SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
- --------------------------------------------------------------------------------
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 Rule 14a-11(c) or Rule 14a-2
Diatide, 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)(4) 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>
DIATIDE, INC.
Nine Delta Drive
Londonderry, New Hampshire 03053
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
Diatide, Inc., a Delaware corporation (the "Company"), will be held on Tuesday,
May 12, 1998 at 10:00 a.m. at the offices of Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts (the "Meeting") for the purpose of considering
and voting upon the following matters:
1. To elect one Class II Director for the ensuing three years;
2. To ratify the selection of Ernst & Young LLP as independent auditors of
the Company for the current year; and
3. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The Board of Directors has no knowledge of any other business to be
transacted at the Meeting.
The Board of Directors has fixed the close of business on Thursday, April
2, 1998 as the record date for the determination of stockholders entitled to
notice of and to vote at the Meeting and at any adjournments thereof.
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1997, which contains financial statements and other information of
interest to stockholders, accompanies this Notice and the enclosed Proxy
Statement.
By order of the Board of Directors,
Ronald B. Kinder, Secretary
April 13, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE TO ASSURE
REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE AFFIXED IF THE
PROXY IS MAILED IN THE UNITED STATES.
<PAGE>
DIATIDE, INC.
Nine Delta Drive
Londonderry, New Hampshire 03053
------------------------
PROXY STATEMENT
------------------------
For the Annual Meeting of Stockholders
To Be Held on May 12, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Diatide, Inc. (the "Company") for the
Annual Meeting of Stockholders to be held on Tuesday, May 12, 1998 at 10:00
a.m. at the offices of Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts and at any adjournments thereof (the "Meeting").
All proxies will be voted in accordance with the instructions of the
stockholder. 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 its exercise by delivery of a
written revocation or a subsequently dated proxy to the Secretary of the
Company or by voting in person at the Meeting. Attendance at the Meeting will
not itself be deemed to revoke a proxy unless the stockholder gives affirmative
notice at the Meeting that the stockholder intends to revoke the proxy and vote
in person.
The Notice of Meeting, this Proxy Statement, the enclosed proxy and the
Company's Annual Report to Stockholders for the year ended December 31, 1997
are being mailed to stockholders on or about April 9, 1998. The Company will,
upon written request of any stockholder, furnish without charge a copy of its
Annual Report on Form 10-K for the year ended December 31, 1997, as filed with
the Securities and Exchange Commission (the "SEC"), without exhibits. Please
address all such requests to the Company, Attention of Daniel F. Harrington,
Chief Financial Officer, Nine Delta Drive, Londonderry, New Hampshire 03053.
Exhibits to such Form 10-K will be provided upon written request and payment of
an appropriate processing fee.
Voting Securities and Votes Required
On April 2, 1998, the record date for determination of stockholders
entitled to notice of and to vote at the Meeting, there were outstanding and
entitled to vote an aggregate of 10,555,652 shares of Common Stock of the
Company, $.001 par value per share (the "Common Stock"), and 1,210,256 shares
of Series A Convertible Preferred Stock of the Company, $.01 par value per
share (the "Preferred Stock"). Holders of shares of Common Stock are entitled
to one vote per share. Holders of shares of Preferred Stock are entitled to one
vote for each share of Common Stock issuable as of the date of such vote upon
conversion of each share of Preferred Stock held (currently, one vote per share
of Preferred Stock). On all matters submitted to the record holders of shares
of Common Stock, such holders and the record holders of shares of Preferred
Stock will vote together as one class.
The holders of a majority of the shares of capital stock issued and
outstanding and entitled to vote at the Meeting shall constitute a quorum for
the transaction of business at the Meeting. Shares of capital stock present in
person or represented by proxy (including shares which abstain or 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 at the
Meeting.
The affirmative vote of the holders of a plurality of the votes cast by
the stockholders entitled to vote at the Meeting is required for the election
of directors. The affirmative vote of the holders of a majority of the shares
of capital stock present or represented by proxy and voting on the matter is
required for the ratification of the selection of the Company's independent
auditors.
Shares which 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
<PAGE>
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.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information, as of January 31,
1998, regarding the beneficial ownership of shares of the Company's Common
Stock and Preferred Stock, the Company's two classes of voting stock, by (i)
each person or entity known by the Company to own beneficially more than 5% of
the outstanding shares of Common Stock, (ii) each person or entity known by the
Company to own beneficially more than 5% of the outstanding shares of Preferred
Stock, (iii) each director and director nominee of the Company, (iv) the Named
Executive Officers (as defined in the Summary Compensation Table below), and
(v) the directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Common Stock Preferred Stock
------------------------------- ----------------------------- Total Percent
Number Number of Common
of of and Preferred
Shares Shares Stock on an
Beneficially Percent Beneficially Percent of As-Converted
Owned(1) of Class Owned Class Basis(2)
------------------ ---------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
5% Stockholders
Chase Venture Capital Associates,
L.P. .................................. 1,653,564(3) 14.3% 871,795 72.0% 13.0%
380 Madison Avenue, 12th Floor
New York, NY 10019
Nycomed Imaging AS ..................... 1,500,000 14.2% -- -- 12.8%
Nycoveien 1-2
N-0401 Oslo, Norway
Entities affiliated with DLJ Capital
Corporation ........................... 1,135,953(4) 10.8% -- -- 9.7%
c/o ML Venture Partners II, L.P.
