<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
PERSEPTIVE BIOSYSTEMS, INC.
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transactions applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transactions 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:
________________________________________________________________________________
[ ] 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 and 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>
PERSEPTIVE BIOSYSTEMS, INC.
500 OLD CONNECTICUT PATH
FRAMINGHAM, MASSACHUSETTS 01701
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 5, 1997
The Annual Meeting of Stockholders of PerSeptive Biosystems, Inc. (the
"Company") will be held at the Crowne Plaza Hotel, 1360 Worcester Road, Natick,
Massachusetts, on Wednesday, March 5, 1997 at 9:00 a.m., local time, to consider
and act upon each of the following matters:
1. To elect two members to the Board of Directors to serve for three-year
terms as Class II Directors.
2. To consider and act upon a proposal to approve amendments to the Company's
1992 Stock Plan (the "Stock Plan") (a) increasing the number of shares of
Common Stock available for issuance under the Stock Plan from 3,585,500 to
4,585,500 shares; and (b) increasing the maximum number of shares that may
be purchased by any participant under the Stock Plan from 600,000 to
1,400,000 shares.
3. To ratify the selection of the firm of Coopers & Lybrand L.L.P. as auditors
for the fiscal year ending September 30, 1997.
4. To transact such other business as may properly come before the meeting and
any adjournments thereof.
Stockholders entitled to notice of and to vote at the meeting shall be
determined as of the close of business on January 22, 1997, the record date
fixed by the Board of Directors for such purpose.
By Order of the Board of Directors
/s/ Samuel P. Hunt III
Samuel P. Hunt III
Secretary
Framingham, Massachusetts
January 28, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE
PROXY CARD IS MAILED IN THE UNITED STATES.
<PAGE>
PERSEPTIVE BIOSYSTEMS, INC.
500 OLD CONNECTICUT PATH
FRAMINGHAM, MASSACHUSETTS 01701
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 5, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of PerSeptive Biosystems, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held at the
Crowne Plaza Hotel, 1360 Worcester Road, Natick, Massachusetts 01760 on
Wednesday, March 5, 1997 at 9:00 a.m. and at any adjournments thereof (the
"Annual Meeting"). ALL PROXIES WILL BE VOTED IN ACCORDANCE WITH THE
STOCKHOLDERS' INSTRUCTIONS, AND IF NO CHOICE IS SPECIFIED, THE ENCLOSED PROXY
CARD (OR ANY SIGNED AND DATED COPY THEREOF) WILL BE VOTED IN FAVOR OF THE
MATTERS SET FORTH IN THE ACCOMPANYING NOTICE OF MEETING. Any proxy may be
revoked by a stockholder at any time before its exercise by: (i) delivering
written revocation or a later dated proxy to the Secretary of the Company; or
(ii) attending the Annual Meeting and voting in person.
Only stockholders of record as of the close of business on January 22,
1997, the record date fixed by the Board of Directors, will be entitled to vote
at the Annual Meeting and at any adjournments thereof. As of January 22, 1997,
there were an aggregate of 21,386,398 shares of common stock, par value $.01 per
share (the "Common Stock"), of the Company outstanding and entitled to vote.
Each share is entitled to one vote.
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter upon which a vote may properly be taken,
should be presented at the Annual Meeting, shares represented by all proxies
received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the proxies.
The Company's Annual Report to Stockholders containing audited
financial statements for the fiscal year ended September 30, 1996, is being
mailed together with this Proxy Statement to all stockholders entitled to vote.
It is anticipated that this Proxy Statement and the accompanying proxy will be
first mailed to stockholders on or about January 31, 1997.
<PAGE>
ELECTION OF DIRECTORS
Pursuant to the Company's Amended and Restated Certificate of
Incorporation, as amended, the Board of Directors of the Company is divided into
three classes. There are two directors currently serving in each class. Each
director serves for a three-year term, with one class of directors being elected
at each Annual Meeting. The Class II Directors' term will expire at this Annual
Meeting. All directors will hold office until their successors have been duly
elected and qualified. Prior to the Annual Meeting, Noubar B. Afeyan and Bruce
J. Ryan were the Class I Directors; Daniel I.C. Wang and John F. Smith were the
Class II Directors; and Edwin M. Kania, Jr. and William F. Pounds were the Class
III Directors. The Board of Directors has fixed the number of directors
comprising the entire Board of Directors at six.
The nominees for Class II Director are Daniel I.C. Wang and John F.
Smith who are currently serving as Class II Directors of the Company. Shares
represented by all proxies received by the Board of Directors and not so marked
as to withhold authority to vote for these nominees will be voted for their
election. The Board of Directors knows of no reason why these nominees should
be unable or unwilling to serve, but if that should be the case, proxies will be
voted for the election of some other person, or for fixing the number of
directors at a lesser number.
Mr. Ryan was elected as a Class I Director by the Board of Directors
by unanimous written consent in lieu of a meeting of the Board of Directors on
November 25, 1996. In connection with Mr. Ryan's election, the number of
directors constituting the entire Board of Directors was increased from five to
six in accordance with the Company's Amended and Restated Certificate of
Incorporation, as amended.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors of the Company held eleven meetings during the
fiscal year ended September 30, 1996. Each of the directors attended at least
75% of the aggregate of all meetings of the Board of Directors and of all
committees of the Board of Directors on which he then served during fiscal 1996.
The Company has standing Audit and Compensation Committees. The
Compensation Committee, of which Mr. Kania and Dr. Wang are the members,
determines the compensation (including stock options) of the Company's senior
management. The Compensation Committee held four meetings during fiscal 1996.
The Audit Committee, of which Mr. Kania and Dr. Pounds are the members, oversees
financial results and internal controls of the Company, including matters
relating to the appointment and activities of the Company's independent
auditors. Dr. Wang was a member of the Audit Committee until May 1996 and Mr.
Smith was a member of the Audit Committee until July 1996. The Audit Committee
held four meetings during fiscal 1996.
2
<PAGE>
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth for each Class I Director, each Class II
Director, each Class III Director and the executive officers of the Company,
their ages and present positions with the Company as of the date of the Annual
Meeting:
NAME AGE POSITION
---- --- --------
Noubar B. Afeyan, Ph.D. ..... 34 Chief Executive Officer, Class I Director and
Chairman of the Board of Directors
John F. Smith................ 61 President, Class II Director
Thomas G. Ruane.............. 54 Senior Vice President, Chief Financial
Officer and Treasurer
Bruce J. Ryan................ 53 Class I Director
Daniel I.C. Wang, Ph.D.(1)... 60 Class II Director
Edwin M. Kania, Jr.(1)(2).... 39 Class III Director
William F. Pounds, Ph.D(2)... 68 Class III Director
- --------------------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
Dr. Afeyan, a founder of the Company, has served as Chief Executive
Officer of the Company since June 1992, as a director of the Company since the
Company's inception in November 1987, as President from June 1992 until July
1996, as Executive Vice President-Technology and Operations from 1987 to 1992,
as Chief Technical Officer from 1987 to 1993, as Treasurer from 1987 to 1995 and
was elected Chairman of the Board of Directors in March 1993. Dr. Afeyan has
also served as President and a Director of PerSeptive Technologies II
Corporation since December 1993 (which became a wholly owned subsidiary of the
Company in March 1996). Prior to joining the Company, Dr. Afeyan served as
Technology Transfer Officer for the Biotechnology Process Engineering Center at
the Massachusetts Institute of Technology.
Mr. Smith has been a director of the Company since 1994 and President of
the Company since July 1996. Mr. Smith has been the President of Mycos
International, Inc., a property development corporation, since April 1993. In
April 1993, Mr. Smith retired as Senior Vice President and Chief Operating
Officer of Digital Equipment Corporation ("Digital"), a computer company, in
which capacities he had served since 1991. He began his career at Digital in
1958 and served in various other senior management positions from 1976 to 1991.
Mr. Smith is a director of Ansys Corporation, Hadco Corporation, Instron
Corporation and Sequoia Systems, Inc.
3
<PAGE>
Mr. Ruane has served as Senior Vice President, Chief Financial Officer and
Treasurer of the Company since August 1995. Mr. Ruane has also served as Vice
President, Chief Financial Officer and Secretary of PerSeptive Technologies II
Corporation since September 1995 (which became a wholly owned subsidiary of the
Company in March 1996). From December 1994 to August 1995, Mr. Ruane was an
independent consultant. From 1988 to December 1994, Mr. Ruane served as Senior
Vice President and Treasurer of NEC Technology, Inc. ("NEC"), as Treasurer and
Corporate Controller of NEC from 1982 to 1988, and as Corporate Controller of
NEC from 1977 to 1982. From 1974 to 1977, Mr. Ruane served as Assistant Division
Controller - Chemical Division of 3M Company.
Mr. Ryan has been a director of the Company since November 1996. Since
July 1994, Mr. Ryan has been Chief Financial Officer and a Vice President of
Amdahl Corporation ("Amdahl"), a supplier of data processing systems, software
and services. In December 1995, he became Executive Vice President and was
appointed Chairman of Amdahl's Operating Council. From 1969 to 1994, Mr. Ryan
held various positions at Digital including Vice President, Corporate Industry
Marketing from April 1994 to July 1994, Vice President of Financial Services,
Government and Professional Industries from 1992 to April 1994 and Vice
President, Corporate Controller from 1983 to 1992. He held various financial
control positions at Digital from 1969 to 1983. Prior to joining Digital, Mr.
Ryan served in several capacities at GTE/Sylvania, a manufacturer of circuit
breakers and thermo protectors. Mr. Ryan is a director of Ross Systems, Inc. and
is a member of the Board of Associates of Gallaudet University.
Dr. Wang has served as a director of the Company since 1988 and served as
Chairman of the Board of Directors from April 1991 to March 1993. Since 1965,
Dr. Wang has been a faculty member at the Massachusetts Institute of Technology
and is currently Director of the Biotechnology Process Center. Dr. Wang is a
member of the National Academy of Engineering and the Scientific Board of
Biogen, Inc., a biotechnology company.
Mr. Kania has been a director of the Company since 1991. Since 1985, Mr.
Kania has been an executive at OneLiberty Ventures, a venture capital firm and
its predecessor, Morgan Holland Ventures Corporation. Since 1988, Mr. Kania has
been a general partner of Morgan, Holland Partners II, L.P., the general partner
of Morgan, Holland Fund II, L.P., both stockholders of the Company. Mr. Kania is
also the managing general partner of OneLiberty Fund III, L.P., a venture
capital fund, a member of the Board of Directors of several privately-held
companies and is also a director of Anesta Corp. and Cytyc Corporation.
