<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Matritech, 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 transaction applies:
Not Applicable
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
Not Applicable
________________________________________________________________________
(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):
Not Applicable
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
Not Applicable
________________________________________________________________________
(5) Total fee paid:
Not Applicable
________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
Not Applicable
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
Not Applicable
________________________________________________________________________
(3) Filing Party:
Not Applicable
________________________________________________________________________
(4) Date Filed:
Not Applicable
________________________________________________________________________
<PAGE>
MATRITECH, INC.
330 NEVADA STREET
NEWTON, MASSACHUSETTS 02160
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 19, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Matritech, Inc., a Delaware corporation (the "Company"), will be held on Friday,
June 19, 1998, at 10:00 a.m. local time, at the offices of the Company, 330
Nevada Street, Newton, Massachusetts 02160, for the following purposes:
I. To elect a Board of Directors for the ensuing year.
II. To ratify the selection of the firm of Arthur Andersen LLP as
auditors for the fiscal year ending December 31, 1998.
III. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Only stockholders of record at the close of business on April 24, 1998
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
By Order of the Board of Directors,
Leslie R. Teso, Secretary
Newton, Massachusetts
April 29, 1998
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.
<PAGE>
MATRITECH, INC.
330 NEVADA STREET
NEWTON, MASSACHUSETTS 02160
_______________________________
PROXY STATEMENT
_______________________________
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
JUNE 19, 1998
Proxies in the form enclosed with this proxy statement are solicited
by the Board of Directors of Matritech, Inc. (the "Company" or "Matritech") for
use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Friday, June 19, 1998 at 10:00 a.m. local time, at the offices of the Company,
330 Nevada Street, Newton, Massachusetts 02160.
Only stockholders of record as of April 24, 1998 (the "Record Date")
will be entitled to vote at the Annual Meeting and any adjournments thereof. As
of April 20, 1998, there were 18,596,054 shares of Common Stock, par value $.01
per share, of the Company issued and outstanding. Each share of Common Stock
outstanding as of the Record Date will be entitled to one vote and stockholders
may vote in person or by proxy. Execution of a proxy will not in any way affect
a stockholder's right to attend the Annual Meeting and vote in person. Any
stockholder giving a proxy has the right to revoke it by written notice to the
Secretary of the Company at any time before it is exercised.
The persons named as attorneys in the proxies are directors and/or
officers of the Company. All properly executed proxies returned in time to be
counted at the Annual Meeting will be voted as stated below under "Voting
Procedures." Any stockholder giving a proxy has the right to withhold authority
to vote for any individual nominee to the Board of Directors by writing that
nominee's name in the space provided on the proxy.
In addition to the election of directors, the stockholders will
consider a proposal to ratify the selection of auditors, as further described in
this proxy statement. Where a choice has been specified on the proxy with
respect to a matter, the shares represented by the proxy will be voted in
accordance with the specifications and will be voted FOR if no specification is
indicated.
The Board of Directors of the Company knows of no other matters to be
presented at the Annual Meeting. If any other matter should be presented at the
Annual Meeting upon which a vote may be properly taken, 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.
An Annual Report, containing financial statements for the fiscal year
ended December 31, 1997, is being mailed together with this proxy statement to
all stockholders entitled to vote. This proxy statement and the form of proxy
were first mailed to stockholders on or about April 29, 1998.
<PAGE>
-2-
PROPOSAL I
ELECTION OF DIRECTORS
The directors of the Company are elected annually and hold office
until the next annual meeting of stockholders and until their successors have
been elected and qualified. Shares represented by all proxies received by the
Board of Directors and not so marked as to withhold authority to vote for any
individual nominee or for all nominees will be voted (unless one or more
nominees are unable to serve) FOR the election of the nominees named below. The
Board of Directors knows of no reason why any such nominee should be unable or
unwilling to serve, but if such 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.
Nominated for election to the Company's Board of Directors are:
Stephen D. Chubb; David L. Corbet; J. Robert Buchanan; Thomas R. Morse; David
Rubinfien; T. Stephen Thompson and C. William Zadel. Each of the nominees
currently serves as a director of the Company. A plurality of the votes cast by
the stockholders present or represented by proxy and entitled to vote at the
meeting is required for the election of directors. See "Voting Procedures."
