SAGE LABORATORIES, INC.
ELEVEN HURON DRIVE
NATICK, MASSACHUSETTS 01760
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------------
Notice is hereby given that the annual meeting of the stockholders of Sage
Laboratories, Inc., a Massachusetts corporation, will be held at 2:00 o'clock
p.m. on Tuesday, November 12, 1996 at the corporation's headquarters, Eleven
Huron Drive, Natick, Massachusetts, for the following purposes:
1. To fix the number of directors and to elect directors for the coming year.
The management recommends that the number of directors be fixed at five and that
the persons named in the accompanying proxy statement be elected as directors.
2. To consider and act upon an amendment to the corporation's Employee Stock
Option Plan so as to increase the pool of shares allocated to the plan by an
additional 250,000 shares.
3. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on September 27, 1996
are entitled to notice of the meeting and to vote thereat.
If you do not intend to be present at the meeting in person, you are asked
to date and sign the enclosed proxy and return it in the accompanying stamped
addressed envelope.
By order of the Board of Directors
GEORGE M. HUGHES
Assistant Clerk
Dated: October 15, 1996
<PAGE>
SAGE LABORATORIES, INC.
ELEVEN HURON DRIVE
NATICK, MASSACHUSETTS 01760
---------------
PROXY STATEMENT
---------------
INFORMATION CONCERNING THE PROXY SOLICITATION
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Sage Laboratories, Inc. (hereinafter called the Company) for use at the
annual meeting of stockholders of the Company to be held on Tuesday, November
12, 1996 and at any adjournments thereof. It is subject to revocation at any
time prior to the exercise thereof by giving written notice to the Company, by
submission of a later dated proxy or by voting in person at the meeting. The
costs of solicitation, including the preparation, assembly and mailing of proxy
statements, notices and proxies, will be paid by the Company. Officers and
employees of the Company may also solicit by telephone, letter or personally.
On September 27, 1996 the Company had outstanding 1,161,265 shares of
common stock, $1.00 par value (hereinafter called the Common Stock), which is
its only class of stock. Stockholders of record at the close of business on
September 27, 1996 will be entitled to vote at the meeting. With respect to all
matters which will come before the meeting, each stockholder may cast one vote
for each share registered in such stockholder's name on the record date. Shares
represented by valid proxies will be voted in accordance with the specifications
in the proxies. If no specifications are made, the proxies will be voted to fix
the number of directors at five and to elect the directors nominated by the
Board of Directors.
The approximate date on which this proxy statement and accompanying proxy
are first being sent or given to stockholders is October 15, 1996.
- 1 -
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table provides information as of September 27, 1996 as to (i)
all persons known to the Company to be beneficial owners of more than 5% of the
Company's outstanding Common Stock, (ii) the Chief Executive Officer and each of
the other executive officers of the Company named in the Summary Compensation
Table, (iii) each director of the Company, and (iv) all current executive
officers and directors of the Company as a group:
<TABLE>
<CAPTION>
Amount Beneficially Percent
Beneficial Owner Owned of Class
---------------- ------------------- --------
<S> <C> <C>
Carl A. Marguerite 291,680(1)(2) 24.3
Quest Advisory Corp. 118,500 10.2
21414 Avenueof the Americas
New York, NY 70019
Louis J. Lanzillo,Jr. 102,500(2) 8.1
Fenimore Asset Management, Inc 94,500 8.1
118 North Grand Street
P.O. Box 310
Cobleskill, New York 12043
Mary Saad 65,000(1) 5.6
4 Minihan Lane
Norwood, Massachusetts 02062
Anthony J. Cieri 44,570(1)(2) 3.8
Janusz J. Majewski 20,000(2) 1.7
John E. Miller 16,500(1)(2) 1.4
Erich P. Ippen 4,500(1)(2) *
C. Duncan Soukup 10,500(2)(3) *
All current executive officers and 490,250(2) 36.5
as a group (7 persons)
</TABLE>
- ----------
* Indicates less than 1%.