Dr. Pounds has been a director of the Company since June 1993. Dr. Pounds
has been a faculty member at the Massachusetts Institute of Technology since
1961 and served as the President of Rockefeller Financial Services from 1981 to
1991. Dr. Pounds is also a director of Sun Company, Inc., EG&G, Inc., Idexx
Laboratories, Inc. and Putnam Mutual Funds.
4
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1993, the Company formed PerSeptive Technologies II
Corporation ("PTC-II") to accelerate research and development aimed at the
application of the Company's core technologies to commercial opportunities in
large life sciences markets. The Company and PTC-II completed a public offering
of 2,645,000 units, each unit consisting of one share of callable common stock
of PTC-II and one Class E Warrant to purchase one share of the Company's Common
Stock. This offering resulted in net proceeds to PTC-II of approximately $53.2
million. Under the terms of the agreements between the Company and PTC-II, the
Company licensed to PTC-II the technology necessary to pursue applications of
the Company's technologies in four programs: clinical diagnostics; systematic
screening of chemical and biological compounds for drug discovery; DNA and
protein sequencing; and DNA and peptide sequencing and PTC-II agreed to utilize
substantially all of the net proceeds of the offering (less $1 million to be
retained by PTC-II for working capital and amounts necessary for general and
administrative expenses) to engage the Company to develop products and services
aimed at these applications. As a result of the arrangements between the Company
and PTC-II described above, PTC-II has paid to the Company an aggregate of $41.1
million as of December 31, 1995. The Company has recognized $14.5 million and
$18.4 million in revenue from PTC-II in the Company's 1994 and 1995 fiscal
years, respectively, which amounts include amortization of a $4.0 million
license fee paid by PTC-II in 1993.
Dr. Afeyan has served as President and Director of PTC-II and Mr. Ruane
has served as Vice President, Chief Financial Officer and Secretary of PTC-II
since December 1993 and September 1995, respectively. On November 1, 1995, the
Company and PTC-II entered into an Agreement and Plan of Merger dated November
1, 1995, as amended (the "Merger Agreement"), among the Company, PTC-II and
PerSeptive Acquisition Corporation, a wholly owned subsidiary of the Company
(the "Merger Subsidiary"), pursuant to which the Company agreed to commence an
exchange offer (the "Exchange Offer") for all of the outstanding units of PTC-II
(the "PTC-II Units"). On February 8, 1996, the Company commenced the Exchange
Offer whereby it offered to exchange one share of the Company's Common Stock and
one new warrant to purchase one share of the Company's Common Stock exercisable
until August 8, 1997 at an exercise price per share of $13.50 (subject to
adjustment) (the "Transaction Consideration") for each PTC-II Unit validly
tendered and not withdrawn. On February 29, 1996, the Company's stockholders
approved the issuance of the Transaction Consideration. On March 8, 1996, the
Exchange Offer expired, with 2,603,125 PTC-II Units, representing over 98% of
the issued and outstanding PTC-II Units, tendered for exchange and not
withdrawn. Pursuant to Merger Agreement, on March 13, 1996, the Merger
Subsidiary merged with and into PTC-II, and PTC-II became a wholly owned
subsidiary of the Company.
In June 1996, the Company entered into a transaction with ChemGenics
(formerly, Myco Pharmaceuticals Inc.), in which the Company transferred certain
assets and employees of the Company's drug discovery program to ChemGenics and
granted a non-exclusive license to ChemGenics to use the Company's technology
(including technology developed through PTC-II) in the field of drug discovery
in exchange for shares of ChemGenics' common stock, $.001 par value per share
("ChemGenics Common Stock"), and warrants to purchase additional shares of
ChemGenics Common Stock exercisable until June 28, 2000. The warrants are
exercisable at $5.00 per share ($13.25 per share after a proposed 2.65-for-1
reverse stock split). The Company is subject to certain contractual restrictions
on the sale or distribution of its holdings of ChemGenics Common Stock. In
December 1996, the Company and ChemGenics executed amendments to their
agreements pursuant to which the Company exchanged a portion of its ChemGenics
Common Stock for a promissory note for $3 million payable on the earlier of
5
<PAGE>
the closing of ChemGenics' initial public offering or December 31, 2002. The
Company currently holds approximately 34% of the outstanding capital stock of
ChemGenics, and warrants which, if exercised, would increase the Company's
holdings to approximately 47% (of which, warrants sufficient to increase the
Company's holdings to approximately 40% are currently exercisable). On January
21, 1997, ChemGenics announced that it had agreed to be acquired by Millenium
Pharmaceuticals, Inc. Dr. Afeyan has served as Chairman of the Board of
Directors of ChemGenics since June 1996 and Mr. Kania has served as a
director of ChemGenics since January 1994.
6
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 1, 1997 (unless otherwise
indicated), certain information regarding beneficial ownership of the Company's
Common Stock (i) by each person who is known to beneficially own 5% of the
outstanding Common Stock, (ii) by each director of the Company, (iii) by each
executive officer named in the Summary Compensation Table on page 10, and (iv)
by all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF COMMON
BENEFICIAL STOCK
NAME TITLE(S) OWNERSHIP(1)(2) OUTSTANDING
---- -------- --------------- ------------
<S> <C> <C> <C>
Noubar B. Afeyan,
Ph.D.(3)(4)............... Chief Executive 563,657 2.3%
Officer, Class
I Director and
Chairman of the
Board of
Directors
John F. Smith(5)(6)........ President, 32,333 *
Class II
Director
Thomas G. Ruane(7)......... Senior Vice 37,498 *
President,
Chief Financial
Officer and
Treasurer
Bruce J. Ryan(8)........... Class I Director 0 -
Daniel I.C. Wang,
Ph.D.(9)(10).............. Class II 73,600 *
Director
Edwin M. Kania, Jr.(9)(11).. Class III 409,082 1.9%
Director
William F. Pounds,
Ph.D.(12)(13).............. Class III 22,333 *
Director
Robert B. Anacone(14)**..... Former 117,564 *
Executive Vice
President-
Worldwide
Marketing,
Sales and
Support
Millipore Corporation 2,160,249 10.1%
Millipore Investment
Holdings Ltd.(15)...........
80 Ashby Road
Bedford, MA 01730
Zesiger Capital
Group LLC (16).............. 1,790,632 8.4%
320 Park Avenue, 30th Floor
New York, NY 10022
All directors and executive
officers as a group
(8 persons) (17).......... 1,256,067 5.7%
</TABLE>
- ---------------
* Less than one percent of the outstanding Common Stock.
** As of October 31, 1996, individual was no longer an executive officer of
the Company.
(1) The persons named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them, except as noted
in the footnotes below and subject to community property laws, if
applicable.
(2) The inclusion herein of any shares of Common Stock deemed beneficially
owned does not constitute an admission of beneficial ownership of those
shares.
7
<PAGE>
(3) Includes 426,317 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997.
Excludes 573,783 shares of Common Stock issuable pursuant to outstanding
stock options that are not exercisable within 60 days of January 1, 1997.
(4) Excludes 700 shares of Common Stock held by the Armine H. Afeyan Trust and
700 shares of Common Stock held by the Taleen M. Afeyan Trust, as to which
shares Dr. Afeyan disclaims beneficial ownership.
(5) Includes 13,333 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997.
Excludes 506,667 shares of Common Stock issuable pursuant to outstanding
stock options that are not exercisable within 60 days of January 1, 1997.
(6) Includes 9,000 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997
granted to Mr. Smith under the Company's 1992 Non-Employee Director Stock
Option Plan. Excludes 4,000 shares of Common Stock issuable pursuant to
outstanding stock options granted to Mr. Smith under the Company's 1992
Non-Employee Director Stock Option Plan that are not exercisable within
60 days of January 1, 1997.
(7) Includes 37,498 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997.
Excludes 92,502 shares of Common Stock issuable pursuant to outstanding
stock options that are not exercisable within 60 days of January 1, 1997.
(8) Excludes 10,000 shares of Common Stock issuable pursuant to outstanding
stock options that are not exercisable within 60 days of January 1, 1997
granted to Mr. Ryan under the Company's 1992 Non-Employee Director Stock
Option Plan.
(9) Includes 9,000 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997
granted to each of Dr. Wang and Mr. Kania under the Company's 1992 Non-
Employee Director Stock Option Plan. Excludes 9,000 shares of Common Stock
issuable pursuant to outstanding stock options that are not exercisable
within 60 days of January 1, 1997 granted to each of Dr. Wang and Mr. Kania
under the Company's 1992 Non-Employee Director Stock Option Plan.
(10) Includes 24,000 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997
granted to Dr. Wang under the Company's 1992 Non-Employee Director Stock
Option Plan. Also includes 38,600 shares of Common Stock held by Victoria
Wang, Dr. Wang's wife.
(11) Includes 544 shares of Common Stock held by Morgan Holland Partners II,
L.P., the general partner of Morgan Holland Fund II, L.P., and 397,376
shares of Common Stock held by Morgan Holland Fund II, L.P. Edwin M. Kania,
Jr., a director of the Company, is a general partner of Morgan Holland
Partners II, L.P. and as such exercises shared investment and voting power
with respect to the 397,920 shares held in the aggregate by Morgan Holland
Partners II, L.P. and Morgan Holland Fund II, L.P. Mr. Kania disclaims
beneficial ownership of such shares. Includes 1,438 shares of Common Stock
and 724 shares of Common Stock issuable upon conversion of $10,000
principal amount of Convertible Subordinated Notes of the Company held by
Morgan, Holland Ventures Corporation Retirement Trust FBO Edwin M. Kania,
Jr. (the "Trust"). Excludes warrants to purchase 600 shares of Common Stock
of the Company held by the Trust.
8
<PAGE>
(12) Includes 13,333 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997.
Excludes 6,667 shares of Common Stock issuable pursuant to outstanding
stock options that are not exercisable within 60 days of January 1, 1997
granted to Dr. Pounds under the Company's 1992 Stock Option Plan.
(13) Includes 9,000 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997
granted to Dr. Pounds under the Company's 1992 Non-Employee Director Stock
Option Plan. Excludes 11,500 shares of Common Stock issuable pursuant to
outstanding stock options granted to Dr. Pounds under the Company's 1992
Non-Employee Director Stock Option Plan that are not exercisable within 60
days of January 1, 1997.
(14) Includes 117,564 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997.
