WEBHIRE INC, DEF 14A, 2000-01-24

WEBHIRE INC
DEF 14A, 2000-01-24
COMPUTER PROGRAMMING SERVICES

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

<TABLE>
<S> <C>
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 Section240.14a-11(c) or
Section240.14a-12
</TABLE>

<TABLE>
<C> <S>
WEBHIRE, INC.
- --------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- ---------------------------------
(Name of Person(s) Filing Proxy
Statement, if other than the
Registrant)
</TABLE>

Payment of Filing Fee (Check the appropriate box):

<TABLE>
<S> <C> <C>
/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:
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(2) Aggregate number of securities to which transaction
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(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):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
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</TABLE>
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WEBHIRE, INC.
91 HARTWELL AVENUE
LEXINGTON, MA 02421
(781) 869-5000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MARCH 15, 2000

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Webhire, Inc. (the "Company") will be held on March 15, 2000 at 3:30 p.m. at the
Sheraton Tara Lexington Inn, 727 Marrett Road, Lexington, Massachusetts (the
"Annual Meeting") for the purpose of considering and voting upon:

1. The election of Russell J. Campanello and Charles R. Lax as Class I
Directors to serve until the Annual Meeting of Stockholders following the
close of the Company's 2002 Fiscal Year and until their successors are
duly elected and qualified;

2. The approval of an amendment to the Company's 1996 Stock Option and
Grant Plan to increase the number of shares issuable thereunder; and

3. Such other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.

The Board of Directors has fixed the close of business on January 17, 2000
as the record date for determination of stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournments or postponements thereof.
Only holders of common stock of record at the close of business on that date
will be entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.

In the event there are not sufficient votes with respect to the foregoing
proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit further solicitation of proxies.

By Order of the Board of Directors

Martin J. Fahey
CHIEF EXECUTIVE OFFICER
<PAGE>
WEBHIRE, INC.
91 HARTWELL AVENUE
LEXINGTON, MA 02421
(781) 869-5000

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MARCH 15, 2000

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Webhire, Inc. (the "Company") for use at
the Annual Meeting of Stockholders of the Company to be held on Wednesday,
March 15, 2000, at 3:30 p.m., local time, at the Sheraton Tara Lexington Inn,
727 Marrett Road, Lexington, Massachusetts, and any adjournments or
postponements thereof (the "Annual Meeting").

At the Annual Meeting, the stockholders of the Company will be asked to
consider and vote upon the following matters:

2. The approval of an amendment to the Company's 1996 Stock Option and
Grant Plan (the "1996 Stock Option Plan") to increase the number of
shares issuable thereunder; and

3. Such other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.

The Notice of Annual Meeting, Proxy Statement and Proxy Card are first being
mailed to stockholders of the Company on or about January 24, 2000 in connection
with the solicitation of proxies for the Annual Meeting. The Board of Directors
has fixed the close of business on January 17, 2000 as the record date for the
determination of stockholders entitled to notice of, and to vote at, the Annual
Meeting (the "Record Date"). Only holders of common stock of record at the close
of business on the Record Date will be entitled to notice of, and to vote at,
the Annual Meeting. As of January 17, 2000, there were approximately 14,600,000
shares of common stock, par value $0.01 per share ("Common Stock"), outstanding
and entitled to vote at the Annual Meeting and approximately 100 stockholders of
record. Each holder of a share of Common Stock outstanding as of the close of
business on the Record Date will be entitled to one vote for each share of
Common Stock held of record with respect to each matter submitted at the Annual
Meeting. A list of stockholders eligible to vote at the Annual Meeting will be
available for inspection at the Annual Meeting and for a period of ten days
prior to the Annual Meeting during regular business hours at the Company's
headquarters at 91 Hartwell Avenue, Lexington, Massachusetts 02421.

The presence, in person or by proxy, of a majority of the total number of
outstanding shares of Common Stock is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and "broker
non-votes" will be counted as present for determining the presence or absence of
a quorum for the transaction of business at the Annual Meeting. A "broker
non-vote" is

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a proxy from a broker or other nominee indicating that such person has not
received instructions from the beneficial owner or other person entitled to vote
the shares on a particular matter with respect to which the broker or other
nominee does not have discretionary voting power.

A quorum being present, the affirmative vote of a plurality of the votes
cast is necessary to elect each nominee as a Director of the Company.
Abstentions and broker non-votes will not be counted as voting with respect to
the election of Directors and, therefore, will not have an effect on the
election of Directors. With respect to the election of Directors, votes may only
be cast in favor of or withheld from the nominee.

A quorum being present, the affirmative vote of a majority of the shares of
Common Stock present in person or represented by proxy and entitled to vote on
the matter is required for the approval of the amendment to the 1996 Stock
Option Plan. Broker non-votes will not be considered entitled to vote on this
mater and, therefore, will have no effect on the approval of the amendment to
the 1996 Stock Option Plan. Abstentions will be counted as voting against the
amendment to the 1996 Stock Option Plan.

STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, DATE, SIGN AND RETURN
THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE. COMMON STOCK REPRESENTED
BY PROPERLY EXECUTED PROXIES RECEIVED BY THE COMPANY AND NOT REVOKED WILL BE
VOTED AT THE ANNUAL MEETING IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED
THEREIN. IF NO INSTRUCTIONS ARE MADE ON THE ACCOMPANYING PROXY CARD THEN THE
PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS SET FORTH HEREIN. IF OTHER MATTERS
ARE PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE
PROXY HOLDERS, SUBJECT TO SECURITIES AND EXCHANGE COMMISSION ("SEC") RULES AND
REGULATIONS GOVERNING THE EXERCISE OF SUCH AUTHORITY. THE BOARD OF DIRECTORS IS
NOT AWARE OF ANY MATTERS OTHER THAN THE ELECTION OF DIRECTORS, THE AMENDMENT TO
THE 1996 STOCK OPTION PLAN AND THE AMENDMENT TO THE 1996 ESPP THAT WILL BE
PRESENTED AT THE ANNUAL MEETING.

Any properly completed proxy may be revoked at any time before it is voted
on any matter (without, however, affecting any vote taken prior to such
revocation) by giving written notice of such revocation to the Secretary of the
Company, or by signing and duly delivering a proxy bearing a later date, or by
attending the Annual Meeting and voting in person. Any stockholder of record as
of the Record Date attending the Annual Meeting may vote in person whether or
not a proxy has been previously given, but the presence, without further action,
of a stockholder at the Annual Meeting will not constitute a revocation of a
previously given proxy.

An Annual Report to Stockholders (which does not form a part of the proxy
solicitation materials), containing financial statements for the fiscal year
ended September 30, 1999 ("Fiscal 1999") is being mailed concurrently herewith
to stockholders of the Company.

The mailing address of the principal executive offices of the Company is 91
Hartwell Avenue, Lexington, Massachusetts 02421.

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PROPOSAL NUMBER 1--ELECTION OF CLASS I DIRECTORS

The Company's charter provides for a staggered Board of Directors consisting
of the number of Directors designated from time to time by the Board of
Directors and divided into three classes as nearly equal in number as possible.
The Directors for each class serve for three year terms with one class being
elected by the Company's stockholders at each annual meeting. The Board of
Directors increased the number of Directors from six to eight in September 1999
in connection with an investment in the Company by SOFTBANK (as defined below).

On July 19, 1999, the Company entered into a stock purchase agreement (the
"Stock Purchase Agreement") with SOFTBANK Capital Partners LP and its affiliates
(collectively, "SOFTBANK"), pursuant to which SOFTBANK agreed to purchase in a
private placement (the "Private Placement") 3,960,396 shares of Common Stock at
a price per share of $5.05, for an aggregate purchase price of $20,000,000.
Pursuant to the terms of the Stock Purchase Agreement, SOFTBANK is entitled to
nominate two members of the Company's Board of Directors. For so long as
SOFTBANK owns at least 10% of the Company's outstanding Common Stock, SOFTBANK
will be entitled to nominate one director each time a class of directors in
which one of its representatives serves is subject to election. Additionally,
one of the SOFTBANK directors will be entitled to serve as a member of the audit
and compensation committees of the Board of Directors. Charles R. Lax was
elected as a director of the Company to serve as one of the SOFTBANK nominees.

The management of the Company will propose that the size of the Board of
Directors be decreased to seven members at the next meeting of the Board of
Directors scheduled to take place on January 20, 2000. In such event, there will
be two vacancies on the Board of Directors, (i) one of which is to be filled by
SOFTBANK as its second nominee and (ii) one of which was created due to the
resignation of A. Bruce Johnston. The Board of Directors is in the process of
identifying candidates to fill the vacancy created by the resignation of
Mr. Johnston. Proxies may not be voted for a greater number of persons than the
two nominees to be re-elected as Class I Directors.

