the Company, the purchaser(s)
of the Company's assets or stock may, in his, her or its discretion, deliver
to the optionee the same kind of consideration that is delivered to the
shareholders of the Company as a result of such sale, conveyance or Change
in Control, or the Board may cancel all outstanding options in exchange for
consideration in cash or in kind which consideration in both cases shall be
equal in value to the value of those shares of stock or other securities the
optionee would have received had the option been exercised (to the extent
then exercisable) and no disposition of the shares acquired upon such
exercise been made prior to such sale, conveyance or Change in Control, less
the option price therefor. Upon receipt of such consideration by the
optionee, his or her option shall immediately terminate and be of no further
force and effect. The value of the stock or other securities the optionee
would have received if the option had been exercised shall be determined in
good faith by the Board, and in the case of shares of the Common Stock of
the Company, in accordance with the provisions of Section 6 hereof. The
Board shall also have the power and right to accelerate the exercisability
of any options, notwithstanding any limitations in this Plan or in the
Agreement upon such a sale, conveyance or Change in Control. A "Change in
Control" shall be deemed to have occurred if any person, or any two or more
persons acting as a group, and all affiliates of such person or persons, who
prior to such time owned less than thirty five percent (35%) of the then
outstanding Common Stock of the Company, shall acquire such additional
shares of the Company's Common Stock in one or more transactions, or series
of transactions, such that following such transaction or transactions, such
person or group and affiliates beneficially own thirty five percent (35%) or
more of the Company's Common Stock outstanding.
(c) Upon dissolution or liquidation of the Company, all options
granted under this Plan shall terminate, but each optionee (if at such time
associated with the Company or any of its subsidiaries) shall have the
right, immediately prior to such dissolution or liquidation, to exercise his
or her option to the extent then exercisable.
(d) No fraction of a share shall be purchasable or deliverable upon
the exercise of any option, but in the event any adjustment hereunder of the
number of shares covered by the option shall cause such number to include a
fraction of a share, such number shall be adjusted to the nearest smaller
whole number of shares.
11. RESTRICTIONS ON ISSUE OF SHARES
-------------------------------
Notwithstanding the provisions of Section 7 hereof, Haemonetics may
delay the issuance of shares covered by the exercise of any option and the
delivery of a certificate for such shares until one of the following
conditions shall be satisfied:
(i) the shares with respect to which an option has been exercised are
at the time of the issue of such shares effectively registered under
applicable Federal and state securities acts now in force or hereafter
amended; or
(ii) counsel for Haemonetics shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that such shares
are exempt from registration under applicable Federal and state securities
acts now in force or hereafter amended.
It is intended that all exercises of options shall be effective.
Accordingly, Haemonetics shall use its best efforts to bring about
compliance with the above conditions within a reasonable time, except that
Haemonetics shall be under no obligation to cause a registration statement
or a post-effective amendment to any registration statement to be prepared
at its expense solely for the purpose of covering the issue of shares in
respect of which any option may be exercised, except as otherwise agreed to
by Haemonetics in writing.
12. RIGHTS OF HOLDER ON PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION
--------------------------------------------------------------------
Unless the shares to be issued upon exercise of an option granted
under the Plan have been effectively registered under the Securities Act of
1933, as now in force or hereafter amended, Haemonetics shall be under no
obligation to issue any shares covered by any option unless the person who
exercises such option, in whole or in part, shall give a written
representation and undertaking to Haemonetics which is satisfactory in form
and scope to counsel to Haemonetics and upon which, in the opinion of such
counsel, Haemonetics may reasonably rely, that he or she is acquiring the
shares issued pursuant to such exercise of the option for his or her own
account as an investment and not with a view to, or for sale in connection
with, the distribution of any such shares, and that he or she will make no
transfer of the same except in compliance with any rules and regulations in
force at the time of such transfer under the Securities Act of 1933, or any
other applicable law, and that if shares are issued without such
registration a legend to this effect may be endorsed upon the securities so
issued. In the event that Haemonetics shall, nevertheless, deem it
necessary or desirable to register under the Securities Act of 1933 or other
applicable statutes any shares with respect to which an option shall have
been exercised, or to qualify any such shares for exemption from the
Securities Act of 1933 or other applicable statutes, then Haemonetics shall
take such action at its own expense and may require from each optionee such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for
such purpose and may require reasonable indemnity to Haemonetics and its
officers and directors from such holder against all losses, claims, damages
and liabilities arising from such use of the information so furnished and
caused by any untrue statement of any material fact therein or caused by the
omission to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
under which they were made.
