Edgar Filing: V I TECHNOLOGIES INC

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Commission Only (as permitted by
[_] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

V.I. TECHNOLOGIES, INC.
-----------------------
(Name of Registrant as Specified In Its Charter)

_________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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V.I TECHNOLOGIES, INC.
134 Coolidge Avenue
Watertown, Massachusetts 02472

April 27, 2001

Dear Stockholder:

You are cordially invited to attend the 2001 Annual Meeting of Stockholders
of V.I. Technologies, Inc. which will be held at the Charles Hotel, One Bennett
Street, Cambridge, Massachusetts on Thursday, May 24, 2001 at 10:00 a.m. local
time. I look forward to greeting as many of our stockholders as possible.

Details of the business to be conducted at the meeting are given in the
attached Notice of Annual Meeting and Proxy Statement.

Whether or not you plan to attend the meeting, it is important that your
shares be represented and voted at the meeting. Therefore, I urge you to sign,
date and promptly return the enclosed proxy in the enclosed envelope so that
your shares will be represented at the meeting. If you so desire, you may
withdraw your proxy and vote in person at the meeting.

We look forward to meeting those of you who will be able to attend the
meeting.

Sincerely,

John R. Barr
President and Chief Executive Officer

V.I. TECHNOLOGIES, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held Thursday, May 24, 2001

To the Stockholders of V.I. Technologies, Inc.:

NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Stockholders of V.I.
Technologies, Inc., a Delaware corporation, will be held at the Charles Hotel,
One Bennett Street, Cambridge, Massachusetts on Thursday, May 24, 2001 at 10:00
a.m. local time, for the following purposes:

1. To elect four Class III Directors to serve until the 2004 Annual
Meeting of Stockholders or until their successors are elected and
qualified.

2. To amend the Company's 1998 Director Stock Option Plan (the "1998
Director Plan") to increase the maximum number of shares of the
Company's common stock for which options may be granted under the 1998
Director Plan from 150,000 shares to 250,000 shares.

3. To amend the Company's Certificate of Incorporation to increase the
total number of authorized shares from 36,000,000 to 46,000,000 and to
increase the number of authorized shares of common stock from
35,000,000 to 45,000,000.

4. To ratify the appointment of KPMG LLP as the Company's independent
accountants for the current fiscal year.

5. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.

Only stockholders of record at the close of business on April 16, 2001 will
be entitled to notice of and to vote at the meeting and any adjournments or
postponements thereof.

It is important that your shares be represented at the meeting. Therefore,
whether or not you plan to attend, please complete your proxy card and return it
in the enclosed envelope, which requires to postage if mailed in the United
States. If you attend the meeting and wish to vote in person, your proxy will
not be used.

By Order of the Board of Directors

June Heck
Secretary
Dated: April 27, 2001

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PROXY STATEMENT
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General Information

This Proxy Statement and Notice of Annual Meeting of Stockholders are being
provided and the accompanying proxy is being solicited by the Board of Directors
of V.I. Technologies, Inc. for use at the Company's 2001 Annual Meeting of
Stockholders to be held at the Charles Hotel, One Bennett Street, Cambridge,
Massachusetts on Thursday, May 24, 2001 at 10:00 a.m. local time, or at any
adjournment or postponement of the meeting, for the purposes set forth in this
Proxy Statement and the foregoing Notice of Annual Meeting of Stockholders.
This Proxy Statement and accompanying proxy card are being mailed on or about
April 27, 2001 to all stockholders entitled to notice of and to vote at the
meeting. The principal executive office of V.I. Technologies, Inc. is located
at 134 Coolidge Avenue, Watertown, Massachusetts 02472 and the Company's
telephone number is (617) 926-1551.

Solicitation

The cost of solicitation of proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company.
Copies of solicitation materials will be furnished to brokerage houses,
fiduciaries, and custodians to forward to beneficial owners of common stock,
$0.01 par value per share, of the Company held in their names. In addition, the
Company will reimburse brokerage firms and other persons representing beneficial
owners of stock for their expenses in forwarding solicitation materials to such
beneficial owners. Original solicitation of proxies by mail may be supplemented
by telephone, telegram and personal solicitation by Directors, officers and
other regular employees of the Company. No additional compensation will be paid
to Directors, officers or other regular employees for such services.

Record Date, Voting Rights and Outstanding Shares

Only holders of record at the close of business on April 16, 2001, will be
entitled to notice of, and to vote at, the meeting. As of April 16, 2000, the
Company had outstanding _________ shares of common stock. Each share of common
stock is entitled to one vote on each proposal that will come before the
meeting. A majority of the outstanding shares of common stock will constitute a
quorum at the meeting. Votes withheld, abstentions and broker non-votes (where
a broker or nominee does not exercise discretionary authority to vote on a
matter) are counted for purposes of determining the presence or absence of a
quorum for the transaction of business.