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors met seven times during the fiscal year ended
December 31, 1997. The Audit Committee of the Board of Directors, of which
Messrs. Thompson and Zadel are members, oversees the accounting and tax
functions of the Company, including matters relating to the appointment and
activities of the Company's independent auditors. The Audit Committee met twice
during the fiscal year ended December 31, 1997. The Compensation Committee of
the Board of Directors, of which Messrs. Morse, Rubinfien and Thompson are
members, reviews and makes recommendations concerning executive compensation,
and administers the 1992 Plan and the Company's 1992 Employee Stock Purchase
Plan. The Compensation Committee met five times and acted by unanimous written
consent once during the year ended December 31, 1997. The Board of Directors
does not currently have a standing nominating committee. Each of the directors,
with the exception of Dr. Buchanan, who attended five out of the seven meetings
of the Board of Directors, attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and of all Committees on which he
served.
<PAGE>
-3-
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the nominees to be elected at the
Annual Meeting, and the executive officers of the Company, their ages as of
April 29, 1998, and the positions currently held by each such person with the
Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Stephen D. Chubb (1)..................... 54 Chairman, Director and Chief Executive Officer
David L. Corbet (1)...................... 44 Director, President and Chief Operating Officer
Leslie R. Teso (1)....................... 39 Vice President, Finance, Treasurer and Secretary
JoAnn Jasinski (1)....................... 46 Vice President, Sales and Marketing
Ying-Jye Wu, Ph.D. (1)................... 49 Vice President, Product Development
J. Robert Buchanan....................... 70 Director
Thomas R. Morse (2)...................... 46 Director
David Rubinfien (2)...................... 76 Director
T. Stephen Thompson (2)(3)............... 50 Director
C. William Zadel (3)..................... 54 Director
</TABLE>
_________________________
(1) Officers of the Company are elected annually by the Board of Directors and
serve until the next Annual Meeting of the Board of Directors and until
their respective successors are elected and qualified, or until their
earlier resignation or removal.
(2) Member of Compensation Committee
(3) Member of Audit Committee
Mr. Chubb, a founder of Matritech, has been Chairman since October
1993 and a director and Matritech's Chief Executive Officer since the Company's
inception in 1987. Mr. Chubb was the Company's President until October 1993 and
was also Treasurer of the Company until March 1992. From 1984 to 1986, Mr.
Chubb served as President and Chief Executive Officer of T Cell Sciences, Inc.,
a publicly traded biotechnology company. Prior to 1984, Mr. Chubb was President
and Chief Executive Officer of Cytogen Company, also a publicly traded
biotechnology company. He currently serves as a director of Charles River
Laboratories, a Division of Bausch and Lomb, a publicly traded medical products
company, and as a director of several private companies.
Mr. Corbet has been Matritech's President, Chief Operating Officer,
and a director since October 1993, and joined the Company in April 1993 as
Executive Vice President. Prior to joining Matritech and since 1991, Mr.
Corbet had served as President and Chief Operating Officer of T Cell
Diagnostics, Inc., a subsidiary of T Cell Sciences, Inc. which is a publicly
traded biotechnology company, and served in various other executive and
managerial offices there since 1985.
Ms. Teso has been Matritech's Vice President, Finance, Treasurer and
Secretary since March 1992. From January 1989 to March 1992, Ms. Teso was the
Company's Controller. From 1985 to 1989, Ms. Teso was Controller of Thackray
USA Inc., a subsidiary of a U.K.-based medical device manufacturer of orthopedic
implants and surgical instruments.
Ms. Jasinski has been Matritech's Vice President, Sales and Marketing
since August 1997. From 1980 to 1997, Ms. Jasinski held a number of management
and sales positions, most recently as Worldwide Marketing Manager, ACS:
Centaur, Worldwide Manager, Strategic Intent and Worldwide
<PAGE>
-4-
Manager, New Product Promotion and Advertising, at Chiron Diagnostics, a
division of Chiron Corporation, a publicly traded biotechnology company.
Dr. Wu has been Matritech's Vice President, Product Development since
February 1997. From March 1995 to February 1997 he was Matritech's Vice
President, Research and Development and from December 1992 to March 1995 he was
Matritech's Vice President, Research. From June 1990 to December 1992, Dr. Wu
was Director of Cell Biology at CytoMed, Inc., a biotechnology company. From
1987 to 1990, Dr. Wu was a manager of research and development at Pharmacia ENI
Diagnostics, Inc., a biotechnology company.
Dr. Buchanan has served as a director of Matritech since June 1996.
From 1994 to 1996, Dr. Buchanan was Chairman of Worldcare, Limited, a
telemedicine company. From 1982 until his retirement in 1994, Dr. Buchanan
served as General Director of Massachusetts General Hospital. From 1977 to
1982, Dr. Buchanan served as President of the Michael Reese Medical Center and
Associate Dean of the Pritzker School of Medicine at the University of Chicago
and from 1969 to 1977 served as Dean of Cornell Medical College. Dr. Buchanan
currently serves as a director of i-STAT Corporation, a publicly traded medical
equipment company; Charles River Laboratories, a Division of Bausch and Lomb, a
publicly traded medical products company; and Premier Practice Management, Inc.,
a privately held physician practice management company.
