<PAGE> 1
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
HemaSure Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
5) Total fee paid:
_______________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_______________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
3) Filing Party:
_______________________________________________________________
4) Date Filed:
_______________________________________________________________
<PAGE> 2
HEMASURE INC.
140 LOCKE DRIVE
MARLBOROUGH, MASSACHUSETTS 01752
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 7, 2000
The 2000 Annual Meeting of Stockholders of HemaSure Inc. (the
"Company") will be held at the Holiday Inn, Marlborough, Massachusetts 01752, on
Wednesday, June 7, 2000 at 10:00 a.m., local time, to consider and act upon the
following matters:
1. To elect seven directors to serve until the next Annual
Meeting of Stockholders.
2. To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.
Stockholders of record at the close of business on April 26, 2000 are
entitled to notice of, and to vote at, the meeting. The stock transfer books of
the Company will remain open for the purchase and sale of the Company's common
stock, par value $.01 per share.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
JAMES B. MURPHY, Secretary
Marlborough, Massachusetts
April 28, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY MAIL IT IN THE ENCLOSED ENVELOPE
IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED
BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.
<PAGE> 3
HEMASURE INC.
140 LOCKE DRIVE
MARLBOROUGH, MASSACHUSETTS 01752
PROXY STATEMENT FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 7, 2000
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of HemaSure Inc. (the "Company") for use at
the 2000 Annual Meeting of Stockholders to be held on June 7, 2000 and at any
adjournment or postponement of that meeting (the "Annual Meeting"). All proxies
will be voted in accordance with the instructions contained therein, and if no
choice is specified, the proxies will be voted in favor of the matters set forth
in the accompanying Notice of Meeting. Any proxy may be revoked by a stockholder
at any time before it is exercised by delivery of written revocation to the
Secretary of the Company.
The Company's Annual Report for the year ended December 31, 1999 is
being mailed to stockholders with the mailing of this Notice of Meeting and
Proxy Statement on or about April 28, 2000.
VOTING SECURITIES AND VOTES REQUIRED
On April 26, 2000, the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting, there were
outstanding and entitled to vote an aggregate of 19,799,417 shares of common
stock of the Company, par value $.01 per share ("Common Stock"). Each share of
Common Stock is entitled to one vote.
Under the Company's Bylaws, the holders of a majority of the shares of
Common Stock issued, outstanding and entitled to vote on any matter shall
constitute a quorum with respect to that matter at the Annual Meeting.
Stockholders holding shares of Common Stock who are present in person or
represented by proxy (including stockholders who abstain from voting their
shares or who do not vote with respect to one or more of the matters presented
for stockholder approval) will be counted for purposes of determining whether a
quorum is present.
The affirmative vote of the holders of a plurality of votes cast by the
stockholders entitled to vote at the Annual Meeting is required for the election
of directors.
Stockholders who abstain from voting as to a particular matter, and
shares held in "street name" by brokers or nominees who indicate on their
proxies that they do not have discretionary authority to vote such shares as to
a particular matter, will not be counted as votes in favor of such matter, and
will also not be counted as votes cast or shares voting on such matter.
Accordingly, abstentions and "broker non- votes" will have no effect on the
voting on a matter that requires the affirmative vote of a certain percentage of
the votes cast or shares voting on a matter.
<PAGE> 4
Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information, as of March 24,
2000, with respect to any person (including any "group," as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) who is known to the Company to be the beneficial owner of more
than five percent of any class of the Company's voting securities, and as to
those shares of the Company's equity securities beneficially owned by each of
its directors and nominees for director, the executive officers of the Company
named in the Summary Compensation Table under the heading "Compensation of
Executive Officers" below, and all of its directors and executive officers as a
group. Unless otherwise specified in the table below, such information, other
than information with respect to the directors and officers of the Company, is
based on a review of statements filed with the Securities and Exchange
Commission pursuant to Sections 13(d), 13(f), and 13(g) of the Exchange Act with
respect to the Company's Common Stock. As of March 24, 2000, there were
19,795,667 shares of Common Stock outstanding. As of April 26, 2000, the record
date for the Annual Meeting, there were 19,799,417 shares of Common Stock
outstanding.
The number of shares of Common Stock beneficially owned by each person
is determined under the rules of the Commission, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares as to which such person has sole
or shared voting power or investment power and also any shares which the
individual has the right to acquire within 60 days after March 24, 2000 through
the exercise of any stock option or other right. Unless otherwise indicated,
each person has sole investment and voting power (or shares such power with his
or her spouse) with respect to the shares set forth in the following table. The
inclusion herein of any shares deemed beneficially owned does not constitute an
admission of beneficial ownership of those shares. Unless otherwise specified,
the address for each person below is c/o HemaSure Inc., 140 Locke Drive,
Marlborough, Massachusetts 01752.
<TABLE>
<CAPTION>
Shares of Common Percentage of Common
Stock Beneficially Stock
Name and Address Owned Outstanding
---------------- ----- -----------
<S> <C> <C>
Sepracor Inc....................................................... 6,700,334(1) 30.2%(1)
111 Locke Drive
Marlborough, MA 01752
Gambro Inc......................................................... 6,177,035 31.2%
10811 West Collins Avenue
Lakewood, CO 80215-4498
Timothy J. Barberich(2)............................................ 142,250(2) *
David S. Barlow(3)................................................. 48,000(3) *
Frank Corbin(4).................................................... 0 *
Justin E. Doheny(5)................................................ 2,200(5) *
</TABLE>
-2-
<PAGE> 5
<TABLE>
<S> <C> <C>
John F. McGuire, III(6)............................................ 430,0000(6) 2.1%
James B. Murphy(7)................................................. 80,090(7) *
David Perez(4)..................................................... 0 *
Peter C. Sutcliffe(8).............................................. 76,525(8) *
Edward C. Wood(9).................................................. 0 *
All directors and executive officers as a group
(nine persons)(10)................................................. 779,065 (10) 3.8%(10)
</TABLE>
- ---------------
* Represents holdings of less than one percent.