(15) Excludes 2,000 shares of the Company's Series A Convertible Redeemable
Preferred Stock, $.01 par value per share (the "Series A Stock"), held in
the aggregate by Millipore Corporation and Millipore Investment Holdings
Ltd. The Company has the obligation to redeem the Series A Stock in two
equal annual 1,000-share installments (in August 1997 and August 1998,
respectively) valued at $10 million each and payable at the option of the
Company in cash or shares of Common Stock valued at the time of redemption.
(16) Based on a Schedule 13G filed with the Securities and Exchange Commission
on April 10, 1996 reflecting beneficial ownership of the Company's Common
Stock as of April 9, 1996. According to the Schedule 13G, Zesiger Capital
Group LLC, an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, has sole voting power with respect to
1,315,684 shares and sole dispositive power with respect to 1,790,632
shares of Common Stock of the Company.
(17) Includes 659,045 shares of Common Stock issuable pursuant to outstanding
stock options that are exercisable within 60 days of January 1, 1997 and
38,600 shares of Common Stock held by family members. See Footnote (10)
above. Also includes 1,438 shares of Common Stock and 724 shares of Common
Stock issuable upon conversion of outstanding Convertible Subordinated
Notes held by Mr. Kania and 397,920 shares of Common Stock held in the
aggregate by Morgan Holland Partners II, L.P. and Morgan Holland Fund II,
L.P. See Footnote (11) above. Excludes 1,214,119 shares of Common Stock
issuable pursuant to outstanding stock options that are not exercisable
within 60 days of January 1, 1997. Also excludes 2,000 shares of Common
Stock, including 600 shares of Common Stock issuable upon conversion of
certain outstanding warrants and 1,400 shares of Common Stock held by
certain trusts in which beneficial ownership is disclaimed.
9
<PAGE>
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
EXECUTIVE COMPENSATION SUMMARY
The following table sets forth the annual and long-term compensation for each
of the past three fiscal years of each of (i) the Company's Chief Executive
Officer, and (ii) each of the Company's most highly compensated executive
officers who were serving as of September 30, 1996 (collectively, with the Chief
Executive Officer, the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION(2) ALL OTHER
ANNUAL COMPENSATION(1) AWARDS COMPENSATION
---------------------------------------------- --------------- -------------
OTHER
SALARY BONUS ANNUAL OPTIONS/
NAME AND PRINCIPAL POSITION YEAR ($) ($)(3) COMPENSATION SARS(#) ($)
- ---------------------------------------- ---- --------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Noubar B. Afeyan, Ph.D................ 1996 $290,000 $ -- -- 430,000 --
Chief Executive Officer, Class I 1995 240,000 50,000 -- 300,100(4) --
Director and Chairman of the 1994 206,667 50,000 -- 300,100(4) --
Board of Directors
John F. Smith......................... 1996 $ 69,423 $ -- 501,500 --
President and Class II Director 1995 -- -- -- 11,500(5) --
1994 -- -- -- 20,000(5) --
--
Thomas G. Ruane....................... 1996 $170,000 $ -- 30,000 --
Senior Vice President, 1995 25,173 -- -- 100,000 --
Chief Financial Officer and 1994 -- -- -- -- --
Treasurer
Robert B. Anacone(6)*................. 1996 $220,000 $ -- -- -- --
Former Executive Vice President- 1995 214,359 25,000 -- 40,100(7) --
Worldwide Marketing, Sales and 1994 186,667 25,000 $205,000(8) 40,100(7) --
Support
</TABLE>
- -----------------
*As of October 31, 1996, individual was no longer an executive officer of the
Company.
(1) Excludes perquisites and other personal benefits, the aggregate annual
amount of which for each officer was less than the lesser of $50,000 or 10%
of the total salary and bonus reported.
(2) The Company did not grant any restricted stock awards or stock appreciation
rights ("SARs") or make any long-term incentive plan payouts during fiscal
year 1996, 1995 or 1994.
(3) Bonuses are reported in the year earned, even if actually paid in a
subsequent year.
(4) On June 6, 1995, the Company repriced and reduced the aggregate number of
underlying shares of certain of Dr. Afeyan's outstanding options as follows:
(i) options to purchase 300,000 shares of the Company's Common Stock
originally granted on December 29, 1993 (fiscal 1994) at an exercise price
of $25.50 per share were canceled in exchange for options to purchase
150,000 shares of the Company's Common Stock at an exercise price of $8.50
per share, such price being not less than the fair market value of the
Company's Common Stock on June 6, 1995, and the
10
<PAGE>
vesting terms on these newly issued options are such that 46,875 shares were
exercisable as of the date of the grant on June 6, 1995, an additional 9,375
became exercisable on June 29, 1995 and an additional 9,375 shares become
exercisable every three months thereafter until such options are fully
exercisable; and (ii) options to purchase 100 shares of the Company's Common
Stock granted on May 19, 1994 at an exercise price of $19.50 per share were
canceled in exchange for options to purchase 50 shares of the Company's
Common Stock at an exercise price of $8.50 per share, such price being not
less than the fair market value of the Company's Common Stock on June 6,
1995, and the vesting terms of these options are such that all 50 share were
exercisable on the date of the grant on June 6, 1995. The total reflected
for fiscal 1995 also includes options to purchase 150,050 shares of the
Company's Common Stock granted on June 6, 1995 at an exercise price of $8.50
per share, such price being not less than the fair market value of the
Company's Common Stock on June 6, 1995, and these options have a term of ten
years from the date of grant and become exercisable as to 25% of the shares
covered on the first anniversary of the date of the grant and as to 6.25% of
the shares covered on the first day of the end of each three month period
thereafter until such options are fully exercisable.
(5) On June 6, 1995, the Company repriced options to purchase 10,000 shares of
the Company's Common Stock originally granted on January 19, 1994 (fiscal
1994) at an exercise price of $25.50 per share in exchange for options to
purchase 20,000 shares of the Company's Common Stock at an exercise price of
$8.50 per share, such price being not less than the fair market value of the
Company's Common Stock on June 6, 1995. The vesting terms on the newly
issued options are such that the options became exercisable in three equal
annual installments commencing January 19, 1994, the date of the original
grant. The total reflected for fiscal 1995 also includes options to
purchase 1,500 shares of the Company's Common Stock granted in January 1996
pursuant to the Company's 1992 Non-Employee Director Stock Option Plan.
(6) Mr. Anacone served as a Senior Vice President of the Company from May 1992
until October 1996.
(7) On June 6, 1995, the Company repriced and reduced the aggregate number of
underlying shares of certain of Mr. Anacone's outstanding options as
follows: (i) options to purchase 40,000 shares of the Company's Common
Stock originally granted on December 29, 1993 (fiscal 1994) at an exercise
price of $25.50 per share were canceled in exchange for options to purchase
20,000 shares of the Company's Common Stock at an exercise price of $8.50
per share, such price being not less than the fair market value of the
Company's Common Stock on June 6, 1995, and the vesting terms on these newly
issued options are such that 6,250 shares were exercisable as of the date of
the grant on June 6, 1995, an additional 1,250 became exercisable on June
29, 1995 and an additional 1,250 shares become exercisable every three
months thereafter until such options are fully exercisable; and (ii) options
to purchase 100 shares of the Company's Common Stock granted on May 19, 1994
at an exercise price of $19.50 per share were canceled in exchange for
options to purchase 50 shares of the Company's Common Stock at an exercise
price of $8.50 per share, such price being not less than the fair market
value of the Company's Common Stock on June 6, 1995, and the vesting terms
of these newly issued options are such that all 50 shares were exercisable
on the date of the grant on June 6, 1995. The total reflected for fiscal
1995 also includes options to purchase 20,050 shares of the Company's Common
Stock granted on June 6, 1995 at an exercise price of $8.50 per share, such
price being not less than the fair market value of the Company's Common
Stock on June 6, 1995, and these options have a term of ten years from the
date of grant and become exercisable as to 25% of the shares covered on the
first anniversary
11
<PAGE>
of the date of the grant and as to 6.25% of the shares covered on the first
day of the end of each three month period thereafter until such options are
fully exercisable.
(8) Mr. Anacone recognized income upon the exercise of the option to purchase,
and subsequent sale of, 10,000 shares of the Company's Common Stock.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth grants of stock options during the fiscal
year ended September 30, 1996 to the Named Officers who are listed in the
Summary Compensation Table above:
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS (2) OPTION TERM (3)
- ----------------------------------------------------------------------------------- ----------------------------------------------
PERCENT
OF TOTAL EXERCISE
OPTIONS/ OPTIONS/SARS OR
SARS GRANTED TO BASE
GRANTED EMPLOYEES IN PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- --------------------------- -------- ------------ --------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Noubar B. Afeyan, Ph.D. 218,300 11.99% $7.500 7/17/06 $1,029,657.73 $2,680,131.59
111,800 6.14% $7.500 7/17/06 $ 527,328.14 $1,372,600.60
76,922 4.22% $7.625 7/16/06 $ 368,865.72 $ 934,778.16
22,978 1.26% $7.625 7/16/06 $ 110,186.90 $ 279,235.23
John F. Smith 1,500 * $7.813 1/19/06 $ 7,369.86 $ 18,676.67
26,229 1.44% $7.625 7/16/06 $ 125,776.49 $ 318,742.32
343,771 18.88% $7.625 7/16/06 $1,648,492.48 $4,177,603.60
130,000 7.14% $7.625 7/16/06 $ 623,391.80 $1,579,797.21
Thomas G. Ruane 22,200 1.22% $7.625 7/16/06 $ 106,456.14 $ 269,780.75
7,800 * $7.625 7/16/06 $ 37,403.51 $ 94,787.83
Robert B. Anacone** 20,000 1.10% $7.625 7/16/06 $ 95,906.43 $ 243,045.73
</TABLE>
- ------------------
* Less than one percent of total stock options granted during fiscal year
1996.
** As of October 31, 1996, individual was no longer an executive officer of the
Company. This option terminated as of October 31, 1996 and may no longer be
exercised.
(1) No stock appreciation rights ("SARs") were granted by the Company in the
fiscal year ended September 30, 1996.
(2) Stock options were granted under the Company's 1992 Stock Plan at an
exercise price equal to the fair market value of the Company's Common Stock
on the date of grant. The options have a term of ten years from the date of
grant and become exercisable (i) as to 25% of the shares covered on the
first anniversary of the date of grant and (ii) as to 6.25% of the shares
covered on the first day of the end of each three month period thereafter
until such options are fully exercisable, except for the
12
<PAGE>
1,500 share option grant to Mr. Smith, which becomes exercisable as to 33
1/3% of the shares covered on each of the first three anniversaries of the
date of grant.