Mr. Morse has served as a director of Matritech since March 1988.
Since 1983, Mr. Morse has served as a Managing Director of Philadelphia Venture
Management, Inc., a venture capital management company which manages
partnerships who are investors in the Company.
Mr. Rubinfien has served as a director of Matritech since May 1988.
Mr. Rubinfien was Chairman and President of Systemix Inc., a biotechnology
company, from 1989 through 1991 and President and Chief Executive Officer of
Microgenics Company, a medical diagnostics company, from 1985 through 1987. Mr.
Rubinfien currently serves as a director of Molecular Biosystems, Inc., a
publicly traded biomedical company, ChemTrak, Inc., a publicly traded
biochemical company, Biocircuits, Inc., a publicly traded biomedical company,
and several private companies.
Mr. Thompson has served as a director of Matritech since May 1994.
Mr. Thompson is President, Chief Executive Officer and a director of Immtech
International, Inc., a privately held biopharmaceutical company, which positions
he has held since 1992. From 1986 to 1992, Mr. Thompson held a number of
management positions, most recently as President and Chief Executive Officer, at
Amersham Corporation, a subsidiary of Amersham International plc. which is a
publicly traded life science and health care company.
Mr. Zadel has served as a director of Matritech since December 1995.
Mr. Zadel is Chairman, President, Chief Executive Officer and a director of
Millipore Corporation, a publicly traded laboratory equipment company, which
positions he has held since April 1996. From 1985 through 1995, Mr. Zadel
served as President and Chief Executive Officer of Ciba Corning Diagnostics
Corporation, a biotechnology company. Mr. Zadel currently serves, and has
served since 1989, as a director of Kulicke & Soffa Industries, Inc., a publicly
traded semiconductor assembly equipment company.
<PAGE>
-5-
SECURITIES OWNERSHIP OF
MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of April 20, 1998, certain
information regarding the ownership of shares of the Company's Common Stock by:
(i) each person who, to the knowledge of the Company, owned beneficially more
than 5% of the shares of Common Stock of the Company outstanding at such date,
(ii) each director and nominee of the Company, (iii) each Named Officer (as
defined below) and (iv) all current directors and executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS(2)
---- ------------- -----------
<S> <C> <C>
Stephen D. Chubb (3)............................................. 427,472 2.3%
David L. Corbet (4).............................................. 140,572 *
Ying-Jye Wu (5).................................................. 66,766 *
Leslie R. Teso (6)............................................... 30,815 *
J. Robert Buchanan (7)........................................... 25,000 *
Thomas Morse (8)................................................. 472,602 2.5%
David Rubinfien (9).............................................. 47,849 *
T. Stephen Thompson (10)......................................... 40,149 *
C. William Zadel (11)............................................ 25,800 *
Forstmann-Leff Associates, Inc. (12)
590 Madison Avenue
New York, NY 10022............................................ 2,286,900 12.3%
FLA Advisers LLC (12)
590 Madison Avenue
New York, NY 10022............................................. 1,753,250 9.4%
KeyCorp (13)
127 Public Square
Cleveland, OH 44114-1306....................................... 960,177 5.2%
All executive officers and directors as a group
(10 persons)(14)................................................. 1,277,025 6.7%
</TABLE>
_____________________________
* Indicates less than 1%
<PAGE>
-6-
(1) Except as indicated in footnotes to this table, the persons named in this
table have sole voting and investment power with respect to all shares of
Common Stock owned based upon information provided to the Company by the
directors, officers and principal stockholders.
(2) The number of shares of Common Stock deemed outstanding for this
calculation includes (i) 18,596,054 shares of Common Stock outstanding on
April 20, 1998 and (ii) all Common Stock underlying stock options which are
currently exercisable or will become exercisable within 60 days of April
20, 1998 by the person or group in question.
(3) Mr. Chubb's beneficial ownership includes 53,670 shares issuable upon
exercise of outstanding stock options which are exercisable on April 20,
1998 or within 60 days thereafter.
(4) Mr. Corbet's beneficial ownership includes 137,506 shares issuable upon
exercise of outstanding stock options exercisable on April 20, 1998 or
within 60 days thereafter. Mr. Corbet holds all of his issued shares
jointly with his wife.