(1) Includes 2,367,000 shares of Common Stock which Sepracor has the right
to acquire within 60 days after March 24, 2000 upon exercise of
outstanding warrants.
(2) Mr. Barberich is the President and Chief Executive Officer of Sepracor.
Includes 113,250 shares of Common Stock which Mr. Barberich has the
right to acquire within 60 days after March 24, 2000 upon exercise of
outstanding stock options.
(3) Includes 45,000 shares of Common Stock which Mr. Barlow has the right
to acquire within 60 days after March 24, 2000 upon exercise of
outstanding stock options.
(4) Messrs. Corbin and Perez are the Vice President of Research and
Development, and Vice President - U.S. Sales and Global Marketing,
respectively, of Gambro BCT, Inc. ("Gambro BCT"), a division of Gambro
Inc.
(5) Includes 1,500 shares of Common Stock which Mr. Doheny has the right to
acquire within 60 days after March 24, 2000 upon exercise of
outstanding options.
(6) Includes 400,000 shares of common Stock which Mr. McGuire has the right
to acquire within 60 days after March 24, 2000 upon exercise of
outstanding options.
(7) Includes 80,000 shares of Common Stock which Mr. Murphy has the right
to acquire within 60 days after March 24, 2000 upon exercise of
outstanding options.
(8) Includes 70,000 shares of Common Stock which Mr. Sutcliffe has the
right to acquire within 60 days after March 24, 2000 upon exercise of
outstanding options.
(9) Mr. Wood was the President of Gambro BCT until April 2000.
(10) Includes an aggregate of 709,750 shares of Common Stock which executive
officers and directors have the right to acquire within 60 days after
March 24, 2000 upon exercise of outstanding stock options.
-3-
<PAGE> 6
ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to elect as directors
the seven nominees named below, unless the proxy is marked otherwise. If a
stockholder returns a proxy without contrary instructions, the persons named as
proxies will vote to elect as directors the nominees named below, each of whom
is currently a member of the Board of Directors of the Company.
Each director will be elected to hold office until the 2001 Annual
Meeting of Stockholders and until his successor is duly elected and qualified.
All of the nominees have indicated their willingness to serve, if elected;
however, if any nominee should be unable to serve, the shares of Common Stock
represented by proxies may be voted for a substitute nominee designated by the
Board of Directors.
There are no family relationships between or among any officers or
directors of the Company.
Set forth below are the name and age of each member of the Board of
Directors, and the positions and offices held by him, his principal occupation
and business experience during the past five years, the names of other publicly
held companies of which he serves as a director and the year of the commencement
of his term as a director of the Company. Information with respect to the number
of shares of Common Stock owned, directly or indirectly, by each director as of
March 24, 2000 appears above under the heading "Stock Ownership of Certain
Beneficial Owners and Management."
Nominees For Director
Timothy J. Barberich, age 51, has served as Chairman of the Board of
the Company since April 1997, as a director since the Company's organization in
1993 and was Chairman of the Board of Directors from 1993 until March 1996. Mr.
Barberich was a founder of Sepracor Inc. ("Sepracor"), a specialty
pharmaceutical company, and has served as President, Chief Executive Officer and
a director of Sepracor since 1984, and as Chairman of the board of directors of
Sepracor since December 1999. As of March 24, 2000, Sepracor owned approximately
22% of the outstanding Common Stock of the Company. Mr. Barberich also serves as
Chairman of the board of directors of BioSepra Inc., a publicly traded
subsidiary of Sepracor engaged in the manufacture of instrumentation and media
for the pharmaceutical industry.
John F. Mcguire, III, age 53, has served as Chief Executive Officer,
President and a director of the Company since April 1997. Prior to that time,
Mr. McGuire served as Vice President and General Manager of Johnson & Johnson's
("J&J") Ortho Diagnostic Systems Blood Bank Business Unit since January 1996.
From March 1995 to January 1996, Mr. McGuire held the position of Vice
President, Sales & Marketing, North America for J&J. From August 1990 to March
1995, Mr. McGuire served as Managing Director of Ortho Diagnostic Systems, U.K.
and Belgium for J&J. From September 1988 to August 1990, Mr. McGuire held the
position of Marketing Director for the AIDS and Hepatitis Business Unit of J&J.
From 1977 to 1988, Mr. McGuire held various management positions at E.I. DuPont
De Nemours & Company, the last of which was National Sales Manager, AIDS &
Hepatitis Business. Mr. McGuire is a member of the Board of Trustees of the
National Blood Foundation Trust Fund.
David S. Barlow, age 43, has served as a director of the Company since
January 1994. Mr. Barlow has served as President of Black Diamond Capital since
September 1999. Mr. Barlow was
-4-
<PAGE> 7
Executive Vice President and President, Pharmaceuticals Division of Sepracor
from October 1995 until September 1999. From July 1993 to October 1995, Mr.