(1) The beneficial owners of these shares have sole voting power and sole
investment power over such shares.
(2) The amounts listed include the following shares subject to options
exercisable within the 60-day period following September 27, 1996 which
were granted under the Company's stock option plans: Messrs. Marguerite
12,500 shares; Lanzillo 35,833 shares; Majewski 13,333 shares; Cieri 1,667
shares; Miller 3,500 shares; Ippen 2,500 shares; Soukup 2,500 shares; and
all current executive officers and directors as a group 71,833 shares
(3) Includes 8,000 shares with respect to which Mr. Soukup has voting control.
Mr. Soukup disclaims any beneficial interest in such shares, except to the
extent he is a beneficiary in the entity owning the shares.
- 2 -
<PAGE>
ELECTION OF DIRECTORS
The management recommends that the number of directors for the coming year
be fixed at five. Five directors will be elected at the 1996 annual meeting. The
management recommends that the current directors, John E. Miller, Carl A.
Marguerite, Erich P. Ippen, Louis J. Lanzillo, Jr. and C. Duncan Soukup be
elected for one-year terms. Each has consented to serve if elected. If any of
them should become unavailable for election, the persons voting the accompanying
proxy may in their discretion vote for a substitute. The management is not
presently aware of any reason that would prevent Messrs. Miller, Marguerite,
Ippen, Lanzillo and Soukup from serving as a director if elected.
Directors will be elected by a plurality of the votes properly cast at the
meeting. Abstentions and broker non-votes will not be treated as votes cast for
this purpose.
Information concerning the nominees for director is given in the following
table.
<TABLE>
<CAPTION>
Has Been a
Business Experience Director of the Term
Name During Past Five Years Company Since Expires
---- ---------------------- --------------- -------
<S> <C> <C> <C>
John E. Miller Director of Intermetrics, Inc, 1976 1996
Age 71 Cambridge, Massachusetts,
producers of computer systems
and software through August
31, 1995. Mr. Miller was
President and Chief Executive
Officer of the same firm until
1986 and Chairman of the
Board until 1993
Carl A. Marguerite Chairman of the Board, Chief 1981 1996
Age 56 Executive Officer and Treasurer
of the Company
President until 1996
Louis J. Lanzillo, Jr. President and Chief Operating 1995 1996
Age 38 Officer of the Company.
President of New England
Division of UNICCO Service
Company until 1995. Vice
President Finance and
Administration from 1986 to 1993
C. Duncan Soukup Founder and Chief Executive 1995 1996
Age 42 Officer of Lionheart Group, Inc.
since 1994. Managing director
Bear Stearns & Co., Inc., New
York from 1988 to 1994.
Erich P. Ippen Elihu Thompson Professor of 1993 1996
Age 56 Electrical Engineering,
Massachusetts Institute of
Technology since 1987.
</TABLE>
- 3 -
<PAGE>
None of the persons named in the foregoing table is a director of any other
company with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or subject to the requirements of Section 15(d)
of that Act or any company registered as an investment company under the
Investment Company Act of 1940.
The Company has an audit committee, whose members are Messrs. Ippen,
Miller, and Soukup. The audit committee reviews with the independent auditors
the results of the auditing engagement. The Company also has a compensation
committee, which consisted during the last fiscal year of Messrs. Ippen, Miller,
and Soukup . The compensation committee makes recommendations to the directors
regarding the compensation of executive officers.
The Company's Board of Directors held four meetings during its last fiscal
year. The compensation committee met twice and the audit committee once. Each
director attended all of the meetings of directors and committees of which he
was a member.
Director Compensation. The Company pays each non-employee director a
quarterly payment of $750 for services as a director and a fee of $750 for each
meeting of the Board of Directors. Directors are paid $500 for attendance at
committee meetings, with no payment if a committee meeting is held on the same
day as a a Board of Directors meeting.
