<PAGE> 1
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Alpha-Beta Technology, Inc.
(Name of Registrant as Specified In Its Charter)
Alpha-Beta Technology, Inc.
(Name of Person(s) Filing Proxy Statement)
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> 2
[ALPHA-BETA LOGO]
ALPHA-BETA TECHNOLOGY, INC.
THREE BIOTECH PARK
ONE INNOVATION DRIVE
WORCESTER, MA 01605
April 22, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Alpha-Beta Technology, Inc. (the "Company") to be held at 11:00 A.M. on
Wednesday, May 20, 1998, at One Innovation Drive, Worcester, MA 01605 (the
"Annual Meeting"). The formal business to be considered and acted upon by the
stockholders at this meeting is (i) the election of three Class III Directors
who shall serve until 2001 and (ii) to consider and vote upon such other
business as may properly come before the Annual Meeting or any adjournments or
postponements thereof. These matters are described in detail in the enclosed
Notice of Annual Meeting and Proxy Statement.
The Board of Directors of the Company requests that you carefully review
the enclosed Proxy Statement and recommends that you vote "FOR" the election of
the nominees for the Board as Class III Directors of the Company.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE REPLY ENVELOPE
PROVIDED AT YOUR EARLIEST CONVENIENCE. THE REPLY ENVELOPE REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
Sincerely,
SPIROS JAMAS
President and Chief Executive
Officer
<PAGE> 3
ALPHA-BETA TECHNOLOGY, INC.
WORCESTER, MA 01605
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
Alpha-Beta Technology, Inc. will be held at 11:00 A.M. at One Innovation Drive,
Worcester, Massachusetts on Wednesday, May 20, 1998, to consider and act on the
following matters:
1. Election of Gustav A. Christensen, Lawrence C. Hoff and Michael E.
Porter as the Class III Directors of the Company to serve until the 2001
Annual Meeting of Stockholders and until their successors are duly elected
and qualified; and
2. Any other matter that may properly come before the meeting or any
adjournment or postponement thereof.
The close of business on March 27, 1998 has been fixed as the record date
for the determination of the stockholders entitled to notice of and to vote at
the Annual Meeting.
By Order of the Board of Directors
D. DAVIDSON EASSON JR.,
Clerk
Worcester, Massachusetts
April 22, 1998
IMPORTANT: MANAGEMENT INVITES YOU TO ATTEND THE ANNUAL MEETING, BUT IF YOU ARE
UNABLE TO BE PRESENT, PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE. NO POSTAGE IS REQUIRED IF THE PROXY IS RETURNED IN THE
ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
<PAGE> 4
ALPHA-BETA TECHNOLOGY, INC.
THREE BIOTECH PARK
ONE INNOVATION DRIVE
WORCESTER, MA 01605
(508) 798-6900
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Alpha-Beta Technology, Inc. (hereinafter the
"Company" or "Alpha-Beta") of proxies in the accompanying form to be used at the
Annual Meeting of Stockholders of the Company to be held at One Innovation
Drive, Worcester, MA 01605 at 11:00 A.M. on Wednesday, May 20, 1998, and at all
adjournments and postponements thereof (the "Annual Meeting"), for the purposes
set forth in the accompanying Notice of Annual Meeting. It is intended that this
statement and the proxies solicited hereby be mailed to stockholders on or
shortly after April 22, 1998. Any stockholder who signs and returns a proxy in
the form enclosed with this statement has the power to revoke the proxy at any
time before it is exercised by giving written notice to such effect to the Clerk
of the Company. A stockholder also may revoke a proxy by filing a duly executed
proxy bearing a later date or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the record date stated below
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 revocation of a previously given proxy.
Proxies properly executed and received in time for the Annual Meeting will be
voted.
The close of business on March 27, 1998, has been fixed as the record date
for the determination of the stockholders entitled to notice of, and to vote at,
the Annual Meeting. As of such date, 20,399,504 shares of Common Stock were
outstanding and entitled to be voted at the Annual Meeting. Each share of Common
Stock is entitled to one vote on all matters voted on at the Annual Meeting.
The proxies in the accompanying form will be voted as specified, but if no
specification is made they will be voted in favor of the election of the
nominees for the Board as Class III Directors of the Company. In the discretion
of the proxy holders, the proxies also will be voted for or against such other
matters as may properly come before the Annual Meeting. The Board of Directors
is not aware that any other matters are to be presented for action at the Annual
Meeting.
The Company will pay the entire expense of soliciting proxies for the
Annual Meeting. In addition to solicitations by mail, solicitations also may be
made by personal interview or telephone. Banks, brokerage houses, custodians,
nominees and other fiduciaries have been requested to forward proxy materials to
the beneficial owners of shares held of record by them and will be reimbursed
for their expenses.
The Annual Report of the Company, including financial statements for the
fiscal year ended December 31, 1997, is being mailed to stockholders
concurrently with this proxy statement. The Annual Report, however, is not part
of the proxy solicitation material. A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENTS, MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO THE ASSOCIATE
DIRECTOR, FINANCE OF THE COMPANY AT THE FOLLOWING ADDRESS: THREE BIOTECH PARK,
ONE INNOVATION DRIVE, WORCESTER, MA 01605, ATTN: MR. H. JAMES MAGEE.
PROPOSAL I -- ELECTION OF DIRECTORS
The Company's By-Laws provide that the power to fix the number of Directors
each year shall rest with the Board. The Board has set the number of Directors
to serve until the next annual meeting at seven.
<PAGE> 5
Pursuant to the Company's By-Laws and Section 50A of the Massachusetts
Business Corporation Law, the Board of Directors is divided into three classes
of Directors, as nearly equal in number as possible, with the members of each
class to serve for three years. Pursuant to these requirements, Spiros Jamas and
Peter H. Levine are serving as the Class I Directors until the 1999 Annual
Meeting, D. Davidson Easson, Jr. and Bernard Canavan are serving as the Class II
Directors until the 2000 Annual Meeting, and Gustav A. Christensen, Lawrence C.