Barlow held the position of Senior Vice President and General Manager of the
Pharmaceuticals Division of Sepracor. From 1991 to 1993, he was president of the
Business Group, a management consulting firm. Previously, he was Vice President,
Worldwide Marketing and Business Development of Armour Pharmaceutical Company, a
subsidiary of Rhone-Poulenc Rorer, from 1988 to 1991. Prior to that time, he was
associated with Pfizer Inc. and Ares-Serono, Inc. in various business planning
and marketing positions. Mr. Barlow is a member of the board of directors of
Enzon Inc. and Pan Pacific Pharmaceutical, Inc., both biopharmaceutical
companies and serves as Chairman of the board of directors of Biostream, Inc.,
an imaging technology company.
Frank Corbin, age 53, has served as director of the Company since June
1999. Mr. Corbin has been Vice President of Research and Development of Gambro
BCT since July 1997. Prior to that Mr. Corbin served as Director of Research and
Development for Gambro BCT from January 1991 until July 1997.
Justin E. Doheny, age 48, has served as a director of the Company since
April 1998. Mr. Doheny has been Executive Vice President and Chief Operating
Officer of Saint Peter's University Hospital, New Brunswick, NJ, since August
1997. During 1996 (June- October), Mr. Doheny served as Senior Vice President of
Saint Barnabas Health Care System in Livingston, NJ. From December 1985 until
June 1996, Mr. Doheny held the position of President of Wayne General Hospital,
located in Wayne, NJ.
David Perez, age 40, has served as a director of the Company since
April 2000. Mr. Perez has been Vice President - U.S. Sales and Global Marketing
of Gambro BCT since May 1999. From May 1997 to May 1999 he was Vice President,
Operations, of UroTherapies, Inc., a physician practice management company. From
September 1995 to May1997 Mr. Perez was Vice President, Western Operations, of
Haemonetics , an automated blood component equipment company. Prior to that, he
was Area Vice President, Western United States, of Caremark International, a
pharmaceuticals services company. Mr. Perez is a member of the board of
directors of the National Blood Foundation and the National Blood Data Resource
Center.
Edward C. Wood, age 55, has served as a director of the Company since
June 1999. Mr. Wood was President of Gambro BCT from 1991 to April 2000. Gambro
BCT is a subsidiary of Gambro AB, a Swedish company, and is a leading provider
of blood separation products. Prior to that, Mr. Wood held various positions in
manufacturing, research and development and marketing with Gambro BCT. He served
on the board of Aastrom Biosciences, Inc. from August 1994 until February 1999.
Board and Committee Meetings
The Company has a standing Audit Committee of the Board of Directors,
which provides the opportunity for direct contact between the Company's
independent accountants and the Board of Directors. The Audit Committee has
responsibility for recommending the appointment of the Company's independent
accountants, reviewing the scope and results of audits and reviewing the
Company's internal accounting control policies and procedures. The Audit
Committee met twice in 1999. From January 1999 to July 1999, the members of the
Audit Committee were Messrs. Doheny and Stutz. From July 1999 to November 1999,
the members of the Audit Committee were Messrs. Doheny, Stutz and Corbin. Since
November 1999, the members of the Audit Committee have been Messrs. Doheny and
Corbin.
-5-
<PAGE> 8
The Company also has a standing Compensation Committee of the Board of
Directors, which provides recommendations to the Board of Directors regarding
compensation programs of the Company. The Compensation Committee is responsible
for establishing and modifying the compensation of all corporate officers of the
Company, adoption and amendment of all stock option and other employee benefit
plans, and the engagement of, terms of any employment agreements and
arrangements with, and termination of, all corporate officers of the Company.
The Compensation Committee met once in 1999. From January 1999 to July 1999, the
members of the Compensation Committee were Messrs. Doheny and Stutz. Since July
1999, the members of the Compensation Committee have been Messrs. Barberich,
Doheny and Wood. See "Report of the Compensation Committee" below.
The Company does not have a nominating committee or a committee serving
a similar function. Nominations are made by and through the full Board of
Directors.
The Board of Directors held four meetings during 1999. Each director
attended at least 75% of the total number of meetings (including consents in
lieu of meetings) of the Board of Directors.
Compensation for Directors
Directors who are neither officers nor employees of the Company or of
any subsidiary of the Company (the "Outside Directors") receive $1,000 for each
meeting of the Board they attend and are entitled to participate in the
Company's 1994 Director Stock Option Plan, as amended (the "Director Option
Plan"), provided that Mr. Barberich and Mr. Barlow do not receive compensation
for attendance at meetings of the Board. Directors who are officers or employees
of the Company do not receive any additional compensation for their services as
directors. On January 5, 1994, options to purchase an aggregate of 75,000 shares
of Common Stock at an exercise price of $2.00 per share were granted under the
Director Option Plan to the following directors: Mr. Barberich, 45,000 shares,
and Mr. Barlow, Mr. Stutz, and two former members of the Board (Messrs. Tullis
and Kimbell) 7,500 shares each. On May 17, 1995, options to purchase 1,500
shares of Common Stock at an exercise price of $5.50 per share were granted
under the Director Option Plan to the following directors: Mr. Barberich, Mr.
Barlow, Mr. Stutz and two former members of the Board (Messrs. Tullis and
Kimbell). On February 15, 1996, options to purchase 18,750 shares of Common
Stock at an exercise price of $12.375 per share were granted under the 1994
Stock Option Plan to Mr. Barberich. On May 16, 1996, options to purchase an
aggregate of 39,000 shares of Common Stock at an exercise price of $16.25 per
share were granted under the Director Option Plan to the following directors:
Mr. Barberich, Mr. Barlow, Mr. Kimbell, and Mr. Stutz, 9,750 shares each. On May
16, 1997, options to purchase an aggregate of 12,000 shares of Common Stock at
an exercise price of $1.75 per share were granted under the Director Option Plan
to the following directors: Mr. Barberich, Mr. Barlow, Mr. Kimbell and Mr.