Under the 1992 Director Stock Option Plan (the "Plan"), options to purchase
2,500 shares of the Company's Common Stock are automatically granted to each
non-employee director on the first trading day after the Company's annual
meeting. The options become exercisable with respect to the full 2,500 shares
six months following the grant date. The options have a term of ten years and an
exercise price equal to 100% of the fair market value of the Company's Common
Stock on the grant date.
- 4 -
<PAGE>
EXECUTIVE COMPENSATION
The following tables set forth certain compensation information for the
Chief Executive Officer of the Company and each of the other most highly
compensated executive officers of the Company whose salary and bonus for the
latest fiscal year exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER SECURITIES LONG-TERM
ANNUAL ANNUAL UNDERLYING COMPENSATION ALL OTHER
COMPENSATION COMPENSATION OPTIONS LTIP COMPENSATION
SARS ---- ------------
Name and Principal ----
Position Year Salary($) Bonus($) ($)(1) Payouts($)(2) ($)(3)
-------- ---- --------- -------- ------ ------------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Carl A. Marguerite 1996 151,961 80,000 87,631 37,500 0 24,030
President, Chief 1995 146,441 125,000 72,372 - 0 24,030
Executive Officer 1994 147,312 95,000 88,611 - 13,500 31,440
and Treasurer
Janusz J. Majewski 1996 91,157 20,000 1,343 10,000 0 17,392
Vice President of
Engineering
Anthony J. Cieri 1996 82,956 15,000 449 5,000 0 15,791
Vice President of 1995 82,956 17,500 1,022 - 0 15,533
Sales 1994 82,325 16,000 0 - 0 15,842
</TABLE>
(1) Amounts include $7,234 in interest, $31,996 in principal forgiven
on certain loans, tax gross up payment of $39,733 and auto expense
of $5,329. For 1995 such amounts were $5,829, $31,996 and $34,004
respectively.. For 1994 such amounts were $12,676, $40,958 and
$31,996 respectively. See "Certain Transactions."
(2) Represents shares of restricted stock as to which the conditions
of forfeiture lapsed upon the achievement of certain corporate
performance goals during the last fiscal year. As of June 30,
1996, Mr. Marguerite held 50,000 shares of such stock, 10,000 of
which shares remain subject to forfeiture. See "Certain
Transactions." Based upon the fair market value of the Company's
Common Stock on June 30, 1996 ($15.81), the aggregate value of the
restricted stock held by Mr. Marguerite was $790,500.
(3) Amounts in this column are derived from the following: for 1996
Messrs. Marguerite, Majewski and Cieri, respectively, $22,500,
$16,989 and $15,068 for contributions to Company's Profit Sharing
Plan, and $1,530, $403 and $723 for insurance premiums. For 1995
Messrs Marguerite and Cieri respectively had $22,500 and $14,843
for contributions to Company's Profit Sharing Plan and $1,530 and
$723 for insurance premiums. In 1994 such amounts for Messrs
Marguerite and Cieri were $30,000 and $14,989 for Profit Sharing
and $1,440 and $853 for insurance premiums respectively.
- 5 -
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money
fiscal year-end(#) Options at
fiscal year-end(1)
Shares Value Exercisable/ Exercisable/
Acquired on Realized Unexercisable Unexercisable
Name Exercise(#)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Janusz J. Majewski 0 0 10,000/13,333 158,125/0
Carl A. Marguerite 10,000 167,000 12,500/25,000 0/0
Anthony J. Cieri 10,000 167,000 1,667/3,333 0/0
</TABLE>
(1) Based on the spread between the option price and the fair market
value of the Common Stock on June 30, 1996 ($15.81).
Stock Options Granted During Fiscal 1996
The following table sets forth each grant of stock options during fiscal
1996 to the Chief Executive Officer and each other executive named in the
Summary Compensation Table. No stock appreciation rights have been granted.