(5) Dr. Wu's beneficial ownership includes 60,466 shares issuable upon exercise
of outstanding stock options exercisable on April 20, 1998 or within 60
days thereafter.
(6) Ms. Teso's beneficial ownership includes 23,990 shares issuable upon
exercise of outstanding stock options exercisable on April 20, 1998 or
within 60 days thereafter. Ms. Teso holds all of her issued shares jointly
with her husband.
(7) Dr. Buchanan's beneficial ownership includes 25,000 shares issuable upon
exercise of outstanding stock options exercisable on April 20, 1998 or
within 60 days thereafter.
(8) Mr. Morse's beneficial ownership includes 382,200 shares of Common Stock
held by Century IV Partners, 50,672 shares of Common Stock held by
Commonwealth Venture Partners I, L.P. and 232 shares of Common Stock held
by Pennsylvania Venture Partners, L.P. In addition, Mr. Morse's
beneficial ownership includes 28,649 shares issuable to Mr. Morse upon
exercise of outstanding stock options exercisable on April 20, 1998 or
within 60 days thereafter. Mr. Morse is an officer and stockholder of
Philadelphia Ventures, Inc., which serves as a general partner or
investment manager to each of Century IV Partners, Commonwealth Venture
Partners I, L.P. and Pennsylvania Venture Partners, L.P. (collectively, the
"Philadelphia Venture Funds"), and may be deemed to share voting and
investment power with respect to such shares of Common Stock. Mr. Chubb,
Chairman, CEO, and a director of the Company is a limited partner of
Pennsylvania Venture Partners, L.P. and an advisor to the Philadelphia
Venture Funds. Mr. Morse disclaims beneficial ownership of the shares
beneficially owned by the Philadelphia Venture Funds, except with respect
to his pecuniary interest therein, if any.
(9) Mr. Rubinfien's beneficial ownership includes 29,649 shares issuable upon
exercise of outstanding stock options exercisable on April 20, 1998 or
within 60 days thereafter. In addition, Mr. Rubinfien's beneficial
ownership includes 18,200 shares held in trust for the benefit of his
children. Mr. Rubinfien is a trustee of the aforementioned trust. Mr.
Rubinfien disclaims beneficial ownership of all shares held in trust for
the benefit of his children.
(10) Mr. Thompson's beneficial ownership includes 29,649 shares issuable upon
exercise of outstanding stock options exercisable on April 20, 1998 or
within 60 days thereafter.
<PAGE>
-7-
(11) Mr. Zadel's beneficial ownership includes 24,800 shares issuable upon
exercise of outstanding stock options exercisable on April 20, 1998 or
within 60 days thereafter.
(12) As of December 31, 1997, Forstmann-Leff Associates, Inc. ("FLA"), a New
York corporation and a registered investment adviser under Section 203 of
the Investment Advisers Act of 1940 (the "Act"), beneficially owned 533,650
shares of the Company's Common Stock of which 501,750 shares were held in
various customer accounts with respect to which it had sole investment
discretion. FLA also had shared investment discretion and shared voting
discretion with respect to 31,900 shares of Common Stock held by FLA Asset
Management, Inc. ("FLAM"), a wholly owned subsidiary of FLA and a
registered investment adviser under the Act. FLA had sole voting
discretion with respect to 480,250 shares of Common Stock of the Company.
As of December 31, 1997, FLA Advisers LLC ("FLALLC"), an affiliate of FLA
and a registered investment adviser under the Act beneficially owned
1,753,250 shares of Common Stock of the Company, which shares were held in
various customer accounts with respect to which FLALLC had sole and shared
investment and voting discretion. FLALLC had sole investment discretion
with respect to 1,753,250 shares of Common Stock of the Company. FLALLC
had sole voting discretion with respect to 1,753,250 shares of Common Stock
of the Company. By virtue of its relationship to FLALLC and FLAM, FLA may
be deemed to be the beneficial owner of 2,286,900 shares of the Company's
Common Stock. FLA's, FLAM's and FLALLC's voting power with respect to
shares held in various customer accounts is pursuant to specific authority
granted by clients, which voting authority may be withdrawn by such
clients. In the event of the termination of an investment advisory
agreement with a client, FLA's, FLAM's and FLALLC's investment and/or
voting power with respect to certain shares held for the account of such
clients may terminate.
All statements contained herein with respect to FLAM, FLA and FLALLC are
based upon the Schedule 13G filed with the SEC on behalf of FLAM, FLA and
FLALLC, and upon information provided to the Company by FLA.