13. APPROVAL OF STOCKHOLDERS
------------------------
The Plan shall be subject to approval by the vote of stockholders
holding at least a majority of the voting stock of Haemonetics voting in
person or by proxy at a duly held stockholders' meeting, or by written
consent of all of the stockholders, and shall take effect immediately as of
its date of adoption upon such approval.
14. EXPENSES OF THE PLAN
--------------------
All costs and expenses of the adoption and administration of the Plan
shall be borne by Haemonetics, and none of such expenses shall be charged to
any optionee.
15. TERMINATION AND AMENDMENT OF PLAN
---------------------------------
Unless sooner terminated as herein provided, the Plan shall terminate
ten (10) years from the date upon which the Plan was duly approved by the
Board. The Board may at any time terminate this Plan or make such
modification or amendment thereof as it deems advisable.
16. LIMITATION OF RIGHTS IN THE OPTION SHARES
-----------------------------------------
An optionee shall not be deemed for any purpose to be a stockholder of
Haemonetics with respect to any of the options except to the extent that the
option shall have been exercised with respect thereto and, in addition, a
certificate shall have been issued theretofore and delivered to the
optionee.
17. NOTICES
-------
Any communication or notice required or permitted to be given under
the Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to Haemonetics, to its principal place of business,
attention: General Counsel, and, if to an optionee, to the address as
appearing on the records of Haemonetics.
APPROVED BY BOARD OF DIRECTORS: May 1, 1998
[APPENDIX B]
HAEMONETICS CORPORATION
1998 Employee Stock Purchase Plan
---------------------------------
1. Purpose
-------
It is the purpose of this 1998 Employee Stock Purchase Plan to provide
a means whereby eligible employees may purchase Common Stock of Haemonetics
Corporation (the "Company") through payroll deductions. It is intended to
provide a further incentive for employees to promote the best interests of
the Company and to encourage stock ownership by employees in order that they
may participate in the Company's economic growth.
It is the intention of the Company that the Plan qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code and the provisions of this Plan shall be construed in
a manner consistent with the Code.
2. Definitions
-----------
The following words or terms, when used herein, shall have the
following respective meanings:
(a) "Plan" shall mean the 1998 Employee Stock Purchase Plan.
(b) "Company" shall mean Haemonetics Corporation, a Massachusetts
corporation.
(c) "Account" means the Employee Stock Purchase Account established
for a Participant under Section 7 hereunder.
(d) "Basic Compensation" shall mean the regular rate of salary or
wages in effect immediately prior to a Purchase Period,
including sales commissions, before any deductions or
withholdings, but shall exclude overtime, bonuses and amounts
paid in reimbursement for expenses.
(e) "Board of Directors" shall mean the Board of Directors of
Haemonetics Corporation.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Committee" shall mean the Stock Purchase Plan Committee
appointed and acting in accordance with the terms of the Plan.
(h) "Common Stock" shall mean shares of the Company's common stock
with a par value of $.01 per share.
(i) "Effective Date" shall mean May 1, 1998.
(j) "Eligible Employees" shall mean all persons employed by the
Company or one of its subsidiaries as defined in Section 424 of
the Code, but excluding:
(1) Persons who have been employed by the Company or its
subsidiaries for less than six months on the first day of
the Purchase Period with the exception of persons
previously eligible;
(2) Persons whose customary employment is less than twenty
hours per week or five months or less per year; and
(3) Persons who are deemed for purposes of Section 423(b)(3)
of the Code to own stock possessing 5% or more of the
total combined voting power or value of all classes of
stock of the Company, its parent or a subsidiary.