Stutz, 3,000 shares each. On January 22, 1998, options to purchase an aggregate
of 162,000 shares of Common Stock, at an exercise price of $0.625, were granted
under the 1994 Stock Option Plan to the following directors: Mr. Barberich,
75,000 shares, and Messrs. Barlow and Stutz, 43,500 shares each. On May 26,
1998, options to purchase an aggregate of 16,500 shares of Common Stock at an
exercise price of $1.50 per share were granted under the Director Option Plan to
the following directors: Mr. Barberich, Mr. Barlow, and Mr. Stutz 3,000 shares
each and Mr. Doheny, 7,500 shares. On June 10, 1999, options to purchase an
aggregate of 27,000 shares of common stock at an exercise price of $4.875 per
share were granted under out 1994 Director Stock Option Plan to the following
directors: Mr. Barberich, Mr. Barlow, Mr. Doheny and Mr. Stutz, 3,000 shares
each, and Mr. Corbin and Mr. Wood, 7,500 shares each.
-6-
<PAGE> 9
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names, ages and positions of the
current executive officers of the Company.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
John F. McGuire............................. 53 President, Chief Executive Officer and Director
James B. Murphy............................. 43 Senior Vice President, Finance and Administration Treasurer and Secretary
Peter C. Sutcliffe.......................... 50 Vice President and Chief Operating Officer
</TABLE>
Mr. McGuire's biography is set forth under "Election of
Directors -- Nominees for Director."
Mr. Murphy has served as Senior Vice President, Finance and
Administration since February 1996. From April 1994 to January 1996, he served
as Vice President and Corporate Controller of the Company. Prior to that, from
1990 to April 1994, he served as Corporate Controller of Sepracor. Previously,
Mr. Murphy held the positions of Senior Corporate Accountant at BBN Inc. and
Senior Accountant at Arthur Andersen LLP.
Mr. Sutcliffe has served as Chief Operating Officer of the
Company since April 3, 1998. From May 1996 until that time, Mr. Sutcliffe served
as Vice President of Manufacturing Operations of the Company. From May 1982
until May 1996, Mr. Sutcliffe held the position of Vice President Manufacturing
for Corning Costar Incorporated. From 1976 until 1982, he was a plant
manufacturing manager at Millipore Corporation.
-7-
<PAGE> 10
Compensation of Executive Officers
Summary Compensation Table. The following table sets forth certain
information with respect to the annual and long-term compensation for the last
three fiscal years of the Company's President and Chief Executive Officer and
the Company's other executive officers (including former executive officers)
whose total annual salary and bonus for 1999 exceeded $100,000 (collectively,
the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
All
Other Annual Securities Other
Compensation Underlying Compensation
Name and Principal Position Year Salary ($) Bonus($) ($)(1) Options/SARs ($)(3)
--------------------------- ---- ---------- -------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John F. McGuire, III............ 1999 $282,000 $20,000 $95,632(2) 100,000 1,008
President and 1998 216,172 - - 200,000 300
Chief Executive Officer 1997 140,302 75,000 - 600,000 195
James B. Murphy................. 1999 $166,600 $10,000 - 50,000 $608
Senior Vice President 1998 140,063 - - 160,000 63
Finance and Administration 1997 119,387 - - 60,000 222
Peter C. Sutcliffe.............. 1999 $176,400 $10,000 - 50,000 $701
Vice President and 1998 160,125 - - 200,000 125
Chief Operating Officer 1997 143,005 - - - 112
</TABLE>
- -------------
(1) Other compensation in the form of perquisites and other personal
benefits, securities or property has been omitted if such compensation
constituted less than the lesser of $50,000 or 10% of the total salary
and bonus for the Named Executive Officer.
(2) Represents relocation expenses.
(3) Represents the taxable portion of group life insurance.
-8-
<PAGE> 11
Option Grant Table. The following table sets forth certain information
regarding options granted during the year ended December 31, 1999 by the Company
to the Named Executive Officers.
OPTION/SAR GRANTS IN LAST YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------
Percent of Market
Total Price of
Number of Options/ Securities Potential Realizable Value
Securities SARs Exercise Underlying at Assumed Annual Rates of
Underlying Granted to or Options/ Stock Price Appreciation
Options/SARs Employees In Base SARs For Option Term(2)
Granted Fiscal Price On Grant Expiration -----------------------
Name (#)(1) Year ($/sh) Date Date 5%($) 10%
---- ------ ---- ------ ---- ---- ----- ---
<S> <C> <C> <C> <C> <C> <C> <C>
John F. McGuire.......... 100,000 34.1297 $5.625 $5.625 9-1-09 $353,753 $896,480
James B. Murphy.......... 50,000 17.0648 $5.625 $5.625 9-1-09 $176,876 $448,240
Peter C. Sutcliffe....... 50,000 17.0648 $5.625 $5.625 9-1-09 $176,876 $448,240
</TABLE>
- ---------------
(1) Options vest in up to five equal annual installments beginning on the
first anniversary of the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for options
if exercised and sold at the end of the option term. These gains are
based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date options are granted. Actual gains, if
any, on stock option exercises will depend on the future performance of
the Common Stock on the date on which the options are sold.