(13) Includes 534,177 shares with respect to which KeyCorp shares voting and
investment power. All statements with respect to KeyCorp are based solely
upon the Schedule 13G filed with the SEC on behalf of KeyCorp and upon
information provided to the Company by KeyCorp.
(14) Includes 413,379 shares issuable upon exercise of outstanding stock options
exercisable on April 20, 1998 or within 60 days thereafter.
<PAGE>
-8-
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the
Company for services rendered for its fiscal year ended December 31, 1997 to Mr.
Chubb, the Company's Chairman and Chief Executive Officer, Mr. Corbet, Dr. Wu
and Ms. Teso, the next three most highly compensated executive officers of the
Company as of December 31, 1997 (the "Named Officers"). No other executive
officers earned total salary and bonus exceeding $100,000 during 1997. The
Company did not grant any restricted stock awards or stock appreciation rights
("SARs") and did not make any long-term incentive plan payouts during 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------- ------------
AWARDS
------------ ALL
SECURITIES OTHER
NAME AND SALARY BONUS UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) OPTIONS(#) ($)(1)
- ---------------------------- --------- ------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Stephen D. Chubb 1997 $205,461 $33,825 8,456 $156
Chairman, Director and 1996 176,000 37,488 209,721 236
Chief Executive Officer 1995 162,000 19,845 -- 252
David L. Corbet 1997 $176,663 $24,269 6,067 $156
Director, President and 1996 165,000 29,288 158,374 226,336
Chief Operating Officer 1995 152,000 33,620 9,000 252
Ying-Jye Wu 1997 $125,261 $16,875 4,219 $150
Vice President, Product 1996 118,800 17,321 55,034 234
Development 1995 108,000 11,340 4,000 252
Leslie R. Teso 1997 $100,399 $13,545 3,386 $123
Vice President, Finance, 1996 90,500 15,204 44,227 208
Treasurer and Secretary 1995 79,000 9,184 3,500 199
</TABLE>
____________________
(1) Such compensation represents insurance premiums paid by the Company with
respect to term life insurance for such individual. With respect to Mr.
Corbet, the 1996 figure also includes an additional $226,100 of ordinary
income recognized upon the exercise of the option to purchase, and
subsequent "disqualifying disposition," as defined in Section 422(c)(2) of
the Internal Revenue Code of 1986, as amended, of 30,000 shares of the
Company's Common Stock.
<PAGE>
-9-
OPTIONS
The following table sets forth information concerning options granted
during the fiscal year ended December 31, 1997 under the Company's 1992 Plan to
the Named Officers:
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Individual Grants(2) Stock Price Appreciation for
- ------------------------------------------------------------------------------------------ Option Term (6)
------------------------------
Number of Percent of Total
Securities Options Granted
Underlying to Employees in
Options Granted Fiscal Exercise Price Expiration
Name (#) Year(%)(7) ($/Share) Date 5%($) 10%($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen D. Chubb 2,114 (3) 1.5% $4.00 12-19-07 $ 5,318 $13,477
6,342 (4) 4.4 4.00 12-19-07 15,954 40,430
David L. Corbet 1,517 (3) 1.0 4.00 12-19-07 3,816 9,671
4,550 (4) 3.1 4.00 12-19-07 11,446 29,006
Ying-Jye Wu 1,055 (3) 0.7 4.00 12-19-07 2,654 6,726
3,164 (4) 2.2 4.00 12-19-07 7,959 20,170
Leslie R. Teso 3,386 (5) 2.3 4.00 12-19-07 8,518 21,586
</TABLE>
_________________________
(1) The Company did not grant any SARs in 1997.
(2) Stock options were granted under the Company's 1992 Plan at an exercise
price equal to the fair market value of the Company's Common Stock on the
date of grant.
(3) The options have a term of ten years from the date of grant and become
exercisable as to 100% of the shares covered on the fourth anniversary of
the date of grant.
(4) The options have a term of ten years from the date of grant and become
exercisable as to 33-1/3% of the shares covered on each of the first three
anniversaries of the date of grant.
(5) The options have a term of ten years from the date of grant and become
exercisable as to 25% of the shares covered on each of the first four
anniversaries of the date of grant.
(6) 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.
(7) A total of 145,671 options were granted to employees in 1997 under the
Company's 1992 Plan.
<PAGE>
-10-
The following table sets forth certain information concerning options
held by the Named Officers on December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised In-
Unexercised Options at the-Money Options at
December 31, 1997 (#) December 31, 1997 ($)(2)
Shares Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stephen D. Chubb................... -- $ -- 52,430/165,747 $ 1,085/$10,655
David L. Corbet.................... -- -- 134,092/129,349 289,349/22,145
Ying-Jye Wu........................ -- -- 58,757/47,496 114,780/11,678
Leslie R. Teso..................... -- -- 22,541/38,307 34,366/9,829
</TABLE>
_______________
(1) The Company has never granted any SARs.