(3) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation (5% and 10%) on
the Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of the Company's Common Stock. There can be no assurance that
the rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the individuals.
13
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options to purchase
the Company's Common Stock granted under the Company's 1989 Stock Plan and 1992
Stock Plan, including (i) the number of shares of Common Stock purchased upon
exercise of options in the fiscal year ended September 30, 1996; (ii) the net
value realized upon such exercise; (iii) the number of unexercised options
outstanding at September 30, 1996; and (iv) the value of such unexercised
options at September 30, 1996:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT SEPTEMBER 30, 1996
ACQUIRED ON VALUE SEPTEMBER 30, 1996 (#) ($)(1)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Noubar B. Afeyan, Ph.D. -- -- 426,317 / 573,783 $496,658 / $21,378
John F. Smith -- -- 22,333 / 510,667 $ 3,750 / $0
Thomas G. Ruane -- -- 37,498 / 92,502 $ 0 / $0
Robert B. Anacone* 10,000 $30,125.00 132,564 / 40,036 $ 100,000 / $0
- ----------------
</TABLE>
*As of October 31, 1996, individual was no longer an executive officer of the
Company. Unvested Options terminated as of October 31, 1996 and may no longer
be exercised.
(1) Value is based on the difference between the option exercise price and the
fair market value at September 30, 1996, the fiscal year-end ($7.00 per
share as quoted on the Nasdaq National Market), multiplied by the number of
shares underlying the option.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
To Our Stockholders:
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is responsible for establishing and administering the Company's cash
and equity compensation programs for its executive officers. Pursuant to the
authority delegated by the Board of Directors, the Compensation Committee
establishes each year the executive officers' cash salaries and other non-equity
benefits and the equity compensation programs for executive officers, which were
formerly administered by the Company's Stock Option Committee. The Compensation
Committee is composed exclusively of directors who are not also officers or
employees of the Company.
The Compensation Committee's executive compensation policies are intended to
provide levels of cash and equity compensation and benefits that will reward and
retain experienced executives who will contribute to the achievement of the
Company's performance objectives in the competitive and rapidly changing
business environment in which the Company operates. An executive's total
compensation package includes a cash salary and bonus determined by the
Compensation Committee,
14
<PAGE>
long-term incentive compensation, in the form of stock options, and various
benefits, including a 401(k) retirement plan and medical insurance plans that
are available to all employees of the Company.
Salaries of the Company's Chief Executive Officer and the most highly
compensated executives during fiscal 1996 are listed in the "Summary
Compensation Table" found on page 10. The Compensation Committee reviews
executive salaries at least once per year and, while it is not required to do
so, it may in its discretion increase these salaries. The Compensation
Committee attempts to keep the Company's compensation programs competitive by
comparing them with those of other companies in the industry. The Compensation
Committee also attempts to balance the compensation level for an individual
executive against the compensation levels for the Company's other executives.
The compensation for an individual executive officer is determined primarily
based upon his individual performance and, to a lesser extent, the performance
of his functional group and the Company as a whole. The Compensation Committee
evaluates Company and functional group performance by reviewing whether
performance objectives have been met, such as meeting profitability, revenue and
expense targets, the addition to and retention of qualified personnel in
functional groups to meet the Company's expected growth, the development and
introduction of new products on schedule and the Company's performance compared
to its competitors. The Compensation Committee evaluates an individual's
performance by assessing whether he has achieved specific objectives and whether
the overall objectives of the Company have been promoted.
Cash Compensation
The Compensation Committee sets the annual salaries for individual executives
by reviewing the salaries historically paid at the Company, the salaries paid by
the Company's competitors to persons holding comparable positions and
compensation studies prepared by independent third parties. The salaries for
executives who joined the Company in fiscal 1996 were determined by negotiation
at the time of hire. The Compensation Committee determines any increases in
annual salaries and bonuses based on a comparison of the executive's actual
performance against his performance objectives, as well as on various subjective
factors. The performance objectives for each executive depend on his area of
responsibility and may include achievement of the financial and performance
objectives of the executive's functional group or of the Company as a whole, the
introduction of new products or the development of new technologies. Among the
subjective factors considered by the Compensation Committee are the executive's
ability to provide leadership, to develop the Company's business, to promote the
Company's image with its customers and stockholders and to manage the Company's
continuing growth.
CEO Cash Compensation. Dr. Afeyan, the Company's Chief Executive Officer, may
participate in the same compensation programs that are available to the
Company's other executive officers. The Compensation Committee believes that
Dr. Afeyan's current annual compensation is competitive with the compensation
paid by other companies in its industry to their chief executive officers.
The Compensation Committee determines the Chief Executive Officer's cash
compensation based upon the Company's overall performance, the performance of
his management team, the compensation paid at competing companies and the
Company's prospects, among other objective and subjective factors. The
Compensation Committee does not find it practicable to quantify or assign
relative weight to the factors on which the Chief Executive Officer's
compensation is based.
15
<PAGE>
Dr. Afeyan received an increase in his base salary during fiscal 1996
to $300,000. His salary increase was based on his performance in fiscal 1995.
Dr. Afeyan was not granted any cash bonus for performance in fiscal 1996. In
increasing his salary, the Compensation Committee reviewed independent studies
of executive compensation in the biotechnology industry and at the Company's
competitors, as well as Dr. Afeyan's performance during the preceding twelve
months including the Company's progress in strengthening its management team and
in achieving its revenues, profitability and product-introduction goals, among
other objective and subjective factors. Specifically, the Compensation Committee
noted the hiring of additional key executives to strengthen the Company's
management team; the implementation of improved financial controls; the
achievement by the Company of financial and other performance objectives and the
significant increase in the Company's product revenues in fiscal 1995 compared
to the prior year. The Compensation Committee also based its decision on Dr.
Afeyan's efforts to enable the Company to overcome numerous obstacles during
fiscal 1995 including: litigation; the relocation of the Company's operations to
one central location; and the need to rebuild confidence in the Company among
its customers, employees and investors. The Compensation Committee will review
Dr. Afeyan's compensation package periodically to ensure that it remains
competitive.
Equity Compensation
The Company's equity compensation program is designed to provide long-
term incentives to executive officers, to encourage executive officers to remain
with the Company and promote the Company's business and to provide executives
with the opportunity to obtain significant, long-term stock ownership in the
Company's Common Stock. The Compensation Committee administers the Company's
1992 Stock Plan.
The Compensation Committee has granted options to executive officers
as the long-term incentive component of the executive officers' total
compensation package. The Compensation Committee generally grants options that
become exercisable over a four-year period as a means of encouraging executives
to remain with the Company and to promote its success. In fiscal 1996, the
Compensation Committee only awarded stock options with exercise prices equal to
the market price of the Common Stock on the date of grant. As a result,
executives will benefit from these stock option grants only to the extent that
the price of the Company's Common Stock increases and the Company's stockholders
have also benefited.
In deciding whether to grant options and in determining the number of
shares to be subject to such options, the Compensation Committee generally
reviews the option holdings of each of the executive officers, including the
number of unvested options and the then current value of such unvested options.
The number of options granted to certain of the most highly compensated
executive officers of the Company in fiscal 1996 is set forth in the table
captioned "Option/SAR Grants in Last Fiscal Year" found on page 12. The total
options held by each of these executives at September 30, 1996 is set forth in
the table captioned "Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values" found on page 14.
The Compensation Committee considers equity compensation to be an
integral part of a competitive executive compensation program. The granting of
stock options encourages management to obtain an equity interest in the Company
and generally aligns the interests of management with those of the Company's
stockholders.
CEO Equity Compensation. In July 1996, the Compensation Committee
granted Dr. Afeyan stock options to purchase 430,000 shares at $7.625 per share,
the then fair market value, on the date of
16
<PAGE>
grant. The new options granted, which vest over four years, were granted to
ensure that Dr. Afeyan will continue to have sufficient equity incentives, to
promote the success of the Company. The number of shares covered by this new
option grant was determined by the Compensation Committee based on its review of
the Company's performance during the prior twelve months. In addition, the
Compensation Committee reviewed several subjective and objectives factors
discussed above. The Compensation Committee will review the options granted to
Dr. Afeyan and the other executive officers of the Company on a periodic basis
to ensure that their equity compensation packages remain competitive.
Tax Considerations. Section 162(m) of the Internal Revenue Code of
1986, as amended ("Section 162(m)"), prevents publicly held corporations from
deducting, for federal income tax purposes, compensation paid in excess of $1
million to certain key executives, with certain exceptions. The Compensation
Committee has considered these requirements and it is the Compensation
Committee's present intention that, so long as it is consistent with its overall
compensation objectives, substantially all executive compensation will be
deductible for federal income tax purposes. Of the options granted to Dr.
Afeyan by the Compensation Committee in July 1996, 99,900 were granted without
regard to Section 162(m). The consequence of granting these stock options is
that during any fiscal year in which these options are exercised, the deduction
taken by the Company, for federal income tax purposes, can not exceed
$1,000,000 even if Dr. Afeyan's compensation for that year which includes his
salary, bonus and profits from the exercise of an option issued without regard
to Section 162(m) exceeds $1,000,000.
THE COMPENSATION COMMITTEE
Edwin M. Kania, Jr.
Daniel I.C. Wang, Ph.D.
17
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Currently, Mr. Kania and Dr. Wang serve as members of the Compensation
Committee of the Board of Directors. The Compensation Committee establishes the
salary and other compensation for the Company's executive officers. No member
of the Compensation Committee was at any time during the fiscal year ended
September 30, 1996 an officer or employee of the Company or any of its
subsidiaries, was formerly an officer of the Company or any of its subsidiaries,
or had any relationship requiring disclosure herein. During the fiscal year
ended September 30, 1996, no executive officer of the Company served as a member
of the compensation committee of another entity (or other committee of the Board
of Directors performing equivalent functions or, in the absence of any such
committee, the entire Board of Directors), one of whose executive officers
served as a member of the Compensation Committee of the Company.
COMPENSATION OF DIRECTORS
During the fiscal year ended September 30, 1996, directors who were
employees of the Company received no cash compensation for their services as
directors, except for reimbursement of expenses incurred in connection with
attending meetings. In fiscal 1995, the directors agreed to waive previously
unpaid, as well as future fees for an indefinite period. They also agreed to
review the compensation arrangements to be paid to directors prior to the Annual
Meeting.