Hoff and Michael E. Porter are serving as the Class III Directors until the 1998
Annual Meeting. The Board has nominated Mr. Christensen, Mr. Hoff and Dr. Porter
for re-election at the 1998 Annual Meeting to serve as Class III Directors until
the 2001 Annual Meeting and until their successors are duly elected and
qualified.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF MR.
CHRISTENSEN, MR. HOFF AND DR. PORTER AS THE CLASS III DIRECTORS OF THE COMPANY.
The executive officers, key employees and Directors of the Company as of
March 1, 1998 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Gustav A. Christensen................... 50 Chairman of the Board of Directors
Spiros Jamas, Sc.D...................... 37 President, Chief Executive Officer and
Director
D. Davidson Easson Jr., Sc.D............ 36 Executive Vice President, Treasurer, Chief
Operating Officer, Clerk and Director
Joseph M. Grimm......................... 46 Vice President of Finance and Chief Financial
Officer
Nadine D. Cohen, Ph.D................... 47 Vice President, Regulatory Affairs and
Quality
Katherine Evans......................... 55 Vice President, Clinical Operations and
Strategic Planning
Parrish M. Galliher..................... 45 Vice President, Operations
William M. Mackin, Ph.D................. 44 Vice President, Biology Research and
Development
Gary R. Ostroff, Ph.D................... 43 Vice President, Discovery Research
Claude P. Selitrennikoff, Ph.D.......... 54 Vice President, Antifungal Research
Bernard Canavan, M.D. (1)............... 62 Director
Lawrence C. Hoff (1)(2)................. 69 Director
Peter H. Levine, M.D.................... 59 Director
Michael E. Porter, Ph.D. (2)............ 50 Director
</TABLE>
- ---------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Mr. Christensen joined Alpha-Beta in December 1990 as a Director and has
served as Chairman of the Board of Directors since August 1991. Prior to joining
the Company, Mr. Christensen served as President and Chief Executive Officer of
Immulogic Pharmaceutical Corporation, a biotechnology company focusing on
immune-related disorders, from April 1988 to June 1990. From 1983 to April 1987,
Mr. Christensen was Senior Vice President, Commercial Affairs at Genetics
Institute, Inc., with responsibility for business
2
<PAGE> 6
development and licensing. Prior to Genetics Institute, he held a variety of
management positions at Baxter International. Mr. Christensen received an M.Sc.
degree in Economics from the University of Aarhus (Denmark) and an M.B.A. degree
from Harvard Business School. Mr. Christensen serves as a Director of Diatide,
Inc.
Dr. Jamas is a founder of Alpha-Beta and has served as President, Chief
Executive Officer and a Director since the Company's inception in March 1988.
Dr. Jamas holds Sc.D. and M.S. degrees from the Massachusetts Institute of
Technology, where he conducted initial research on glucans prior to founding the
Company.
Dr. Easson is a founder of Alpha-Beta and has served as Executive Vice
President, Treasurer and a Director of the Company since March 1988 and as Chief
Operating Officer since April 1991. Dr. Easson holds a Sc.D. degree in
Biochemical Engineering from the Massachusetts Institute of Technology, where he
developed carbohydrate engineering principles for bacterial polysaccharides
prior to founding the Company. Dr. Easson serves as a Director of the Worcester
Business Development Corporation, the University of Massachusetts Medical Center
Foundation and the Bay State Chapter of the Juvenile Diabetes Foundation
International.
Mr. Grimm joined Alpha-Beta as Vice President, Finance and Chief Financial
Officer in January 1998. Prior to joining Alpha-Beta, Mr. Grimm held several
management positions at Genetics Institute, Inc., including Vice President of
Finance and Treasurer before Genetics Institute, Inc. was acquired by American
Home Products Corp. in April 1997. Mr. Grimm holds a B.A. from the University of
Wisconsin and a M.B.A. from the University of Minnesota.
Dr. Cohen joined Alpha-Beta as Director of Quality in 1994 and has served
as Vice President of Quality since December 1995. Dr. Cohen has served as Vice
President of Regulating Affairs and Quality of the Company since November 1997.
From February 1993 until she joined the Company, Dr. Cohen was Director of QA/QC
at T Cell Sciences, Inc. From 1984 to 1993, Dr. Cohen was the Associate Director
of Quality Operations at the Massachusetts Public Health Biologic Laboratories
where she served as head of the QA and QC departments, and also had
responsibility for Regulatory Affairs. Dr. Cohen holds a Ph.D. in Biochemistry
from the University of Rochester.
Ms. Evans joined Alpha-Beta as Director of Project Management in 1992 and
has served as Vice President of Strategic and Operational Planning since January
1997 and as Vice President of Clinical Operations and Strategic Planning since
November 1997. Prior to joining Alpha-Beta, Ms. Evans was Director of Project
Management at Genetics Institute, Inc. During her 7 year tenure at Genetics
Institute, Ms. Evans served as Project Manager for t-PA, Factor VIII and EPO.
Ms. Evans holds a B.A. and M.A. in History from Smith College.
Mr. Galliher joined the Company as Director of Manufacturing Development in
1994 and has served as Vice President of Manufacturing Development since
December 1995. In November 1997, Mr. Galliher was promoted to Vice President of
Operations with responsibility for manufacturing and manufacturing development.
Prior to joining Alpha-Beta, Mr. Galliher was responsible for a variety of
functions during his 12 year tenure at Biogen, Inc., including process
engineering validation, process scale-up, bioprocess development, clinical
manufacturing, and production plant design and startup. Mr. Galliher holds a
B.S. in Biology from Boston University and an M.S. in Biochemical Engineering
from the Massachusetts Institute of Technology.