For purposes of the Plan, employment will be treated as continuing
intact while a Participant is on military leave, sick leave, or other bona
fide leave of absence, for up to 90 days or so long as the Participant's
right to re-employment is guaranteed either by statute or by contract, if
longer than 90 days.
(k) "Exercise Date" shall mean the last day of a Purchase Period;
provided, however, that if such date is not a business day,
"Exercise Date" shall mean the immediately preceding business
day.
(l) "Participant" shall mean an Eligible Employee who elects to
participate in the Plan under Section 6 hereunder.
(m) Except as provided below, there shall be two "Purchase Periods"
in each full calendar year during which the Plan is in effect,
one commencing on November 1st of each calendar year and
continuing through April 30 of such calendar year, and the
second commencing on May 1st of each calendar year and
continuing through October 31st of such calendar year. The
first Purchase Period after adoption of the Plan shall commence
on November 1, 1998. The last Purchase Period shall commence on
May 1, 2008 and end on October 31, 2008.
(n) "Purchase Price" shall mean the lower of (i) 85% of the fair
market value of a share of Common Stock for the first business
day of the relevant Purchase Period, or (ii) 85% of such value
on the relevant Exercise Date. If the shares of Common Stock
are listed on any national securities exchange, or traded on the
National Association of Securities Dealers Automated Quotation
System ("NASDAQ") National Market System, the fair market value
per share of Common Stock on a particular day shall be the
closing price, if any, on the largest such exchange, or if not
traded on an exchange, the NASDAQ National Market System, on
such day, and, if there are no sales of the shares of Common
Stock on such particular day, the fair market value of a share
of Common Stock shall be determined by taking a weighted average
of the means between the highest and lowest sales on the nearest
date before and the nearest date after the particular day in
accordance with Treasury Regulations Section 25.2512-2. If the
shares of Common Stock are not then listed on any such exchange
or the NASDAQ National Market System, the fair market value per
share of Common Stock on a particular day shall be the mean
between the closing "Bid" and the closing "Asked" prices, if
any, as reported in the National Daily Quotation Service for
such day. If the fair market value cannot be determined under
the preceding sentences, it shall be determined in good faith by
the Board of Directors.
3. Grant of Option to Purchase Shares.
-----------------------------------
Each Eligible Employee shall be granted an option effective on the
first day of each Purchase Period to purchase shares of Common Stock. The
term of the option shall be the length of the Purchase Period. The number
of shares subject to each option shall be the quotient of the aggregate
payroll deductions in the Purchase Period authorized by each Participant in
accordance with Section 6 divided by the Purchase Price, but in no event
greater than 800 shares per option. Notwithstanding the foregoing, (i) no
employee shall be granted an option which permits his right to purchase
shares under the Plan and under all other Code Section 423(b) employee stock
purchase plans of the Company or any parent or subsidiary corporation to
accrue at a rate which exceeds in any one calendar year $25,000 of the fair
market value of the Common Stock as of the date the option to purchase is
granted.
4. Shares.
-------
There shall be 375,000 shares of Common Stock reserved for issuance to
and purchase by Participants under the Plan, subject to adjustment as herein
provided. The shares of Common Stock subject to the Plan shall be either
shares of authorized but unissued Common Stock or shares of Common Stock
reacquired by the Company and held as treasury shares. Shares of Common
Stock not purchased under an option terminated pursuant to the provisions of
the Plan may again be subject to options granted under the Plan.
The aggregate number of shares of Common Stock which may be purchased
pursuant to options granted hereunder, the number of shares of Common Stock
covered by each outstanding option, the maximum number of shares that may be
granted in any Purchase Period and the purchase price for each such option
shall be appropriately adjusted for any increase or decrease in the number
of outstanding shares of Common Stock resulting from a stock split or other
subdivision or consolidation of shares of Common Stock or for other capital
adjustments or payments of stock dividends or distributions or other
increases or decreases in the outstanding shares of Common Stock effected
without receipt of consideration by the Company.