Year-End Option Table. The following table sets forth certain
information regarding options held as of December 31, 1999 by the Named
Executive Officers. No Named Executive Officer exercised stock options in 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST YEAR AND
YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of Unexercised
Unexercised In-The-Money
Options/SARs at Options/SARs at
Fiscal Year-End (#) Fiscal Year-End ($)(1)
------------------- ----------------------
Shares
Acquired
on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable(2) Unexercisable
---- ------------ ------------ ---------------- -------------
<S> <C> <C> <C> <C>
John F. McGuire..................... 200,000/700,000 $987,600/2,962,800
James B. Murphy..................... 50,000/220,000 $234,400/789,460
Peter C. Sutcliffe.................. 45,000/205,000 $209,710/715,390
</TABLE>
- ---------------
(1) Value is based on the closing sales price of the Company's Common Stock
on December 31, 1999 ($5.5625), the last trading day of the Company's
1999 fiscal year, less the applicable option exercise price.
-9-
<PAGE> 12
Option Repricing Table. The table set forth below provides certain
information concerning all adjustments to the exercise prices of outstanding
stock options held by executive officers of the Company during the past 10
years.
<TABLE>
<CAPTION>
TEN-YEAR OPTION/SAR REPRICINGS
Number of
Securities Market Price Exercise Length of Original
Underlying of Stock at Price at Option Term
Options/SARs Time of Time of Remaining at Date
Repriced or Repricing or Repricing or New of Repricing or
Name Date Amended Amendment Amendment Exercise Price Amendment (years)
---- ------- --------- --------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
John F. McGuire.......... 1/22/98 600,000 $0.6250 $ 2.5630 $0.6250 9
James B. Murphy.......... 4/16/97 12,000 $3.5000 $ 7.5000 10
4/16/97 30,000 $3.5000 $12.3800 $3.5000 10
1/22/98 120,000 $0.6250 $ 3.5000 $3.5000 9
$0.6250
Peter C. Sutcliffe....... 4/16/97 25,000 $3.5000 $14.3750 $3.5000 9
1/22/98 100,000 $0.6250 $ 3.5000 $0.6250 9
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors, which is
currently comprised of three non-employee directors, Messrs. Barberich, Doheny
and Wood, are responsible for determining the compensation package of each
executive officer and recommending it to the Board of Directors. The
Compensation Committee sets the compensation for executive officers and
establishes compensation policies for the Company's Chief Executive Officer and
the other executive officers of the Company. All decisions by the Compensation
Committee are reviewed by the Board of Directors.
The Company's executive compensation program is designed to promote the
achievement of the Company's business goals, and, thereby, to maximize corporate
performance and stockholder returns. Executive compensation consists of a
combination of base salary, bonus and stock-based incentives. The Compensation
Committee considers stock incentives to be a critical component of an
executive's compensation package in order to help align executive interests with
stockholder interests.
Compensation Philosophy
The objective of the executive compensation program is to align
compensation with business objectives and individual performance, and to enable
the Company to attract, retain and reward executive officers who are expected to
contribute to the long-term success of the Company. The Company's executive
compensation philosophy is based on the principles of competitive and fair
compensation and sustained performance.
- COMPETITIVE AND FAIR COMPENSATION
The Company is committed to providing an executive
compensation program that helps attract and retain highly
qualified executives. To ensure that compensation is
competitive, the Company compares its compensation practices
with those of other companies in the industry and sets its
compensation guidelines based on this review. The Company
believes compensation for its executive officers is within the
range of compensation paid to executives with comparable
qualifications, experience and responsibilities in the same or
similar businesses and of comparable size and success. The
Company also strives to achieve equitable relationships both
among the compensation of individual officers and between the
compensation of officers and other employees throughout the
organization.
- SUSTAINED PERFORMANCE
Executive officers are rewarded based upon corporate
performance and individual performance. Corporate performance
is evaluated by reviewing the extent to which strategic and
business plan goals are met, including such factors as
achievement of operating budgets, timely development and
commercial introduction of new products, establishment of
strategic alliances with third parties and performance
relative to competitors. Individual performance is evaluated
by reviewing attainment of specified individual objectives and
the degree to which teamwork and Company values are fostered.
In evaluating each executive officer's performance, the Company
generally conforms to the following process:
- Company and individual goals and objectives are established at
the beginning of the performance cycle.
- At the end of the performance cycle, the accomplishments of
the executive's goals and objectives and his contributions to
the Company are evaluated.
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<PAGE> 13
- The executive's performance is then compared with peers within
the Company and the results are communicated to the executive.
- The comparative results, combined with comparative
compensation practices of other companies in the industry, are
then used to determine salary, bonus and stock compensation
levels.
Annual compensation for the Company's executives generally consists of
a base salary, bonus and from time to time, the Committee may consider the
granting of stock options based upon performance in a particular year.
The salary for executives is generally set by reviewing compensation
for competitive positions in the market and the historical compensation levels
of the executives. Increases in annual salaries are based on actual corporate
and individual performance against targeted performance and various subjective
performance criteria. Targeted performance criteria vary for each executive
based on his area of responsibility, and may include achievement of the
operating budget for the Company as a whole or of a department or project of the
Company, continued innovation in development and commercialization of the
Company's technology and products, timely development and commercial
introduction of new products, implementation of financing strategies and
establishment of strategic alliances with third parties. Subjective performance
criteria include an executive's ability to motivate others, develop the skills
necessary to grow as the Company matures, recognize and pursue new business
opportunities and initiate programs to enhance the Company's growth and success.
The Committee does not use a specific formula based on these targeted
performance and subjective criteria, but instead makes an evaluation of each
executive officer's contributions in light of all such criteria.