Dr. Mackin joined Alpha-Beta in 1992 as a Senior Scientist in the Biology
Department. Dr. Mackin has been promoted through several positions and was named
Vice President, Biology Research & Development in January 1997. Previously, Dr.
Mackin was a Senior Scientist engaged in immune-based drug discovery efforts for
9 years at E.I. du Pont de Nemours and Company and Dupont Merck Pharmaceutical
Company. From
3
<PAGE> 7
1980 to 1983, Dr. Mackin was a recipient of a National Arthritis Foundation
postdoctoral fellowship at the University of Connecticut Health Center. Dr.
Mackin holds a B.S. in Microbiology from the University of Illinois and a Ph.D.
in Medical Microbiology and Immunology from the University of Illinois Medical
School.
Dr. Ostroff joined the Company in 1988 as Director of Research and was
named Vice President of Research and Development in 1992. Dr. Ostroff has also
served as Vice President of Discovery Research since January 1995. Dr. Ostroff
was previously Microbiology Group Leader at Genzyme Corporation from July 1984
to September 1988. Dr. Ostroff obtained his Ph.D. in Molecular Biology from the
University of Delaware in 1982.
Dr. Selitrennikoff has been the Vice President, Antifungal Research/General
Manager of Denver Operations of the Company since the Company's acquisition of
MycoTox, Inc. in June 1997. Prior to such time, Dr. Selitrennikoff served as
President and Chief Executive Officer of MycoTox, Inc. Dr. Selitrennikoff is a
Professor with tenure at the University of Colorado Health and Sciences Center.
Dr. Canavan has been a Director of the Company since February 1994. Dr.
Canavan was President of American Home Products Corp., a pharmaceutical
manufacturer, from June 1990 until his retirement in February 1994. From
September 1987 to June 1990, Dr. Canavan was the Executive Vice President of
American Home Products Corp. and Chairman of Wyeth-Ayerst Laboratories. Dr.
Canavan also serves as a Director of Magainin Pharmaceuticals and Biochem Pharma
Inc.
Mr. Hoff has been a Director of the Company since February 1992. Mr. Hoff
was President and Chief Operating Officer of the Upjohn Company until his
retirement in 1990. Mr. Hoff was employed by Upjohn for 39 years starting as a
pharmaceutical sales representative in 1950. He became Vice President and
General Manager of Pharmaceutical Operations in 1974 and President in 1984. Mr.
Hoff also served as Chairman of the Pharmaceutical Manufacturers Association in
1987 and Chairman-elect in 1986. Mr. Hoff serves on the boards of MedImmune,
Inc. and Curative Health Systems, Inc. Mr. Hoff also served on the board of
Pathogenesis, Inc. until March 1998.
Dr. Levine has been a Director of the Company since October 1995. He has
been the President and Chief Executive Officer of Memorial Health Care, Inc.
(formerly The Medical Center of Central Massachusetts, Inc.) since 1990, and is
a Professor of Medicine at the University of Massachusetts Medical School. He
currently serves on the boards of the Worcester Polytechnic Institute, the
Massachusetts Biotechnology Research Institute and the Massachusetts Hospital
Association.
Dr. Porter has been a Director of the Company since September 1991. He is
the C. Roland Christensen Professor of Business Administration at Harvard
Business School. Dr. Porter has served as a counselor on competitive strategy to
many leading U.S. and international corporations, including AT&T, Credit Suisse
First Boston, Procter & Gamble and Royal Dutch Shell. Dr. Porter joined the
Harvard faculty in 1973. He received a Ph.D. in Business Economics from Harvard
University and an M.B.A. from Harvard Business School. Dr. Porter also serves as
a Director of ThermoQuest Corporation, Parametric Technology, Inc. and R & B
Falcon Corporation.
BOARD MEETINGS, COMMITTEES, ATTENDANCE AND FEES
The Board of Directors held 4 regularly scheduled meetings and 2 special
meetings during the 1997 fiscal year. The Board has a compensation committee
(the "Compensation Committee") and an audit committee (the "Audit Committee"),
each of which is discussed below. The Board does not have a nominating
committee. Each of the incumbent Directors attended more than 75% of the
aggregate of the total number of meetings of the Board of Directors and the
committees of which he was a member which were held during the period he was a
Director or committee member.
4
<PAGE> 8
COMPENSATION COMMITTEE
This committee reviews and makes recommendations to the Board concerning
salaries and incentive compensation for management level employees and
scientific consultants to the Company, in addition to administering the
Company's 1988 Stock Option and Grant Plan and 1997 Stock Option and Grant Plan
(together, the "Stock Option Plans"). See "Report of Executive Compensation
Committee." The Compensation Committee held 2 meetings during the 1997 fiscal
year.
The committee members are Dr. Canavan and Mr. Hoff.
AUDIT COMMITTEE
This committee is responsible for reviewing the results and scope of the
audit and examination reports of the independent auditors and for reviewing the
letters to management prepared by the independent auditors. The Audit Committee
held 2 meetings during the 1997 fiscal year.
The committee members are Mr. Hoff and Dr. Porter.