3000 Sand Hill Road
Building 4, Suite 270
Menlo Park, CA 94025-7114
Medsource S.A. ......................... 1,093,846(5) 10.0% 307,692 25.4% 9.0%
c/o BB Medtech AG
Vodergasse 3
CH-8200 Schaffhausen
Switzerland
Medical Science Partners Group ......... 1,028,830(6) 9.8% -- -- 8.6%
20 William Street, Suite 250
Wellesley, MA 02181
Entities affiliated with Chemicals
and Materials Enterprise
Associates, L.P. ...................... 617,895(7) 5.9% -- -- 5.3%
One Cleveland Center, Suite 2700
Cleveland, OH 44114
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Common Stock Preferred
--------------------------------- ----------------------------- Total Percent
Number Number of Common
of of and Preferred
Shares Shares Stock on an
Beneficially Percent Beneficially Percent of As-Converted
Owned(1) of Class Owned Class Basis(2)
-------------------- ---------- -------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Directors
Gustav Christensen ................. 29,400(8) * -- -- *
Robert E. Curry .................... 1,140,953(9) 10.8% -- -- 9.7%
Richard T. Dean .................... 357,696(10) 3.4% -- -- 3.0%
Hirsch Handmaker ................... 49,640(11) * -- -- *
Robert S. Lees ..................... 171,487(12) 1.6% -- -- 1.5%
Joseph F. Lovett ................... 1,042,670(13) 9.9% -- -- 8.9%
Donald L. Murfin ................... 622,895(14) 5.9% -- -- 5.3%
Daniel L. Peters ................... 1,505,000(15) 14.3% -- -- 12.8%
Other Named Executive Officers
Ronald B. Kinder ................... 59,559(16) * -- -- *
Daniel F. Harrington ............... 36,000(17) * -- -- *
Christopher F. Nicodemus ........... -- -- -- -- *
Edward M. Aten ..................... 18,000(18) * -- -- *
All directors and executive officers
as a group (12 persons) ........... 5,033,300(19) 46.6% -- -- 42.0%
</TABLE>
- ------------
* Less than 1%.
(1) The number of shares beneficially owned by each person or entity known by
the Company to own beneficially more than 5% of the outstanding voting
stock, director and executive officer is determined under rules
promulgated by the SEC, 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 an individual or
group has sole or shared voting power or investment power and also any
shares which an individual or group has the right to acquire within 60
days after January 31, 1998 through the conversion of Preferred Stock or
the exercise of any stock option, warrant or other right. The inclusion
herein of such shares, however, does not constitute an admission that the
named stockholder is a direct or indirect beneficial owner of such shares.
Unless otherwise indicated, each person or group named in the table has
sole voting and investment power (or shares such power with his or her
spouse) with respect to all shares of capital stock listed as owned by
such person or entity.
(2) This column reflects each listed individual's or group's percent
beneficial ownership of the Company's voting stock on an as-converted
basis. This column differs from the column entitled "Percent of Class"
with respect to the Company's Common Stock because the percent calculation
in this column is based on the assumption that all of the shares of
Preferred Stock currently outstanding are converted into 1,210,256 shares
of Common Stock. The percent calculation in the column entitled "Percent
of Class" with respect to the Company's Common Stock includes shares of
Common Stock issuable upon conversion of the Preferred Stock only to the
extent that the listed individual or group beneficially owns such shares
of Preferred Stock.
5
<PAGE>
(3) Includes 871,795 shares of Common Stock issuable upon conversion of
871,795 shares of Preferred Stock held by Chase Venture Capital
Associates, L.P. ("CVC") and 130,769 shares of Common Stock subject to
outstanding common stock purchase warrants held by CVC.
(4) Consists of 809,705 shares held by ML Venture Partners II, L.P. ("ML
Ventures"), 281,647 shares held by Sprout Capital VI, L.P. ("Sprout
Capital") and 44,601 shares held by DLJ Capital Corporation ("DLJ
Capital"). These entities are affiliates under common control.
(5) Includes 307,692 shares of Common Stock issuable upon conversion of
307,692 shares of Preferred Stock held by Medsource S.A. ("Medsource") and
46,154 shares of Common Stock subject to outstanding common stock purchase
warrants held by Medsource.
(6) Consists of 919,089 shares held by Medical Science Partners, L.P. ("MSP"),
96,154 shares held by Medical Science Partners II, L.P. ("MSP II") and
13,587 shares held by Medical Science II Co-Investment L.P. ("MS
Co-Investment"). These entities are affiliates under common control.
(7) Consists of 257,456 shares held by Chemical and Materials Enterprise
Associates, L.P. ("CMEA") and 360,439 shares held by New Enterprise
Associates V, L.P. ("NEA"). These entities are affiliates under common
control.
(8) Includes 12,200 shares subject to outstanding stock options held by Mr.
Christensen, which are exercisable within the 60-day period following
January 31, 1998, and 2,200 shares held in an individual retirement
account of which Mr. Christensen is the beneficiary.
(9) Consists of 5,000 shares subject to outstanding stock options held by Dr.
Curry, which are exercisable within the 60-day period following January
31, 1998, 809,705 shares held by ML Ventures, 281,647 shares held by
Sprout Capital and 44,601 shares held by DLJ Capital. Dr. Curry is a
General Partner of Sprout Group, a division of DLJ Capital. ML Ventures is
an affiliate of Sprout Capital, and Dr. Curry may be considered a
beneficial owner of the shares beneficially owned by ML Ventures, Sprout
Capital and DLJ Capital, although Dr. Curry disclaims beneficial ownership
of such shares, except as to his pecuniary interests therein.
(10) Includes 112,087 shares subject to outstanding stock options held by Dr.
Dean, which are exercisable within the 60-day period following January 31,
1998.