1992 Non-Employee Director Stock Option Plan
Each non-employee director is entitled to participate in the Company's
1992 Non-Employee Director Stock Option Plan (the "Director Plan"). The
Director Plan authorizes the grant of stock options only to members of the
Company's Board of Directors who are neither employees nor officers of the
Company. Pursuant to the Director Plan, each non-employee director of the
Company who was a member of the Board of Directors on June 1, 1992 was granted
an option to purchase 6,000 shares of the Company's Common Stock and received an
option for 1,500 shares of Common Stock on each successive anniversary of June
1, 1992 through June 1, 1995. Prior to June 1, 1996, this annual option grant
was increased to 7,500 shares. Each non-employee director who became or becomes
a member of the Board of Directors after June 1, 1992 automatically is granted
on the date of such election without further action of the Board of Directors,
an option to purchase 10,000 shares of the Company's Common Stock. Each non-
employee director also received an option for 1,500 shares on each successive
anniversary of such date prior to May 6, 1996 after which this annual option
grant was increased to 7,500 shares. On March 11, 1996, the Board of Directors
of the Company voted to amend the Director Plan by increasing the automatic
annual grants to 7,500 shares. This amendment was approved by the Stockholders
of the Company on May 6, 1996.
Options granted under the Director Plan may not be exercised until
they become vested. Under the terms of the Director Plan, the initial 6,000 and
10,000 share option grants under the Director Plan vest in four equal annual
installments beginning on the first anniversary of the date of grant. The 1,500
share and 7,500 share annual options vest in three equal annual installments
beginning on the first anniversary of the date of such grant. The exercise
price per share of options granted under the Director Plan is 100% of the fair
market value of the Company's Common Stock on the date the option is granted.
Options granted under the Director Plan expire on the date which is ten years
from the date of the option grant.
18
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the yearly change in the cumulative total
stockholder return on the Company's Common Stock during the period from the
Company's initial public offering through September 30, 1996, with the
cumulative total return on the Center for Research in Securities Prices ("CRSP")
Index for the Nasdaq Stock Market (U.S. Companies) and the CRSP Index for Nasdaq
Pharmaceuticals Stocks. The comparison assumes $100 was invested on May 29,
1992 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends, if any.
COMPARISON OF CUMULATIVE TOTAL RETURN/(L)(2)/
<TABLE>
<CAPTION>
5/29/92 9/30/92 9/30/93 9/30/94 9/29/95 9/30/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Company $ 100.00 $153.521 $247.887 $159.859 $121.127 $ 78.873
Nasdaq Stock Market $ 100.00 $100.038 $131.028 $133.099 $182.456 $216.533
Nasdaq Pharmaceuticals $ 100.00 $ 90.970 $ 91.042 $ 79.116 $116.505 $140.476
</TABLE>
Notes:
A. The lines represent monthly index levels derived from compounded
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on May 29, 1992.
___________________________
(1) Prior to May 29, 1992, the Company's Common Stock was not publicly traded.
Comparative data is provided only for the period since that date. This
graph is not "soliciting material," is not deemed filed with the Securities
and Exchange Commission and is not to be incorporated by reference in any
filing of the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934 whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
(2) The stock price performance shown on the graph is not necessarily indicative
of future price performance. Information used on the graph was obtained
from the Center for Research in Security Prices, Chicago, Illinois, a source
believed to be reliable, but the Company is not responsible for any errors
or omissions in such information.
19
<PAGE>
PROPOSAL TO AMEND THE 1992 STOCK PLAN
PROPOSED AMENDMENT
The 1992 Stock Plan (the "Stock Plan") was adopted by the Company's Board of
Directors and approved by the Company's stockholders in March 1992. In 1994,
1995, and 1996 amendments to the Stock Plan increasing the number of shares
reserved for issuance thereunder was approved by the Company's stockholders. A
maximum of 3,585,500 shares of Common Stock are currently reserved for issuance
under the Stock Plan upon the exercise of options or in connection with awards
of stock of the Company ("Awards") or the opportunity to make direct stock
purchases of shares of the Company ("Purchases"). The Board of Directors has
approved and recommended to the stockholders that they approve an amendment to
increase the number of shares authorized for issuance under the Stock Plan to
4,585,500 shares.
The Company's management relies on stock options as an essential part of the
compensation packages necessary for the Company to attract and retain
experienced officers and employees. The Board of Directors of the Company
believes that the proposed increase in the number of shares available under the
Stock Plan is essential to permit the Company's management to continue to
provide long-term, equity-based incentives to present and future key employees.
As of January 1, 1997 approximately 170,000 shares remained authorized for
issuance under the Stock Plan. If the increase in the number of shares
authorized for issuance under the Stock Plan is not approved by the
stockholders, the Company may be unable to continue to provide suitable long-
term equity based incentives to present and future employees and will be
required to rescind options to purchase an aggregate of 439,950 shares of Common
Stock (the "New Options") granted pursuant to the Stock Plan to employees of the
Company since July 1996. Each of the New Options were granted with an exercise
price equal to the fair market value on the date of grant. The Company has not
at the present time determined who will receive options or other rights to the
remaining shares of Common Stock that will be authorized for issuance under the
Stock Plan if the proposed amendment to the Stock Plan is approved. The
Compensation Committee of the Board of Directors has determined, however, that a
substantial portion of such remaining shares will be subject to options to be
granted to approximately 20 members of the Company's senior management the
vesting of which will be tied to the achievement of certain specified financial
goals by the Company. The Compensation Committee has not made a final
determination as to the number of such performance based options or the
recipients thereof.
The following table sets forth as of January 1, 1997 the New Options granted
pursuant to the Stock Plan to (i) the Named Officers listed in the Summary
Compensation Table, (ii) all executive officers of the Company as a group, (iii)
all directors who are not executive officers of the Company as a group and (iv)
all employees including all officers who are not executive officers, as a group:
<TABLE>
<CAPTION>
NAME TITLE(S) OPTIONS GRANTED
------ -------- ---------------
<S> <C> <C>
Noubar B. Afeyan, Ph.D. Chief Executive Officer, Class I 111,800
Director and Chairman of the
Board of Directors
John F. Smith President and Class II Director 130,000
Thomas G. Ruane Senior Vice President, Chief 7,800
Financial Officer and Treasurer
Robert Anacone Former Executive Vice 0
President-Worldwide Marketing,
Sales and Support
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
All executive officers as a group (4 persons).................................... 249,600
All directors who are not executive officers as a group (4 persons).............. 0
All employees who are not executive officers as a group (82 persons)............. 190,350
</TABLE>
The Stock Plan limits to 600,000 shares the number of shares of Common
Stock that a participant may acquire pursuant to option grants, Awards or
Purchases under the Stock Plan. The purpose of the Stock Plan is to provide
long-term, equity-based incentives to a broad group of the Company's officers,
employees and consultants. With the proposed increase in the total number of
shares available under the Stock Plan, the Board of Directors believes that it
is appropriate to increase the limit of the total number of shares that any one
participant can receive under the Stock Plan. Consequently, the Board of
Directors has approved and recommended to the stockholders that they approve an
amendment to the Stock Plan increasing the limit of the maximum number of shares
of Common Stock that any participant may acquire under the Stock Plan to
1,400,000.
DESCRIPTION OF THE 1992 STOCK PLAN
The purpose of the Stock Plan is to provide incentives to officers and
other employees of the Company and any present or future subsidiaries
(collectively, "Related Corporations") by providing them with opportunities to
purchase stock of the Company pursuant to options which qualify as incentive
stock options ("ISO" or "ISOs") as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Stock Plan also provides for
the issuance to consultants, employees, officers and directors of the Company
and Related Corporations of options which do not qualify as ISOs ("Non-Qualified
Option" or "Non-Qualified Options"). Awards and Purchases may also be granted
to consultants, employees, officers and directors of the Company. ISOs, Non-
Qualified Options, Awards and Purchases are sometimes referred to collectively
as "Stock Rights" and ISOs and Non-Qualified Options are sometimes referred to
collectively as "Options." On January 2, 1997, the closing price of the
Company's Common Stock on the Nasdaq National Market was $6.75.
Administration. The Stock Plan is administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"), which
consists of two directors. Subject to the terms of the Stock Plan, the
Committee has the authority to determine the persons to whom Stock Rights shall
be granted (subject to certain eligibility requirements for grants of ISOs) and
the terms of the Stock Rights granted, including (a) the number of shares
subject to each grant, (b) when the Stock Right becomes exercisable, (c) the per
share exercise or purchase price, (d) the duration of the Stock Right, (e) the
time, manner and form of payment upon the exercise of a Stock Right and (f)
other terms and provisions governing the Stock Rights. The interpretation and
construction by the Committee of any provision of the Stock Plan or of any Stock
Right granted under the Stock Plan shall be final unless otherwise determined by
the Board of Directors.
Eligible Participants. Subject to certain limitations, ISOs under the
Stock Plan may be granted to any employee of the Company other than members of
the Committee. The aggregate fair market value (determined at the time of grant)
of the shares of Common Stock subject to ISOs granted to an employee and which
first become exercisable during any calendar year cannot exceed $100,000; any
portion of an ISO grant that exceeds such $100,000 limit will be treated for tax
purposes as a Non-Qualified Option. Non-Qualified Options, Awards and Purchases
may be granted to any director (other than a member of
21
<PAGE>
the Committee), officer, employee or consultant of the Company. As of January 1,
1997, there were approximately 513 officers and employees of Related
Corporations that were eligible to participate in the Stock Plan.
Granting of Stock Rights, Prices and Duration. Stock Rights may be
granted under the Stock Plan at any time prior to March 27, 2002. Pursuant to
the Stock Plan, ISOs cannot be granted at exercise prices less than the fair
market value of the Common Stock on the date of grant as determined in good
faith by the Board of Directors (or less than 110% of the fair market value in
the case of ISOs granted to an employee or officer holding 10% or more of the
voting stock of the Company). The exercise price per share of Non-Qualified
options granted under the Stock Plan cannot be less than the minimum legal
consideration required under applicable state law.
The Stock Plan provides that each Option shall expire on the date
specified by the Committee, but not more than ten years from its date of grant
in the case of ISOs and ten years and one day in the case of Non-Qualified
Options. However, in the case of an ISO granted to an employee owning more than
10% of the total combined voting power of all classes of stock of the Company or
any Related Corporation, such ISO shall expire five years from the date of
grant.
Exercise of Options. Each Option granted under the Stock Plan shall
either be fully exercisable at the time of grant or shall become exercisable in
such installments as the Committee may specify. Each Option may be exercised
from time to time, in whole or in part, up to the total number of shares with
respect to which it is then exercisable. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option (subject to the
$100,000 per year limit on the fair market value of stock subject to ISOs
granted to any employee which may become exercisable in any calendar year).