ELECTION AND COMPENSATION OF DIRECTORS
All of the Directors are elected by the stockholders of the Company. There
are no existing understandings or arrangements regarding the election or
nomination for election of any of the Directors. Each of the non-employee
Directors receives a director fee of $10,000 per annum and up to $1,000 for each
Board and committee meeting he attends. In lieu of a director fee, each Director
may elect to receive stock options with a fair market value equal to the
director fee as determined by the Black-Scholes option pricing model, an
accepted model for stock option valuation. Each non-employee Director is also
eligible to participate in the Company's Stock Option Plans in accordance with
the respective terms of such plans.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following tables set forth (a) the compensation paid or accrued to the
Company's Chief Executive Officer and two other current executive officers of
the Company who made in excess of $100,000 for the year ended December 31, 1997
and two other executive officers who would have been included in the list of the
four most highly-compensated executive officers of the Company for the year
ended December 31, 1997 had their employment with the Company not terminated
prior to such date (the "Named Executive Officers") for services rendered to the
Company in all capacities during the fiscal years ended December 31, 1997, 1996
and 1995, and (b) certain information related to stock options held by such
individuals at December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------- ---------------------------------
AWARDS PAYOUTS
----------------------- -------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL
COMPEN- STOCK OPTIONS/ LTIP OTHER
NAME AND PRINCIPAL SALARY BONUS SATION AWARDS SARs PAYOUTS COMPEN-
POSITION YEAR ($) ($) ($) ($) (#) ($) SATION
------------------ ---- ------ ----- ------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Spiros Jamas..................... 1997 $271,000 none $ 611(4) none 330,974(5) none none
President, Chief Executive 1996 242,000 $40,000 none none 80,000 none none
Officer and Director 1995 220,000 17,600 none none 65,250 none none
D. Davidson Easson Jr............ 1997 204,000 none none none 202,537(6) none none
Executive Vice President, 1996 176,000 30,000 557(4) none 40,000 none none
Treasurer, Chief Operating 1995 160,000 12,800 2,414(4) none 42,250 none none
Officer and Director
Paul A. Bleicher................. 1997 201,400(1) 15,000(3) none none none none none
Vice President, Clinical 1996 186,250 35,000 3,784(4) none 45,000 none none
Affairs and Strategic 1995 165,000 13,200 3,095(4) none 35,300 none none
Technology Acquisition
and Medical Director
Peter H. Grassam................. 1997 187,400(2) none $ 627(4) none 92,205(7) none none
Vice President, Operations 1996 178,500 25,000 707(4) none 20,000 none none
and General Manager, 1995 171,000 11,970 727(4) none 33,700 none none
Smithfield Site
</TABLE>
- ---------------
(1) The amount shown represents Dr. Bleicher's annual salary for 1997. Dr.
Bleicher's employment terminated with the Company on August 15, 1997.
(2) The amount shown represents Mr. Grassam's annual salary for 1997. Mr.
Grassam's employment terminated with the Company on October 31, 1997.
(3) The amount shown represents a bonus which was granted on April 3, 1996 and
accrued upon completion of the clinical trial for Betafectin(R) on March 1,
1997.
(4) The amounts shown represent amounts paid for certain tax planning and
advice.
(5) The amount shown includes 180,974 options granted in connection with the
Company's 1997 option exchange program (see "Report on Exchange of Certain
Options").
(6) The amount shown includes 102,537 options granted in connection with the
Company's 1997 option exchange program (see "Report on Exchange of Certain
Options").
(7) The amount shown represents options granted in connection with the Company's
1997 option exchange program (see "Report on Exchange of Certain Options").
6
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL
INDIVIDUAL GRANTS RATES OF
------------------------------------------ STOCK PRICE
% OF TOTAL APPRECIATION
OPTIONS GRANTED EXERCISE OR FOR OPTION TERM(1)
OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION ---------------------
NAME GRANTED IN 1997 ($/Sh) DATE 5%($) 10%($)
---- ------- --------------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Spiros Jamas.............. 749(2)(4) 0.04% $3.00 10/01/07 $ 1,413 $ 3,581
49,500(2)(5) 2.36 3.00 10/01/07 93,391 236,670
37,125(2)(6) 1.77 3.00 10/01/07 70,043 177,503
21,600(2)(7) 1.03 3.00 10/01/07 40,752 103,275
72,000(2)(8) 3.43 3.00 11/07/07 135,841 344,248
150,000(9) 7.15 2.97 11/07/07 280,173 710,012
D. Davidson Easson Jr..... 587(2)(4) 0.03 3.00 10/01/07 1,107 2,807
27,900(2)(5) 1.33 3.00 10/01/07 52,638 133,396
23,650(2)(6) 1.13 3.00 10/01/07 44,620 113,076
14,400(2)(7) 0.69 3.00 10/01/07 27,168 68,850
36,000(2)(8) 1.72 3.00 10/01/07 67,921 172,124
75,000(9) 3.57 2.97 11/07/07 140,086 355,006
25,000(9) 1.19 2.81 12/16/07 44,180 111,960
Paul A. Bleicher.......... n/a 0.00(3) n/a n/a n/a n/a
Peter H. Grassam.......... 36,000(2)(10) 1.72 $3.00 10/01/07 67,921 172,124
18,000(2)(6) .86 $3.00 10/01/07 33,960 86,062
10,125(2)(6) .48 $3.00 10/01/07 19,103 48,410
10,080(2)(7) .48 $3.00 10/01/07 19,017 48,195
18,000(2)(8) .86 $3.00 10/01/07 33,960 86,062
</TABLE>
- ---------------
(1) Represents the value of the options granted at the end of the option terms
if the price of the Company's Common Stock were to appreciate annually by
5% and 10%, respectively. There is no assurance that the stock price will
appreciate at the rates shown in the table. If the stock price appreciates,
the value of stock held by all shareholders will increase.
(2) These options were granted in connection with the Company's 1997 option
exchange program pursuant to which effective October 1, 1997, each
outstanding stock option held by an employee or Director of the Company
which had an exercise price greater than the fair market value of the
Common Stock on such date was eligible to be exchanged for a new option
exercisable for a number of shares of Common Stock equal to 90% of the
number of shares of Common Stock originally subject to the exchanged
option. Such new options have an exercise price equal to the fair market
value of the Common Stock on the date of exchange. These new options
terminate on October 1, 2007 and vest in accordance with the vesting
schedule of the exchanged options, subject to a one year delay. (see
"Report on Exchange of Certain Stock Options").
(3) Dr. Bleicher's employment with the Company terminated on August 15, 1997.
Dr. Bleicher was not granted any options in 1997.
(4) These options vest in five equal annual installments commencing on January
1, 1994.