Compensation at the executive officer level also includes the long-term
incentives afforded by stock options. The stock option program is designed to
promote the identity of long-term interests between the Company's employees and
its shareholders and assist in the retention of executives. The size of option
grants is generally intended to reflect the executive's position with the
Company and his contributions to the Company, including his success in achieving
the individual performance criteria described above. The option program
generally uses a vesting period of up to five years to encourage key employees
to continue in the employ of the Company. All stock options granted to executive
officers in 1999 were granted at fair market value on the date of grant. During
1999, all executive officers received options to purchase an aggregate of
200,000 shares of Common Stock, at a weighted average exercise price of $5.625
per share.
Executive officers are also eligible to participate in the Company's
1995 Employee Stock Purchase Plan, as amended (the "Purchase Plan"). The
Purchase Plan is available to virtually all employees of the Company and
generally permits participants to purchase shares of Common Stock at a discount
of approximately 15% from the fair market value at the beginning or end of the
applicable purchase period.
Base Salaries
The base salaries of the Named Executive Officers have been set by
reviewing compensation for competitive positions in the market and the
historical compensation levels of such executives. The employment agreements
with the Named Executive Officers are described more fully under "Certain
Relationship and Related Transactions."
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), enacted in 1993, generally disallows a tax deduction to public
companies for compensation over $1 million paid to the corporation's Chief
Executive Officer and four other most highly compensated executive officers.
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<PAGE> 14
Qualifying performance compensation will not be subject to the deduction limit
if certain requirements are met. The Company intends to structure the
performance-based portion of the compensation of its executive officers (which
currently consists of stock option grants and performance based bonuses
described above), in a manner that complies with the new statute to mitigate any
disallowance of deductions.
Compensation Committee
Timothy J. Barberich
Edward C. Wood
Justin E. Doheny
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Messrs.
Barberich, Wood and Mr. Doheny. None of or Messrs. Barberich, Wood or Doheny
were at any time during 1999, or formerly, an officer or employee of the Company
or any subsidiary of the Company, nor has any member of the Compensation
Committee had any relationship with the Company requiring disclosure under Item
404 of Regulation S-K under the Exchange Act.
No executive officer of the Company has served in 1999 as a director or
member of the Compensation Committee (or other committee serving an equivalent
function) of any other entity, one of whose executive officers served as a
director of or member of the Compensation Committee of the Company.
THE FOLLOWING SECTION OF THIS PROXY STATEMENT SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY FILING BY THE COMPANY WITH THE SEC UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, NOTWITHSTANDING ANY SUCH INCORPORATION BY REFERENCE OF ANY OTHER
PORTIONS OF THIS PROXY STATEMENT.
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<PAGE> 15
COMPARATIVE STOCK PERFORMANCE
The comparative stock performance graph below compares the cumulative
stockholder return on the Common Stock of the Company for the period from
December 31, 1994 through the year ended December 31, 1999 with the cumulative
total return on (i) the CRSP Total Return Index for The Nasdaq Stock Market (the
"Nasdaq Composite Index"), and (ii) the Nasdaq Pharmaceutical Index (assuming
the investment of $100 in the Company's Common Stock on January 1, 1995, the
Nasdaq Composite Index and the Nasdaq Pharmaceutical Index on December 31, 1994
and reinvestment of all dividends).
Measurement points are on the last trading day of the years ended
December 31, 1994, December 31, 1995, December 31, 1996, December 31, 1997,
December 31, 1998 and December 31, 1999.
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
HemaSure Inc. 100 396.12 194.18 29.13 52.43 186.41
Nasdaq Composite Index 100 141.33 173.89 213.07 300.25 542.43
Nasdaq Pharmaceutical Index 100 183.41 183.98 189.98 241.68 451.62
</TABLE>
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<PAGE> 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Sepracor. The Company was organized in December 1993 as a subsidiary of
Sepracor. Effective January 1, 1994, Sepracor transferred its blood filtration
and membrane filter design business to the Company in exchange for 3,000,000
shares of Common Stock. As of March 24, 2000, Sepracor beneficially owned
approximately 22% of the Company's outstanding Common Stock. Mr. Barberich, a
director of the Company, is President and Chief Executive Officer of Sepracor.
Until September 1999, Mr. Barlow, a director of the Company, was Executive Vice
President and President, Pharmaceuticals Division of Sepracor.
In September 1998, the Company completed a $5 million revolving line of
credit arrangement with a commercial bank. Sepracor, the Company's largest
shareholder has guaranteed to repay amounts borrowed under the line of credit.
In exchange for the guarantee, the Company granted to Sepracor warrants to
purchase up to 1,700,000 shares of the Company's common stock at a price of
$0.69 per share. The warrants will expire in the year 2003 and have certain
registration rights associated with them. In March 1999, Sepracor purchased an
additional 1,333,334 shares of Common Stock of the Company for $1.50 per share
and in connection therewith received warrants to purchase an additional 667,000
shares at a price of $1.50 per share and certain registration rights in respect
of such acquired securities.
On March 23, 1999, we completed a private placement financing with
Sepracor in which we received $2,000,000 in exchange for 1,333,334 shares of our
common stock and warrants to purchase an additional 667,000 shares of common
stock at $1.50 per share. The warrants will expire in the year 2004 and have
certain registration rights associated with them. The Company may require
Sepracor to exercise these warrants at any time after the Company completes an
equity financing for at least $3,000,000 with a third party and the market price
of our common stock is greater than $3.00 per share for 15 consecutive trading
days.
Sepracor is entitled to certain rights with respect to the registration
under the Securities Act of a total of 6,700,334 shares of common stock,
including shares of common stock issuable upon exercise of outstanding warrants.