At the Annual Meeting, each Class I director will be elected to serve until
the Annual Meeting of Stockholders following the close of the Company's 2002
Fiscal Year and until his successor is duly elected and qualified. The Board of
Directors has nominated Russell J. Campanello and Charles R. Lax for re-election
as Class I directors. Unless otherwise specified in the proxy, it is the
intention of the persons named in the proxy to vote the shares represented by
each properly executed proxy for the re-election of Mr. Campanello and Mr. Lax
as directors. The nominees have agreed to stand for re-election and to serve for
re-election as directors. However, if Mr. Campanello or Mr. Lax fails to stand
for re-election or are unable to accept re-election, the proxies will be voted
for the election of such other person as the Board of Directors may recommend.

VOTE REQUIRED FOR APPROVAL

A quorum being present, the affirmative vote of a plurality of the votes
cast is necessary to elect each nominee as a director of the Company.

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS VOTE "FOR" THE RE-ELECTION OF THE NOMINEES OF THE BOARD OF
DIRECTORS OF THE COMPANY.

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<PAGE>
INFORMATION REGARDING DIRECTORS

Set forth below is certain information regarding the directors of the
Company, including the Class I directors who have been nominated by the Board of
Directors for re-election at the Annual Meeting, based on information furnished
by them to the Company.

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE
- ---- -------- --------
<S> <C> <C>
CLASS I--TERM EXPIRES AT ANNUAL MEETING FOLLOWING FISCAL
1999
Russell J. Campanello *..................................... 43 1994
Charles R. Lax*............................................. 40 1999

CLASS II--TERM EXPIRES AT ANNUAL MEETING FOLLOWING FISCAL
2000
Martin J. Fahey............................................. 45 1997
A. Bruce Johnston**......................................... 40 1994

CLASS III--TERM EXPIRES AT ANNUAL MEETING FOLLOWING FISCAL
2001
Lars D. Perkins............................................. 40 1986
J. Paul Costello............................................ 60 1982
</TABLE>

* NOMINEES FOR RE-ELECTION

** MR. JOHNSTON RESIGNED HIS POSITION EFFECTIVE SEPTEMBER 29, 1999.

The principal occupation and business experience during at least the last
five years for each Director of the Company is set forth below:

RUSSELL J. CAMPANELLO was elected as a director of the Company in
October 1994. Since March 1998, Mr. Campanello has served as Senior Vice
President, Human Resources at Genzyme Corporation. From February 1996 to
March 1998, Mr. Campanello was Vice President of Human Development and
Organizational Productivity at Nets Inc. (formerly Industry.Net), a facilitator
of electronic commerce on the Internet. Nets Inc. filed a voluntary petition for
bankruptcy under Chapter 11 of the Federal Bankruptcy Code in May, 1997. Prior
to joining Nets Inc., Mr. Campanello spent eight years as the Vice President of
Human Resources of Lotus Development Corporation.

CHARLES R. LAX was elected as a director of the Company in September 1999.
Mr. Lax is a general partner and a co-founder of SOFTBANK Capital Partners, an
investment group founded in July 1999. Mr. Lax was also a co-founder and is a
general partner with SOFTBANK Technology Ventures (SBTV). Mr. Lax also
co-founded Flatiron Partners as a SOFTBANK joint venture with Chase Capital
Partners. Prior to becoming a General Partner with SBTV, Mr. Lax served as Vice
President at SOFTBANK Holdings Inc. from 1996 until the establishment of SBTV.
Mr. Lax is also a director of Global Sports, Inc. (NASDAQ: GSPT), Art Technology
Group, Inc. (NASDAQ: ARTG), 1-800-FLOWERS.COM (NASDAQ: FLWS), and Interliant,
Inc. (NASDAQ: INIT).

MARTIN J. FAHEY was named Chief Executive Officer in July 1999. Mr. Fahey
was elected President of the Company and as a member of the Board of Directors
in July 1997. Mr. Fahey joined the Company as Vice President and Chief Operating
Officer in May 1996. From January 1995 to May 1996, Mr. Fahey was an independent
consultant. From July 1991 to December 1994, he was Chief Executive Officer of
Vertigo Development, a multimedia company which Mr. Fahey co-founded. Mr. Fahey
was employed by Lotus Development Corporation, a software company, from
January 1983 to June 1991, most recently as the Director of Spreadsheet
Marketing.

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A. BRUCE JOHNSTON was elected as a director of the Company in January 1994.
Mr. Johnston is a Managing Director of idealab! From January 1996 through
September 1999, Mr. Johnston was a Principal of TA Associates, Inc., a private
equity firm. From June 1992 to January 1996, Mr. Johnston was a Vice President
of TA Associates. Mr. Johnston resigned his position as a member of the Board of
Directors effective September 29, 1999.

LARS D. PERKINS, co-founder of the Company, has served as Chairman of the
Board of the Company since 1986. Mr. Perkins served as President of the Company
from 1986 to 1997 and as Chief Executive Officer from 1986 to 1999.

J. PAUL COSTELLO, co-founder of the Company has served as a member of the
Board of Directors of the Company since its founding in 1982. Mr. Costello has
served as President of J. Paul Costello Associates, Inc., a consulting company,
since 1969 and of Costello & Company, Inc., a contract recruiting company, since
1979. In December 1992, he also was named President of Corporate Staffing
Center, Inc., a provider of outsourced staffing services to large corporate
clients. Mr. Costello has been a human resource management consultant for over
thirty years.

The Board of Directors of the Company held eight meetings during Fiscal
1999. During Fiscal 1999, each of the Directors attended 100% of the total
number of meetings of the Board and of the committees of which he was a member
during the term of his service as Director. The Board of Directors has a
standing Audit Committee and Compensation Committee.

AUDIT COMMITTEE. The Audit Committee of the Company's Board of Directors
(the "Audit Committee") recommends the firm to be appointed as independent
accountants to audit the Company's financial statements and to perform services
related to the audit, reviews the scope and results of the audit with the
independent accountants, reviews with management and the independent accountants
the Company's year-end operating results and considers the adequacy of the
Company's internal accounting procedures. The Audit Committee consisted of
Russell J. Campanello and A. Bruce Johnston throughout Fiscal 1999. Charles R.
Lax was elected to the Audit Committee upon his election to the Board of
Directors. The Audit Committee met twice during Fiscal 1999.

COMPENSATION COMMITTEE. The Compensation Committee of the Board of
Directors (the "Compensation Committee") reviews and recommends the compensation
arrangements for all directors and officers of the Company. The Compensation
Committee also administers and takes such other action as may be required in
connection with the incentive plans of the Company, including the Company's 1994
Stock Option Plan, the 1996 Stock Option and Grant Plan and the 1996 Employee
Stock Purchase Plan. The Compensation Committee consisted of Russell J.
Campanello and A. Bruce Johnston throughout Fiscal 1999. Charles R. Lax was
elected to the Compensation Committee upon his election to the Board of
Directors. The Compensation Committee met five times during Fiscal 1999.

DIRECTOR COMPENSATION

Non-employee directors receive $5,000 per year for services rendered as
directors, plus a per meeting fee of $1,000 for each directors' meeting attended
in person after the fifth meeting, up to a maximum additional amount of $5,000
per fiscal year. In addition, all directors of the Company are reimbursed for
travel expenses incurred in attending meetings of the Board of Directors and its
committees. Each non-employee director automatically receives an option to
purchase 5,000 shares of Common Stock under the 1996 Stock Option Plan when such
director is first elected to the Board of Directors, with such option shares
vesting proportionately over four years. In addition, each

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non-employee director automatically receives an option to purchase 2,500 shares
of Common Stock on each October 1 that such director is a member of the Board of
Directors, with such option shares vesting proportionately over four years. All
option grants to non-employee directors are at a per share exercise price equal
to the fair market value of the Common Stock at the time of grant.

EXECUTIVE OFFICERS

The names and ages of all executive officers of the Company and the
principal occupation and business experience during at least the last five years
for each are set forth below. Except for executive officers who have employment
agreements with the Company, the executive officers serve at the pleasure of the
Board of Directors.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- ---------------------------------------------------
<S> <C> <C>
Martin J. Fahey........................... 45 President, Chief Executive Officer and Director
Thomas F. Brady........................... 47 Vice President of Internet Services and Operations
Cynthia G. Eades.......................... 43 Chief Financial Officer, Vice President of Finance,
Treasurer and Secretary
Ronald M. Visocchi........................ 50 Vice President, General Manager of Enterprise
Division
Robert J. Lederman, Jr.................... 42 Vice President of Internet Sales
Timothy J. McManus........................ 46 Vice President of Internet Business Development
Robert J. Perry........................... 42 Vice President of Marketing
Edward F. Murray.......................... 44 Vice President of Development, Electronic Commerce
Henry M. Margolis......................... 40 Vice President of Internet Strategic Marketing
</TABLE>

THOMAS F. BRADY was named Vice President of Internet Services and Operations
in November 1998. Mr. Brady joined the Company as Vice President of Client
Services in October 1997. From May 1995 to October 1997, he served as Vice
President of Services of Kronos, Inc., a leading provider of labor management
software. Prior to joining Kronos, Inc., Mr. Brady was employed at Digital
Corporation from 1977 to 1995 in various operations and business development
management positions.