(11) Includes 38,200 shares held by Healthcare Technology Group ("HTG"), an
entity of which Dr. Handmaker is the principal. Also includes 6,000 shares
subject to outstanding stock options held by HTG and 1,440 shares subject
to outstanding stock options held by Dr. Handmaker. These options are
exercisable within the 60-day period following January 31, 1998.
(12) Includes 7,400 shares subject to outstanding stock options held by Dr.
Lees, which are exercisable within the 60-day period following January 31,
1998 and 1,000 shares held by his spouse.
(13) Includes 5,000 shares subject to outstanding stock options held by Mr.
Lovett, which are exercisable within the 60-day period following January
31, 1998, 919,089 shares held by MSP, 96,154 shares held by MSP II and
13,587 shares held by MS Co-Investment. Mr. Lovett is a general partner of
the general partners of MSP, MSP II and MS Co-Investment and may be
considered a beneficial owner of the shares beneficially owned by such
entities, although Mr. Lovett disclaims beneficial ownership of such
shares, except as to his pecuniary interests therein.
(14) Consists of 5,000 shares subject to outstanding stock options held by Mr.
Murfin, which are exercisable within the 60-day period following January
31, 1998, 257,456 shares held by CMEA and 360,439 shares held by NEA. Mr.
Murfin is a general partner of CMEA and a special partner of NEA and may
be considered a beneficial owner of the shares beneficially owned by CMEA
and NEA, although Mr. Murfin disclaims beneficial ownership of such
shares, except as to his pecuniary interests therein.
(15) Consists of 5,000 shares subject to outstanding stock options held by Mr.
Peters, which are exercisable within the 60-day period following January
31, 1998 and 1,500,000 shares held by Nycomed Imaging AS ("Nycomed").
6
<PAGE>
Mr. Peters is the President and a director of Nycomed Inc., a subsidiary
of Nycomed ASA, Nycomed's parent company, and may be considered a
beneficial owner of the shares beneficially owned by Nycomed, although Mr.
Peters disclaims beneficial ownership of such shares.
(16) Includes 56,800 shares subject to outstanding stock options held by Mr.
Kinder, which are exercisable within the 60-day period following January
31, 1998.
(17) Consists of shares subject to outstanding stock options held by Mr.
Harrington, which are exercisable within the 60-day period following
January 31, 1998.
(18) Includes 12,000 shares issued to Dr. Aten on February 19, 1998 upon the
exercise of stock options.
(19) See Notes (8) through (18) above.
PROPOSAL 1--ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of three Class
I Directors, two Class II Directors and three Class III Directors. At each
annual meeting of stockholders, directors are elected for a full term of three
years to succeed those whose terms are expiring. A Class II Director will be
elected at the Meeting for a three-year term expiring at the 2001 Annual
Meeting. Class III Directors will be elected at the 1999 Annual Meeting for a
three-year term expiring at the 2002 Annual Meeting. Class I Directors will be
elected at the 2000 Annual Meeting for a three-year term expiring at the 2003
Annual Meeting.
The persons named in the enclosed proxy will vote to elect, as a Class II
Director, Joseph F. Lovett, the director nominee named below, unless the proxy
is marked otherwise. Mr. Lovett is currently a director of the Company. The
Company's other current Class II director, Dr. Curry, is not standing for
re-election to the Board of Directors. Dr. Deleage, a former Class II director,
resigned from the Board of Directors on February 25, 1998.
The Class II director will be elected to hold office until the annual
meeting of stockholders to be held in 2001 and until his successor is elected
and qualified. The nominee has indicated his willingness to serve, if elected;
however, if the nominee should be unable to serve, the person acting under the
proxy may vote the proxy for a substitute nominee designated by the Board of
Directors. The Board of Directors has no reason to believe that the nominee
will be unable to serve if elected.
Set forth below are the name and age of each member of the Board of
Directors, including the nominee for election as Class II Director, whose term
of office will continue beyond the date of the Meeting, and the position and
offices held by such member, 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.
<TABLE>
<CAPTION>
Principal Occupation, Other
Director Business Experience during Past Five
Name Age Since Years and Other Directorships
- ---------------------------- ----- ---------- -------------------------------------------------------
<S> <C> <C> <C>
Nominee For Term Expiring
in 2001 (Class II Director)
Joseph F. Lovett ........... 49 1990 General Partner of Medical Science Ventures, L.P., the
general partner of Medical Science Partners, L.P., a
venture capital firm, since 1988. From 1985 to 1988,
Senior Vice President of Damon Biotech, a
biotechnology company. From 1980 to 1985, served in
a variety of positions at Mallinckrodt, Inc.
("Mallinckrodt"), a health care products and specialty
chemicals company, most recently as Vice President
and General Manager of the Diagnostic Products
Division.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation, Other
Director Business Experience during Past Five
Name Age Since Years and Other Directorships
- -------------------------------- ----- ---------- ----------------------------------------------------------
<S> <C> <C> <C>
Directors Whose Terms Expire
in 1999 (Class III Directors)
Richard T. Dean, Ph.D. ......... 50 1990 President and Chief Executive Officer since April 1990,
and a founder of the Company. Director of
Radiopharmaceutical Research and Development at
Centocor, Inc., a pharmaceutical company, from 1986 to
1990. From 1981 to 1986, served in a variety of positions
at Mallinckrodt, most recently as Associate Director,
Diagnostic Chemistry Research and Development.
Robert S. Lees, M.D. ........... 63 1990 A founder of the Company and Chairman of the
Company's Board of Scientific Advisors. Professor of
Health Sciences and Technology in the Harvard-
Massachusetts Institute of Technology Division of
Health Sciences and Technology since 1988 and
President of the Boston Heart Foundation since 1985.