These rights provide that Sepracor may require the Company to register shares
subject to certain conditions and limitations.
Any future arrangements and transactions between us and Sepracor will
continue to be on terms which we determine are fair and reasonable to us.
Gambro Inc. On May 3, 1999, we completed a private placement financing
with Gambro Inc. The stock subscription agreement, which we entered into with
Gambro Inc. in connection with this financing, provides for an initial
investment of $9,000,000 in exchange for 4,500,000 shares of our common stock.
The stock subscription agreement also provides Gambro Inc. with an option to
purchase additional shares of our common stock for up to an aggregate purchase
price of $3,000,000 at any time between August 3, 1999 and May 3, 2000 with the
price per share of common stock to be based upon the market price of our common
stock. In October 1999, Gambro Inc. exercised this option in full. In connection
with the exercise of this option, Gambro Inc. purchased 498,355 shares at a
price of $6.02 per share. The price and number of shares reflects the average
price of our stock in the 30 days prior to the exercise date of October 5, 1999.
The stockholders' agreement, which we entered into with Gambro Inc. in
connection with this financing, provides that Gambro Inc. will have
representation on our board of directors of up to two directors and our
representative committees and contains, among other things, various registration
rights and anti-dilution and standstill provisions. Subject to certain terms and
conditions, the anti-dilution provisions prohibit us from selling or issuing our
common stock or securities convertible into our common stock in any offering to
a third party without offering Gambro Inc. the opportunity to purchase at the
same price and terms that number of securities necessary for Gambro Inc. to
maintain its beneficial ownership of our outstanding common
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<PAGE> 17
stock. Furthermore, in an offering or in certain other limited situations, we
must provide Gambro Inc. with notice of our intention to sell as well as a right
to negotiate with us first for the purchase of our securities. Gambro Inc.
agrees to certain restrictions on its ability to sell our common stock owned by
it and its permitted transferees. Gambro Inc. also agrees to refrain from
acquiring beneficial ownership of additional equity or debt securities of our
company, engaging in certain proxy solicitation activities, seeking to control
our management, policies or affairs and taking certain actions relating to
business combinations and similar transactions without prior approval of our
board of directors. Gambro Inc. purchased 1,178,680 shares of common stock in
the private placement financing consummated by the Company in March 2000.
Messrs. Corbin and Perez, two of the Company's directors, are Vice
President of Research and Development and Vice President, U.S. Sales and Global
Marketing, respectively, of Gambro BCT. Until April 2000, Mr. Wood, one of our
directors, was President of Gambro BCT.
In 1998, we completed a distribution and development agreement, which
was amended in May 1999, with Gambro Inc. to act as our exclusive distributor of
our r\LS System worldwide, except for sales to the American Red Cross.
Furthermore, this agreement provides that Gambro Inc. may (upon mutual agreement
by us and Gambro Inc.) distribute additional future products developed by us
that filter blood and its components. Gambro Inc. markets and sells blood
component apheresis equipment to the blood center market. The agreement with
Gambro Inc. contemplates the development by us of an OEM filter for use the with
Gambro Inc.'s Trima Automated Blood Collection System. The distribution
agreement provides for a five year term that expires in June 2004, subject to
automatic three year renewals unless the agreement is previously terminated.
Employment and Retention Agreements. The Company entered into an
employment agreement, as of April 1, 1997 (the "Agreement"), with John F.
McGuire which provides that Mr. McGuire serve as President and Chief Executive
Officer of the Company. The Agreement provided for a first year salary of
$14,583 per month and an annual bonus of $75,000 to be earned upon the
achievement of certain goals as determined by the Board of Directors, and for
adjustments thereto in subsequent years, as determined by the Board of Directors
or its Compensation Committee. Upon execution of the Agreement, Mr. McGuire
received an option to purchase 600,000 shares of Common Stock at an exercise
price equal to the "low" bid price for the Common Stock as quoted on the Nasdaq
National Market System for the week of April 4, 1997. The options vest in four
equal annual installments commencing in 1998. Pursuant to the Agreement, an
additional 200,000 incentive stock options were issued to Mr. McGuire in
January, 1998. Finally, pursuant to the terms of the Agreement, if Mr. McGuire
is terminated other than for cause, he will receive one year's salary plus the
bonus payable for the prior year, to be paid monthly over the course of the 12
months following such termination, or until he secures employment in an
equivalent role.
On December 15, 1998, the Company entered into senior management
retention Agreements (the "Retention Agreements"), with each of John F. McGuire,
James B. Murphy and Peter C. Sutcliffe, (each individually a "Key Employee"), to
reinforce and encourage their continued attention and dedication to their
duties. Pursuant to the Retention Agreements, in the event a change of control
occurs (as defined in the agreements) and the Key Employee (i) is terminated by
the Company after the change of control, (ii) remains employed by the Company
for 12 months after the change of control or (iii) terminates his employment
with the Company for good cause, then the Key Employee is eligible for (i)
payment of his full base salary plus all amounts entitled under any compensation
plan through the termination date, (ii) severance payments, payable in 24 equal
monthly installments equal to 200% (except for Mr. McGuire who shall receive
300%), of the higher of his annual base salary immediately prior to the date of
termination or his base salary in effect immediately prior to the change of
control and (iii) life, disability, dental, accident and group health insurance
benefits for a period of 36 months after such termination. The Retention
Agreements are
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<PAGE> 18
automatically renewed each year unless written notice of termination is
delivered by October 30th of any given year.