Individual Grants
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Name Number of % of Total Exercise or Expiration Date
Securities Options Base Price
Underlying ($/Sh)
Options Granted(1) Employees in
Fiscal Year
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Carl A. Marguerite 37,500 37% $21.75 11/14/00
Anthony J. Cieri 5,000 5% $19.78 11/14/00
Janusz J. Majewski 10,000 10% $19.78 11/14/00
</TABLE>
(1) One third are exercisable now; one third exercisable twelve months from
date of grant; balance exercisable twelve months thereafter.
CERTAIN TRANSACTIONS
Restricted Stock Option Plan. On February 18, 1992, the Company adopted a
1992 Restricted Stock Plan for Mr. Marguerite, pursuant to which the Company
issued 10,000 shares of Common Stock to him, subject to forfeiture upon a
voluntary termination of his employment or upon a termination of his employment
by the Company for cause. These conditions of forfeiture lapse on January 1,
2002, but may lapse on an accelerated basis as to 2,000 shares on January 1 of
each of the years 1993 through 1997 if certain corporate performance goals are
achieved. In connection with the stock grant, the Company loaned Mr. Marguerite
$113,000 interest free to meet certain tax obligations. The loan is payable in
five equal annual installments beginning in December 1993. In connection with
prior stock grants, the Company provided Mr. Marguerite with prior interest-free
loans. During the fiscal year ended June 30, 1996, $31,996 in principal on such
loans was forgiven by the Company. The largest aggregate amount of all of Mr.
Marguerite's indebtedness to the Company outstanding during the fiscal year
ending June 30, 1996 was $87,039, the amount outstanding as of October 4, 1995
was $74,862.
- 6 -
<PAGE>
Bylaw Amendment. On September 4, 1996 the directors amended the
company's bylaws so as to create the position of chairman of the board who shall
be the company's chief executive officer. The bylaw amendment further provides
that the president of the company shall be the chief operating officer. The
bylaws provide that any bylaw adopted or amended by the directors may be amended
or repealed by the stockholders.
PROPOSAL TO INCREASE SHARES UNDER EMPLOYEE STOCK OPTION PLAN
At the September 4, 1996 Board of Directors meeting it was voted to add
250,000 shares to the Company's Stock Option Plan so that a total of 288,500
shares would be reserved for the grant of options under the plan. A copy of the
plan as it is proposed to be amended is attached hereto as Exhibit A. The
directors believe that the increase in shares is necessary to provide
flexibility in making equity incentives available to persons making significant
contributions to the Company. The affirmative vote of a majority of the shares
of common stock represented at the annual meeting in person or by proxy will be
required to increase the number of shares to be reserved under the plan.
The directors recommend a vote FOR the proposal.
SELECTION OF AUDITORS
The Board of Directors has selected the firm of Arthur Andersen & Co., One
International Place, Fort Hill Square, Boston, Massachusetts 02110, which has
served as auditors for the Company since it was formed, to serve as auditors for
the Company for the fiscal year ending June 30, 1996. Representatives of Arthur
Andersen & Co. are expected to be present at the annual meeting of stockholders
with an opportunity to make a statement if they desire to do so. Such
representatives will be available to respond to appropriate questions.
PROPOSALS OF SECURITY HOLDERS FOR 1996 ANNUAL MEETING
Proposals of security holders intended to be presented at the annual
meeting of the Company's stockholders scheduled for November 11, 1997 must be
received by the Company for inclusion in its proxy statement and form of proxy
relating to that meeting not later than June 13, 1997.
MISCELLANEOUS
The management does not know of any business which will come before the
meeting except the matters described in the notice. If other business is
properly presented for consideration at the meeting, it is intended that the
proxies will be voted by the persons named therein in accordance with their
judgment on such matters.
In the event that a quorum is not present when the meeting is convened, it
is intended to vote the proxies in favor of adjourning from time to time until a
quorum is obtained.