Revocability of Proxy and Voting of Shares

Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised. It may be revoked by filing with the Secretary of the
Company, at the principal executive offices of the Company, 134 Coolidge Avenue,
Watertown, Massachusetts 02472, an instrument of revocation or a duly executed
proxy bearing a later date. It may also be revoked by attendance at the meeting
and an election given to the Secretary of the Company to vote in

person. If not revoked, the proxy will be voted at the meeting in accordance
with the stockholder's instructions indicated on the proxy card. If no
instructions are indicated, the proxy will be voted (i) FOR the election of the
Class III Directors described herein; (ii) FOR the amendment to the Company's
1998 Director Plan to increase the number of shares of the Company's common
stock for which awards may be granted under the 1998 Director Plan from 150,000
shares to 250,000 shares; (iii) FOR an increase in the authorized shares of
common stock under the Company's Certificate of Incorporation from 35,000,000 to
45,000,000; (iv) FOR the ratification of the appointment of KPMG LLP as the
Company's independent accountants for the current fiscal year, and (v) in
accordance with the judgment of the proxies as to any other matter that may be
properly brought before the meeting or any adjournments or postponements
thereof.

Stockholder Proposals

The Company's Amended and Restated Bylaws require a stockholder who wishes
to bring business before or propose director nominations at an annual meeting to
give written notice to the Secretary of the Company not less than 50 days nor
more than 75 days before the meeting date, unless less than 65 days' notice or
public disclosure of the meeting date is given, in which case the stockholder's
notice must be received within 15 days after such notice or disclosure is given.
The notice must contain specified information about the proposed business or
nominee(s) and the stockholder making the proposal or nomination(s).
Accordingly, to be brought before the Annual Meeting of Stockholders, proposals
must be received by not later than the close of business on May 14, 2001.

Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2002 Annual Meeting of Stockholders must
be received by the Secretary of the Company no later than December 14, 2001 in
order to be included in the Proxy Statement and form of proxy relating to that
meeting.

SECURITY OWNERSHIP BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to
beneficial ownership of the Company's shares of common stock as of January 31,
2001, (i) by each person (or group of affiliated persons) who is known by the
Company to own beneficially more than five percent of the Company's outstanding
shares of common stock; (ii) by each of the Company's executive officers named
in the Summary Compensation Table (the "Named Executive Officers"), (iii) by
each of the Company's Directors; and (iv) by all current Directors and executive
officers as a group. Except as indicated in the footnotes to this table, the
persons named in the table have sole voting and investment power with respect to
all shares shown as beneficially owned by them.

Number of Shares
Name of Beneficial Owner Beneficially Owned/(1)/ Percent of Class
------------------------ ---------------------- ----------------

5% Stockholders

Ampersand Funds/(2)/ 7,637,363 34%
55 William Street, Suite 240
Wellesley, MA 02481
New York Blood Center, Inc./(3)/ 2,434,704 11%
310 East 67th Street
New York, NY 10021-6295
J.P. Morgan Partners LLC 1,801,470 8%
1221 Avenue of the Americas
New York, NY 10020/(4)/
Pall Corporation/(5)/ 2,253,022 10%
2200 Northern Boulevard
East Hills, NY 11548
Massachusetts Financial Services Company/(6)/ 1,137,719 5%
500 Boylston Street
Boston, MA 02116

Named Executive
Officers

Samuel K. Ackerman, M.D. 428,637 2%
John R. Barr/(7)/ 325,715 1%
Thomas T. Higgins/(8)/ 135,000 *
Bernadette Alford -

Other Directors

Richard A. Charpie/(9)/ 7,647,863 34%
Jeremy Hayward-Surry/(10)/ - -
Bernard Horowitz, Ph.D./(11)/ 320,337 2%
Irwin Lerner/(12)/ 31,624 *
Joseph Limber - -
Peter D. Parker/(13)/ 7,647,863 34%
Doros Platika - -
David Tendler/(14)/ 2,449,704 11%
Damion Wicker, M.D./(15)/ 1,811,970 8%
All Current Directors and Executive
Officers as a Group (14 persons)/(16)/ 13,150,850 57%

___________________
* Indicates less than one percent

(1) Beneficial ownership of common stock is determined in accordance with the
rules of the Securities and Exchange Commission, and includes shares for
which the holder has sole or shared voting or investment power. Shares of
common stock subject to options currently exercisable or which become
exercisable on or before March 31, 2001 are deemed to be beneficially owned
and outstanding by the person holding such options and, in accordance with
the rules of the Securities and Exchange Commission, are included for
purposes of computing the percentage ownership of the person holding such
options, but are not deemed outstanding for purposes of computing the
percentage ownership of any other person.