Director and founder of the Arteriosclerosis Center at
the Massachusetts Institute of Technology ("MIT")
since 1973. Director of the Noninvasive Diagnostic
Laboratory at the Massachusetts General Hospital and
Chairman of the Metabolism Study Section at the
National Institutes of Health. Professor at MIT since
1968 and Harvard University since 1988.
Daniel L. Peters ............... 45 1996 President and a Director of Nycomed Inc., a diagnostic
imaging contrast agent company, since October 1994.
From 1991 to 1994, served in a variety of positions at
Sanofi-Winthrop, a pharmaceutical company, most
recently as President.
Directors Whose Terms Expire
in 2000 (Class I Directors)
Gustav A. Christensen .......... 50 1990 Chairman of the Board of Directors of Alpha-Beta
Technologies, Inc., a biotechnology company, since
1990. From 1988 to 1990, President and Chief
Executive Officer of Immulogic Pharmaceutical
Corporation, a biotechnology company, and from 1983
to 1988, Senior Vice President of Commercial Affairs
and Vice President of Marketing and Business
Development for Genetics Institute, Inc., a
biotechnology company.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation, Other
Director Business Experience during Past Five
Name Age Since Years and Other Directorships
- -------------------------------- ----- ---------- ---------------------------------------------------------
<S> <C> <C> <C>
Donald L. Murfin ............... 54 1993 General Partner of Chemicals and Materials Enterprise
Associates, L.P., a venture capital firm affiliated with
New Enterprise Associates V, L.P., of which he is a
Special Partner, since 1989. From 1979 to 1988,
President and a Director of Lubrizol Enterprises, Inc.,
a venture development company, and from 1985 to
1988, Vice President of The Lubrizol Corporation, its
parent company. Member of the Board of Directors of
Genentech, Inc., a biotechnology company.
Hirsch Handmaker, M.D. ......... 57 1997 President of Healthcare Technology Group since 1986.
From 1996 to 1997, a physician with Clinical
Diagnostic Radiology, Inc. From 1994 to 1997,
Executive Director of the Arizona Institute of Nuclear
Medicine (the "Arizona Institute") and Medical
Director of Papago Imaging, a medical imaging
company. From 1972 to 1994, Director of Nuclear
Medicine at the Children's Hospital of San Francisco
and its successor, the California Pacific Medical
Center. From 1983 to 1987, President and Chairman of
Diagnostic Networks, Inc., a healthcare company.
From 1974 to 1982, President and Chairman of
RadPharm, Inc., a healthcare company subsequently
sold to Mallinckrodt. Diplomate of the American
Boards of Radiology and Nuclear Medicine and a
Fellow of the American College of Nuclear Physicians.
</TABLE>
For information relating to shares of Common Stock beneficially owned by
each of the directors, see "Security Ownership of Certain Beneficial Owners and
Management."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. Such persons are required by the SEC regulations to furnish the
Company with copies of all Section 16(a) forms filed by such person with
respect to the Company.
Based solely on its review of copies of reports filed by reporting persons
pursuant to Section 16(a) of the Exchange Act, or written representations from
reporting persons that no Form 5 filing was required for such person, the
Company believes that, during 1997, all filings required to be made by
reporting persons of the Company were timely made in accordance with the
requirements of the Exchange Act, other than a filing by Richard T. Dean with
respect to stock option exercises, a filing by Edward M. Aten with respect to a
stock option exercise, a filing by Robert S. Lees with respect to a stock
purchase, a filing by Ronald B. Kinder with respect to a stock option grant,
and a filing by Hirsch Handmaker with respect to a stock purchase, which
filings were not made on a timely basis.
Board and Committee Meetings
The Board of Directors held five meetings during 1997. All directors
attended at least 75% of the meetings of the Board of Directors and the
meetings of the committees on which they served.
The Board of Directors has a Compensation Committee, which makes
recommendations concerning salaries and incentive compensation for employees of
and consultants to the Company, establishes and approves salaries and
9
<PAGE>
incentive compensation for certain senior officers and employees and
administers and grants stock options pursuant to the Company's stock option
plans. The Compensation Committee held three meetings during 1997. The members
of the Compensation Committee are Dr. Curry and Messrs. Lovett and Peters. See
"Compensation of Executive Officers--Report of the Compensation Committee on
Executive Compensation."
The Board of Directors has an Audit Committee, which reviews the results
and scope of the audit and other services provided by the Company's independent
public accountants. The Audit Committee held three meetings during 1997. The
members of the Audit Committee are Messrs. Christensen and Murfin. Dr. Deleage
also served on the Audit Committee during 1997.
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.
Compensation of Directors
Each non-employee director is paid $1,500 for personal or telephonic
attendance at a Board or committee meeting. Other directors are not entitled to
compensation in their capacities as directors. All of the directors are
reimbursed for their expenses incurred in connection with their attendance at
Board and committee meetings.
In addition, Dr. Lees received approximately $40,000 in compensation in
the year ended December 31, 1997 in connection with the provision of certain
consulting services to the Company.
Each non-employee director is entitled to participate in the Company's
1996 Director Stock Option Plan (the "Director Plan"). The Director Plan
provides that options to purchase 5,000 shares of Common Stock will be granted
to each new director upon his or her initial election to the Board of
Directors. Under the Director Plan, annual options to purchase 2,500 shares of
Common Stock will be granted to each eligible director on May 1 of each year.