By order of the Board of Directors
GEORGE M. HUGHES
Assistant Clerk
Dated: October 15, 1996
- 7 -
<PAGE>
Exhibit A
SAGE LABORATORIES, INC.
Stock Option Plan
This Stock Option Plan dated September 2, 1987 governs options to purchase
common stock of and stock appreciation rights with respect to Sage Laboratories,
Inc. (the "Company") granted by the Company to its employees. It supersedes all
prior plans for the granting of such options.
1. Shares Subject to the Plan
There are reserved for issue hereunder 500,000 shares of the Company's
common stock, $.10 par value, of which 288,500 remain available for grant.
Shares subject to options under this Plan and stock appreciation rights which
lapse, terminate or otherwise become unexercisable may be reoptioned under this
Plan. In the event that the number of outstanding shares of common stock of the
Company shall be changed by reason of split-up, combinations of shares,
recapitalizations or stock dividends, the number of shares subject to the Plan,
the number of shares subject to outstanding options and the option exercise
price shall be appropriately adjusted to reflect any change.
2. Employees Eligible to Receive Options
Options may be granted from time to time by the Company's Board of
Directors, within the limits set forth in Section 1 of this Plan, to any
individual who at the time of the grant is a key employee of the Company. The
term "key employee" shall include officers of the Company.
3. Plan Administration
The selection of key employees for participation in this Plan and decisions
concerning the timing, pricing and amount of grants or awards shall be made by
the Board of Directors; provided that, if at the time of any grant or award to
an officer of the Company who is subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended, each member of the Board is not a
"disinterested person" as defined in Rule 16b-3(2)(i) under said Act, such grant
or award shall be made by a committee consisting of those directors (but not
less than two) who are disinterested persons, and in that event, references
herein to the Board of Directors shall be deemed to refer to such committee.
4. Granting of Options
Options shall be granted under this Plan either as incentive stock options
("incentive stock options") as defined in Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code"), or as options which do not meet the
requirements of Section 422A ("non-statutory stock options"). All options shall
be substantially in the form of Attachment A. The granting date for each option
granted hereunder shall be the date on which it is approved by the Company's
Board of Directors or such later date as the directors may specify. No options
shall be granted hereunder after August 31, 1997.
5. Option Price
In the case of incentive stock options, the price at which shares may from
time to time be optioned shall be not less than the fair market value of a share
of the Company's common stock on the granting date. If the employee to whom the
option is granted owns on the granting date stock representing more than 10
percent of the total combined voting power of all classes of stock of the
Company or of any parent or subsidiary corporation, then the option price shall
not be less than 110 percent of the fair market value of the Company's common
stock on the granting date. In determining such value, the Board of Directors
shall consider all relevant information and shall act in good faith to ensure
that the option price is not less than such value.
- 8 -
<PAGE>
In the case of non-statutory stock options, the price at which shares may
from time to time be optioned shall be determined by the Board of Directors,
provided that such price shall be not less than 50% of the fair market value of
the Company's common stock on the granting date. Within such limitation, the
Board of Directors may subsequently reduce the price to obtain an exercise price
for a non-statutory option which takes into account any tax benefit expected to
be realized by the Company due to the exercise of the non-statutory option.
6. Stock Appreciation Rights
The Board of Directors may in its discretion grant stock appreciation
rights to persons eligible to receive options, either separately or in relation
to options granted under this Plan. When stock appreciation rights are granted
in relation to an option, the exercise of the option or the exercise of the
stock appreciation rights shall cause a corresponding reduction of related stock
appreciation rights or of the related option, respectively. Upon the exercise of
a stock appreciation right, the holder shall receive, in cash, in shares of the
Company's common stock or in a combination thereof as the Board of Directors
shall determine, an amount equal to the amount, if any, by which the fair market
value of the Company's common stock on the exercise date exceeds the base price.