CYNTHIA G. EADES joined the Company as Chief Financial Officer, Vice
President of Finance and Treasurer in December 1994. In May 1997, Ms. Eades was
elected to the office of Secretary to the Company. From February 1993 to
February 1994, she was Vice President and Chief Financial Officer of Virtual
World Entertainment, a developer and operator of virtual reality entertainment
centers. Prior to such time, Ms. Eades was employed by Dun & Bradstreet Software
Services, Inc., a business applications software company, as Controller from
October 1991 to February 1993 and Director of Finance from June 1990 to
October 1991. Ms. Eades is a Certified Public Accountant and was employed by
Price Waterhouse from June 1978 to June 1990.

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RONALD M. VISOCCHI was elected Vice President, General Manager of the
Enterprise Division in April 1999. Mr. Visocchi joined the Company in
February 1998 as Director of Sales. From March 1995 to January 1998,
Mr. Visocchi was President of a start-up company. From June 1985 to March 1992,
Mr. Visocchi was Vice President, General Manager of an Atex Publishing Systems
Business Unit of Eastman Kodak. Mr. Visocchi began his career with 13 years in
marketing and sales management at Xerox Corporation.

ROBERT J. LEDERMAN, JR. was named Vice President of Internet Sales in
June 1999. Mr. Lederman joined the Company as Vice President of Human Resources
in January 1997. From June 1994 to January 1997, Mr. Lederman was employed by
Fidelity Investments as the Director of Human Resources. From June 1992 to
June 1994 Mr. Lederman was Director of Employment and Employee Relations for
Clean Harbors Environmental Services Company.

TIMOTHY J. MCMANUS was named Vice President of Internet Business Development
in November 1998. Mr. McManus joined the Company as Vice President of Internet
Products in November 1997. From January 1997 to October 1997, Mr. McManus was
the founder of Calendarcast, Inc., a development stage company evaluating
applications of Internet-based push technologies. From March 1996 to
January 1997, Mr. McManus was Vice President of Product Management and
Development at Corechange LLC, a spin-off of Cambridge Technology
Partners, Inc. From October 1987 to March 1996, Mr. McManus was employed at
Lotus Development Corporation where he managed a number of key product and
business development functions within both the Communications Products Division
and the Desktop Products Organization.

ROBERT J. PERRY assumed operational responsibility for the marketing
organization in November 1996 and was elected to the office of Vice President of
Marketing effective as of January 1, 1997. Mr. Perry joined the Company in
May 1996 as Director of Product Management. From November 1995 through
May 1996, Mr. Perry was an independent marketing and product management
consultant. From October 1983 to November 1995, Mr. Perry was employed by Lotus
Development Corporation most recently as Director of Advanced Corporate
Technology Liaisons. He had previously served as Director of Product Management
for Notes, Director of Product Management for Graphical Spreadsheets and Group
Product Manager for Spreadsheets.

EDWARD F. MURRAY joined the Company as Vice President of Development,
Electronic Commerce in November 1998. From September 1996 to November 1998,
Mr. Murray was Vice President and Chief Technologist of the Product Development
division of The Instream Corporation. From October 1989 to October 1995,
Mr. Murray was employed by Lotus Development Corporation where he was
responsible for the development of several product lines including Lotus Works
and Lotus Forms.

HENRY M. MARGOLIS joined the Company as Vice President of Internet Strategic
Marketing in July 1999. From March 1998 to July 1999, Mr. Margolis was founder
and Chief Executive Officer of Hireworks, Inc., which was acquired by Webhire.
Prior to Hireworks, Mr. Margolis spent 11 years at Viewlogic Systems, Inc., most
recently as Director of Consulting from 1996 to 1998.

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<PAGE>
EXECUTIVE COMPENSATION

The following sections of this Proxy Statement set forth and discuss the
compensation paid or awarded during the last three fiscal years to the Company's
Chief Executive Officer and the four other most highly compensated executive
officers who earned in excess of $100,000 during Fiscal 1999 (the "Named
Executives").

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation paid to, awarded to or
earned by the Named Executives for services rendered to the Company in all
capacities during the last three fiscal years ended September 30, 1999.

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- --------------
FISCAL SECURITIES
YEAR UNDERLYING ALL OTHER
NAME & PRINCIPAL POSITION ENDED SALARY ($) BONUS ($) OPTIONS (#) COMP. ($)
- ------------------------- -------- ---------- --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Lars D. Perkins......................... 1999 160,000 -- 25,000 1,500(1)
Chairman of the Board 1998 160,000 50,000 -- 2,756
1997 157,500 72,000 -- 1,000

Martin J. Fahey......................... 1999 175,000 52,736 50,000 2,396(1)
President, CEO 1998 145,000 50,000 -- 4,012
1997 142,500 65,975 200,500(2) 1,689

Thomas F. Brady......................... 1999 145,000 29,000 27,800 1,979(1)
VP of Services and Operations 1998 123,229(3) 13,000 40,000 2,958
1997 -- -- -- --

Ronald M. Visocchi...................... 1999 120,000 93,808 35,000 1,014(1)
VP, General Manager Enterprise 1998 51,538(4) 143,588 10,000 2,379
Division 1997 -- -- -- --

Timothy J. McManus...................... 1999 140,000 28,000 37,500 3,598(1)
VP of Internet Business Development 1998 110,000(5) 12,000 30,000 800
1997 -- -- -- --
</TABLE>

- ------------------------

(1) Other Compensation includes group term life insurance benefits, a Company
contribution to the Named Executive for assistance in the purchase of a
personal computer, and/or a matching contribution made by the Company on
behalf of the Named Executive under the Company's 401K savings plan.

(2) In connection with the grant during Fiscal 1997 of options to purchase up to
100,500 shares of Common Stock, the Company canceled options to purchase up
to 100,500 shares of Common Stock that were granted during Fiscal 1996.

(3) Based on eleven months of service with the Company during the fiscal year
ended September 30, 1998. Mr. Brady's salary would have totaled $130,000 had
he been employed by the Company for the entire fiscal year.

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<PAGE>
(4) Based on eight months of service with the Company during the fiscal year
ended September 30, 1998. Mr. Visocchi's salary would have totaled $80,000
had he been employed by the Company for the entire fiscal year.

(5) Based on eleven months of service with the Company during the fiscal year
ended September 30, 1998. Mr. McManus' salary would have totaled $125,000
had he been employed by the Company for the entire fiscal year.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth each grant of stock options during Fiscal
1999 to the Named Executives. No stock appreciation rights ("SARs") have been
granted.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS EXERCISE STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM (1)
OPTIONS EMPLOYEES PER EXPIRATION ------------------------
NAME GRANTED (A) FISCAL YEAR SHARE DATE 5% 10%
- ---- ----------- ----------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Lars D. Perkins................ 25,000 3.41% $ 6.50 07/16/09 $102,195 $258,983
Martin J. Fahey................ 50,000 6.83% $3.625 10/01/08 $113,987 $288,866
Thomas F. Brady................ 27,800 3.80% $3.625 10/01/08 $ 63,377 $160,609
Ronald M. Visocchi............. 4,000 0.55% $3.875 11/02/08 $ 9,748 $ 24,703
31,000 4.23% $4.875 03/11/09 $ 95,042 $240,854
Timothy J. McManus............. 37,500 5.12% $3.625 10/01/08 $ 85,490 $216,649
</TABLE>

- ------------------------

(A) All options were granted at fair market value as of the date of grant, vest
over a four year period, and are valid for a term of ten years, except for
the following shares subject to options which were granted in lieu of cash
bonuses and were fully vested as of the date of grant: 15,000 shares for
Mr. Fahey; 7,800 shares for Mr. Brady; and 7,500 shares for Mr. McManus.

(1) This column shows the hypothetical gains or "option spreads" of the options
granted based on assumed annual compound stock appreciation rates of 5% and
10% over the full 10 year term of the options. The 5% and 10% assumed rates
of appreciation are mandated by the rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection of
future Common Stock prices. The gains shown are net of the option exercise
price, but do not include deductions for taxes or other expenses associated
with the exercise of the option or the sale of the underlying shares. The
actual gains, if any, on the exercises of stock options 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.