Payment for exercise of an Option under the Stock Plan may be made in
cash or by check or, if authorized by the Committee in its discretion, in full
or in part by a personal recourse, interest bearing note, by tendering shares of
Common Stock of the Company that have been owned by the employee for least six
months or by an assignment to the Company of the proceeds from the sale of the
Common Stock acquired upon exercise of the Option and an authorization to the
broker or selling agent to pay the amount to the Company.
Effect of Termination of Employment, Disability or Death. If an ISO
optionee ceases to be employed by the Company or any Related Corporation other
than by reason of death or disability, no further installment of his or her ISOs
will become exercisable, and the ISOs shall terminate after the passage of 90
days from the date of termination of employment (but not later than their
specified expiration dates), except to the extent that such ISOs shall have been
converted into Non-Qualified Options.
If an optionee dies, any ISO held by the optionee may be exercised, to
the extent exercisable on the date of death, by the optionee's estate, personal
representative or beneficiary who acquires the option by will or the laws of
descent and distribution, at any time within 180 days from the date of the
optionee's death (but not later than the specified expiration date of the ISO).
If an ISO optionee ceases to be employed by the Company by reason of his or her
disability (as defined in Section 22(e)(3) of the Code), the optionee may
exercise any ISO held by him or her on the date of termination of employment, to
the extent exercisable on that date, at any time within 180 days from the date
of termination of employment (but not later than the specified expiration date
of the ISO). Non-Qualified Options are subject to the termination and
cancellation provisions as may be determined by the Committee.
Non-Assignability of Options. During his lifetime only the optionee
may exercise an Option; no assignment or transfers are permitted except by will
or by the laws of descent and distribution.
22
<PAGE>
Miscellaneous. Option holders are protected against dilution in the
event of a stock dividend, recapitalization, stock split, merger or similar
transaction. The Board of Directors may from time to time adopt amendments,
certain of which are subject to shareholder approval, and may terminate the
Stock Plan at any time (although such action shall not affect options previously
granted). Any shares subject to an Option which for any reason expires or
terminates unexercised may again be available for option grants under the Stock
Plan. Unless terminated sooner, the Stock Plan will terminate on March 26,
2002.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. The following general rules are applicable
under current federal income tax law to ISOs under the Stock Plan:
1. In general, no taxable income results to the optionee upon the grant of an
ISO or upon the issuance of shares to him or her upon the exercise of the
ISO, and no federal income tax deduction is allowed to the Company upon
either grant or exercise of an ISO.
2. If shares acquired upon exercise of an ISO are not disposed of within (i)
two years following the date the option was granted or (ii) one year
following the date the shares are issued to the optionee pursuant to the
ISO exercise (the "Holding Periods"), the difference between the amount
realized on any subsequent disposition of the shares and the exercise price
will generally be treated as capital gain or loss to the optionee.
3. If shares acquired upon exercise of an ISO are disposed of before the
expiration of one or both of the requisite Holding Periods (a
"Disqualifying Disposition"), then in most cases the lesser of (i) any
excess of the fair market value of the shares at the time of exercise of
the ISO over the exercise price or (ii) the actual gain on disposition will
be treated as compensation to the optionee and will be taxed as ordinary
income in the year of such disposition.
4. In any year that an optionee recognizes compensation income on a
Disqualifying Disposition of stock acquired by exercising an ISO, the
Company generally should be entitled to a corresponding deduction for
federal income tax purposes.
5. Any excess of the amount realized by the optionee as the result of a
Disqualifying Disposition over the sum of (i) the exercise price and (ii)
the amount of ordinary income recognized under the above rules will be
treated as capital gain.
6. Capital gain or loss recognized on a disposition of shares will be long-
term capital gain or loss if the optionee's holding period for the shares
exceeds one year.
7. An optionee may be entitled to exercise an ISO by delivering shares of the
Company's Common Stock to the Company in payment of the exercise price if
the optionee's ISO agreement so provides. If an optionee exercises an ISO
in such fashion, special rules will apply.
8. In addition to the tax consequences described above, the exercise of ISOs
may result in a further "minimum tax" under the Code. The Code provides
that an "alternative minimum tax" (at a rate of 26% or 28%) will be applied
against a taxable base which is equal to "alternative minimum taxable
income," generally reduced by a statutory exemption. In general, the
amount by which the value of the Common Stock received upon exercise of the
ISO exceeds the exercise price is included in the optionee's alternative
minimum taxable income. A taxpayer is required to pay the higher of his or
her regular tax liability or the alternative minimum tax. A taxpayer who
pays alternative minimum tax attributable to the exercise of an ISO may be
entitled to a tax credit against his or her regular tax liability in later
years.
Non-Qualified Options. The following general rules are applicable under current
federal income tax law to Non-Qualified Options under the Stock Plan:
23
<PAGE>
1. The optionee generally does not recognize any taxable income upon the grant
of a Non-Qualified Option, and the Company is not allowed a federal income
tax deduction by reason of such grant.
2. The optionee generally will recognize ordinary compensation income at the
time of exercise of a Non-Qualified Option in an amount equal to the
excess, if any, of the fair market value of the shares on the date of
exercise over the exercise price. The Company may be required to withhold
income tax on this amount.
3. When the optionee sells the shares, he or she generally will recognize a
capital gain or loss in an amount equal to the difference between the
amount realized upon the sale of the shares and his or her basis in the
shares (generally, the exercise price plus the amount taxed to the optionee
as compensation income). If the optionee's holding period for the shares
exceeds one year, such gain or loss will be a long-term capital gain or
loss.
4. The Company generally should be entitled to a tax deduction when
compensation income is recognized by the optionee.
5. An optionee may be entitled to exercise a Non-Qualified Option by
delivering shares of the Company's Common Stock to the Company in payment
of the exercise price. If an optionee exercises a Non-Qualified Option in
such fashion, special rules will apply.
Awards and Purchases. Under current federal income tax law, persons receiving
Common Stock pursuant to an Award or Purchase generally will recognize ordinary
compensation income equal to the fair market value of the shares received,
reduced by any purchase price paid. The Company should generally be entitled to
a corresponding federal income tax deduction. When such Common Stock is sold,
the seller generally will recognize capital gain or loss. Special rules apply
if the stock acquired is subject to vesting, or is subject to certain
restrictions on resale under Federal securities laws applicable to directors,
officers or 10% stockholders.
The Board of Directors recommends a vote FOR the approval of the proposal to
amend the Company's 1992 Stock Plan.
24
<PAGE>
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of Coopers & Lybrand L.L.P.
("Coopers & Lybrand"), independent public accountants, to serve as auditors for
the fiscal year ending September 30, 1997 and is asking the stockholders to
ratify that selection. Stockholder ratification of the Company's independent
public accountants is not required under Delaware law or under the Company's
Amended and Restated Certificate of Incorporation, as amended, or its Amended
and Restated By-Laws, as amended. If the Stockholders do not ratify the
selection of Coopers & Lybrand as the Company's independent public accountants
for the fiscal year ended September 30, 1997, the Company's Board of Directors
will evaluate what would be in the best interests of the Company and its
stockholders and consider whether to select new independent public accountants
for the current fiscal year or whether to wait until the completion of the audit
for the current fiscal year before changing independent public accountants.
It is expected that one or more representatives of Coopers & Lybrand will be
present at the Annual Meeting with the opportunity to make a statement if so
desired and will be available to respond to appropriate questions from the
stockholders.
The Board of Directors recommends a vote FOR ratification of this selection.
VOTING PROCEDURES
The representation, in person or by proxy, of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum for the transaction of business. Shares
represented by proxies pursuant to which votes have been withheld from any
nominee for director, or which contain one or more abstentions or broker "non-
votes," are counted as present or represented for purposes of determining the
presence or absence of a quorum for the Annual Meeting. A "non-vote" occurs
when a broker or other nominee holding shares for a beneficial owner votes on
one proposal, but does not vote on another proposal because the broker does not
have discretionary voting power and has not received instructions from the
beneficial owner.
Election of Directors. Directors are elected by a plurality of the votes
cast, in person or by proxy, at the Annual Meeting. The two nominees who
receives the highest number of affirmative votes of the shares present or
represented and voting on the election of directors at the Annual Meeting will
be elected as the Class II Directors for a three-year term. Shares present or
represented and not so marked as to withhold authority to vote for a particular
nominee will be voted in favor of a particular nominee and will be counted
toward such nominee's achievement of a plurality. Shares present at the meeting
or represented by proxy where the stockholder properly withholds authority to
vote by marking the "WITHHOLD" box on the proxy for such nominee will not be
counted toward such nominee's achievement of a plurality.
Proposal 2. With respect to the proposal to approve amendments to the
Company's 1992 Stock Plan (the "Stock Plan"), the Company's Amended and Restated
By-Laws, as amended, and federal tax regulations provide that the affirmative
vote of the majority of shares present, in person or represented by proxy, and
voting on that matter is required for approval. Under the Stock Plan, however,
any amendment must be approved by the affirmative vote of the holders of a
majority of the Company's stock present, or represented, and entitled to vote at
the Annual Meeting. Shares subject to abstentions would be considered shares
present and entitled to vote at the Annual Meeting for the purposes of
determining whether the matter has been approved and thus abstentions would have
the effect of a vote against the matter. Broker "non-votes," are not considered
shares entitled to vote because the broker
25
<PAGE>
does not have the authority to vote the shares with regard to the Stock Plan.
Accordingly, broker "non-votes" would not affect the outcome of a vote on these
matters.
Other Matters. For all other matters being submitted to stockholders at the
Annual Meeting, the affirmative vote of the majority of shares present, in
person or represented by proxy, and voting on that matter is required for
approval. Shares voted to abstain are included in the number of shares present
or represented and voting on each matter. Shares subject to broker "non-votes"
are not considered to have been voted for the particular matter and have the
practical effect of reducing the number of affirmative votes required to achieve
a majority for such matter by reducing the total number of shares from which the
majority is calculated.
American Stock Transfer & Trust Company will serve as the Inspector of
Elections and will count all votes and ballots.
26
<PAGE>
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual Meeting
of Stockholders must be received no later than the close of business on December
4, 1996 at the Company's principal executive offices in order to be included in
the Company's proxy statement for that meeting. Any such proposal must comply
with the rules and regulations of the SEC. The Amended and Restated By-Laws, as
amended, of the Company provide that in order for a stockholder to bring
business before, or propose director nominations at, an annual meeting, the
stockholder must give written notice to the Secretary of the Company not less
than 60 days, nor more than 90 days, prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is more than 30 days before or more than 60 days
after such an anniversary date, notice by the stockholder to be timely must be
delivered not earlier than the close of business on the ninetieth day prior to
such annual meeting and not later than the close of business on the later of
sixtieth day prior to such annual meeting or the tenth day following the day on
which public announcement of the date of such meeting is first made by the
Company. The notice must contain specified information about the proposed
business or each nominee and the stockholder making the proposal or nomination.