The base price shall be (i) the option exercise price in the case of stock
appreciation rights granted in relation to options and (ii) the price determined
by the Board of Directors in each other case.
7. Dates of Exercise
Stock options granted hereunder shall become exercisable at the expiration
of two years from the granting date of the option or at the expiration of such
period of time after the granting date as the Board of Directors may establish
by vote with respect to a particular option. The expiration date of each option
shall be determined by the Board of Directors, provided that (i) the term of
each stock option granted under this Plan shall not exceed a period of ten years
from the date of its grant, and (ii) if the employee to whom an incentive stock
option is granted owns on the granting date stock representing more than 10
percent of the total combined voting power of all classes of stock of the
Company or of any parent or subsidiary corporation, the term of such incentive
stock option under this Plan shall not exceed a period of five years from the
date of its grant. Unless otherwise provided in the option, stock appreciation
rights granted in relation to stock options will be automatically exercised upon
the termination or expiration of the related option.
8. Non-transferability
Options and stock appreciation rights granted under this Plan shall not be
transferable by the holder otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employment Retirement Income Security Act, or the
rules thereunder; and shall be exercisable, during the holder's lifetime, only
by him.
9. Withholding Taxes
Upon the exercise of non-statutory stock options or stock appreciation
rights, the holder shall be required to pay to the Company or authorize the
Company to deduct from other amounts payable to him the amount of any taxes
which the Company is required to withhold with respect to such exercise or
issue. Such payment by the holder in the case of the exercise of non- statutory
stock options may be made at the election of the holder in cash, already owned
shares of common stock, or the retention of shares which would otherwise be
delivered to the holder upon such exercise.
- 9 -
<PAGE>
10. Amendment or Termination
The Company's Board of Directors may amend or terminate this Plan at any
time, provided that the aggregate number of shares of the Company which may be
optioned or which may be subject to stock appreciation rights hereunder may not
be increased (except as permitted by Section 1) and the class of employees
eligible to receive options or rights under this Plan may not be changed without
the affirmative vote of the holders of a majority of the common shares of the
Company outstanding and entitled to vote at a meeting held for the purpose.
11. Stockholder Approval
This Plan is subject to approval by the stockholders of the Company within
twelve months from the date hereof by the affirmative vote of a majority of the
shares of stock of the Company outstanding and entitled to vote thereon. In the
event such approval is not obtained, all options and stock appreciation rights
granted under this Plan shall be void and without effect.
- 10 -
<PAGE>
Attachment A
SAGE LABORATORIES, INC.
[Incentive] [Non-Statutory] Stock Option
Sage Laboratories, Inc. (hereinafter called the Company), a Massachusetts
corporation, as an incentive and inducement to _________________ (hereinafter
called the Optionee), who is presently an employee of the Company, to devote his
best efforts to the affairs of the Company, which incentive and inducement the
Board of Directors of the Company has determined to be a sufficient
consideration for the grant of this Option, hereby grants to the Optionee the
right and option (herein called the Option) to purchase from the Company up to
_____ shares of its common stock, $.10 par value. This Option is granted under,
and is subject to the provisions of, the Company's Stock Option Plan dated
September 2, 1987, and shall be exercisable only on the following terms and
conditions:
[1. The price to be paid for each share upon exercise of the whole or any
part of this Option shall be $____, which is not less than the fair market value
of a common share of the Company on the granting date or, if the Optionee owns
on the granting date stock representing more than ten percent of the total
combined voting power of all classes of stock of the Company or of its parent or
subsidiary corporation, is not less than 110 percent of the fair market value of
a common share of the Company on the granting date.](1)
[1. The basic price to be paid for each share of the Company's common stock
upon exercise of the whole or any part of this Option shall be $_______,
provided that such basic price may be reduced by the Board of Directors to
account for any tax benefit expected to be realized by the Company due to the
grant or exercise of this Option.](2)
2. Except as otherwise provided herein, this Option may be exercised at any
time after _______________________. 19__. This Option may not be exercised as to
any shares after the expiration of ten years from the granting date. [except
that if, on the granting date, the Optionee owns more than 10 percent of the
total combined voting power of all classes of stock of the Company or of its
parent or subsidiary corporation, this Option may not be exercised after the
expiration of five years from the granting date.](3)
[2A. Subject to the terms and conditions hereof, the Optionee is hereby
granted the right and option to exercise stock appreciation rights with respect
to not exceeding ________________________ of the shares subject to this Option.