(2) Value is based on the difference between the option exercise price and
$4.875, the fair market value of the Company's Common Stock on December 31,
1997, the last trading day for fiscal year ended 1997, multiplied by the
number of shares of Common Stock underlying the options.
COMPENSATION OF DIRECTORS
Currently, non-employee directors do not receive cash compensation for
attendance at meetings of the Board of Directors and of its committees, but
receive compensation in the form of options to purchase Common Stock of the
Company pursuant to the Company's 1992 Non-employee Director Stock Option Plan
(the "Director Plan"). The Director Plan includes two types of option grants:
(a) each non-employee director who first became or becomes a member of the Board
of Directors on or after June 7, 1996 is automatically granted on the date of
such election without further action by the Board, an option to purchase 10,000
shares of the Company's Common Stock ("Initial Option") which vests over a four-
year period and (b) annually, each non-employee director is automatically
granted as of the date of the Annual Meeting of Stockholders in such year an
option, which vests over a one-year period, to purchase 10,000 shares of Common
Stock ("Annual Option"). Any non-employee who becomes a director after the
Annual Meeting of Stockholders in any year shall be entitled to receive, in
addition to the Initial Option, a fraction of the Annual Option equal to (x)
divided by twelve (12), where (x) equals the number of complete months remaining
until the first anniversary of the preceding Annual Meeting of Stockholders.
All options granted pursuant to the Director Plan have an exercise price equal
to the fair market value of the Company's Common Stock on the date of grant and
expire ten years after the date of grant. Directors are also reimbursed for
their expenses incurred in attending meetings of the Board of Directors and
committees thereof.
Directors who are employees of the Company receive no additional
compensation for service on the Board of Directors or its committees.
<PAGE>
-11-
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee") is
composed of Thomas R. Morse, David Rubinfien and T. Stephen Thompson, none of
whom are currently officers or employees of the Company. The functions of the
Committee are to establish salaries and incentive compensation for the Company's
executive officers and to administer the 1992 Plan and the 1992 Employee Stock
Purchase Plan.
The Company's executive compensation programs are designed (i) to attract
and retain experienced and well qualified executives capable of leading the
Company to meet its business objectives, and (ii) to motivate them to enhance
long-term stockholder value. In setting the compensation level for executive
officers, the Committee is guided by the following considerations:
. Compensation levels should be competitive with compensation generally being
paid to executives in the biotechnology industries to ensure the Company's
ability to attract and retain superior executives;
. Each individual executive officer's compensation should reflect the
performance of the Company as a whole, the performance of the officer's
business unit, if applicable, and the performance of the executive officer;
and
. A significant portion of executive officer compensation should be paid in
the form of equity-based incentives to link closely stockholder and
executive interests and to encourage stock ownership by executive officers.
An executive's total compensation package includes a cash salary and bonus
determined by the Committee, 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 next three most highly
compensated executives during fiscal 1997 are listed in the "Summary
Compensation Table" found on page 8. The 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 Committee attempts to keep the
Company's compensation programs competitive by comparing them with those of
other local and national companies in the industry. The Committee also attempts
to balance the compensation level for an individual executive against his or her
specific job requirements, including the individual's influence on obtaining
corporate objectives.
Cash Compensation. The 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
Committee determines any increases in annual salaries and bonuses based on a
comparison of the executive's actual performance against his or her performance
objectives, as well as on various subjective factors. The performance
objectives for each executive depend on his or her area of responsibility and
may include achievement of the performance objectives in the areas of product
commercialization, clinical trials, corporate partnering, and financings, as
well as financial objectives. Among the subjective factors considered by the
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. The Committee also
solicits and considers performance reviews and recommendations from senior
management in establishing compensation levels for all but the Chief Executive
Officer.
<PAGE>
-12-
Equity Compensation. The Company's equity compensation program is
designed to (i) provide long-term incentives to executive officers, (ii) tie
compensation to creating long-term shareholder value, (iii) encourage executive
officers to remain with the Company and promote the Company's business, and (iv)
provide executives with the opportunity to obtain significant, long-term stock
ownership in the Company's Common Stock.
The Committee has granted options to executive officers as the long-term
incentive component of the executive officers' total compensation package. The
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 1997, the Committee only awarded the Company's
executives 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 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 1997 is set forth in the table captioned "Option Grants in
Last Fiscal Year" found on page 9. The total options held by each of these
executives at December 31, 1997 is set forth in the table captioned "Aggregated
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values" found on
page 10.