(2) Consists of 980,000 shares held by Ampersand IV Limited Partnership ("AMP
IV"), 20,000 shares held by Ampersand IV Companion Fund Limited Partnership
("AMP IV CF"), 5,029,687 shares held by Ampersand Specialty Materials and
Chemicals III Limited Partnership ("ASMC III"), 81,782 shares held by
Ampersand Specialty Materials and Chemicals III Companion Fund Limited
Partnership ("ASMC III CF"), 1,052,342 shares held by Ampersand Specialty
Materials and Chemicals II Limited Partnership ("ASMC II"), 331,487 shares
held by Laboratory Partners I Limited Partnership ("Lab Partners") and
142,065 shares held by Laboratory Partners Companion Fund Limited
Partnership ("Lab Partners CF"). AMP-IV Management Company Limited
Liability Company is the general partner of AMP IV and AMP IV CF. ASMC-
III MCLP LLP is the general partner of ASMC-III Management Company Limited
Partnership, which itself is the general partner of both ASMC III and ASMC
III CF and has voting and investment control over the shares held by those
two entities. ASMC-II MCLP LLP is the general partner of ASMC-II
Management Company Limited Partnership, which itself is the general partner
of ASMC II and has voting and investment control over the shares held by
ASMC II. Ampersand Lab Partners MCLP LLP is the general partner of
Ampersand Lab Partners Management Company Limited Partnership, which itself
is the general partner of both Lab Partners and Lab Partners CF and has
voting and investment control over the shares held by those two entities.
The general partners of AMP-IV Management Company Limited Liability Company
who share voting and investment control over the shares controlled by AMP-
IV Management Company Limited Liability Company are Richard A. Charpie,
Peter D. Parker, K Kachadurian, David J. Parker, Stuart A. Auerbach,
Charles D. Yie and Samuel K. Ackerman. The general partners of ASMC-III
MCLP LLP, who share voting and investment control over the shares
controlled by ASMC-III MCLP LLP, are Richard A. Charpie, Peter D. Parker, K
Kachadurian, David J. Parker, Stuart A. Auerbach, and Charles D. Yie.
Richard A. Charpie, Peter D. Parker, Stuart A. Auerbach and Charles D. Yie
are the general partners of ASMC-II MCLP LLP and Ampersand Lab Partners
MCLP LLP and share voting and investment control over the shares controlled
by those entities. Richard A. Charpie is the Managing General Partner of
each of AMP-IV Management Company Limited Liability Company, ASMC-II MCLP
LLP, ASMC-III MCLP LLP, and Ampersand Lab Partners MCLP LLP. Richard A.
Charpie, Peter D. Parker and Samuel K. Ackerman are Directors of the
Company.

(3) Mr. Tendler, a Director of the Company, is a member of the Board of
Trustees and Executive Committee of the New York Blood Center, Inc.
("NYBC").

(4) Dr. Wicker, a Director of the Company, is a Managing Director of J.P.
Morgan Partners LLC.

(5) Mr. Hayward-Surry, a Director of the Company, is the President and a
director of Pall Corporation.

(6) Based on the information provided in the Schedule 13G filed by
Massachusetts Financial Services Company ("MFS") with the Securities and
Exchange Commission on February 12, 2001. MFS has sole voting power over
779,375 shares and sole dispositive power over 996,735 shares.

(7) Includes 325,715 shares issuable upon the exercise of outstanding options
exercisable on or before March 31, 2001.

(8) Includes 135,000 shares issuable upon the exercise of outstanding options
exercisable on or before March 31, 2001.

(9) Consists of shares described in note (2) of which Dr. Charpie may be
considered the beneficial owner and 10,500 shares issuable upon the
exercise of outstanding options exercisable on or before March 31, 2001.
Dr. Charpie disclaims beneficial ownership of the shares described in note
(2) except to the extent of his pecuniary interest therein.

(10) Excludes the shares held by Pall Corporation.

(11) Consists of 27,222 shares and 293,115 shares issuable upon the exercise
of outstanding options exercisable on or before March 31, 2001.

(12) Consists of 14,416 shares and 17,208 shares issuable upon the exercise of
outstanding options exercisable on or before March 31, 2001.