All options will vest on the first anniversary of the date of grant; provided,
that the exercisability of these options will be accelerated upon the
occurrence of a change in control of the Company (as defined in the Director
Plan). A total of 250,000 shares of Common Stock may be issued upon the
exercise of stock options granted under the Director Plan. The exercise price
of options granted under the Director Plan will equal the closing price of the
Common Stock on the date of grant. On May 1, 1997, each director of the Company
other than Drs. Dean and Handmaker (who became a director after May 1, 1997)
received stock options under the Director Plan to purchase 2,500 shares of
Common Stock at a price of $6.25 per share, the fair market value on the date
of grant. Upon Dr. Handmaker's election to the Board of Directors in May 1997,
he received stock options to purchase 5,000 shares of Common Stock at a price
of $5.625 per share, the fair market value on the date of grant. As of March
15, 1998, options to purchase an aggregate of 57,500 shares of stock were
outstanding under the Director Plan.
The Company is a party to consulting and other arrangements with
affiliates of Dr. Handmaker. For a description of these arrangements with the
Company, see "Certain Relationships and Related Transactions."
Compensation of Executive Officers
Summary Compensation Table
The following table sets forth the compensation for each of the last three
fiscal years for the Company's Chief Executive Officer and the Company's four
other most highly compensated executive officers (other than the Chief
Executive Officer) whose total annual salary and bonus exceeded $100,000 for
the year ended December 31, 1997 (the "Named Executive Officers").
10
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------------ -------------
Securities All Other
Other Annual Underlying Compensation
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Options (#) ($)
- ---------------------------------- ------ ------------ ---------------- ------------------ ------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Richard T. Dean .................. 1997 $221,194 $50,625(1) -- 75,000 $5,835(2)(3)
President, Chief Executive 1996 207,500 47,250(4) -- -- 5,998(5)(6)
Officer and Director 1995 197,125 40,000(7) -- 60,000 7,990(8)(9)
Ronald B. Kinder ................. 1997 177,500 27,000(1) -- 38,000 3,024(2)(3)
Executive Vice President, 1996 152,607 -- -- -- 2,939(5)(6)
Chief Operating Officer and 1995 144,930 -- -- 15,000 2,810(8)(9)
Secretary
Daniel F. Harrington(10) ......... 1997 165,344 37,202(1) -- -- 1,843(2)(3)
Vice President, Chief 1996 6,875 50,000(11) -- 100,000 --
Financial Officer and
Treasurer
Christopher F. Nicodemus(12) ..... 1997 104,583 12,000(1) -- 75,000 217(3)
Vice President of Clinical
Operations
Edward M. Aten(13) ............... 1997 101,022 -- 8,273(14) -- 5,921(2)(15)
Former Vice President of 1996 163,625 -- 57,438(14) --
Medical Affairs
</TABLE>
- ------------
(1) Reflects amounts paid as a bonus in 1998 to the Named Executive Officer
for 1997.
(2) Includes $997, $2,375, $1,449 and $1,400 contributed by the Company on
behalf of Dr. Dean, Mr. Kinder, Mr. Harrington and Dr. Aten, respectively,
pursuant to the Company's 401(k) Plan in 1997.
(3) Includes $4,838, $649, $394 and $217 of insurance premiums paid by the
Company on behalf of Dr. Dean, Mr. Kinder, Mr. Harrington and Dr.
Nicodemus, respectively, during 1997 with respect to life insurance for
the benefit of the Named Executive Officer.
(4) Reflects amount paid as a bonus in 1997 to Dr. Dean for 1996.
(5) Includes $1,000 and $2,289 contributed by the Company on behalf of Dr.
Dean and Mr. Kinder, respectively, pursuant to the Company's 401(k) Plan
in 1996.
(6) Includes $4,998 and $650 of insurance premiums paid by the Company on
behalf of Dr. Dean and Mr. Kinder, respectively, during 1996 with respect
to life insurance for the benefit of the Named Executive Officer.
(7) Reflects amount paid as a bonus in 1996 to Dr. Dean for 1995.
(8) Includes $957 and $2,210 contributed by the Company on behalf of Dr. Dean
and Mr. Kinder, respectively, pursuant to the Company's 401(k) Plan in
1995.
(9) Includes $7,033 and $600 of insurance premiums paid by the Company on
behalf of Dr. Dean and Mr. Kinder, respectively, during 1995 with respect
to life insurance for the benefit of the Named Executive Officer.
11
<PAGE>
(10) Mr. Harrington commenced his employment with the Company on December 15,
1996.
(11) Reflects amount paid by the Company as a signing bonus.
(12) Dr. Nicodemus commenced his employment with the Company on June 23, 1997.
(13) Dr. Aten resigned as Vice President of Medical Affairs of the Company in
July 1997.
(14) Reflects amount paid by the Company for relocation costs, including
related tax adjustments.
(15) Includes $4,334 paid in consideration of the surrender of accrued but
unused vacation days.
Employment Agreement
The Company is a party to an employment agreement with Dr. Dean for the
period ending April 2, 1999, subject to automatic extension for additional
one-year periods unless either Dr. Dean or the Company provides written notice
to the contrary to the other party at least six months prior to the expiration
of the employment period. Under this agreement, Dr. Dean is currently entitled
to receive an annual base salary of $233,445, as it may be adjusted in the
discretion of the Board of Directors or as a result of changes in the U.S.
Consumer Price Index, and an annual cash bonus equal to up to 25% of his annual
base salary based on the attainment of management objectives determined by the
Board of Directors in its sole discretion. In the event Dr. Dean's employment
is terminated (i) by the Company without cause, (ii) due to nonrenewal of the
employment agreement by the Company or (iii) by Dr. Dean following a change in
control of the Company or the significant diminution in his authority or
responsibility, he will continue to receive his annual base salary during the
one-year period commencing on the date of termination. In the event of a change
in control of the Company (as defined in his option agreements), all
outstanding unvested options held by Dr. Dean will become immediately vested.