CEO Compensation. With respect to the compensation of the Company's Chief
Executive Officer, Mr. Chubb's 1997 salary was increased to $205,461 from
$176,000 in 1996. In addition, Mr. Chubb was granted a cash bonus in the amount
of $33,825 for 1997. On December 19, 1997 he received options under the
Company's 1992 Plan to purchase up to 8,456 shares of the Company's Common Stock
at an exercise price of $4.00 per share. These options become exercisable over
a four-year period from the date of grant. All options granted to Mr. Chubb
during 1997 expire ten years from the date of grant and have exercise prices
equal to 100% of the fair market value of the Company's Common Stock as of the
date of grant. In arriving at the level of compensation for Mr. Chubb, the
Committee attempted to measure Mr. Chubb's contribution to the progress made by
the Company during 1997 toward the achievement of the Company's principle
objectives, but the 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. The Committee concluded that the Company had made
significant progress during 1997 towards achieving its objectives, including (i)
submission of a 510(k) Premarket Notification to the U.S. Food and Drug
Administration for the Company's NuMA colon cancer test and (ii) completion of a
private placement of 2,200,000 shares of the Company's Common Stock resulting in
proceeds to the Company, net of commissions and issuance costs, of approximately
$10,904,000.
<PAGE>
-13-
Tax Matters. Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), generally prevents publicly held corporations from
deducting, for federal income tax purposes, compensation in excess of $1 million
paid to certain executives, with certain exceptions. The Compensation Committee
has considered these requirements and exceptions 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.
Respectfully submitted,
Thomas R. Morse
David Rubinfien
T. Stephen Thompson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Thomas R. Morse, David
Rubinfien and T. Stephen Thompson. No member of the Committee is currently, or
has ever been, an officer or employee of the Company or any of its subsidiaries,
or had any relationship with the Company during the last fiscal year that would
require disclosure herein.
During the 1997 fiscal year no executive officer of the Company served as a
member of a compensation committee (or other board committee performing
equivalent functions or, in the absence of any such committee, the entire board
of directors), nor served as a director, of another entity, one of whose
executive officers serves as a director of the Company or serves on the
Company's Compensation Committee.
<PAGE>
-14-
STOCK PERFORMANCE GRAPH
The Stock Performance Graph set forth below compares the cumulative total
stockholder return on the Company's Common Stock from December 31, 1992 to
December 31, 1997, with the cumulative total return of the Nasdaq Market Index
and the Company's four digit SIC Code Index over the same period. The
comparison assumes $100 was invested on December 31, 1992 in the Company's
Common Stock, in the Nasdaq Market Index and in the four digit SIC Code Index
and assumes reinvestment of dividends, if any.
COMPARISON OF CUMULATIVE TOTAL RETURN (l)(2)
[LINE GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
Matritech, Inc. 100.00 67.50 37.50 81.25 170.00 97.50
SIC Code 2835 100.00 99.13 93.23 158.14 145.04 119.32
Nasdaq Market Index 100.00 119.95 125.94 163.35 202.99 248.30
</TABLE>
(1) 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 Media General Financial Services, a source believed to be reliable, but
the Company is not responsible for any errors or omissions in such
information.
<PAGE>
-15-
PROPOSAL II
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of Arthur Andersen LLP,
independent certified public accountants, to serve as auditors for the fiscal
year ending December 31, 1998. Arthur Andersen LLP has served as the Company's
auditors since fiscal 1987. It is expected that a member of the firm 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. 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 or its Amended and Restated By-Laws. If the stockholders do not
ratify the selection of Arthur Andersen LLP as the Company's independent public
accountants for the fiscal year ended December 31, 1998, 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. The Board of Directors recommends a vote FOR the ratification of
this selection.
VOTING PROCEDURES
The presence, 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 establish 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 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.
Proposal I. Directors are elected by a plurality of the votes cast, in
person or by proxy, at the Annual Meeting. The seven nominees receiving 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
directors. Shares represented by all proxies received by the Board of Directors
and not so marked as to withhold authority to vote for any individual nominee or
for all nominees will be voted (unless one or more nominees are unable to serve)
for the election of the nominees. Where the stockholder properly withheld
authority to vote for a particular nominee or nominees, such stockholder's
shares will not be counted toward such nominee or nominees' achievement of a
plurality.