(13) Consists of shares described in note (2) of which Mr. Parker may be
considered the beneficial owner and 10,500 shares issuable upon the
exercise of outstanding options exercisable on or before March 31, 2001.
Mr. Parker disclaims beneficial ownership of the shares described in note 2
shares except to the extent of his pecuniary interest therein.

(14) Consists of 2,434,704 shares held by the NYBC, of which Mr. Tendler may
be considered the beneficial owner, 3,500 shares directly owned by Mr.
Tendler and 11,500 shares issuable upon the exercise of outstanding
options exercisable on or before March 31, 2001. Mr. Tendler disclaims
beneficial ownership of the shares held by NYBC.

(15) Consists of shares held by J.P. Morgan Partners LLC of which Dr. Wicker may
be considered the beneficial owner and 10,500 shares issuable upon the
exercise of outstanding options exercisable on or before March 31, 2001.
Dr. Wicker disclaims beneficial ownership of shares held by J.P. Morgan
Partners LLC except to the extent of his pecuniary interest therein.

(16) Includes 814,038 shares issuable upon the exercise of outstanding options
exercisable on or before March 31, 2001.

PROPOSAL 1: ELECTION OF DIRECTORS

The Board is divided into three classes. One class of Directors is elected
each year for a three-year term. The term of the Company's Class III Directors
will expire at this meeting. The nominees for Class III Director are Samuel K.
Ackerman, M.D., David Tendler, Doros Platika, M.D. and Joseph M. Limber.
Messrs. Ackerman, Tendler, Platika and Limber are currently Class III Directors
of the Company and are available for re-election as Class III Directors. The
Class III Directors elected in 2001 will serve for a term of three years which
will expire at the Company's 2004 Annual Meeting of Stockholders or when their
successors are elected and qualified. It is intended that the persons named as
Proxies will vote for Samuel K. Ackerman, M.D., David Tendler, Doros Platika,
M.D. and Joseph M. Limber for election to the Board as Class III Directors.

Votes Required to Elect the Directors

The affirmative vote of the holders of a plurality of the common stock
represented and voting at the meeting will be required to elect Samuel K.
Ackerman, M.D., David Tendler, Doros Platika, M.D. and Joseph M. Limber. If
Messrs. Ackerman, Tendler, Platika and Limber are re-elected as Directors at the
meeting, the Board will consist of a total of ten Directors, nine of whom have
principal occupations outside the Company, one of whom is the President and
Chief Executive Officer.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE NAMED NOMINEES

Biographical Information

Biographical and certain other information concerning the Directors of the
Company is set forth below:

Class III Nominees for Election for a Three-year Term Expiring at the 2004
Annual Meeting

Samuel K. Ackerman, M.D., age 53, co-founded Pentose in June 1995 and served
as President, Chief Executive Officer and Director of Pentose from February 1997
until the merger with the Company on November 12, 1999. Dr. Ackerman became the
Chairman of the Board of Directors in September 2000. He previously served as
Vice President, Development and Regulatory Affairs of OraVax, Inc. from December
1993 to January 1997. From May 1986 to November 1993 he was Senior Vice
President, Medical and Regulatory Affairs of XOMA Corporation and before that
directed the Investigational New Drug Division of the Center for Biologics
Evaluation and Research of the Food and Drug Administration.

David Tendler, age 63, has served as a Director of the Company since
December 1994. From 1994 until September 2000, he served as the Chairman of the
Board of Directors. Since September 2000, he has been the Chairman of the
Executive Committee. In 1985, Mr. Tendler founded his own international
consulting firm, Tendler Beretz LLC, and has since remained as President and
Chief Executive Officer. In 1981, he was named Chairman and CEO of Phibro
Corporation, which subsequently acquired Salomon Brothers--at which point Mr.
Tendler became Co-Chairman and CEO of Phibro-Salomon. He joined Philipp Brothers
(the predecessor to Englehard Minerals & Chemicals Corp./Phibro Corp.) in 1960,
managed Far Eastern operations for more than seven years, and was promoted to
President of Phibro in 1975. He remains active in the private equity and
consulting businesses, and in various charitable organizations, including
service as a director of BioTechnology General Corporation and a member of the
Board of Trustees and the Executive Committee of the NYBC. Mr. Tendler has a
B.B.A. from the City University of New York.