The Company has also entered into a registration rights agreement with Dr.
Dean that provides that in the event the Company proposes to register any of
its securities under the Securities Act of 1933, as amended, at any time, with
certain exceptions, Dr. Dean shall be entitled to include the shares of Common
Stock held by him in such registration, subject to the right of the managing
underwriter of any underwritten offering to exclude from such registration for
marketing reasons some or all of such shares.
12
<PAGE>
Option Grants Table
The following sets forth, as to the Named Executive Officers, information
concerning stock options granted in the year ended December 31, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potentional Realizable
Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term (1)
--------------------------------------------------------------- -------------------------
Number of
Securities
Underlying % of Total
Option Options Granted to Exercise
Granted Employees in Price Expiration
Name (#)(2) Fiscal Year ($/sh)(3) Date(4) 5% 10%
- ---------------------------------- ------------ -------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard T. Dean .................. 75,000 17.3 $ 5.375 6/13/07 $253,523 $642,477
Ronald B. Kinder ................. 38,000 8.7 6.625 2/07/07 158,324 401,225
Daniel F. Harrington ............. -- -- -- -- -- --
Christopher F. Nicodemus ......... 75,000 17.3 5.625 6/23/07 265,315 672,360
Edward M. Aten ................... -- -- -- -- -- --
</TABLE>
- ------------
(1) Amounts represent hypothetical gains that could be achieved for respective
options if exercised 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 the respective options were granted to their
expiration date. The gains shown are net of the option exercise price, but
do not include deductions for taxes or other expenses associated with the
exercise. Actual gains, if any, on stock option exercises will depend on
the future performance of the Common Stock, the option holder's continued
employment through the option period and the date on which the options are
exercised.
(2) These options are exercisable in five equal annual installments commencing
on the first anniversary of the date on which the option was originally
granted. These options are intended to qualify as incentive stock options.
The exercisability of these options may be accelerated in the event of a
change in control of the Company.
(3) The exercise price of an option is equal to the fair market value of the
Company's Common Stock on the date of grant.
(4) The expiration date of an option is the tenth anniversary of the date on
which the option was originally granted.
13
<PAGE>
Aggregated Option Exercises and Year-End Option Table
The following table sets forth certain information regarding each exercise
of a stock option during the year ended December 31, 1997 by each of the Named
Executive Officers and the number and value of unexercised options held by each
of the Named Executive Officers on December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
Number of Number of Shares Value of Unexercised In-the-
Shares Value Underlying Options at Fiscal Money Options at Fiscal
Acquired Realized Year-End Year-End(2)
Name on Exercise ($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- ----------------------------- ------------- ---------- ------------------------------ -----------------------------
<S> <C> <C> <C> <C>
Richard T. Dean ............. 66,600 $355,525 112,087/111,000 $985,433/$585,750
Ronald B. Kinder ............ -- -- 56,800/68,200 445,950/402,925
Daniel F. Harrington ........ -- -- 36,000/64,000 74,232/137,968
Christopher F. Nicodemus..... -- -- 0/75,000 0/262,500
Edward M. Aten .............. 12,000 60,850 12,000/0 89,500/0
</TABLE>
- ------------
(1) Based on fair market value of the Common Stock on the date of exercise less
the option exercise price.
(2) Value based on the closing sales price of the Company's Common Stock on
December 31, 1997 ($9.125), the last trading day of 1997, less the
applicable option exercise price.
Report of the Compensation Committee on Executive Compensation
The Compensation Committee of the Company's Board of Directors is
responsible for establishing compensation policies with respect to the
Company's executive officers, including the Chief Executive Officer and the
other executive officers named in the Summary Compensation Table, and setting
the compensation for these individuals.
The Compensation Committee seeks to achieve three broad goals in
connection with the Company's executive compensation programs and decisions
regarding individual compensation. First, the Compensation Committee structures
executive compensation programs in a manner that the Committee believes will
enable the Company to attract and retain key executives. Second, the
Compensation Committee establishes compensation programs that are designed to
reward executives for the achievement of business objectives of the Company
and/or the individual executive's particular area of responsibility. By tying
compensation in part to achievement, the Compensation Committee believes that a
performance-oriented environment is created for the Company's executives.
Finally, the Company's executive compensation programs are intended to provide
executives with an equity interest in the Company so as to link a portion of
the compensation of the Company's executives with the performance of the
Company's Common Stock.
The compensation programs for the Company's executives established by the
Compensation Committee consist principally of two elements based upon the
foregoing objectives: base salary and a stock-based equity incentive in the
form of participation in the Company's stock option plans.
In establishing base salaries for the executive officers, including the
Chief Executive Officer, the Compensation Committee monitors salaries at other
companies, particularly those that are in the same industry as the Company or
related industries and/or located in the same general geographic area as the
Company, considers historic salary levels of the individual and the nature of
the individual's responsibilities and compares the individual's base salary
with those of other executives at the Company. To the extent determined to be
appropriate, the Compensation Committee also considers general economic
conditions, the Company's financial performance and the individual's
performance. In 1997, Dr. Dean's base salary was as specified in his Employment
Agreement with the Company.
