PROPOSAL NO. 2
ELECTION OF DIRECTORS
Presently our Board of Directors consists of eight persons: Christian Williamson, Chairman, James Fields, President, Jon Latorella, Sonja Benjani, David Skerrett, Ralph Caruso and Richard Pyle and George Isaac. Messrs. Willliamson and Pyle had been elected to the Board by vote of Board members October 2, 2008. A ninth Director, Ralph Nagle, resigned effective November 3, 2008 and was replaced by Mr. Isaac on December 1, 2008
At a Board meeting on November 3, 2008 the Directors debated the current difficult situation in which the Company finds itself and resolved to make some changes in the composition of the Board to add individuals who have been active in proposing changes in the direction of the Company and an improvement in its capital structure. Our By-laws provide that the Board of Directors has discretion to increase or decrease the number of Directors and to appoint new directors subject to certain limitations requiring shareholder consent. On December 1, 2008 the Board of Directors voted to (a) to propose to shareholders that they eliminate classification of Directors by term and (b) subject to approval of proposal (a), to fix the number of Directors at seven and to propose that the shareholders elect the following individuals to serve as Directors, each for a one-year term and until his successor shall be elected and qualify:
Dr. Christian T. Williamson
Richard L. Pyle
David Skerrett
Ralph Caruso
Patrick F. Murphy
James Ahern
George G. Isaac
The Board of Directors knows of no reason why any of the Board nominees will be unable to serve their full terms. The Board of Directors may appoint Directors to fill vacancies in the event that one or more Directors leave the Board of Directors or in the event that the size of the Board of Directors is increased.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the close of business on October 31, 2008, there were 22,881,647 shares of Common Stock issued and outstanding. There were also unexercised vested options and warrants issued to purchase 3,050,832 shares of Common Stock outstanding on that date. 2,740,714 issued shares and 717,500 vested and unvested options, warrants, and convertible shares were owned by officers, directors and over 5% shareholders.
The following table sets forth certain information known to us with respect to the beneficial ownership of our Common Stock as of the close of business on October 31, 2008, by:
-Each of our directors;
-Each of our executive officers; -Each person known to us to beneficially own more than 5% of either class of our common stock; and -All of our directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In computing the number of shares beneficially owned by a person and the percentage of ownership of that person, shares of common stock underlying options or warrants held by that person that are currently exercisable or will become exercisable within 60 days of October 31, 2008 are deemed outstanding, while such shares are not deemed outstanding for computing percentage ownership of any other person. To our knowledge, except as indicated in the footnotes to this table, each shareholder identified in the table possesses sole voting and investment power with respect to all shares shown as beneficially owned by such shareholder. Each of our directors and executive officers can be contacted at 100 Cummings Center, Suite 235M, Beverly, Massachusetts 01915.
NUMBER OF SHARES PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
-------------------------- ------------------ --------
Directors
JAMES C. FIELDS 978,705(1) 4.2%
CHRISTIAN T. WILLIAMSON 858,880 3.8%
SONIA P. BEJJANI 92,508(2) *
RICHARD L. PYLE 57,182 *
RALPH CARUSO 22,944 *
DAVID SKERRETT 1,995(3) *
JON R. LATORELLA - *
PAUL DEROCHE - *
GEORGE ISAAC - *
5% or More Shareholders
SPECIAL SITUATION FUNDS
153 E. 53rd Street
55th Floor
New York, NY 10022 1,410,000(4) 6.1%
All directors and executive
officers as a group (10 persons) 3,422,214(5) 14.5% |