Such rights may be exercised at any time when this Option is exercisable and
will be automatically exercised upon the termination or expiration of this
Option. The stock appreciation rights are granted in direct relation to this
Option and, accordingly, the exercise of this Option or the exercise of the
stock appreciation rights shall cause a corresponding reduction of the related
stock appreciation rights or of the related optioned shares, respectively. Upon
exercise of a stock appreciation right, the Optionee shall be entitled to
receive for each share as to which the right is exercised, in cash, in shares of
the Company's common stock or in a combination thereof as the Board of Directors
shall determine, an amount equal to the amount, if any, by which the fair market
value of a share of the Company's common stock as determined in good faith by
the Board of Directors exceeds the option price.]
- ----------
1 This provision is for incentive stock options.
2 This provision is for non-statutory stock options.
3 The five year limit is necessary only for incentive stock options.
- 11 -
<PAGE>
3. This Option may be exercised at any time and from time to time, subject
to the limitations set forth elsewhere herein, up to the aggregate number of
shares specified herein, but in no event for the purchase of other than full
shares. Notice of exercise shall be delivered to the Company specifying the
number of shares with respect to which the Option is being exercised and
specifying a date not later than fifteen days after the date of the delivery of
such notice as the date on which the Optionee will take up and pay for such
shares. On the date specified in such notice, the Company will deliver to the
Optionee a certificate for the number of shares with respect to which the Option
is being exercised, against payment therefor in cash or by certified check, or
with the consent of the Company, in whole or in part in common stock of the
Company valued at fair market value, in which case the certificates for such
shares shall be delivered to the Company duly endorsed for transfer, free and
clear of all liens, encumbrances, charges or adverse claims and in which case
Optionee shall pay all state and federal taxes imposed upon the transfer of such
shares.
4. The Optionee shall not be deemed, for any purpose, to have any rights
whatever in respect of shares as to which the Option shall not have been
exercised and payment made as aforesaid.
5. If any change is made in the Company's common stock resulting in the
change of such stock into, or the right to exchange such stock for, a larger or
smaller number of shares or for other stock or property, the Optionee shall be
entitled to receive such shares or such other stock or property in lieu of the
common shares purchasable under this Option without any change in the option
price upon the exercise of this Option as a whole, and a proportionate amount
thereof upon any partial exercise of this Option. The Optionee shall also be
similarly entitled to receive upon the exercise of this Option, in whole or in
part, the equivalent of any and all stock dividends (whether in common stock or
preferred stock of the Company) declared and paid after the granting date of
this Option to the holders of the Company's common shares which he would have
received if on the record date for determination of the stockholders entitled to
receive such dividend or dividends he had been the holder of record of the
shares purchased on such exercise.
6. This Option is not transferable by the Optionee otherwise than by will
or the laws of descent and distribution, or pursuant to a qualified domestic
relations order as defined in the Internal Revenue Code of 1986 or Title I of
the Employment Retirement Income Security Act, or the rules thereunder; and is
exercisable, during the Optionee's lifetime, only by him.
7. If the Optionee's employment with the Company, or a parent or subsidiary
corporation of the Company, or a corporation or a parent or subsidiary
corporation of such corporation issuing or assuming a stock option in a
transaction to which Section 425(a) of the Code applies, is terminated otherwise
than by his death, he may exercise the rights which he had hereunder at the time
of such termination only as follows:
(a) If the Optionee has retired, he may exercise such rights at any time
within three months from the date of his retirement; and
(b) If the Optionee's employment has been terminated for any other reason,
he may exercise such right at any time within 60 days from such termination.