Other Matters. For all other proposals submitted to the stockholders at the
Annual Meeting, the affirmative vote of the majority of shares present, in
person or represented by proxy, and voting on that proposal is required for
approval. Abstentions, as well as broker "non votes" are not considered to have
been voted for such proposal and have the practical effect of reducing the
number of affirmative votes required to achieve a majority for such proposal by
reducing the total number of shares from which the majority is calculated. If
any other matter not discussed in this Proxy Statement should be presented at
the Annual Meeting upon which a vote may be properly taken, 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.
<PAGE>
-16-
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy statement to
be furnished to all stockholders entitled to vote at the next annual meeting of
stockholders of the Company pursuant to SEC Rule 14a-8 must be received at the
Company's principal executive offices not later than December 30, 1998. In
order to curtail controversy as to the date on which a proposal was received by
the Company, it is suggested that proponents submit their proposals by Certified
Mail, Return Receipt Requested. The Amended and Restated By-Laws 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 30 days prior to the first
anniversary of the preceding year's notice of annual meeting; provided, however,
that such notice shall not be required to be given more than 60 days prior to
the annual meeting of stockholders. The notice must contain specified
information about the proposed business or each nominee and the stockholder
making the proposal or nomination.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
Company's Common Stock (collectively, "Reporting Persons") to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
of the Company. Such persons are required by regulations of the SEC to furnish
the Company with copies of all such filings. Based on its review of the copies
of such filings received by it with respect to the fiscal year ended December
31, 1997 and written representations from certain Reporting Persons, the Company
believes that all Reporting Persons complied with all Section 16(a) filing
requirements in the fiscal year ended December 31, 1997.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company. Proxies
will be solicited principally through the mails. Further solicitation of
proxies from some stockholders may be made by directors, officers and regular
employees of the Company personally, by telephone, telegraph or special letter.
No additional compensation, except for reimbursement of reasonable out-of-pocket
expenses will be paid for any such further solicitation. In addition, the
Company may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have stock of the Company registered
in the name of a nominee. The Company will reimburse such persons for their
reasonable out-of-pocket costs.
<PAGE>
Appendix A
----------
MATRITECH, INC.
ANNUAL MEETING OF STOCKHOLDERS OF MATRITECH, INC.
TO BE HELD ON JUNE 19, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MATRITECH, INC.
The undersigned, revoking all prior proxies, hereby appoints Stephen D.
Chubb and Leslie R. Teso, and each of them, with full power of substitution, as
proxies to represent and vote as designated herein, all shares of Common Stock
of Matritech, Inc. (the "Company") which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Stockholders of the Company
to be held at the offices of the Company at 330 Nevada Street, Newton,
Massachusetts 02160 on Friday, June 19, 1998 at 10:00 a.m. local time, and at
all adjournments thereof, upon matters set forth in the Notice of Annual Meeting
of Stockholders and Proxy Statement dated April 29, 1998, a copy of which has
been received by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES AND FOR THE PROPOSAL IN ITEM 2. THE
PROXIES ARE AUTHORIZED, IN THEIR DISCRETION, TO VOTE UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, the signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------ -----------------------------------
- ------------------------------ -----------------------------------
- ------------------------------ -----------------------------------
<PAGE>
-2-
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
MATRITECH, INC.
<TABLE>
<S> <C> <C> <C>
1.) Election of Directors - To elect seven members to the For All Withhold For All Except
Board of Directors to serve until the next Annual Meeting Nominees From All
of Stockholders and until their successors have been Nominees
elected and qualified. [_] [_] [_]
</TABLE>
NOMINEES: J. ROBERT BUCHANAN, STEPHEN D. CHUBB,
DAVID L. CORBET, THOMAS R.MORSE, DAVID RUBINFIEN,
T. STEPHEN THOMPSON AND C. WILLIAM ZADEL.
_____________________________________
Instruction: To withhold authority to vote for one or more
of the nominees listed above, mark the "For All Except"
box and write the nominee(s) name(s) in the space provided
above.
<TABLE>
<S> <C> <C> <C>
2.) To ratify the selection of the firm of Arthur Andersen For Against Abstain
LLP as auditors for the fiscal year ending December 31, [_] [_] [_]
1998.
</TABLE>
3.) To transact such other business as may properly come
before the meeting and any adjournments thereof.
Mark box at right if you plan to attend the Annual Meeting [_]
Mark box at right if an address change or comment has been [_]
noted on the reverse side of this card.
RECORD DATE SHARES:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING PROPOSALS.
Please be sure to sign and date this Proxy. Date:_______________________
- --------------------------------- ----------------------------
Stockholder sign here Co-owner sign here
<PAGE>
-3-
MATRITECH, INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of
Matritech that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted, then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, June 19,
1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
MATRITECH, INC.