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<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES

The following table sets forth the shares acquired and the value realized
upon exercise of stock options during Fiscal 1999 by the Named Executives, and
the number and value of unexercised options held by such individuals on
September 30, 1999.

<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR END FISCAL YEAR END (A)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Lars D. Perkins.............. -- $ -- --/25,000 $ --/$107,825
Martin J. Fahey.............. -- $ -- 145,375/105,125 $987,362/$713,107
Thomas F. Brady.............. -- $ -- 25,300/42,500 $144,669/$257,678
Ronald M. Visocchi........... -- $ -- 3,750/41,250 $ 17,580/$241,130
Timothy J. McManus........... -- $ -- 20,625/46,875 $122,003/$303,188
</TABLE>

- ------------------------

(A) Amount equals the difference between the fair market value and exercise
price at September 30, 1999.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board of Directors for Fiscal 1999
consisted of Mr. Campanello and Mr. Johnston. Mr. Lax was elected to the
Compensation Committee upon his election to the Board of Directors in
September 1999. Mr. Campanello, Mr. Johnston, and Mr. Lax are not employees of
the Company. Mr. Campanello has been a director of the Company since
October 1994. Mr. Johnston was a director of the Company from January 1994
through September 1999. No executive officers of the Company serve on the
Compensation Committee.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION

GENERAL

The Compensation Committee of the Board of Directors advises the Chief
Executive Officer and the Board of Directors on matters of the Company's
compensation philosophy and reviews and recommends the compensation arrangements
for all directors and officers. The Compensation Committee also administers and
takes such other action as may be required in connection with the incentive
plans of the Company, including the 1994 Stock Option Plan, the 1996 Stock
Option Plan and the 1996 Employee Stock Purchase Plan.

COMPENSATION PHILOSOPHY

The philosophy underlying the development and administration of the
Company's executive compensation policies is to align the interests of executive
management with the Company's annual and long-term performance goals. Key
elements of this philosophy are:

- Providing the executive with a base salary that is competitive with
executive base salaries for comparable companies in its industry and
geographical area, enabling the Company to attract and retain highly
qualified executive officers.

12
<PAGE>
- Establishing a discretionary incentive compensation program that delivers
cash bonuses commensurate with (i) the Company's performance, as measured
by operating, financial and strategic objectives; and (ii) the executive's
performance, as measured against organizational and management objectives.

- Providing significant equity-based incentives for executives, in the form
of stock options, to strengthen the mutuality of interests between the
executive officers and the Company's stockholders.

The suggested base salary for each executive officer is determined on the
basis of experience, personal performance, the salary levels in effect for
comparable positions within the industry and the geographical area, and internal
base salary comparability considerations. The weight given to each of these
factors differs from individual to individual. On an annual basis, the
Compensation Committee reviews any proposed changes to these salaries and, while
not required to, may approve increases to the base salaries.

DISCRETIONARY INCENTIVE COMPENSATION

The discretionary incentive compensation program is a vehicle by which
executives can earn additional cash compensation, depending upon Company and
individual performance relative to specified annual objectives. The objectives
generally represent specific strategic and qualitative objectives, such as
departmental performance improvements, implementation of specified programs and
the timing and caliber of deliverables, as well as quantitative targets. Bonuses
may be paid to each executive officer depending upon the relative success of his
or her department in achieving its goals for that year and on the Company's
success in achieving its revenue and profitability goals.

EQUITY BASED INCENTIVES

Equity based long-term incentives are provided through grants of stock
options under the 1994 Stock Option Plan and the 1996 Stock Option Plan. The
option grants are designed to align the interests of each executive officer with
those of the stockholders and to provide each individual with a significant
incentive to manage the Company from the perspective of an owner with an equity
stake in the Company. Each option grant allows the individual to acquire shares
of the Company's Common Stock at a fixed price per share (generally, the market
price on the grant date) over a specified period of time (generally ten years).
Each option generally vests over a four-year period, contingent upon the
executive officer's continued employment. Accordingly, the option grant will
provide a return to the executive officer only if the executive officer remains
employed by the Company during the vesting period.

The number of shares subject to each option grant is set at a level intended
to create a meaningful opportunity for stock ownership based on the executive
officer's current position with the Company, the base salary associated with
that position, the size of comparable awards made to individuals in similar
positions within the industry, the individual's potential for increased
responsibility and promotion over the option term and the individual's personal
performance in recent periods. The Compensation Committee also considers the
number of unvested options held by the executive officer in order to maintain an
appropriate level of equity incentive for that individual. However, the
Compensation Committee does not adhere to specific formulae as to the relative
option holdings of the Company's executive officers.

13
<PAGE>
CHIEF EXECUTIVE COMPENSATION

Compensation for the Company's Chief Executive Officer is determined with
two primary objectives: (i) to establish a level of base salary competitive with
comparable companies and (ii) to make a significant percentage of the total
compensation package contingent upon the Company's achievement of revenue and
profitability and other corporate objectives. In both Fiscal 1999 and 1998,
Mr. Perkins earned a base salary of $160,000.

Although Mr. Perkins was eligible for a cash bonus of up to $160,000 for
Fiscal 1998, his cash bonus earned for that period was $50,000. Mr. Perkins
received no cash bonus for Fiscal 1999. Mr. Fahey earned a base salary of
$175,000 for Fiscal 1999, compared to a base salary of $145,000 for Fiscal 1998.
Although Mr. Fahey was eligible for a cash bonus of up to 70% of his base salary
for Fiscal 1999, his cash bonus earned for that period was $52,736 and a
fully-vested stock option grant for the purchase of 16,000 shares of Common
Stock at an exercise price of $9.00 per share.

RUSSELL J. CAMPANELLO CHARLES R. LAX

STOCK PERFORMANCE GRAPH

The following graph represents a comparison of the cumulative total return
(assuming the reinvestment of dividends) for a $100 investment on July 23, 1996
in the Common Stock of the Company, the NASDAQ Composite Index (a broad market
index) and the NASDAQ Computer and Data Processing Stocks Index (a published
industry index).

CHART

14
<PAGE>
- ------------------------

(1) The NASDAQ Composite Index is a broad market index which represents over
5,000 NASDAQ companies. The NASDAQ Composite Index is a measure of all
NASDAQ System issues, exclusive of warrants. Each security in this Index is
weighted by its relative market-capitalization.

(2) The NASDAQ Computer and Data Processing Stocks Index is comprised of the
publicly traded stocks of over 600 technology companies. The Company
believes that the NASDAQ Computer and Data Processing Stocks is a
representative peer group index because it contains stock of companies
similar in business, size and growth characteristics to Webhire, Inc.

(3) July 22, 1996 was the effective date of the Company's registration statement
relating to its initial public offering. Trading began in the Company's
Common Stock on July 23, 1996.

(4) The closing sale price of the Common Stock on September 30, 1999 and
January 17, 2000 was $10.813 and $13.875, respectively.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with each of the Named
Executives which generally (i) restrict such Named Executive from engaging in
any "competitive business" (as defined in the agreement) for a period of up to
two years following termination of employment, subject to payment by the Company
of up to 30% of the executive officer's base salary; (ii) require the Named
Executive to assign to the Company all rights in all works, ideas and inventions
made by such executive officer during the term of employment which directly
relate to the Company's actual or proposed business; and (iii) require the Named
Executive to keep confidential, both during the term of employment and for a
defined period thereafter, all confidential or proprietary information of the
Company.

15
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS

The following table sets forth certain information as of January 17, 2000
with respect to the beneficial ownership of Common Stock of the Company by
(i) all persons known by the Company to be the beneficial owners of more than 5%
of the outstanding Common Stock of the Company, (ii) each Director of the
Company, (iii) each of the Named Executives, and (iv) all executive officers and
Directors of the Company as a group. Unless otherwise indicated, the beneficial
owner has sole voting power and sole dispositive power with respect to the
Common Stock beneficially owned.

<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS NUMBER OF SHARES OUTSTANDING SHARES OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) COMMON STOCK (1,2)
- -------------------------------------------------- --------------------- ---------------------
<S> <C> <C>
SOFTBANK Capital Partners LP...................... 5,355,943 36.81%
1188 Centre Street
Newton Center, MA 02459

Yahoo! Inc........................................ 274,726(A) 1.89%
3420 Central Expressway
Santa Clara, CA 95051

BancBoston Robertson Stephens Inc................. 836,166 5.75%
555 California Street
Suite 2600
San Francisco, CA 94104
Lars D. Perkins................................... 1,113,438(B) 7.65%
J. Paul Costello.................................. 1,312,447(C) 9.02%
Russell J. Campanello............................. 20,312(D) *
Charles R. Lax.................................... -- *
Martin J. Fahey................................... 216,475(E) 1.49%
Thomas F. Brady................................... 40,417(F) *
Ronald M. Visocchi................................ 18,500(G) *
Timothy J. McManus................................ 37,483(H) *
All executive officers and directors
as a group (13 persons)......................... 3,148,653(I) 21.64%
</TABLE>

- ------------------------

(1) The number of shares deemed outstanding includes any shares subject to stock
options held by the person or entity in question that are currently
exercisable or exercisable within 60 days following January 17, 2000.