Upon the death of the Optionee, those entitled to do so by the Optionee's will
or the laws of descent and distribution shall have the right, at any time within
twelve months after the date of death, to exercise in whole or in part any
rights which were available to the Optionee at the time of his death.
- 12 -
<PAGE>
Notwithstanding the foregoing provisions of this Section 7, the exercise of
this Option is subject to the limitations set forth elsewhere herein.
8. [It shall be a condition to the Optionee's right to purchase stock
hereunder that the Optionee shall notify the Company in writing within 30 days
of the disposition of one or more shares of stock which were transferred to him
pursuant to his exercise of this Option if such disposition occurs within two
years from the granting date or within one year after the transfer of such
shares to him.](4) The Company may, in its discretion, require that (i) the
shares of stock reserved for issue upon the exercise of this Option shall have
been duly listed, upon official notice of issuance, upon any national securities
exchange on which the Company's common stock may then be listed, and that either
(ii) a Registration Statement under the Securities Act of 1933, as amended, with
respect to said shares shall have become effective, or (iii) the Optionee shall
have represented in form and substance satisfactory to the Company that it is
his intention to purchase for investment the shares at the time being purchased
under this Option, and such other steps, if any, as counsel for the Company
shall deem necessary to comply with any law applicable to the issue of such
shares by the Company shall have been taken by the Company or the Optionee, or
both.
9. Any exercise of this Option is conditioned upon the payment, if the
Company so requests, by the Optionee or by his heirs by will or by the laws of
descent and distribution, of all state and federal taxes imposed upon the
exercise of this Option and the issue to the Optionee of the shares covered
hereby.
- ----------
4 This provision is for incentive stock options.
IN WITNESS WHEREOF, Sage Laboratories, Inc. has caused this Option to be
executed on its behalf and its corporate seal to be hereunto affixed as of
__________________________.
SAGE LABORATORIES, INC.
By:____________________
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<PAGE>
SAGE LABORATORIES, INC.
Proxy Solicited by the Board of Directors for the
Annual Meeting of Stockholders to be held November 12, 1996
The undersigned appoints Carl A. Marguerite and George M. Hughes, or either
of them, the attorneys and proxies of the undersigned, with power of
substitution, to vote all the shares of Sage Laboratories, Inc. which the
undersigned is entitled to vote at the annual meeting of stockholders to be held
on November 12, 1996, and at any adjournments thereof, in the election of
directors and, in their discretion, upon such other matters as may properly come
before the meeting.
1. ELECTION OF DIRECTORS
Nominees: Erich P. Ippen, Louis J. Lanzillo, Jr., Carl A. Marguerite, John
E. Miller, C. Duncan Soukup
[ ] FOR ALL NOMINEES [ ] WITHHELD FROM ALL NOMINEES
[ ] FOR ________________________ BUT WITHHELD FROM _______________________
2. Approval of amendment to Employee Stock Option Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED FOR THE ABOVE-NAMED NOMINEES FOR DIRECTOR AND FOR THE
AMENDMENT TO EMPLOYEE STOCK OPTION PLAN IF NO CONTRARY INSTRUCTIONS THEREFOR ARE
GIVEN.
Please complete, sign and date on reverse side and mail in enclosed envelope.
(over)
<PAGE>
(Continued from reverse side)
Account Number No. of Shares Proxy No.
Receipt of the notice of the annual meeting and of the
accompanying proxy is acknowledged.
Dated: ___________________________, 1996
________________________________________
________________________________________
(Signature(s) of Stockholder)
This proxy should be signed by the
registered holder. Where stock is
registered in the names of more than one
person, all such persons should sign.
When signing as executors,
administrators, trustees, guardians,
etc., please indicate your title as
such.