(5) These options vest in five equal annual installments commencing on December
31, 1994.
(6) These options vest in four equal annual installments commencing on January
18, 1996.
(7) These options vest in four equal annual installments commencing on November
28, 1996.
7
<PAGE> 11
(8) These options vest in four equal annual installments commencing on December
27, 1997.
(9) These options vest in four equal annual installments commencing on December
31, 1997.
(10) These options vest in five equal annual installments commencing on
September 1, 1995.
(11) These options vest in five equal annual installments commencing on October
1, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR-END FISCAL YEAR-END(1)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Spiros Jamas..................... none n/a 132,862/205,911 $16,251/0
D. Davidson Easson Jr............ none n/a 83,129/126,709 15,266/0
Paul A. Bleicher................. none n/a 77,675/ 0(2) 0/0(2)
Peter H. Grassam................. none n/a 31,320/ 60,885(3) 0/0(3)
</TABLE>
- ---------------
(1) All information provided is with respect to stock options. No SARs have been
issued by the Company. The dollar values have been calculated by determining
the difference between the fair market value of the securities underlying
the options and the exercise price of the options. The fair market value of
unexercised in-the-money options was calculated on the basis of the closing
price per share for Common Stock on The Nasdaq National Market of $2.59375
on December 31, 1997.
(2) Pursuant to the terms of a consulting arrangement between the Company and
Dr. Bleicher, Dr. Bleicher's vested options did not expire in connection
with the termination of his employment on August 15, 1997.
(3) Mr. Grassam's options expired on January 29, 1998 in connection with the
termination of his employment on October 31, 1997.
REPORT ON EXCHANGE OF CERTAIN STOCK OPTIONS
The Compensation Committee of the Board of Directors of the Company has
provided the following report on option repricings.
During fiscal year 1997, the Compensation Committee considered the stock
options held by employees and Directors of the Company and the fact that
significant portions of the outstanding options had exercise prices well above
the recent historical trading prices for the Company's Common Stock. The
Committee believed that it was important to provide equity incentives to
employees and Directors to remain with the Company and to reincentivize such
persons to improve Company performance and stockholder value. Accordingly,
effective as of October 1, 1997, the Board of Directors approved, upon the
recommendation of the Compensation Committee, an exchange program pursuant to
which each outstanding stock option held by an employee or Director of the
Company which had an exercise price greater than the fair market value of the
Common Stock on such date was eligible to be exchanged for a new option
exercisable for a number of shares of Common Stock equal to 90% of the number of
shares of Common Stock originally subject to the exchanged option. Pursuant to
the exchange program, the vesting schedule of the new options is subject to a
one year delay relative to the exchanged options. The new options have an
exercise price equal to the fair market value of the Common Stock on the date of
exchange and terminate on October 1, 2007. In connection with the exchange
program, 1,303,205 stock options, of which 592,790 options were held by
executive officers of the
8
<PAGE> 12
Company, with original exercise prices ranging from $4.43 to $27.00 were
exchanged for 1,172,982 new options with an exercise price of $3.00 per share,
of which 533,511 new options were granted to executive officers of the Company.
The table below sets forth information pertaining to all repricings of
options held by any executive officer during all fiscal years since the
Company's initial public offering in 1992. Options are considered to be repriced
whenever the Company adjusts or amends the exercise price of stock options
previously granted to any executive officer, whether through amendment,
cancellation or an exchange program, or any other means. Since its initial
public offering, the Company's 1997 option exchange program was the only time
the Company repriced any outstanding options.
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES MARKET PRICE ORIGINAL OPTION
UNDERLYING OF STOCK AT EXERCISE PRICE TERM
OPTIONS TIME OF AT TIME OF NEW REMAINING AT
REPRICED REPRICING REPRICING EXERCISE DATE OF
NAME DATE (#)(1) ($) ($) PRICE REPRICING
---- ---- ---------- ------------ -------------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Spiros Jamas............... 10/1/97 832 $3.00 $15.75 $3.00 approximately 5 years
President, Chief Executive 10/1/97 55,000 3.00 17.63 3.00 approximately 5 years
Officer and Director 10/1/97 41,250 3.00 8.25 3.00 approximately 7 years
10/1/97 24,000 3.00 6.75 3.00 approximately 8 years
10/1/97 80,000 3.00 9.63 3.00 approximately 9 years
D. Davidson Easson Jr...... 10/1/97 652 3.00 15.75 3.00 approximately 5 years
Executive Vice President, 10/1/97 31,00 3.00 17.63 3.00 approximately 5 years
Treasurer, Chief Operating 10/1/97 26,250 3.00 8.25 3.00 approximately 7 years
Officer and Director 10/1/97 14,000 3.00 6.75 3.00 approximately 8 years
10/1/97 40,000 3.00 9.63 3.00 approximately 9 years
Peter H. Grassam........... 10/1/97 40,000 3.00 22.50 3.00 approximately 5 years
Vice President, Operations 10/1/97 20,000 3.00 8.50 3.00 approximately 6 years
and General Manager 10/1/97 22,500 3.00 8.25 3.00 approximately 7 years
Smithfield Site(2) 10/1/97 11,200 3.00 6.75 3.00 approximately 8 years
10/1/97 20,000 3.00 9.63 3.00 approximately 9 years
</TABLE>
- ---------------
(1) Amounts shown represent options exchanged. The new options are exercisable
for a number of shares of Common Stock equal to 90% of the number of shares
of Common Stock originally subject to the exchanged options.
(2) Mr. Grassam's employment with the Company terminated on October 31, 1997.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. Christensen pursuant to
which Mr. Christensen serves as Chairman of the Board and must commit a minimum
of one half of his business time to matters related to the Company. Mr.