14
<PAGE>
The Compensation Committee uses stock options as a significant element of
the compensation package of the Company's executive officers, including the
Chief Executive Officer, because they provide an incentive to executives to
maximize stockholder value and because they reward the executives only to the
extent that stockholders also benefit. It is not the policy of the Compensation
Committee, however, to grant stock options to executives annually, and the
timing of such grants depends upon a number of factors, including new hires of
executives, the executives' current stock and option holdings and such other
factors as the Compensation Committee deems relevant. In 1997, after reviewing
the Company's executive officers' stock and option holdings and after giving
consideration to the fact that no stock options were granted to Dr. Dean and
Mr. Kinder in 1996, the Compensation Committee granted stock options to Dr.
Dean and Mr. Kinder in connection with the Company's performance during 1996
and 1997, including consummation of the initial public offering and
accomplishments in areas such as product development. The Compensation
Committee also granted stock options to Dr. Nicodemus in connection with the
commencement of his employment with the Company. When granting stock options,
it has generally been the policy of the Compensation Committee to fix the
exercise price of such options at 100% of the fair market value of the Common
Stock on the date of grant.
In addition to base salary and stock options, the Compensation Committee
also considers the payment of cash bonuses as part of its compensation program.
In this regard, the Compensation Committee determined to pay a cash bonus of
$50,625 to Dr. Dean for 1997. This bonus, which was consistent with bonuses
previously paid to Dr. Dean, was paid in recognition of Dr. Dean's leadership
of the Company in attaining its 1997 performance goals, including the
consummation of a preferred stock financing, filing of a New Drug Application
for AcuTect[TM] and other accomplishments in areas such as product development
and enhancement of the Company's patent position.
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 $1,000,000 paid to its chief executive officer
and its four other most highly compensated executive officers. Qualifying
performance-based compensation will not be subject to the deduction limit if
certain requirements are met. In this regard, the Company has limited the
number of shares subject to stock options which may be granted to Company
employees in a manner that complies with the performance-based requirements of
Section 162(m). Based on the compensation awarded to Dr. Dean and the other
executive officers of the Company, it does not appear that the Section 162(m)
limitation will have a significant impact on the Company in the near term.
While the Committee does not currently intend to qualify its incentive awards
as a performance-based plan, it will continue to monitor the impact of Section
162(m) on the Company.
COMPENSATION COMMITTEE
Robert E. Curry
Joseph F. Lovett
Daniel L. Peters
Compensation Committee Interlocks and Insider Participation
The current members of the Company's Compensation Committee are Dr. Curry
and Messrs. Lovett and Peters. No executive officer of the Company has served
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.
Since January 1, 1997, the Company has engaged in certain transactions
with Nycomed, an entity of which Mr. Peters is an affiliate. See "Certain
Relationships and Related Transactions."
Certain Relationships and Related Transactions
Since January 1, 1997, the Company has entered into or engaged in the
following transactions with the following directors, executive officers and
stockholders who beneficially own more than 5% of the outstanding voting stock
of the Company (the "5% Stockholders"), and affiliates of such directors,
officers and 5% Stockholders.
15
<PAGE>
In August 1995, the Company and Nycomed entered into a strategic alliance
relating to the Company's radiolabelled peptide imaging products ("Techtides").
The strategic alliance contemplates research and development support and a
marketing collaboration. Under the strategic alliance, the Company granted
Nycomed options to co-promote Techtides in the United States and to distribute
and license Techtides in Europe, South Africa and certain countries in the
Middle East. During the year ended December 31, 1997, Nycomed paid to the
Company an aggregate of $4,000,000 under the collaborative agreements as
research and development support and a milestone payment.
The Company is a party to a number of clinical trial agreements with the
Arizona Institute, an organization for which Dr. Handmaker serves as Executive
Director. These agreements provide for the Arizona Institute to act as a site
for clinical trials of the Company's products and provide that Dr. Handmaker
will serve as principal investigator in connection with the conduct of the
clinical trials at the site. During 1997, the Company paid to the Arizona
Institute a total of $261,462 under these agreements.
In 1997, the Company entered into a scientific advisory consulting
agreement with HTG, an entity of which Dr. Handmaker is the principal, under
which it paid to HTG a total of $48,579. In addition, in January 1997 the
Company granted HTG options under the Company's 1992 Stock Option Plan to
purchase 30,000 shares of Common Stock at an exercise price of $7.375 per
share. Such options will become exercisable in five equal annual installments
in arrears commencing on January 3, 1998. On January 1, 1998, the Company and
HTG entered into a new one-year scientific advisory consulting agreement that
terminated the prior agreement and provided for HTG to provide the Company with
up to 20 days of consulting services and HTG to receive consulting fees of
$30,000 and reimbursement of expenses for a period of one year.
In September 1997, the Company sold $11.8 million of Preferred Stock to
three of the Company's existing investors in a private transaction, including
CVC and Medsource. The Preferred Stock is convertible into 1,210,256 shares of
Common Stock on a one for one basis, subject to adjustment for certain events.
The Company also issued warrants to the investors to purchase an aggregate of
181,538 shares of Common Stock at an exercise price of $11.70 per share. The
warrants will expire on September 23, 1999. Under the terms of a Registration
Rights Agreement, dated as of September 23, 1997, the investors holding in the
aggregate at least 51% of the Stockholder Registrable Shares (as defined in
such agreement) have the right to require the Company to register the Common
Stock issuable upon the conversion of the Preferred Stock or the exercise of
the warrants at any time after October 1, 1998.