EXPENSES AND SOLICITATION
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, certain of the Company's directors, officers
and regular employees, without additional remuneration, may solicit proxies by
telephone, telegraph and personal interviews. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names, and the Company will reimburse them for their
reasonable out-of-pocket costs. Solicitation by officers and employees of the
Company may also be made of some stockholders in person or by mail, telephone or
telegraph following the original solicitation. The Company has retained
Georgeson & Company Inc., New York, New York to assist in the solicitation of
proxies at a cost estimated not to exceed $12,500.
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 ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and the
Nasdaq National Market. Officers, directors and greater than ten percent
stockholders are required by Securities and Exchange Commission regulation to
furnish the Company with all Section 16(a) forms they file.
Based solely on its review of the copies of such forms and written
representations received from certain reporting persons that no Forms 5 were
required, the Company believes that during fiscal 1996 all filing requirements
applicable to its officers, directors and greater than ten percent stockholders
were complied with except for a Form 4 required to be filed by Mr. Kania upon
the merger of PTC-II into the Company which resulted in the exchange of 600
shares of callable common stock of PTC-II for 600 shares of Common Stock of the
Company.
27
<PAGE>
(As Amended, January 20, 1997)
PERSEPTIVE BIOSYSTEMS, INC.
1992 STOCK PLAN
---------------
1. Purpose. This 1992 Stock Plan (the "Plan") is intended to provide
-------
incentives: (a) to the officers and other employees of PerSeptive Biosystems,
Inc. (the "Company"), its parent (if any) and any present or future subsidiaries
of the Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code") ("ISO" or "ISOs"); (b) to
directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"); (c) to directors, officers,
employees and consultants of the Company and Related Corporations by providing
them with awards of stock in the Company ("Awards"); and (d) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to make direct purchases of stock in the
Company ("Purchases"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options". Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 424 of the Code.
2. Administration of the Plan.
---------------------------
A. Board or Committee Administration. The Plan shall be
---------------------------------
administered by the Board of Directors of the Company (the "Board") or by a
committee appointed by the Board (the "Committee"); provided, that, to the
extent required by Rule 16b-3, or any successor provision ("Rule 16b-3"), of the
Securities Exchange Act of 1934, with respect to specific grants of Stock
Rights, the Plan shall be administered by a disinterested administrator or
administrators within the meaning of Rule 16b-3. Hereinafter, all references in
this Plan to the "Committee" shall mean the Board if no Committee has been
appointed. Subject to ratification of the grant or authorization of each Stock
Right by the Board (if so required by applicable state law), and subject to the
terms of the Plan, the Committee shall have the authority to (i) determine the
employees of the Company and Related Corporations (from among the class of
employees eligible under paragraph 3 to receive ISOs) to whom ISOs may be
granted, and to determine (from among the class of individuals and entities
eligible under paragraph 3 to receive Non-Qualified Options and Awards and to
make Purchases) to whom Non-Qualified Options, Awards and authorizations to make
Purchases may be granted; (ii) determine the time or times at which Options or
Awards may be granted or Purchases made; (iii) determine the option price of
shares subject to each Option, which price shall not be less than the minimum
price specified in
<PAGE>
paragraph 6, and the purchase price of shares subject to each Purchase; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to paragraph 7) the time or times when each Option shall
become exercisable and the duration of the exercise period; (vi) determine
whether restrictions such as repurchase options are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such restrictions, if
any, and (vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a Non-Qualified
Option, it shall take whatever actions it deems necessary, under Section 422 of
the Code and the regulations promulgated thereunder, to ensure that such Option
is not treated as an ISO. The interpretation and construction by the Committee
of any provisions of the Plan or of any Stock Right granted under it shall be
final unless otherwise determined by the Board. The Committee may from time to
time adopt such rules and regulations for carrying out the Plan as it may deem
best. No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Stock Right
granted under it.
B. Committee Actions. The Committee may select one of its members
-----------------
as its chairman, and shall hold meetings at such times and places as it may
determine. Acts by a majority of the Committee, or acts reduced to or approved
in writing by a majority of the members of the Committee (if consistent with
applicable state law), shall be the valid acts of the Committee. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies however caused, or remove all members
of the Committee and thereafter directly administer the Plan.
C. Grant of Stock Rights to Board Members. Stock Rights may be
--------------------------------------
granted to members of the Board consistent with the provisions of the first
sentence of paragraph 2(A) above, if applicable. All grants of Stock Rights to
members of the Board shall in all other respects be made in accordance with the
provisions of this Plan applicable to other eligible persons. Consistent with
the provisions of the first sentence of paragraph 2(A) above, members of the
Board who are either (i) eligible for Stock Rights pursuant to the Plan or (ii)
have been granted Stock Rights may vote on any matters affecting the
administration of the Plan or the grant of any Stock Rights pursuant to the
Plan, except that no such member shall act upon the granting to himself of Stock
Rights, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board during which action is taken with respect to
the granting to him of Stock Rights.
3. Eligible Employees and Others. The maximum number of shares of Common
-----------------------------
Stock that may be issued to any officer, director, employee or consultant
pursuant to the Plan is 1,400,000 shares. ISOs may be granted to any employee
of the Company or any Related Corporation. Those officers and directors of the
Company who are not employees may not be granted ISOs under the Plan. Non-
Qualified Options, Awards and authorizations to make Purchases may be granted to
any employee, officer or director (whether or not also an employee) or
consultant of the Company or any Related Corporation. The Committee may take
into consideration a recipient's individual circumstances in determining whether
to grant an ISO, a Non-Qualified Option, an Award or an authorization to make a
Purchase. Granting of any Stock
2
<PAGE>
Right to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Stock
Rights.
4. Stock. The stock subject to Options, Awards and Purchases shall be
-----
authorized but unissued shares of Common Stock of the Company, par value $.01
per share (the "Common Stock"), or shares of Common Stock reacquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 4,585,500 subject to adjustment as provided in paragraph
13; provided, however, that such number of shares shall not be subject to
-----------------
adjustment by reason of the four for one stock split in the form of a stock
dividend declared by the Board of Directors of the Company at a meeting on March
27, 1992. Any such shares may be issued as ISOs, Non-Qualified Options or
Awards, or to persons or entities making Purchases, so long as the number of
shares so issued does not exceed such number, as adjusted. If any Stock Right
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, the unissued shares subject to such Stock Options shall again be
available for grants of Stock Rights under the Plan. For the purposes of the
foregoing sentence, shares withheld from the Stock Right exercise to pay the
exercise price and/or tax consequences of the exercise shall be deemed to have
been issued.
5. Granting of Stock Rights. Stock Rights may be granted under the Plan
------------------------
at any time on or after March 27, 1992 and prior to March 27, 2002. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant. The Committee shall have the right, with the consent of the optionee, to
convert an ISO granted under the Plan to a Non-Qualified Option pursuant to
paragraph 16.
6. Minimum Option Price; ISO Limitations.
-------------------------------------
A. Price for Non-Qualified Options. The exercise price per share
-------------------------------
specified in the agreement relating to each Non-Qualified Option granted
under the Plan shall in no event be less than the minimum legal consideration
required therefor under the laws of Delaware or the laws of any jurisdiction
in which the Company or its successors in interest may be organized.
B. Price for ISOs. The exercise price per share specified in the
--------------
agreement relating to each ISO granted under the Plan shall not be less than
the fair market value per share of Common Stock on the date of such grant.
In the case of an ISO to be granted to an employee owning stock possessing
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or any Related Corporation, the price per share
specified in the agreement relating to such ISO shall not be less than one
hundred ten percent (110%) of the fair market value per share of Common Stock
on the date of grant.
C. $100,000 Annual Limitation on ISOs. Each eligible employee may be
----------------------------------
granted ISOs only to the extent that, in the aggregate under this Plan and
all incentive stock option plans of the Company and any Related Corporation,
such ISOs do not become exercisable
3
<PAGE>
for the first time by such employee during any calendar year in a manner
which would entitle the employee to purchase more than $100,000 in fair
market value (determined at the time the ISOs were granted) of Common Stock
in that year. Any options granted to an employee in excess of such amount
will be granted as Non-Qualified Options.
D. Determination of Fair Market Value. If, at the time an Option is
----------------------------------
granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the last business day for which the
prices or quotes discussed in this sentence are available prior to the date
such Option is granted and shall mean (i) the average (on that date) of the
high and low prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; or (ii) the last reported sale
price (on that date) of the Common Stock on the NASDAQ National Market List,
if the Common Stock is not then traded on a national securities exchange; or
(iii) the closing bid price (or average of bid prices) last quoted (on that
date) by an established quotation service for over-the-counter securities, if
the Common Stock is not reported on the NASDAQ National Market List.
However, if the Common Stock is not publicly traded at the time an Option is
granted under the Plan, "fair market value" shall be deemed to be the fair
value of the Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
7. Option Duration. Subject to earlier termination as provided in
---------------
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years and one day from the date of grant in
the case of Non-Qualified Options, (ii) ten years from the date of grant in the
case of ISOs generally, and (iii) five years from the date of grant in the case
of ISOs granted to an employee owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Related Corporation. Subject to earlier termination as provided in
paragraphs 9 and 10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs 9 through
------------------
12, each Option granted under the Plan shall be exercisable as follows:
A. Vesting. The Option shall either be fully exercisable on the date
-------
of grant or shall become exercisable thereafter in such installments as the
Committee may specify.
B. Full Vesting of Installments. Once an installment becomes
----------------------------
exercisable it shall remain exercisable until expiration or termination of
the Option, unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be exercised at
----------------
any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable.
4
<PAGE>
D. Acceleration of Vesting. The Committee shall have the right to
-----------------------
accelerate the date of exercise of any installment of any Option; provided
that the Committee shall not, without the consent of an optionee, accelerate
the exercise date of any installment of any Option granted to any employee as
an ISO (and not previously converted into a Non-Qualified Option pursuant to
paragraph 16) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in paragraph
6(C).