Christensen currently receives an annual salary of $124,000 per annum. In
addition to his salary, the agreement provides for the sale, subject to certain
vesting conditions (which conditions have previously been met), of 44,000 shares
of Common Stock to Mr. Christensen at a purchase price of $.51 per share and the
issuance of options, subject to certain vesting conditions, for the purchase of
88,000 shares of Common Stock at an exercise price of $.51 per share. 44,000 of
such option shares have vested and the remainder shall vest, subject to certain
conditions, on December 31, 1998, subject to acceleration upon consummation of
certain corporate and financing transactions. The agreement also provides for
the payment of cash bonuses of up to 0.5% of the cumulative net proceeds
received by the Company from certain joint ventures, strategic alliances and
private placements through December 31, 1998.
Pursuant to an employment letter with the Company, Dr. Ostroff is entitled
to up to three months' salary and benefits if the Company terminates his
employment without cause.
9
<PAGE> 13
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
The Compensation Committee
The Compensation Committee currently consists of Mr. Hoff and Dr. Canavan.
The Compensation Committee's responsibilities include: (i) reviewing the
performance of the Chief Executive Officer and the other executive officers of
the Company and making recommendations as to their cash and equity-based
compensation and benefits; (ii) issuing options and stock grants under the
Option Plans; and (iii) making recommendations as to the compensation policies
for the Company's non-officer employees.
Overall Objectives and Executive Compensation Philosophy
The overall objectives of the Compensation Committee are to set the
Company's executive compensation policies and programs for the Company's senior
management so as to ensure that executive compensation is appropriately tied to
the Company's performance and that the Company is capable of attracting,
retaining and motivating executive officers and other key employees. The
Compensation Committee established the following principles by which to achieve
its overall objectives. First, the Compensation Committee determined that
executive officer base salaries should, in general, be set at levels which are
at or slightly below industry averages. Second, the Company's executive officers
should be eligible for performance-based annual cash bonuses which are
conditioned upon significant achievement by both the Company and the individual.
Third, the Compensation Committee determined that it is appropriate to grant
stock options on a discretionary basis to ensure that key executives are
properly motivated in terms of future performance. The Compensation Committee
also believes that any such stock option or other equity-based compensation
should involve long-term vesting to encourage long-term tenure and enhancement
of shareholder value.
Upon the Compensation Committee's recommendations, the Company has adopted
a policy by which the performance and compensation of all executive officers and
key employees are reviewed annually at each calendar year end. In connection
with such review, the annual salary of such executive officers and other key
employees for the upcoming fiscal year is adjusted based upon a review of their
performance during the previous fiscal year, any new roles or responsibilities
undertaken during that year, a comparison of the Company's compensation packages
to those of comparable companies and consideration of the Company's performance
and financial condition. As part of the annual review, any annual cash bonus
awards would also be made on the basis of previously-established performance
guidelines and any annual stock option or grant awards would be made.
For its 1997 annual compensation review, the Compensation Committee used a
comparison group of public biotechnology companies based upon company size. All
compensation data for this peer group was derived from a 1996 survey performed
by an independent compensation consulting agency. The members of the
Compensation Committee also relied upon their knowledge of the biotechnology
industry and the general salary levels paid by public biotechnology companies.
Base Salary
The Compensation Committee adjusted 1997 annual salaries for each of the
Company's executive officers. Such adjustments reflected an average increase for
the executive officer group of 7% over 1996. As part of these adjustments, three
individuals who were promoted to Vice President received salary adjustments
significantly greater than the average increase. In making these adjustments,
the Compensation Committee considered the fact that the executive compensation
survey used by the Committee concluded that the Company's annual salaries were
less than the competitive norm.
10
<PAGE> 14
Annual Bonus
The Company previously established an annual bonus program for the
executive officers and key employees of the Company. Under this program, the
executive officers and key employees are eligible for annual bonuses based upon
the Committee's subjective assessment of each individual's attainment of his or
her performance goals as well as the Committee's assessment of the Company's
overall performance.
For 1997, the Compensation Committee determined to award option bonuses to
the Company's executive officers. In connection therewith, the Compensation
Committee considered the Company's attainment of significant milestones,
including research and development and manufacturing, as well as a successful
equity financing. The Compensation Committee also considered the fact that the
executive compensation survey used by the Committee concluded that the Company's
option grants were significantly less than the competitive market average. The
Compensation Committee did not consider, nor did it award, any cash bonuses for
1997. However, pursuant to the terms of a bonus arrangement approved by the
Board of Directors on April 3, 1996, Dr. Bleicher did receive a $15,000 bonus on
March 1, 1997 in connection with the completion of the clinical trial for
Betafectin(R).
Stock Options
Under the Stock Option Plans, stock options are granted to Directors,
officers, other employees, scientific advisers and consultants and other key
persons. In general, stock options are granted to the Company's executive
officers at the time of their hire, annually as part of the Compensation
Committee's year-end review and at such other times as the Compensation
Committee may deem appropriate, such as a promotion. The Compensation Committee
bases its stock option award decisions upon its comparison of comparable
biotechnology companies, its assessment of an individual's performance and
importance to the Company and its determination that valued employees should
have significant amount of unvested options as a long-term incentive.
Stock options are designed to align the interest of executives with those
of the shareholders. Stock options are granted to executive officers with an
exercise price equal to the fair market value of the common stock on the date of
grant and usually vest between three and five years. This approach is designed
to incentivize the executives to create long-term shareholder value, since the
full benefit of the compensation package cannot be realized unless stock price
appreciation occurs over a number of years.
As part of its 1997 annual compensation review, the Compensation Committee
determined to award an aggregate of 689,490 stock options to various executive
officers and director-level and associate director-level employees of the
Company at year-end in connection with the bonus program described above. In
determining the number of option shares granted to individual executive
officers, the Compensation Committee considered the fact that the executive
compensation survey used by the Committee concluded that, for most senior level
positions of the Company, the amount of stock options granted was less to
significantly less than the competitive norm. The Committee also considered the
factors described above for the bonus program.