Novo Nordisk A/S. Under the terms of the May 1996 agreement relating to
the Company's acquisition of the plasma product unit of Novo Nordisk A/S (the
"Denmark Acquisition"), the purchase price to be paid for the plasma product
unit was to be comprised of three portions: (i) $1,800,000 was to be payable in
1998 in cash or common stock of the Company or a subsidiary of the Company, at
the Company's option; (ii) approximately $13,000,000 was to be payable from time
to time upon the sale of acquired inventory (valued at approximately
$13,000,000), but in any event no later than 1998, provided that up to
approximately $3,000,000 of such portion could be forgiven in certain
circumstances; and (iii) approximately $8,000,000 was to be payable in 1998 in
cash or Common Stock of the Company or a subsidiary of the Company, at the
Company's option, provided that all of this portion would be forgiven in certain
circumstances. In January 1997, the Company and Novo Nordisk entered into a
Restructuring Agreement relating to the Denmark Acquisition (the "Restructuring
Agreement"). Pursuant to the Restructuring Agreement, approximately $23,000,000
of indebtedness owed to Novo Nordisk was restructured by way of issuance by the
Company to Novo Nordisk of a 12% convertible subordinated promissory note in the
principal amount of approximately $11,722,000, which was due and payable on
December 31, 2001 (the "Note"), with interest payable quarterly (provided that
up to approximately $3,000,000 would be forgiven in certain circumstances).
Approximately $8,500,000 of the reduction of such indebtedness was forgiven. The
remainder of the reduction represented a net amount due from Novo Nordisk to the
Company related to various service arrangements between the two companies. On
January 6, 1998, the Company elected to convert all indebtedness under the Note,
pursuant to the terms thereof, into shares of Common Stock of the Company at a
conversion price equal to $10.50 per share, or 827,375 shares. Pursuant to a
registration rights agreement, the Company previously granted Novo Nordisk
certain registration rights with respect to any shares of Common Stock acquired
by Novo Nordisk upon conversion of the Note. Novo Nordisk has contested the
conversion of the Note, including the forgiveness of the $3,000,000 amount. The
Company believes such claims are without merit.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP is currently serving as the Company's
independent accountants. Coopers & Lybrand L.L.P. has served as the Company's
independent accountants since 1998. Representatives of PricewaterhouseCoopers
LLP are expected to be present at the Annual Meeting. They will have the
opportunity to make a statement if they desire to do so and will also be
available to respond to appropriate questions from stockholders.
OTHER MATTERS
The Board of Directors does not know of any other matters which may
come before the meeting. However, if any other matters are properly presented to
the meeting, it is the intention of the persons named in the accompanying proxy
to vote, or otherwise act, in accordance with their judgment on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph, facsimile and personal interviews. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names, and the Company will reimburse them for their
reasonable out-of-pocket expenses incurred in connection with the distribution
of proxy materials.
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<PAGE> 19
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Marlborough, Massachusetts not later than January 25, 2001 for inclusion in
the proxy statement for that meeting.
By Order of the Board of Directors
JAMES B. MURPHY
Secretary
April 28, 2000
THE BOARD OF DIRECTORS ENCOURAGES STOCKHOLDERS TO ATTEND THE
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT
RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR
COOPERATION WILL BE APPRECIATED. STOCKHOLDERS WHO ATTEND THIS MEETING MAY VOTE
THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
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<PAGE> 20
HEMASURE INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting of Stockholders - June 7, 2000
Those signing on the reverse side, revoking any prior proxies, hereby
appoint(s) Timothy J. Barberich and John F. McGuire, or each or any of them,
with full power of substitution, as proxies for those signing on the reverse
side to act and vote at the 2000 Annual Meeting of Stockholders of HemaSure
Inc., and at any adjournments or postponements thereof as indicated upon all
matters referred to on the reverse side and described in the Proxy Statement for
the Meeting, and, in their discretion, upon any other matters which may properly
come before the Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER(S). IF NO OTHER INDICATION IS MADE, THE PROXIES
SHALL VOTE "FOR" PROPOSAL NUMBERS 1 AND 2.
A VOTE FOR THE DIRECTOR NOMINEES AND FOR PROPOSAL NUMBER 2 IS RECOMMENDED
BY THE BOARD OF DIRECTORS.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN
ENCLOSED ENVELOPE.
-----------------
| SEE REVERSE |
| SIDE |
-----------------
<PAGE> 21
PLEASE MARK YOUR
[X] VOTES AS IN THIS
EXAMPLE
<TABLE>
<CAPTION>
WITHHOLD AUTHORITY TO
FOR ALL NOMINEES VOTE FOR ALL NOMINEES
LISTED AT RIGHT LISTED AT RIGHT
<S> <C> <C> <C>
1. ELECTION
OF [ ] [ ] NOMINEES: Timothy J. Barberich
DIRECTORS David S. Barlow
Frank Corbin
Justin E. Doheny
John F. McGuire
David Perez
Edward C. Wood
</TABLE>
INSTRUCTIONS: To withhold authority to vote for
individual nominee(s) strike a line through
each such nominee's name in the list at right.
Your shares will be voted for the remaining
nominee(s).
FOR AGAINST ABSTAIN
2. To transact such other business as may
properly come before the meeting or any [ ] [ ] [ ]
adjournment thereof.
Please read the reverse side of this card.
PLEASE VOTE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_____________________________________________________________
_____________________________________________________________
SIGNATURE________________________________________________________ DATE_________
NOTE: Please sign this proxy exactly as your name appears hereon. Joint owners
should each sign personally. Trustees or other Fiduciaries should indicate
the capacity in which they sign. If a corporation or partnership, the
signature should be that of an authorized officer who should give his or
her title.
