XML 37 R25.htm IDEA: XBRL DOCUMENT v3.23.1
CAPITAL STOCK
 12 Months Ended
Apr. 01, 2023
Share-based Payment Arrangement [Abstract]  
CAPITAL STOCK CAPITAL STOCK
Stock Plans

On July 25, 2019 (the “Effective Date”), the Haemonetics Corporation 2019 Long-Term Incentive Compensation Plan (the “2019 Equity Plan”) was approved and became effective. The 2019 Equity Plan permits the award of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (including performance-based restricted stock units) and other awards to the Company’s key employees, non-employee directors and certain consultants and advisors of the Company and its subsidiaries. The 2019 Equity Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which consists of four independent members of the Company’s Board of Directors, and
is the successor to the Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, as amended (the “2005 Equity Plan”).

Upon the Effective Date, no further awards were granted under the 2005 Equity Plan; however, each outstanding award under the 2005 Equity Plan will remain outstanding under that plan and continue to be governed under its terms and any applicable award agreement. The maximum number of shares available for award under 2019 Equity Plan is 5,759,433, which consists of 2,700,000 shares of common stock authorized for issuance under the 2019 Equity Plan plus 3,059,433 shares of common stock reserved for issuance under the 2005 Equity Plan that remained available for grant under the 2005 Plan as of the Effective Date. Under the 2019 Equity Plan, any shares that are subject to the award of stock options or SARs will be counted against the authorized share reserve as one share for every one share issued and any shares that are subject to awards other than stock options, SARs or cash awards will be counted against the authorized share reserve as 2.76 shares for every one share granted. Shares of common stock subject to outstanding grants under the 2005 Equity Plan as of the Effective Date that terminate, expire, or are otherwise canceled without having been exercised will be added to the share reserve at the applicable 2019 Equity Plan ratios. The total shares available for future grant as of April 1, 2023 were 3,118,602.

Share-Based Compensation

Compensation cost related to share-based transactions is recognized in the consolidated financial statements based on fair value. The total amount of share-based compensation expense, which is recorded on a straight line basis, is as follows:
(In thousands)202320222021
Selling, general and administrative expenses$21,903$20,694$22,888
Research and development2,364 2,537 1,874 
Cost of goods sold1,316 1,128 754 
$25,583$24,359$25,516

Stock Options

Options are granted to purchase common stock at prices as determined by the Committee, but in no event shall such exercise price be less than the fair market value of the common stock at the time of the grant. Options generally vest in equal installments over a four year period for employees and one year from grant for non-employee directors. Options expire not more than 7 years from the date of the grant. The grant-date fair value of options, adjusted for estimated forfeitures, is recognized as expense on a straight line basis over the requisite service period, which is generally the vesting period. Forfeitures are estimated based on historical experience.
A summary of stock option activity for the fiscal year ended April 1, 2023 is as follows:
Options
Outstanding		Weighted
Average
Exercise Price
per Share		Weighted
Average
Remaining
Life (years)		Aggregate
Intrinsic
Value
($000’s)
Outstanding at April 2, 20221,056,638 $66.87 3.79$12,423 
Granted276,928 58.02   
Exercised(59,400)44.82   
Forfeited/Canceled(123,972)82.42   
Outstanding at April 1, 20231,150,194 $64.21 3.55$27,481 
Exercisable at April 1, 2023618,735 $62.68 1.97$16,617 
Vested or expected to vest at April 1, 20231,054,821 $64.44 3.12$25,311 

The total intrinsic value of options exercised was $1.9 million, $1.7 million and $8.2 million during fiscal 2023, 2022 and 2021, respectively.

As of April 1, 2023, there was $9.1 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of 2.6 years.

The fair value was estimated using the Black-Scholes option-pricing model based on the closing stock price at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of the Company’s common stock over the expected term of the option. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued. The expected life of the option was estimated with reference to historical exercise patterns, the contractual term of the option and the vesting period.