During fiscal year 1997, the Compensation Committee considered the stock
options held by employees and Directors of the Company and the fact that
significant portions of the outstanding options had exercise prices well above
the recent historical trading prices for the Company's Common Stock. The
Committee believed that it was important to provide equity incentives to
employees and Directors to remain with the Company and to reincentivize such
persons to improve Company performance and stockholder value. Accordingly,
effective as of October 1, 1997, the Board of Directors approved, upon the
recommendation of the Compensation Committee, an exchange program pursuant to
which each outstanding stock option held by an employee or Director of the
Company which had an exercise price greater than the fair market value of the
Common Stock on such date was eligible to be exchanged for a new option
exercisable for a number of shares
11
<PAGE> 15
of Common Stock equal to 90% of the number of shares of Common Stock originally
subject to the exchanged option. Pursuant to the exchange program, the vesting
schedule of the new options is subject to a one year delay relative to the
exchanged options. The new options have an exercise price equal to the fair
market value of the Common Stock on the date of exchange and terminate on
October 1, 2007.
CEO Compensation
As discussed above, consistent with its treatment of the Company's other
executive officers, the Compensation Committee determined to increase Dr. Jamas'
annual salary for 1997 by 12% to $271,000. This salary level represents
approximately 84% of the average 1997 annual base salary paid to chief executive
officers in the comparable group of public biotechnology companies used by the
Compensation Committee. Dr. Jamas also received stock options for 150,000
shares.
The Members of the Compensation Committee:
Bernard Canavan
Lawrence C. Hoff
The report of the Compensation Committee shall not be deemed to be
incorporated by reference as a result of any general incorporation by reference
of this Proxy Statement or any part hereof in the Company's Annual Report on
Form 10-K.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Dr. Canavan and Mr. Hoff. Neither of
these individuals is or formerly was an officer or employee of the Company or
has any other material business relationship or affiliation with the Company,
except his service as a Director.
12
<PAGE> 16
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the quarterly cumulative total
stockholder return on the Company's Common Stock, against the cumulative return
of the NASDAQ Composite Index and the American Stock Exchange ("AMEX") Biotech
Index, for the period commencing on December 31, 1992 and ending on December 31,
1997.
LOGO
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ALPHA-BETA AMEX BIOTECH NASDAQ
(FISCAL QUARTER COVERED) TECHNOLOGY INDEX COMPOSITE
<S> <C> <C> <C>
12/31/92 100 100 100
3/31/93 119 68 102
6/30/93 159 68 104
9/30/93 171 65 113
12/31/93 205 68 115
3/31/94 137 54 110
6/30/94 68 47 104
9/30/94 87 53 113
12/31/94 56 48 111
3/31/95 48 45 121
6/30/95 31 53 138
9/30/95 52 67 154
12/31/95 79 78 155
3/31/96 79 79 163
6/30/96 56 82 175
9/30/96 68 82 181
12/31/96 67 85 191
3/31/97 67 82 180
6/30/97 58 84 213
9/30/97 19 103 249
12/31/97 16 95 232
</TABLE>
13
<PAGE> 17
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth, to the best knowledge and belief of the
Company, certain information regarding the beneficial ownership of the Company's
Common Stock as of March 1, 1998 by (i) each person known by the Company to be
the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each
of the Company's Directors, (iii) each of the Named Executive Officers and (iv)
all of the Company's executive officers and Directors as a group. Except as
indicated in the footnotes to this table, the Company believes that the persons
named in this table have sole voting and investment power with respect to the
shares of Common Stock indicated.
<TABLE>
<CAPTION>
DIRECTORS, EXECUTIVE SHARES PERCENTAGE
OFFICERS AND 5% STOCKHOLDERS BENEFICIALLY OWNED(1) OF CLASS
---------------------------- --------------------- ----------
<S> <C> <C>
Ross Financial Corporation(2).......................... 5,106,895 24.05%
P.O. Box 31363 SMB
Mirco Commerce Centre
Cayman Islands
State of Wisconsin Investment Board(3)................. 1,646,000 7.75
P.O. Box 7842
Madison, WI 53707
Spiros Jamas, Sc.D.(4)................................. 465,629 2.19
D. Davidson Easson Jr., Sc.D.(5)....................... 413,224 1.95
Gustav A. Christensen(6)............................... 229,462 1.08
Michael E. Porter, Ph.D.(7)............................ 63,017 *
Lawrence C. Hoff(8).................................... 21,600 *
Bernard Canavan, M.D.(9)............................... 20,800 *
Peter H. Levine, M.D.(10).............................. 4,100 *
All Directors and executive officers as a group........ 1,197,689 5.64
(8 persons)(11)
</TABLE>
- ---------------
* Less than 1%
(1) The numbers and percentages include shares of Common Stock issuable upon
exercise of certain outstanding options as described in the footnotes
below.
(2) As reported in the Amendment No. 7 to Schedule 13D dated February 4, 1998
and filed with the Securities and Exchange Commission.
(3) As reported in the Amendment No. 4 to Schedule 13G dated January 22, 1998
and filed with the Securities and Exchange Commission.
(4) Represents 323,337 shares of Common Stock and 142,292 shares of Common
Stock that Dr. Jamas may acquire upon the exercise of options exercisable
within 60 days after March 1, 1998.
(5) Represents 365,592 shares of Common Stock and 89,152 shares of Common Stock
that Dr. Easson may acquire upon the exercise of options exercisable within
60 days after March 1, 1998. This also includes 47,632 shares of Common
Stock owned by Dr. Easson's children, as to all of which Dr. Easson
disclaims beneficial ownership.
(6) Represents 73,819 shares of Common Stock and 155,643 shares of Common Stock
that may be acquired by Mr. Christensen upon the exercise of options
exercisable within 60 days after March 1, 1998.
(7) Represents 56,000 shares of Common Stock and 7,017 shares of Common Stock
that may be acquired by Dr. Porter upon the exercise of options exercisable
within 60 days after March 1, 1998.