5. Administration.
---------------
The Plan shall be administered by the Board of Directors or a Stock
Purchase Plan Committee appointed from time to time by the Board of
Directors. All members of the Committee shall serve at the discretion of
the Board. The Board of Directors or the Committee, if one has been
appointed, is vested with full authority to make, administer and interpret
such equitable rules and regulations regarding the Plan as it may deem
advisable. The Board of Directors', or the Committee's, if one has been
appointed, determinations as to the interpretation and operation of the Plan
shall be final and conclusive. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under the Plan.
6. Election to Participate.
------------------------
An Eligible Employee may elect to become a Participant in the Plan for
a Purchase Period by completing a "Stock Purchase Agreement" form prior to
the first day of the Purchase Period for which the election is made. Such
Stock Purchase Agreement shall be in such form as shall be determined by the
Board of Directors or the Committee. The election to participate shall be
effective for the Purchase Period for which it is made. There is no limit
on the number of Purchase Periods for which an Eligible Employee may elect
to become a Participant in the Plan. In the Stock Purchase Agreement, the
Eligible Employee shall authorize regular payroll deductions of any full
percentage of his Basic Compensation, but in no event less than two percent
nor more than eight percent (8%) of his Basic Compensation. An Eligible
Employee may not change his authorization except as otherwise provided in
Section 9. Options granted to Eligible Employees who have failed to execute
a Stock Purchase Agreement within the time periods prescribed by the Plan
will automatically lapse.
7. Employee Stock Purchase Account.
--------------------------------
An Employee Stock Purchase Account will be established for each
Participant in the Plan for bookkeeping purposes, and payroll deductions
made under Section 6 will be credited to such Accounts. However, prior to
the purchase of shares in accordance with Section 8 or withdrawal from or
termination of the Plan in accordance with the provisions hereof, the
Company may use for any valid corporate purpose all amounts deducted from a
Participant's wages under the Plan and credited for bookkeeping purposes to
his Account.
The Company shall be under no obligation to pay interest on funds
credited to a Participant's Account, whether upon purchase of shares in
accordance with Section 8 or upon distribution in the event of withdrawal
from or termination of the Plan as herein provided.
8. Purchase of Shares.
-------------------
Each Eligible Employee who is a Participant in the Plan automatically
and without any act on his part will be deemed to have exercised his option
on each Exercise Date to the extent that the balance then in his Account
under the Plan is sufficient to purchase at the Purchase Price whole shares
of the Common Stock subject to his option. Any balance remaining in the
Participant's Account shall be carried forward and credited for use in the
next Purchase Period. If the Employee chooses not to participate in the
next Purchase Period, any balance will be refunded to him in cash.
Notwithstanding the foregoing, any balance remaining in a Participant's
Account at the end of a Purchase Period as a result of aggregate payroll
deductions having exceeded the limitations set forth in Section 3 shall be
refunded to the Participant in cash without interest.
9. Withdrawal.
-----------
A Participant who has elected to authorize payroll deductions for the
purchase of shares of Common Stock may cancel his election by written notice
of cancellation delivered to the office or person designated by the Company
to receive Stock Purchase Agreements ("Cancellation"), but any such notice
of Cancellation must be so delivered not later than ten (10) days before the
relevant Exercise Date.
A Participant will receive in cash, as soon as practicable after
delivery of the notice of Cancellation, the amount credited to his Account.
Any Participant who so withdraws from the Plan may again become a
Participant at the start of the next Purchase Period in accordance with
Section 6.
Upon dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving entity every option
outstanding hereunder shall terminate, in which event each Participant shall
be refunded the amount of cash then in his Account.