In 1997, the Company was a party to a number of agreements with Certus
International, Inc. ("Certus"), an affiliate of Dr. Aten, the Company's former
Vice President of Medical Affairs, including: a Clinical Services Agreement
pursuant to which Certus agreed to supervise the Company's clinical trials of
its P829 Techtide; a Data Management Agreement pursuant to which Certus agreed
to provide data management services with respect to the Company's clinic trials
of AcuTect and; a second Clinical Services Agreement pursuant to which Certus
agreed to supervise and provide data management services with respect to the
Company's clinical trials of Sn-117m DTPA. The Company also retained Certus to
perform certain other consulting services, including review of clinical trial
protocols and clinical trial data management, in connection with certain of the
Company's other clinical trials. During the year ended December 31, 1997, the
Company paid to Certus a total of $690,284 under these agreements.
16
<PAGE>
Stock Performance Graph
The stock performance graph below compares the cumulative stockholder
return on the Common Stock of the Company for the period from June 12, 1996
(the date of the Company's initial public offering) through December 31, 1997
with the cumulative total return on (i) the S&P 500 Index and (ii) the Nasdaq
Pharmaceutical Index. This graph assumes the investment of $100 in the
Company's Common Stock (at the initial public offering price), the S&P 500
Index and the Nasdaq Pharmaceutical Index on June 12, 1996 and assumes
dividends are reinvested. Prior to June 12, 1996, the Company's Common Stock
was not registered under the Exchange Act.
Comparative Total Returns: Diatide, Inc., S&P 500 Index, Nasdaq Pharmaceutical
Index
[Stock Performance Graph]
- --------------------------------------------------------------------
6/12/96 12/31/96 12/31/97
- --------------------------------------------------------------------
Diatide, Inc. 100.00 83.82 107.35
- --------------------------------------------------------------------
S&P 500 Index 100.00 112.11 149.51
- --------------------------------------------------------------------
Nasdaq Pharmaceutical Index 100.00 99.23 102.54
- --------------------------------------------------------------------
17
<PAGE>
PROPOSAL 2--RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as auditors of the
Company for the year ending December 31, 1998, subject to ratification by the
stockholders at the Meeting. If the stockholders do not ratify the selection of
Ernst & Young LLP, the Board of Directors will reconsider the matter. A
representative of Ernst & Young LLP, which served as auditors for the year
ended December 31, 1997, is expected to be present at the Meeting, to respond
to appropriate questions, and to make a statement if he or she so desires.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal that a stockholder intends to present at the 1999 Annual
Meeting of Stockholders must be submitted to the Secretary of the Company at
its offices, Nine Delta Drive, Londonderry, New Hampshire 03053, no later than
December 14, 1998 in order to be considered for inclusion in the Proxy
Statement relating to that meeting.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
for consideration at the Meeting other than that described above. However, if
any other business should come before the Meeting, it is the intention of the
persons named in the enclosed proxy to vote, or otherwise act, in accordance
with their best judgment on such matters.
The Company will bear the costs of soliciting proxies. In addition to
solicitations by mail, the Company's directors, officers and regular employees
may, without additional remuneration, solicit proxies by telephone, telegraph,
facsimile and personal interviews. The Company will also request brokerage
houses, custodians, nominees and fiduciaries to forward copies of the proxy
material to the owners of stock held in their name and request instructions for
voting the proxies. The Company will reimburse such brokerage houses and other
persons for their reasonable expenses in connection with this distribution.
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL 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. PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION IS APPRECIATED.
STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN THOUGH
THEY HAVE SENT IN THEIR PROXIES.
By Order of the Board of Directors,
Ronald B. Kinder, Secretary
April 13, 1998
18
<PAGE>
PROXY
DIATIDE, INC.
Annual Meeting of Stockholders -- May 12, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY
The undersigned, revoking all prior proxies, hereby appoint(s) Richard T.
Dean, Daniel F. Harrington and Ronald B. Kinder, and each or any of them, as
proxies of the undersigned (with full power of substitution in them and each of
them) to attend and represent the undersigned at the Annual Meeting of
Stockholders of Diatide, Inc. (the "Company") to be held at the offices of Hale
and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, on Tuesday, May 12,
1998 at 10:00 a.m. (local time), and any adjourned sessions thereof, and there
to act and vote, as indicated upon all matters referred to on the reverse side
and described in the proxy statement relating to the Meeting, all shares of
capital stock of the Company which the undersigned would be entitled to vote or
act upon, with all powers the undersigned would possess, if personally present
at the Meeting and at any adjourned sessions thereof. Each of the following
matters is being proposed by the Board of Directors of the Company. All
capitalized terms used in this proxy and not defined herein shall have have the
meaning ascribed them in the proxy statement relating to the Meeting.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON OTHER MATTERS
AS PROPERLY MAY COME BEFORE THE MEETING, OR ANY ADJOURNMENT THEREOF.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE.
<PAGE>
|X| Please mark votes
as in this example.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned. If no direction is given with respect to any election to
office or proposal specified below, this proxy will be voted FOR such
election to office or proposal.
1. Election of Class II Director.
Nominee: Joseph F. Lovett
|_| FOR |_| WITHHELD
2. Ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for the current year.
|_| FOR |_| AGAINST |_| ABSTAIN
MARK HERE |_|
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
Attendance of the undersigned at the Meeting or at any adjourned session
thereof will not be deemed to revoke this proxy unless the undersigned
shall affirmatively indicate thereat the intention of the undersigned to
vote said shares in person. If the undersigned hold(s) any of the shares
of the Company in a fiduciary, custodial or joint capacity or capacities,
this proxy is signed by the undersigned in every such capacity as well as
individually.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED POST-PAID
RETURN ENVELOPE.
Please sign name(s) exactly as apearing hereon. When signing as attorney,
executor, administrator or other fiduciary, please give you full title as
such. Joint owners should each sign personally.
Signature: ______________ Date: _______ Signature: ______________ Date: _______