9. Termination of Employment. If an ISO optionee ceases to be employed by
-------------------------
the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs shall
become exercisable, and his ISOs shall terminate after the passage of ninety
(90) days from the date of termination of his employment, but in no event later
than on their specified expiration dates, except to the extent that such ISOs
(or unexercised installments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any period during
which such optionee's right to reemployment is guaranteed by statute. A bona
fide leave of absence with the written approval of the Committee shall not be
considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
10. Death; Disability.
-----------------
A. Death. If an ISO optionee ceases to be employed by the Company and
-----
all Related Corporations by reason of his death, any ISO of his may be
exercised, to the extent of the number of shares with respect to which he
could have exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the ISO by will or by the laws
of descent and distribution, at any time prior to the earlier of the
specified expiration date of the ISO or 180 days from the date of the
optionee's death.
B. Disability. If an ISO optionee ceases to be employed by the
----------
Company and all Related Corporations by reason of his disability, he shall
have the right to exercise any ISO held by him on the date of termination of
employment, to the extent of the number of shares with respect to which he
could have exercised it on that date, at any time prior to the earlier of the
specified expiration date of the ISO or 180 days from the date of the
termination of the optionee's employment. For the purposes of the Plan, the
term "disability" shall mean "permanent and total disability" as defined in
Section 22(e)(3) of the Code or successor statute.
5
<PAGE>
11. Assignability. No Option shall be assignable or transferable by the
-------------
optionee except by will or by the laws of descent and distribution. During the
lifetime of the optionee each Option shall be exercisable only by him.
12. Terms and Conditions of Options. Options shall be evidenced by
-------------------------------
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. In granting any Non-Qualified Option, the
Committee may specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and cancellation provisions as the Committee may determine. The Committee may
from time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.
13. Adjustments. Upon the occurrence of any of the following events, an
-----------
optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:
A. Stock Dividends and Stock Splits. If the shares of Common Stock
--------------------------------
shall be subdivided or combined into a greater or smaller number of shares or
if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock
deliverable upon the exercise of Options shall be appropriately increased or
decreased proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination or stock
dividend.
B. Consolidations or Mergers. If the Company is to be consolidated
-------------------------
with or acquired by another entity in a merger, sale of all or substantially
all of the Company's assets or otherwise (an "Acquisition"), the Committee or
the board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board"), shall, as to outstanding Options, either
(i) make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then subject to such
Options the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition; or (ii) upon written notice
to the optionees, provide that all Options must be exercised, to the extent
then exercisable, within a specified number of days of the date of such
notice, at the end of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment equal to the excess of
the fair market value of the shares subject to such Options (to the extent
then exercisable) over the exercise price thereof.
6
<PAGE>
C. Recapitalization or Reorganization. In the event of a
----------------------------------
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph B above) pursuant to which securities of the
Company or of another corporation are issued with respect to the outstanding
shares of Common Stock, an optionee upon exercising an Option shall be
entitled to receive for the purchase price paid upon such exercise the
securities he would have received if he had exercised his Option prior to
such recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any
--------------------
adjustments made pursuant to subparagraphs A, B or C with respect to ISOs
shall be made only after the Committee, after consulting with counsel for the
Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424 of the
Code) or would cause any adverse tax consequences for the holders of such
ISOs. If the Committee determines that such adjustments made with respect to
ISOs would constitute a modification of such ISOs, it may refrain from making
such adjustments.
E. Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such
other time and subject to such other conditions as shall be determined by the
Committee.
F. Issuances of Securities. Except as expressly provided herein, no
-----------------------
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.
G. Fractional Shares. No fractional shares shall be issued under the
-----------------
Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
H. Adjustments. Upon the happening of any of the events described in
-----------
subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments
to be made under this paragraph 13 and, subject to paragraph 2, its
determination shall be conclusive.
If any person or entity owning restricted Common Stock obtained by exercise
of a Stock Right made hereunder receives shares or securities or cash in
connection with a corporate transaction described in subparagraphs A, B or C
above as a result of owning such restricted Common Stock, such shares or
securities or cash shall be subject to all of the conditions and restrictions
applicable to the restricted Common Stock with respect to which such shares or
securities or cash were issued, unless otherwise determined by the Committee or
the Successor Board.
7
<PAGE>
14. Means of Exercising Stock Rights. A Stock Right (or any part or
--------------------------------
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right is
being exercised, accompanied by full payment of the purchase price therefor (a)
in United States dollars in cash or by check, (b) at the discretion of the
Committee, through delivery or withholding from the Stock Right exercise of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Stock Right, (c) at the discretion of
the Committee, by delivery of the grantee's personal recourse note bearing
interest payable not less than annually at no less than 100% of the lowest
applicable Federal rate, as defined in Section 1274(d) of the Code, (d) at the
discretion of the Committee and consistent with applicable law, through the
delivery of an assignment to the Company of a sufficient amount of the proceeds
from the sale of the Common Stock acquired upon exercise of the Stock Right and
an authorization to the broker or selling agent to pay that amount to the
Company, which sale shall be at the participant's direction at the time of
exercise, or (e) at the discretion of the Committee, by any combination of (a),
(b), (c) and (d) above. If the Committee exercises its discretion to permit
payment of the exercise price of an ISO by means of the methods set forth in
clauses (b), (c), (d) or (e) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question.
Notwithstanding the foregoing, no employee may pay any part of the exercise
price hereof by delivering shares of Common Stock to the Company unless such
Common Stock has been owned by such employee free of any substantial risk of
forfeiture for at least six months. The holder of a Stock Right shall not have
the rights of a shareholder with respect to the shares covered by his Stock
Right until the date of issuance of a stock certificate to him for such shares.
Except as expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board of
--------------------------
Directors and Stockholders of the Company on March 31, 1992. The Plan shall
expire at the end of the day on March 27, 2002 (except as to Options outstanding
on that date). The Board may terminate or amend the Plan in any respect at any
time, except that, without the approval of the stockholders obtained within 12
months before or after the Board adopts a resolution authorizing any of the
following actions: (a) the total number of shares that may be issued under the
Plan may not be increased materially (except by adjustment pursuant to paragraph
13); (b) the benefits accruing to participants under the Plan may not be
materially increased; (c) the requirements as to eligibility for participation
in the Plan may not be materially modified; (d) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (e) the provisions
of paragraph 6(B) regarding the exercise price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to paragraph
13); (f) the expiration date of the Plan may not be extended; and (g) the Board
may not take any action which would cause the Plan to fail to comply with Rule
16b-3. Except as otherwise provided in this paragraph 15, in no event may
action of the Board or stockholders alter or impair the rights of a grantee,
without his consent, under any Stock Right previously granted to him.
8
<PAGE>
16. Conversion of ISOs into Non-Qualified Options; Termination of ISOs.
------------------------------------------------------------------
The Committee, at the written request of any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such ISOs. At
the time of such conversion, the Committee (with the consent of the optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
17. Application Of Funds. The proceeds received by the Company from the
--------------------
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. Governmental Regulation. The Company's obligation to sell and deliver
-----------------------
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
19. Withholding of Additional Income Taxes. Upon the exercise of a Non-
--------------------------------------
Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of restricted Common
Stock acquired on the exercise of a Stock Right hereunder, the Company, in
accordance with Section 3402(a) of the Code, may require the optionee, Award
recipient or purchaser to pay additional withholding taxes in respect of the
amount that is considered compensation includible in such person's gross income.
The Committee in its discretion may condition (i) the exercise of an Option,
(ii) the grant of an Award, (iii) the making of a Purchase of Common Stock for
less than its fair market value, or (iv) the vesting of restricted Common Stock
acquired by exercising a Stock Right, on the grantee's payment of such
additional withholding taxes. Payment of such additional withholding taxes
shall be in United States dollars in cash or by check and/or at the discretion
of the Committee, through the delivery of previously held shares of common stock
or withholding from the Stock Right exercise of shares of Common Stock having a
fair market value equal as of the date of exercise to the amount of such
withholding taxes.
20. Notice to Company of Disqualifying Disposition. Each employee who
----------------------------------------------
receives an ISO must agree to notify the Company in writing immediately after
the employee makes a Disqualifying Disposition of any Common Stock acquired
pursuant to the exercise of an ISO. A Disqualifying Disposition is any
disposition (including any sale) of such Common Stock before the later of (a)
two years after the date the employee was granted the ISO, or (b) one year after
9
<PAGE>
the date the employee acquired Common Stock by exercising the ISO. If the
employee has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter.
21. Governing Law; Construction. The validity and construction of the
---------------------------
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of Delaware, or the laws of any jurisdiction in which the Company
or its successors in interest may be organized. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.
10
<PAGE>
PERSEPTIVE BIOSYSTEMS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
P
R MARCH 5, 1997
O
X SOLICITED BY THE BOARD OF DIRECTORS
Y
The undersigned hereby appoints Noubar B. Afeyan, Thomas G. Ruare and
Samuel P. Hunt III, and each or all of them, proxies, with full power of
substitution to vote all shares of stock of PerSeptive Biosystems, Inc. (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held on Wednesday, March 5, 1997, at 9:00
a.m., local time, at the Crowne Plaza Hotel, 1360 Worcester Road, Natick,
Massachusetts, and at any adjournments thereof, upon matters set forth in the
Notice of Annual Meeting of Stockholders and Proxy Statement dated January 28,
1997, a copy of which has been received by the undersigned.
___________
SEE REVERSE
SIDE
___________
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] Please mark votes as in this example.
1. To elect two members to the Board of Directors to serve a three-year
term as Class II Directors
Nominees: Daniel J.C. Wang FOR WITHHELD
John F. Smith [ ] [ ]
_______________________________________
INSTRUCTIONS: To withhold your vote for any
individual nominee write the nominee's name on the space
provided above.
FOR AGAINST ABSTAIN
2. To approve amendments to the [ ] [ ] [ ]
Company's 1992 Stock Plan
(the "Stock Plan") (a) increasing
the number of shares available for
issuance under the Stock Plan from
3,585,500 to 4,585,500 shares; and
(b) increasing the maximum number
of shares that may be purchased by
any participant under the Stock Plan
from 600,000 to 1,400,000 shares
3. To ratify the selection of the firm
of Coopers & Lybrand L.L.P. as
auditors for the fiscal year ending
September 30, 1997. [ ] [ ] [ ]
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND
FOR THE PROPOSALS IN ITEMS 2 AND 3.
<PAGE>
MARK HERE [ ]
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
(Please sign exactly as your name appears hereon.
If signing as attorney, executor, trustee or
guardian, please give your full title as such. If
stock is held jointly, each owner should sign.
Please read reverse side before signing.)
Signature: __________________________________ Date_____________
Signature: __________________________________ Date_____________