(2) The applicable percentage ownership is based on the number of shares of
Common Stock owned and outstanding as of January 17, 2000, together with the
applicable options of such stockholder that are currently exercisable or
exercisable within 60 days following January 17, 2000.

* Represents beneficial ownership of less than 1% of the Common Stock

(A) Shares owned by Yahoo! Inc. were acquired concurrent with the investment
made by SOFTBANK.

(B) Includes 7,812 shares subject to options held by Mr. Perkins.

(C) Includes 403,164 shares of Common Stock beneficially owned by Joseph A.
Bartoloni and Paul D. Spiro as trustees of trusts for the benefit of
Mr. Costello's children, John P. Costello III and Brett Ann Costello.
Mr. Costello does not have any voting or dispositive powers with respect to
such shares and, accordingly, disclaims beneficial ownership of such shares.

16
<PAGE>
(D) Includes 15,312 shares subject to options held by Mr. Campanello.

(E) Includes 197,373 shares subject to options held by Mr. Fahey.

(F) Includes 35,417 shares subject to options held by Mr. Brady.

(G) Includes 16,000 shares subject to options held by Mr. Visocchi.

(H) Includes 37,483 shares subject to options held by Mr. McManus.

(I) Includes 446,063 shares subject to options held by executive officers and
directors as a group.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Since the Company's inception in 1982, Costello & Company, Inc. ("Costello")
has been permitted to use the Company's software products and documentation
thereto which is part of the Company's standard offering to its customers. To
formalize this arrangement, on January 1, 1993, the Company entered into a
License Agreement with Costello pursuant to which the Company granted Costello a
fully-paid, perpetual license to use the Company's then current software
products and all replacement products developed and/or marketed by the Company,
with certain limited exceptions, and documentation thereto. Pursuant to the
terms of the License Agreement, Costello does not acquire any rights of
ownership in the software or documentation and said software and documentation
may only be used by Costello and J. Paul Costello, his wife, children and any
business entity at least 51% of which is owned by any of them, to each of whom
Costello may grant rights to use the software. John P. Costello III, J. Paul
Costello's son, performs general consulting services for the Company on behalf
of J. Paul Costello Associates, Inc. ("JPC Associates"). J. Paul Costello, the
President and principal shareholder of both Costello and JPC Associates and a
director of the Company, derives a personal benefit from such arrangements.

The Company believes that the transactions with Costello and JPC Associates
were made on terms no less favorable to the Company than would have been
obtained from unaffiliated third parties. The Company has adopted a policy that
transactions between the Company and its officers, directors and affiliates
shall be reviewed on an ongoing basis and be submitted to the Audit Committee or
other comparable body for review where appropriate.

17
<PAGE>
PROPOSAL NUMBER 2--APPROVAL OF AN AMENDMENT TO THE COMPANY'S 1996 STOCK OPTION
PLAN

INTRODUCTION

On December 3, 1999, the Board of Directors adopted, subject to stockholder
approval at the Annual Meeting, an amendment to the 1996 Stock Option Plan (the
"Plan Amendment") pursuant to which the number of shares of Common Stock
reserved for issuance under the 1996 Stock Option Plan was increased from
1,708,156 to 3,500,000. The effect of the Plan Amendment is reflected in full on
EXHIBIT A attached hereto.

The Board of Directors believes that the Company's growth and long-term
success depend in large part upon retaining and motivating key management
personnel and other full-time employees and that such retention and motivation
can be achieved in part through the grant of stock options. The Board of
Directors also believes that stock options can play an important role in the
success of the Company by encouraging and enabling the directors, officers and
other employees of the Company, upon whose judgment, initiative and efforts the
Company depends for sustained growth and profitability, to acquire a proprietary
interest in the long-term performance of the Company. The Board of Directors
anticipates that providing such persons with a direct stake in the Company will
assure a closer identification of the interests of the participants in the 1996
Stock Option Plan with those of the Company, thereby stimulating the efforts of
such participants to promote the Company's future success and strengthen their
desire to remain with the Company. The Board of Directors believes that the
proposed increase in the number of shares issuable under the 1996 Stock Option
Plan will help the Company to accomplish these goals and will keep the Company's
equity incentive compensation competitive.

As of January 17, 2000, options to purchase 156,000 shares of Common Stock
currently reserved for issuance under the 1996 Stock Option Plan have not yet
been granted.

RECOMMENDATION

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF
THE AMENDMENT TO THE 1996 STOCK OPTION PLAN.

SUMMARY OF 1996 STOCK OPTION PLAN

The following description of certain features of the 1996 Stock Option Plan
is intended to be a summary only. The summary is qualified in its entirety by
the full text of the 1996 Stock Option Plan which is attached hereto as EXHIBIT
A and which indicates the effect of the Plan Amendment.

On May 8, 1996, the 1996 Stock Option Plan was adopted by the Board of
Directors and approved by the Stockholders. The 1996 Stock Option Plan permits
the grant of (i) options to purchase shares of Common Stock intended to qualify
as incentive stock options ("Incentive Options") under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) options that do not
so qualify ("Non-Qualified Options") and (iii) shares of Common Stock. The 1996
Stock Option Plan is designed and intended as a performance incentive for
officers, directors, employees, consultants and other key persons performing
services for the Company to encourage such persons to acquire or increase a
proprietary interest in the success of the Company. Prior to the Plan Amendment,
there were 1,708,156 shares authorized for issuance under the 1996 Stock Option
Plan. If approved, the Plan Amendment

18
<PAGE>
would increase the number of shares of Common Stock authorized for issuance
under the 1996 Stock Option Plan to 3,500,000.

PLAN ADMINISTRATION; ELIGIBILITY

The 1996 Stock Option Plan provides that it shall be administered by the
full Board of Directors or a committee of non-employee directors, as appointed
by the Board of Directors from time to time.

The Board of Directors may discontinue or amend the 1996 Stock Option Plan
at any time provided that the rights and obligations under any option issued
prior to any amendment cannot be adversely affected by such amendment without
the consent of the optionee.

The Board of Directors has full power to select, from among the persons
eligible for awards under the 1996 Stock Option Plan, the individuals to whom
awards will be granted, to make any combination of awards to participants, and
to determine the specific term of each award, subject to the provisions of the
1996 Stock Option Plan. Incentive Options may be granted only to officers or
other employees of the Company, including members of the Board of Directors who
are also employees of the Company. Non-Qualified Options may be granted or
issued to officers or other employees of the Company, directors and to
consultants and other key person who provide services to the Company (regardless
of whether they are also employees).

MATERIAL TERMS OF OPTIONS

The exercise price of each option granted under the 1996 Stock Option Plan
is determined by the Board of Directors but, in the case of Incentive Options,
may not be less than 100% of the fair market value of the underlying shares on
the date of grant. No Incentive Option may be granted under the 1996 Stock
Option Plan to any employee of the Company or any subsidiary who owns at the
date of grant shares of stock representing in excess of 10% of the voting power
of all classes of stock of the Company unless the exercise price for stock
subject to such option is at least 110% of the fair market value of such stock
at the time of grant and the option term does not exceed five years. Each option
may be exercised during the optionee's lifetime only by the optionee, or his or
her guardian or legal representative. As of the close of business on
January 17, 2000, the fair market value of a share of Common Stock was $13.875
as determined by the price of a share of the Common Stock on NASDAQ.

The Term of each option is fixed by the Board of Directors and, in the case
of an Incentive Option, may not exceed ten years from the date of grant. Except
with respect to the automatic grants of options which are granted to
non-employee directors on the date they become directors and on each October 1
that such director is a member of the Board of Directors, which provide for a
fixed vesting schedule, the Board of Directors determines at what time or times
each option may be exercised and, subject to the provisions of the 1996 Stock
Option Plan, the period of time during which options may be exercised, if any,
after termination of employment for any reason. Options may be made exercisable
in installments, and the exercisability of options may be accelerated by the
Board of Directors. Upon exercise of options, the option exercise price must be
paid in full (i) in cash or by certified or bank check or other instrument
acceptable to the Board of Directors, (ii) if the applicable option agreement
permits, by delivery of shares of Common Stock already owned by the optionee, or
(iii) through a "cashless" exercise procedure, subject to certain limitations.