10. Issuance of Stock Certificates.
-------------------------------
The shares of Common Stock purchased by a Participant shall, for all
purposes, be deemed to have been issued and sold at the close of business on
the Exercise Date. Prior to that date none of the rights or privileges of a
stockholder of the Company, including the right to vote or receive
dividends, shall exist with respect to such shares.
Within a reasonable time after the Exercise Date, the Company shall
issue and deliver a certificate for the number of shares of Common Stock
purchased by a Participant for the Purchase Period, which certificate shall
be registered either in the Participant's name, jointly in the names of the
Participant and his spouse, or in the name of the Participant or his spouse
as guardian for their children, as the Participant shall designate in his
Stock Purchase Agreement. Such designation may be changed at any time by
filing notice thereof with the party designated by the Company to receive
such notices.
11. Termination of Employment.
--------------------------
(a) Upon a Participant's termination of employment for any reason,
other than death, no payroll deduction may be made from any
compensation due him and the entire balance credited to his
Account shall be automatically refunded.
(b) Upon the death of a Participant, no payroll deduction shall be
made from any compensation due him at time of death, and the
entire balance in the deceased Participant's Account shall be
paid in cash to the Participant's designated beneficiary, if
any, under a group insurance plan of the Company covering such
employee, or otherwise to his estate.
12. Rights Not Transferable.
------------------------
The right to purchase shares of Common Stock under this Plan is
exercisable only by the Participant during his lifetime and is not
transferable by him. If a Participant attempts to transfer his right to
purchase shares under the Plan, he shall be deemed to have requested
withdrawal from the Plan and the provisions of Section 9 hereof shall apply
with respect to such Participant.
13. No Guarantee of Continued Employment.
-------------------------------------
Granting of an option under this Plan shall imply no right of
continued employment with the Company for any Eligible Employee.
14. Notice.
-------
Any notice which an Eligible Employee or Participant files pursuant to
this Plan shall be in writing and shall be delivered personally or by mail
addressed to Haemonetics Corporation, 400 Wood Road, Braintree,
Massachusetts 02184 Attn: Alicia R. Lopez, General Counsel. Any notice
to a Participant or an Eligible Employee shall be conspicuously posted in
the Company's principal office or shall be mailed addressed to the
Participant or Eligible Employee at the address designated in the Stock
Purchase Agreement or in a subsequent writing.
15. Application of Funds.
---------------------
All funds deducted from a Participant's wages in payment for shares
purchased or to be purchased under this Plan may be used for any valid
corporate purpose provided that the Participant's Account shall be credited
with the amount of all payroll deductions as provided in Section 7.
16. Government Approvals or Consents.
---------------------------------
This Plan and any offering and sales to Eligible Employees under it
are subject to any governmental approvals or consents that may be or become
applicable in connection therewith. Subject to the provisions of Section
17, the Board of Directors of the Company may make such changes in the Plan
and include such terms in any offering under this Plan as may be necessary
or desirable, in the opinion of counsel, to comply with the rules or
regulations of any governmental authority, or to be eligible for tax
benefits under the Code or the laws of any state.
17. Amendment of the Plan.
----------------------
The Board of Directors may, without the consent of the Participants,
amend the Plan at any time, provided that no such action shall adversely
affect options theretofore granted hereunder, and provided that no such
action by the Board of Directors without approval of the Company's
stockholders may: (a) increase the total number of shares of Common Stock
which may be purchased by all Participants; or (b) change the class of
employees eligible to receive options under the Plan.
For purposes of this Section 17, termination of the Plan by the Board
of Directors pursuant to Section 18 shall not be deemed to be an action
which adversely affects options theretofore granted hereunder.
18. Term of the Plan.
-----------------
The Plan shall become effective on the Effective Date, provided that
it is approved within twelve months after adoption by the Board of Directors
at a duly-held stockholder's meeting by stockholders of the Company holding
a majority of the Company's voting stock. The Plan shall continue in effect
through October 31, 2008, provided, however, that the Board of Directors
shall have the right to terminate the Plan at any time. In the event of the
expiration of the Plan or its termination, all options then outstanding
under the Plan shall automatically be canceled and the entire amount
credited to the Account of each Participant hereunder shall be refunded to
each such Participant.