14
<PAGE> 18
(8) Represents 18,000 shares of Common Stock and 3,600 shares of Common Stock
that may be acquired by Mr. Hoff upon the exercise of options exercisable
within 60 days after March 1, 1998.
(9) Represents 1,000 shares of Common Stock and 19,800 shares of Common Stock
that may be acquired by Dr. Canavan upon the exercise of options
exercisable within 60 days after March 1, 1998.
(10) Represents 4,000 shares of Common Stock that may be acquired by Dr. Levine
upon the exercise of options exercisable within 60 days after March 1, 1998
and includes 500 shares of Common Stock owned by Dr. Levine's wife, as to
which Dr. Levine disclaims beneficial ownership.
(11) Includes 842,026 shares of Common Stock issuable upon the exercise of
options exercisable within 60 days after March 1, 1998.
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 executive officers and Directors, and
persons who own more than 10% of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership with the SEC
and The Nasdaq National Market. Officers, Directors and greater than 10%
stockholders are required to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and representations that no
other reports were required during the fiscal year ended December 31, 1997, all
Section 16(a) filing requirements applicable to its executive officers,
Directors and greater than 10% beneficial owners were satisfied.
REQUIRED VOTE
The presence in person or by proxy of at least a majority of the total
number of outstanding shares of the Common Stock of the Company is necessary to
constitute a quorum at the Annual Meeting for the transaction of business. A
quorum being present, Directors will be elected by a plurality of the votes cast
on such matter by the holders of Common Stock entitled to vote on the election
of Directors. In accordance with the provisions of Massachusetts law and the
Company's Articles of Organization and By-Laws, the Company will treat
abstentions and broker non-votes as present at the Annual Meeting solely for
purposes of determining whether or not a quorum exists. Accordingly, abstentions
and broker non-votes will not be considered to be voting on the matters as to
which such abstentions or broker non-votes exist and, thus, will not be counted
in determining whether such matters have been approved by a plurality of votes
cast by the stockholders who are voting on such matters.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Management has selected the firm of Arthur Andersen LLP, independent
certified public auditors, to serve for the fiscal year ending December 31,
1998. Arthur Andersen LLP has served as the Company's independent accountants
since the fiscal year ended 1988.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting of Stockholders and will be given the opportunity to make a statement if
he or she so desires. The representative of Arthur Andersen LLP also will be
available to respond to appropriate shareholder questions.
15
<PAGE> 19
OTHER MATTERS
The Board of Directors of the Company knows of no other matters to be
presented for action at the Annual Meeting. If any other matters shall be
brought before the Annual Meeting, it is the intention of the persons named in
the accompanying proxy to vote on such matters in accordance with their
judgment.
STOCKHOLDER PROPOSALS
In order for a proposal by a stockholder to be included in the Board of
Directors' Proxy Statement for the Company's Annual Meeting in 1999, it must be
received at the Company's principal executive offices in Worcester on or before
December 23, 1998. Such a proposal must also comply with the requirements as to
form and substance established by applicable laws and regulations in order to be
included in the Proxy Statement and should be directed to the Clerk of the
Company.
In addition, the By-Laws of the Company provide that a stockholder must
give written notice to the Clerk of the Company of any nominees for Directors
and any proposals the stockholder intends to make at the annual meeting. To be
timely for the Annual Meeting of Stockholders to be held in 1999, a
stockholder's notice shall be delivered to, or mailed and received at, the
principal executive offices of the Company no later than March 21, 1999 nor
earlier than January 20, 1999; provided, however, in the event that an annual
meeting is scheduled to be held on a date earlier than April 20, 1999 or later
than July 19, 1999, notice by the stockholder to be timely must be delivered not
earlier than the close of business on the 120th day prior to the scheduled date
of such annual meeting and not later than the close of business on the later of
the 60th day prior to the scheduled date of such annual meeting or the 10th day
following the first date on which the date of the annual meeting is publicly
disclosed.
D. DAVIDSON EASSON JR.,
Clerk
16
<PAGE> 20
1118-PS-98
<PAGE> 21
PROXY
ALPHA-BETA TECHNOLOGY, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED hereby appoints Spiros Jamas, D. Davidson Easson Jr. and
Joseph M. Grimm, and each of them, proxies, with full power of substitution, to
represent and vote all shares of the Common Stock, $.01 par value, of Alpha-Beta
Technology, Inc. (the "Company") which the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held at the Company's offices at One
Innovation Drive, Worcester, MA 01605 at 11:00 A.M., local time, and at any
adjournments and postponements thereof, upon the matters set forth in the Notice
of Annual Meeting and Proxy Statement, dated April 22, 1998.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE STOCKHOLDER, BUT IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSED ELECTION OF
DIRECTORS. A STOCKHOLDER WISHING TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATION NEED ONLY SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED ENVELOPE.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
<PAGE> 22
[X] PLEASE MARK
VOTE AS IN
THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 1.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. Proposal to elect the following persons as Class III Directors;
NOMINEES: Gustav A. Christensen, Lawrence C. Hoff
and Michael E. Porter
FOR WITHHELD
[ ] [ ]
[ ] ______________________________________________
For all nominees except as noted above
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE ACCOMPANYING NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS, THE PROXY STATEMENT WITH RESPECT THERETO AND
THE COMPANY'S ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31,
1997, AND HEREBY REVOKES ANY PROXY OR PROXIES HERETOFORE GIVEN. THIS PROXY MAY
BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE DATE, SIGN AND
PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR SHARES MAY BE
REPRESENTED AT THE MEETING.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
(Please sign exactly as your name appears on your stock certificate. Joint
owners should each sign personally. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. It is
requested that corporation proxies be signed by the President or Vice President
and the Secretary or Assistant Secretary.)
Signature: ____________ Date: ________ Signature: ____________ Date: ________