The 1996 Stock Option Plan provides that in the case of certain transactions
constituting a change in control of the Company, the 1996 Stock Option Plan and
the options issued thereunder shall

19
<PAGE>
terminate upon the effectiveness of any such transaction or event, unless
provision is made in connection with such transaction for the assumption of
options theretofore granted, or the substitution for such options with new
options of the successor entity or parent thereof, with appropriate adjustment
as to the number and kind of shares and the per share exercise prices. In the
event of such termination, each holder of outstanding options shall be permitted
to exercise all vested options and all or a portion of unvested options, as
specified in the applicable option agreement, for a period of at least 15 days
prior to the date of such termination.

TAX ASPECTS UNDER THE U.S. INTERNAL REVENUE CODE

Under current federal tax law, an employee who receives a non-qualified
option does not generally realize any taxable income at the time the option is
granted. However, upon the exercise of such an option, the employee will
recognize ordinary income measured by the excess of the then fair market value
of the Common Stock over the exercise price, and the Company generally will be
entitled to a tax deduction for a corresponding amount. On the other hand, an
employee who receives an incentive stock option under Section 422 of the Code
does not generally realize any taxable income at the time the option is granted
or at the time it is exercised. The excess of the fair market value of the
Common Stock on the date of exercise over the option price is a "tax preference
item," however, that may cause the employee to be subject to the alternative
minimum tax. Upon the sale of stock received upon exercise of any incentive
stock option, the optionee will recognize a capital gain or loss or, depending
on the holding period of the shares, ordinary income, equal to the difference
between the sale price and exercise price. The Company is not entitled to a tax
deduction with respect to the grant or exercise of an incentive stock option.

1996 STOCK OPTION PLAN BENEFITS

As grants of awards under the 1996 Stock Option Plan are subject to the
discretion of the Board of Directors, the benefits or amounts that will be
received by or allocated to any individual or group of individuals under the
1996 Stock Option Plan is not determinable, except that under the 1996 Stock
Option Plan, each non-employee director first joining the Board of Directors
automatically receives an option to purchase 5,000 shares of Common Stock when
such director is first elected or appointed to the Board of Directors, with
option shares vesting proportionately over four years. In addition, each
non-employee director automatically receives an option to purchase 2,500 shares
of Common Stock on each October 1 that such director is a member of the Board of
Directors, with option shares vesting proportionately over four years. All
option grants to non-employee directors are at a per share exercise price equal
to the fair market value of the Common Stock at the time of grant.

INDEPENDENT AUDITORS

The firm of Arthur Andersen LLP ("Arthur Andersen") has been selected by the
Board of Directors to be the Company's independent auditors for Fiscal 2000.
Arthur Andersen has served as independent auditors of the Company since Fiscal
1993.

The consolidated financial statements of the Company for Fiscal 1999 have
been audited and reported upon by Arthur Andersen. Arthur Andersen also
performed tax services for the Company during Fiscal 1999.

20
<PAGE>
A representative of Arthur Andersen will be present at the Annual Meeting
and will be given the opportunity to make a statement if he or she so desires.
The representative will be available to respond to appropriate questions.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of the Company's
outstanding shares of Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater than ten percent stockholders are required by Securities
Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Section 16(a)
reports were required for those persons, the Company believes that during Fiscal
1999, all filing requirements were complied with, except that J. Paul Costello,
a director of the Company, inadvertently failed to file on a timely basis a
report relating to a September 1999 transaction.

EXPENSES OF SOLICITATION

The Company will pay the entire expense of soliciting proxies for the Annual
Meeting. In addition to solicitations by mail, certain directors, officers and
regular employees of the Company (who will receive no compensation for their
services other than their regular compensation) may solicit proxies by
telephone, telegram or personal interview. Banks, brokerage houses, custodians,
nominees and other fiduciaries have been requested to forward proxy materials to
the beneficial owners of shares of Common Stock held of record by them and such
custodians will be reimbursed for their expenses.

SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE
ANNUAL MEETING OF STOCKHOLDERS FOLLOWING THE CLOSE OF
THE COMPANY'S 2000 FISCAL YEAR

Stockholder proposals intended to be presented at the next annual meeting of
stockholders must be received by the Company no later than October 19, 2000 in
order to be considered for inclusion in the Company's proxy statement and form
of proxy for that meeting. Such a proposal must also comply with the
requirements as to form and substance established by applicable laws and
regulations, including the rules and regulations of the SEC, in order to be
included in the proxy statement.

Any stockholder of record wishing to have a stockholder proposal considered
at the next annual meeting of stockholders, other than a proposal to be
considered for inclusion in the Company's proxy statement described above, must
provide written notice of such proposal and appropriate supporting
documentation, as set forth in the Company's By-laws, to the Company at its
principal executive office not less than 75 days nor more than 120 days prior to
the first anniversary of the date of the preceding year's annual meeting (the
"Anniversary Date"); provided, however, that in the event the annual meeting is
scheduled to be held on a date more than 30 days before the Anniversary Date or
more than 60 days after the Anniversary Date, a stockholder's notice shall be
timely if delivered to, or mailed to and received by, the Company at its
principal executive office not later than the close of business on the later of
the 75th day prior to the scheduled date of such annual meeting or the 15th day
following

21
<PAGE>
the day on which public announcement of the date of such annual meeting is first
made by the Company. Proxies solicited by the Board of Directors will confer
discretionary voting authority with respect to these proposals, subject to SEC
rules and regulations governing the exercise of such authority.

Any such proposal should be mailed to: Secretary, Webhire, Inc., 91 Hartwell
Avenue, Lexington, MA 02421.

OTHER MATTERS

The Board of Directors does not know of any matters other than those
described in this Proxy Statement which will be presented for action at the
Annual Meeting. If other matters are duly presented, proxies will be voted in
accordance with the best judgment of the proxy holders.

STOCKHOLDERS MAY OBTAIN, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO,
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE 1999 FISCAL YEAR BY
WRITING TO WEBHIRE, INC., 91 HARTWELL AVENUE, LEXINGTON, MASSACHUSETTS 02421.

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

22
<PAGE>
EXHIBIT A

AMENDED AND RESTATED
WEBHIRE, INC.
1996 STOCK OPTION AND GRANT PLAN

1. PURPOSE

This Stock Option and Grant Plan (the "Plan") is intended as a performance
incentive for officers, employees, directors, consultants and other key persons
of Webhire, Inc. (the "Company") or its Subsidiaries (as hereinafter defined) to
enable the persons to whom options are granted (the "Optionees") or to whom
shares of common stock are granted (the "Grantees") to acquire or increase a
proprietary interest in the success of the Company. The Company intends that
this purpose will be effected by the granting of "incentive stock options"
("Incentive Options") as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), nonqualified stock options ("Nonqualified
Options"), including, without limitation, grants of Nonqualified Options to
members of the Board of Directors of the Company and consultants and other key
persons who provide services to the Company or its Subsidiaries (regardless of
whether they are also employees), and outright grants of common stock under the
Plan. The term "Subsidiaries" includes any corporations in which stock
possessing fifty percent or more of the total combined voting power of all
classes of stock is owned directly or indirectly by the Company.

2. OPTIONS TO BE GRANTED AND ADMINISTRATION

(a) Options granted under the Plan may be either Incentive Options or
Nonqualified Options, and shall be designated as such at the time of grant. To
the extent that any option intended to be an Incentive Option shall fail to
qualify as an "incentive stock option" under the Code, such option shall be
deemed to be a Nonqualified Option.

(b) The Plan shall be administered by a committee (the "Committee") of not
less than two directors of the Company appointed by the Board of Directors of
the Company (the "Board of Directors") each of whom is not an employee of the
Company or any of its Subsidiaries and is a "disinterested person" within the
meaning of Rule 16b-3(c)(2)(i) promulgated under the Securities Exchange Act of
1934, as amended (the "Act") through August 14, 1996 and is a "non-employee
director" within the meaning of Rule 16(b)-3(b)(3) of the Act on and after
August 15, 1996. On and after the Plan becomes subject to Section 162(m) of the
Code, each member of the Committee also shall be an "outside director" within
the meaning of Section 162(m) of the Code and the regulations promulgated
thereunder. On and after August 15, 1996, the Plan may also be administered by
the Board of Directors, and all references to the "Committee" herein may also be
deemed to refer to the Board of Directors on and after August 15, 1996.