The assumptions utilized for option grants during the periods presented are as follows:
202320222021
Volatility45.0 %41.9 %33.5 %
Expected life (years)5.04.94.9
Risk-free interest rate2.9 %0.8 %0.4 %
Dividend yield0.0 %0.0 %0.0 %
Grant-date fair value per Option$24.86$20.97$30.53

Restricted Stock Units

Restricted Stock Units (“RSUs”) generally vest in equal installments over a four year period for employees and one year from grant for non-employee directors. The grant-date fair value of RSUs, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair market value of RSUs is determined based on the market value of the Company’s shares on the date of grant.
A summary of RSU activity for the fiscal year ended April 1, 2023 is as follows:
SharesWeighted
Average
Grant Date Fair Value
Unvested at April 2, 2022386,536 $69.27 
Granted207,177 59.36 
Vested(161,045)70.24 
Forfeited(51,360)65.64 
Unvested at April 1, 2023381,308 $63.94 

The weighted-average grant-date fair value of RSUs granted and total fair value of RSUs vested are as follows:
202320222021
Grant-date fair value per RSU$59.36 $56.96 $102.19 
Fair value of RSUs vested$70.24 $79.60 $66.87 

As of April 1, 2023, there was $15.4 million of total unrecognized compensation cost related to non-vested restricted stock units. This cost is expected to be recognized over a weighted average period of 2.5 years.

Performance Share Units

The grant date fair value of Performance Share Units (“PSUs”), adjusted for estimated forfeitures, is recognized as expense on a straight line basis from the grant date through the end of the performance period. The value of these PSUs is generally based on relative total shareholder return which equals total shareholder return for the Company as compared with total shareholder return of the PSU comparison group, measured over a three year performance period. The PSUs comparison group consists of the Standard and Poor's (“S&P”) MidCap 400 Index. Depending on the Company’s relative performance during the performance period, a recipient of the award is entitled to receive a number of ordinary shares equal to a percentage, ranging from 0% to 200%, of the award granted. If the Company’s total shareholder return for the performance period is negative, then any share payout will be capped at 100% of the target award, regardless of the Company’s performance relative to the its comparison group. As a result, the Company may issue up to 647,974 shares related to outstanding performance-based awards.
A summary of PSU activity for the fiscal year ended April 1, 2023 is as follows:
SharesWeighted
Average
Grant Date Fair Value
Unvested at April 2, 2022282,946 $102.17 
Granted(1)
88,851 84.96 
Vested— — 
Forfeited(47,810)89.43 
Unvested at April 1, 2023323,987 $87.35 
(1) Includes the adjustment of 62,577 shares for awards granted in fiscal 2020, based on actual relative total shareholder return of 0%

The Company uses the Monte Carlo model to estimate the probability of satisfying the performance criteria and the resulting fair value of PSU awards with market conditions. The assumptions used in the Monte Carlo model for PSUs granted during each fiscal year were as follows:
202320222021
Expected stock price volatility52.22 %49.23 %36.79 %
Peer group stock price volatility47.43 %45.75 %42.31 %
Correlation of returns65.45 %65.06 %65.12 %
The weighted-average grant-date fair value of PSUs granted and total fair value of PSUs vested are as follows:
202320222021
Grant-date fair value per PSU$84.96 $72.52 $123.92 
Fair value of PSUs vested$— $— $47.43 

As of April 1, 2023, there was $14.5 million of total unrecognized compensation cost related to non-vested performance share units. This cost is expected to be recognized over a weighted average period of 1.8 years.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (the “Purchase Plan”) under which a maximum of 3,200,000 shares (subject to adjustment for stock splits and similar changes) of common stock may be purchased by eligible employees. Substantially all of its full-time employees are eligible to participate in the Purchase Plan.

The Purchase Plan provides for two “purchase periods” within each of its fiscal years, the first commencing on November 1 of each year and continuing through April 30 of the next calendar year, and the second commencing on May 1 of each year and continuing through October 31 of such year. Shares are purchased through an accumulation of payroll deductions (of not less than 2% or more than 15% of compensation, as defined) for the number of whole shares determined by dividing the balance in the employee’s account on the last day of the purchase period by the purchase price per share for the stock determined under the Purchase Plan. The purchase price for shares is the lower of 85% of the fair market value of the common stock at the beginning of the purchase period, or 85% of such value at the end of the purchase period.

The fair values of shares purchased under the Employee Stock Purchase Plan are estimated using the Black-Scholes single option-pricing model with the following weighted average assumptions:
202320222021
Volatility44.9 %55.6 %49.8 %
Expected life (months)666
Risk-free interest rate2.9 %0.1 %0.1 %
Dividend Yield0.0 %0.0 %0.0 %

The weighted average grant date fair value of the six-month option inherent in the Purchase Plan was approximately $18.10, $20.77 and $30.77 during fiscal 2023, 2022 and 2021, respectively.