19. Withholding of Additional Income Taxes.
---------------------------------------
By electing to participate in the Plan, each Participant acknowledges
that the Company is required to withhold taxes with respect to the amounts
deducted from the Participant's compensation and accumulated for the benefit
of the Participant under the Plan and each Participant agrees that the
Company may deduct additional amounts from the Participant's compensation,
when amounts are added to the Participant's account, used to purchase Common
Stock or refunded, in order to satisfy such withholding obligations. Each
Participant further acknowledges that when Common Stock is purchased under
the Plan, the Company may be required to withhold taxes with respect to all
or a portion of the difference between the fair market value of the Common
Stock purchased and its purchase price, and each Participant agrees that
such taxes may be withheld from compensation otherwise payable to such
Participant. It is intended that tax withholding will be accomplished in
such a manner that the full amount of payroll deductions elected by the
Participant under Section 6 will be used to purchase Common Stock. However,
if amounts sufficient to satisfy applicable tax withholding obligations have
not been withheld from compensation otherwise payable to any Participant,
then, notwithstanding any other provision of the Plan, the Company may
withhold such taxes from the Participant's accumulated payroll deductions
and apply the net amount to the purchase of Common Stock, unless the
Participant pays to the Company, prior to the exercise date, an amount
sufficient to satisfy such withholding obligations. Each Participant
further acknowledges that the Company may be required to withhold taxes in
connection with the disposition of stock acquired under the Plan and agrees
that the Company may take whatever action it considers appropriate to
satisfy such withholding requirements, including deducting from compensation
otherwise payable to such Participant an amount sufficient to satisfy such
withholding requirements or conditioning any disposition of Common Stock by
the Participant upon the payment to the Company of an amount sufficient to
satisfy such withholding requirements.
20. General.
--------
Whenever the context of this Plan permits, the masculine gender shall
include the feminine and neuter genders.
[PROXY CARD]
PROXY
HAEMONETICS CORPORATION
Proxy-Annual Meeting of Stockholders
July 22, 1998
The undersigned hereby appoints Sir Stuart Burgess and James L. Peterson
or any one of them, with full power of substitution, attorneys and proxies to
represent the undersigned at the Annual Meeting of Stockholders of
Haemonetics Corporation to be held Wednesday, July 22, 1998 at State Street
Bank & Trust Company, 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 on the reverse side.
PLEASE DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED ON THE REVERSE
SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING IN PERSON.
------------- -------------
| SEE REVERSE | CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SEE REVERSE |
| SIDE | | SIDE |
------------- -------------
HAEMONETICS CORPORATION
Dear Shareholder:
There are four actions to be considered at the annual meeting, July 22, 1998
that require your vote.
Your vote counts and you are strongly encouraged to exercise your right to
vote.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then, please sign the card and return your card in the enclosed, paid
envelope.
Your vote must be received by the annual meeting date of July 22, 1998 to be
considered.
Thank you for your prompt attention to this matter.
Sincerely,
/s/ Alicia R. Lopez
Haemonetics Corporation
[X] Please mark votes
as in this example.
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 PROPOSALS 2, 3 AND 4.
1. ELECTION OF DIRECTORS:
Nominees: Yutaka Sakurada and Donna C.E. Williamson
[ ] FOR ALL NOMINEES [ ] WITHHELD FROM ALL NOMINEES
[ ]
-------------------------------------------------------------------
For the single nominee written above by the undersigned stockholder
2. To approve the Company's 1998 Stock Option Plan for Non-employee
directors, as described in the Company's Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve the Company's 1998 Employee Stock Purchase Plan, as
described in the Company's Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the selection by the Board of Directors of Arthur Andersen &
Company as independent public accountants for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name(s) appear on the Proxy. When shares are
held by joint tenants, both should sign. When signing as attorney, as
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.
Signature: Date: Signature: Date:
---------------- -------- ---------------- --------