(i) to determine from time to time the options or stock to be granted to
eligible persons under the Plan, to prescribe the terms and provisions
(which need not be identical) of options or stock granted under the Plan to
such persons and to approve the grant of options or stock, as the case may
be;

23
<PAGE>
(ii) to construe and interpret the Plan and grants thereunder and to
establish, amend, and revoke rules and regulations for administration of the
Plan. In this connection, the Committee may correct any defect or supply any
omission, or reconcile any inconsistency in the Plan, in any option
agreement, or in any related agreements, in the manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective;

(iii) to accelerate the exercisability or vesting of all or any portion
of any option;

(iv) subject to the provisions of Section 5(a), to extend the period in
which options may be exercised;

(v) generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the Company
with respect to the Plan.

All decisions and determinations by the Committee in the exercise of its powers
shall be final and binding upon the Company, the Optionees and the Grantees.

3. STOCK

(a) The stock granted under the Plan, or subject to the options granted
under the Plan, shall be shares of the Company's authorized but unissued common
stock, par value $.01 per share (the "Common Stock"). The total number of shares
that may be issued under the Plan shall not exceed an aggregate of 3,500,000
shares of Common Stock. On and after the date the Plan is subject to
Section 162(m) of the Code, options with respect to no more than 400,000 shares
of Common Stock may be granted to any one individual during any one calendar
year period. Such numbers shall be subject to adjustment as provided in
Section 7 hereof.

(b) Whenever any outstanding option under the Plan expires, is canceled or
is otherwise terminated (other than by exercise), the shares of Common Stock
allocable to the unexercised portion of such option may again be the subject of
options or grants of Common Stock under the Plan.

4. ELIGIBILITY

(a) Incentive Options may be granted only to officers or other employees of
the Company or its Subsidiaries, including members of the Board of Directors who
are also employees of the Company or its Subsidiaries. Nonqualified Options may
be granted to officers or other employees of the Company or its Subsidiaries,
members of the Board of Directors and consultants and other key persons who
provide services to the Company or its Subsidiaries (regardless of whether they
are also employees). Grants of Common Stock may be made to any officer,
director, employee, consultant or other key person of the Company or its
Subsidiaries.

(b) No person shall be eligible to receive any Incentive Option under the
Plan if, at the date of grant, such person beneficially owns stock representing
in excess of 10% of the voting power of all outstanding capital stock of the
Company (a "Ten Percent Stockholder") unless notwithstanding anything in this
Plan to the contrary (i) the purchase price for the Common Stock subject to such
option is at least 110% of the fair market value of such stock at the time of
the grant and (ii) the option by its terms is not exercisable more than five
years from the date of grant thereof.

(c) Notwithstanding any other provision of the Plan, to the extent that the
aggregate fair market value of the stock with respect to which Incentive Options
are exercisable for the first time by any

24
<PAGE>
individual during any calendar year (under all plans of the Company and its
parent and Subsidiaries) exceeds $100,000, the options attributable to the
excess over $100,000 shall be treated as Nonqualified Options under the Plan.
Such annual limitation shall be applied by taking Incentive Options into account
in the order in which they were granted.

(d) Each individual who first joins the Board of Directors as a non-employee
Director shall automatically be granted a Nonqualified Option to acquire 5,000
shares of Common Stock on the first day such individual serves as a non-employee
Director. Each non-employee Director who is serving as Director of the Company
on each October 1, beginning with October 1, 1996, shall automatically be
granted on such day a Nonqualified Option to acquire 2,500 shares of Common
Stock. The exercise price per share for the Common Stock covered by an option
granted hereunder shall be equal to the "fair market value" (determined pursuant
to the formula set forth in Section 5(d) hereof) of the Common Stock on the date
the option is granted, and except as otherwise provided in this Section 4(d),
any options granted hereunder shall be subject to the other provisions of this
Plan.

An option granted under this Section 4(d) shall be exercisable with respect
to one-fourth of the total shares to which the option relates on each
anniversary of the grant date; provided, however, that any option so granted
shall become immediately exercisable in full upon the termination of service of
the non-employee Director because of disability or death. No option issued under
this Section 4(d) shall be exercisable after the expiration of ten years from
the date upon which such option is granted. For purposes of this Section 4(d),
"disability" means an individual's inability to perform his normal required
services for the Company and its Subsidiaries for a period of six consecutive
months by reason of the individual's mental or physical disability, as
determined by the Committee in good faith in its sole discretion.

The provisions of this Section 4(d) shall apply only to options granted or
to be granted to non-employee Directors, and shall not be deemed to modify,
limit or otherwise apply to any other provision of this Plan or to any option
issued under this Plan to an Optionee who is not an non-employee Director of the
Company. To the extent inconsistent with the provisions of any other Section of
this Plan, the provisions of this Section 4(d) shall govern the rights and
obligations of the Company and non-employee Directors respecting options granted
or to be granted to non-employee Directors.

5. TERMS OF THE OPTION AGREEMENTS

Subject to the terms and conditions of the Plan, each option agreement shall
contain such provisions as the Committee shall from time to time deem
appropriate. Option agreements need not be identical, but each option agreement
by appropriate language shall include the substance of all of the following
provisions:

(a) EXPIRATION; TERMINATION OF EMPLOYMENT. Notwithstanding any other
provision of the Plan or of any option agreement, each option shall expire on
the date specified in the option agreement, which date in the case of any
Incentive Option shall not be later than the tenth anniversary of the date on
which the option was granted; provided, however, that if such Incentive Option
is held by a Ten Percent Stockholder, the expiration date of such Incentive
Option shall not be later than five years from the date of grant thereof. If an
Optionee's employment or service as a director with the Company and its
Subsidiaries terminates for any reason, the Committee may in its discretion
provide, at any time, that any outstanding option granted to such Optionee under
the Plan shall be exercisable, subject to the

25
<PAGE>
expiration date of such option, for such period following termination of
employment as may be specified by the Committee, which period for purposes of
Incentive Options shall not exceed three months where such termination is not
due to death or disability (within the meaning of Section 22(e)(3) of the Code)
or one year where such termination is due to death or disability. If an
Optionee's employment or service as a director with the Company and its
Subsidiaries terminates due to the Optionee's willful actions against the
interests of the Company, the option may be terminated upon written notice to
the Optionee; in such a case, the option will cease to be exercisable
immediately upon the Optionee's receipt of such written notice.

(b) MINIMUM SHARES EXERCISABLE. The minimum number of shares with respect to
which an option may be exercised at any one time shall be fifty (50) shares, or
such lesser number as is subject to exercise under the option at the time,
provided that no fractional shares may be issued.

(c) EXERCISE. Each option shall be exercisable in such installments (which
need not be equal) and at such times as may be designated by the Committee. To
the extent not exercised, installments shall accumulate and be exercisable, in
whole or in part, at any time after becoming exercisable, but not later than the
date the option expires.

(d) PURCHASE PRICE. The purchase price per share of Common Stock subject to
each option shall be determined by the Committee; provided, however, that the
purchase price per share of Common Stock subject to each Incentive Option shall
be not less than the fair market value of the Common Stock on the date such
Incentive Option is granted. For the purposes of the Plan, the fair market value
of the Common Stock shall be determined in good faith by the Committee;
provided, however, that (i) if the Common Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
Small-Cap Market on the date the option is granted, the fair market value shall
not be less than the average of the highest bid and lowest asked prices of the
Common Stock on NASDAQ reported for such date or, if no prices were reported for
such date, for the last date preceding such date on which prices were reported,
(ii) if the Common Stock is admitted to trading on a national securities
exchange or the NASDAQ National Market System on the date the option is granted,
the fair market value shall not be less than the closing price reported for the
Common Stock on such exchange or system for such date or, if no sales were
reported for such date, for the last date preceding such date for which a sale
was reported, and (iii) the fair market value of the Common Stock on the
effective date of the registration statement for the Company's initial public
offering shall be the initial offering price.

(e) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any option unless and until
(i) the option shall have been exercised pursuant to the terms thereof,
(ii) all requirements under applicable law and regulations shall have been
complied with to the satisfaction of the Company, (iii) the Company shall have
issued and delivered the shares to the Optionee, and (iv) the Optionee's name
shall have been entered as a stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such shares of Common Stock.

(f) TRANSFER. No option granted hereunder shall be transferable by the
Optionee other than by will or by the laws of descent and distribution, and such
option may be exercised during the Optionee's lifetime only by the Optionee, or
his or her guardian or legal representative. Notwithstanding the foregoing, the
Committee may provide in an option agreement that the optionee may transfer,
without consideration for the transfer, his Nonqualified Options to members of
his immediate family, to trusts

26
<PAGE>
for the benefit of such family members and to partnerships in which such family
members are the only partners.

6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

(a) Any option granted under the Plan may be exercised by the Optionee in
whole or, subject to Section 5(b) hereof, in part by delivering to the Company
on any business day a written notice specifying the number of shares of Common
Stock the Optionee then desires to purchase (the "Notice"). As a condition
precedent to the exercise of any option, the Optionee shall pay or make
arrangements for the payment of all taxes to be withheld, in accordance with
Section 9 of the Plan.

(b) Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be made either: (i) in cash, or by certified or bank
check or other payment acceptable to the Company, equal to the option exercise
price for the number of shares specified in the Notice (the "Total Option
Price"); (ii) if authorized by the applicable option agreement and if permitted
by law, by delivery of shares of Common Stock that the Optionee has beneficially
owned for more than six months and which the Optionee may freely transfer having
a fair market value, determined by reference to the provisions of Section 5(d)
hereof, equal to or less than the Total Option Price, plus cash in an amount
equal to the excess, if any, of the Total Option Price over the fair market
value of such shares of Common Stock; or (iii) by the Optionee delivering the
Notice to the Company together with irrevocable instructions to a broker to
promptly deliver the Total Option Price to the Company in cash or by other
method of payment acceptable to the Company; provided, however, that the
Optionee and the broker shall comply with such procedures and enter into such
agreements of indemnity or other agreements as the Company shall prescribe as a
condition of payment under this clause (iii).

(c) The delivery of certificates representing shares of Common Stock to be
purchased pursuant to the exercise of an option will be contingent upon the
Company's receipt of the Total Option Price and of any written representations
from the Optionee required by the Committee, and the fulfillment of any other
requirements contained in the option agreement or applicable provisions of law.

7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

(a) If the shares of the Company's Common Stock as a whole are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or the
like, an appropriate and proportionate adjustment shall be made in the number
and kind of shares subject to the Plan, and in the number, kind, and per share
exercise price of shares subject to unexercised options or portions thereof
granted prior to any such change. In the event of any such adjustment in an
outstanding option, the Optionee thereafter shall have the right to purchase the
number of shares under such option at the per share price, as so adjusted, which
the Optionee could purchase at the total purchase price applicable to the option
immediately prior to such adjustment.

(b) Adjustments under this Section 7 shall be determined by the Committee
and such determinations shall be conclusive. The Committee shall have the
discretion and power in any such event to determine and to make effective
provision for acceleration of the time or times at which any option or portion
thereof shall become exercisable. No fractional shares of Common Stock shall be
issued under the Plan on account of any adjustment specified above.

27
<PAGE>
8. EFFECT OF CERTAIN TRANSACTIONS

In the case of (i) the dissolution or liquidation of the Company, (ii) a
reorganization, merger, consolidation or other business combination in which the
Company is acquired by another entity (other than a holding company formed by
the Company) or in which the Company is not the surviving entity, or (iii) the
sale of all or substantially all of the assets of the Company to another entity,
the Plan and the options issued hereunder shall terminate upon the effectiveness
of any such transaction or event, unless provision is made in connection with
such transaction for the assumption of options theretofore granted, or the
substitution for such option of new options of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and the
per share exercise prices, as provided in Section 7. In the event of such
termination, (A) all outstanding options which are then currently exercisable
for shares of Common Stock and (B) such percentage between twenty-five percent
(25%) and one hundred percent (100%) of any outstanding options that are not
then currently exercisable for shares of Common Stock as shall have been
determined by the Committee at the time of grant of the applicable options shall
be exercisable for at least fifteen (15) days prior to the date of such
termination whether or not otherwise exercisable during such period; provided,
however, that in the absence of any express determination by the Committee as to
the percentage of any options that shall be accelerated under clause (B) above,
the percentage shall be twenty-five percent (25%).

9. TAX WITHHOLDING

(a) Each Optionee shall, no later than the exercise date of any option, pay
to the Company, or make arrangements satisfactory to the Committee regarding
payment of any Federal, state, or local taxes of any kind required by law to be
withheld with respect to such income. The Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Optionee.

(b) An Optionee may elect to have his tax withholding obligation satisfied,
in whole or in part, by (i) authorizing the Company to withhold from shares of
Common Stock to be issued pursuant to any option number of shares with an
aggregate fair market value (determined by reference to the provisions of
Section 5(d) hereof), that would satisfy the withholding amount due, or
(ii) transferring to the Company shares of Common Stock owned by the Optionee
with an aggregate fair market value (determined by reference to the provisions
of Section 5(d) hereof) that would satisfy the withholding amount due.

10. CONDITION TO GRANTS OF COMMON STOCK

In addition to the terms and conditions expressly contemplated by the Plan,
the Committee may impose such other terms and conditions on the grant of any
Common Stock under the Plan as it may determine.

11. AMENDMENT OF THE PLAN

The Board of Directors may discontinue the Plan or amend the Plan at any
time, and from time to time. Plan amendments shall be subject to approval by the
Company stockholders if and to the extent determined by the Committee to be
necessary to ensure that Incentive Options granted under the Plan are qualified
under Section 422 of the Code.

28
<PAGE>
Except as provided in Sections 7 and 8 hereof, rights and obligations under
any option granted before any amendment of the Plan shall not be altered or
impaired by such amendment, except with the consent of the Optionee.

12. NONEXCLUSIVITY OF THE PLAN

Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock or stock options otherwise than under
the Plan, and such arrangements may be either applicable generally or only in
specific cases. Neither the Plan nor any option granted hereunder shall be
deemed to confer upon any employee any right to continued employment with the
Company or its Subsidiaries.

13. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW

(a) The obligation of the Company to sell and deliver shares of Common Stock
with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

(b) The Plan shall be governed by Delaware law, except to the extent that
such law is preempted by federal law.

14. EFFECTIVE DATE OF PLAN RESTATEMENT; STOCKHOLDER APPROVAL

This Plan shall become effective upon the date that it is approved by the
Board of Directors of the Company; provided, however, that the Plan shall be
subject to the approval of the Company's stockholders in accordance with
applicable laws and regulations at an annual or special meeting held within
twelve months of such effective date. No options granted under the Plan prior to
such stockholder approval may be exercised until such approval has been
obtained. No Incentive Options may be granted under the Plan after the tenth
anniversary of the effective date of the Plan.

29
<PAGE>

DIRECTIONS TO 2000 ANNUAL MEETING OF STOCKHOLDERS OF WEBHIRE, INC.

FROM POINTS NORTH:
Rte. 95/128 South to Exit 30B. Enter Sheraton Tara Lexington Inn on first
driveway on the right.

FROM LOGAN INTERNATIONAL AIRPORT:
Follow signs out of the airport to Route 93 (Expressway/Downtown Boston)
through the Sumner Tunnel. Take 93 North to Exit 37 (Route 95/128 South) to
Exit 30B (Route 2A/Hanscomb Air Force Base/Concord). Enter Sheraton Tara
Lexington Inn on the first driveway on the right.

WEB42B DETACH HERE

PROXY

WEBHIRE, INC.

Annual Meeting of Stockholders - March 15, 2000

The undersigned, revoking all prior proxies, hereby appoints Cynthia G. Eades
and Martin J. Fahey, and each of them (with full power of substitution), as
proxies of the undersigned to attend the Annual Meeting of Stockholders of
Webhire, Inc. (the "Company") to be held on Wednesday, March 15, 2000 and any
adjourned sessions thereof, and there to vote and act upon (1) as hereinafter
specified upon the proposal listed on the reverse side and as more
particularly described in the Company's Proxy Statement and (2) in their
discretion upon such other matters as may properly come before the meeting.

The undersigned hereby acknowledges receipt of: (1) Notice of Annual Meeting
of Stockholders of the Company, (2) accompanying Proxy Statement, and (3)
Annual Report of the Company for the fiscal year ended September 30, 1999.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK
MAY BE REPRESENTED AT THE MEETING.

/SEE REVERSE/ CONTINUED AND TO BE SIGNED ON REVERSE SIDE /SEE REVERSE/
/ SIDE / / SIDE /

<PAGE>

WEB42A DETACH HERE

Please mark
/X/ votes as in
this example.

The shares represented by this proxy will be voted as directed by the
undersigned. If no direction is given with respect to the proposals specified
below, this proxy will be voted "FOR" such proposals.

1. To re-elect (01) Russell J. Campanello and
(02) Charles R. Lax as Class I Directors of the
Company.
FOR WITHHELD
/ / / /

/ / -------------------------------------------------------
For all nominees except as noted above

2. To amend the Company's 1996 Stock Option and FOR AGAINST ABSTAIN
Grant Plan to increase the number of shares / / / / / /
issuable thereunder from 1,708,156 to
3,500,000.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /

MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /

Please sign name(s) exactly as appearing
hereon. When signing as attorney, executor,
administrator or other fiduciary, please give
your full title as such. Joint owners should
each sign personally. If a corporation, sign in
full corporate name by authorized person.

Signature: __________________ Date:____ Signature:__________________ Date:____