Doris Platika, M.D., age 47, has served as a Director since August 2000.
Dr. Platika is President and CEO of Curis, Inc., a developer of biotechnology
products based on technologies in regenerative medicines. Dr. Platika has been
the CEO of Ontogeny, Inc. since July 1996. Prior to joining Ontogeny, Dr.
Platika completed residencies in medicine and neurology at Massachusetts General
Hospital (MGH) where he rose to Chief Resident. He completed his post-doctoral
study at Massachusetts Institute of Technologies' Whitehead Institute and at MGH
in association with Harvard Medical School. Dr. Platika also served on the
faculties of Harvard Medical School and Albert Einstein College of Medicine as
head of gene therapy.

Joseph M. Limber, age ___, has served as a Director since February 2000.
Mr. Limber is currently the President and CEO of ACLARA BioSciences, Inc., an
emerging pharmaceutical drug discovery tools company, and has been with ACLARA
since 1998. From 1996 to 1998 Mr. Limber was the President and COO of Praecis
Pharmaceuticals. Prior to this position, he served as Executive Vice President
and Vice President of Marketing and Sales of SEQUUS Pharmaceuticals _____, Inc.
Mr. Limber also held management positions in marketing and sales with Syntex
Corporation from 1987 to 1992 and with Ciba-Geigy Corporation from 1975 to 1987.
Mr. Limber holds a B.A. from Duquesne University.

Class I Directors Continuing in Office Until the 2002 Annual Meeting

John R. Barr, age 44, joined the Company as President, Chief Executive
Officer and a Director in November 1997. Previously, Mr. Barr served as
President of North American Operations at

Haemonetics Corporation from 1995 to 1997 where he had responsibility for
Haemonetics' blood bank, commercial plasma and blood bank services businesses.
He also managed the global manufacturing and North American research and
development functions and served as a member of the Board of Directors of
Haemonetics. Prior to joining Haemonetics in 1990, he held various positions at
Baxter Healthcare Corporation. Mr. Barr has an undergraduate degree in
Biomedical Engineering from the University of Pennsylvania and an M.M. from the
Kellogg School of Management at Northwestern University.

Richard A. Charpie, Ph.D., age 49, has served as a Director of the Company
since October 1995. Dr. Charpie served as the Chief Executive Officer of the
Company from August 1997 to November 1997. He was the Vice President of the
Company from November 1997 until January 1998. Dr. Charpie has been the
Managing General Partner of Ampersand Ventures and all of its affiliated
partnerships ("Ampersand") since he founded Ampersand in 1988 as a spin-off of
the venture capital group of PaineWebber Incorporated. Currently, Dr. Charpie
serves as a director of TriPath Imaging and of several privately-held companies.
Dr. Charpie holds an M.S. in Physics and a Ph.D. in Applied Economics and
Finance, both from the Massachusetts Institute of Technology.

Irwin Lerner, age 70, has served as a Director of the Company since
September 1996. He is the former Chairman of the Board of Directors, Chairman
of the Executive Committee, President and Chief Executive Officer of Hoffmann-
LaRoche Inc., having retired in September 1993 after being an employee of the
company for over 31 years. Mr. Lerner is the Chairman of the Board of Medarex,
Inc. and serves on the boards of Humana Inc., Public Service Enterprise Group,
Covance Inc. and Axys Pharmaceuticals. He has been a member of the Board of
Project Hope and has chaired the New Jersey Governor's Council for a Drug-Free
Workplace. He served for twelve years on the Board of Pharmaceutical
Manufacturers Association (now PhRMA), including chairing the Association's FDA
Issues Committee and the PMA Foundation. Mr. Lerner has served on the Boards of
the National Committee for Quality Health Care, the Partnership for New Jersey
and the Center for Advanced Biotechnology and Medicine of Rutgers University.
He received his B.S. and M.B.A. degrees from Rutgers University, where he is
currently the Distinguished Executive-in-Residence at the Graduate School of
Management.

Class II Directors Continuing in Office Until the 2003 Annual Meeting

Jeremy Hayward-Surry, age 58, has served as a Director of the Company since
December 1997. He has been the President of Pall Corporation since July 1994
and a member of its Board of Directors since April 1993. Mr. Hayward-Surry was
also the Treasurer and Chief Financial Officer of Pall from August 1992 until
December 1997 and Executive Vice President of Pall from 1992 to July 1994. Mr.
Hayward-Surry is a Fellow of the Institute of Chartered Accountants in England
and Wales.

Peter D. Parker, age 50, has served as a Director of the Company since
October 1995. After fourteen years at AMAX, a metals company, Mr. Parker joined
Ampersand in 1989 to lead its first specialty materials venture capital
partnership, Ampersand Specialty Materials Ventures Limited Partnership, and Mr.
Parker is a General Partner of Ampersand Ventures. He currently serves as a
director of Lighting Technologies International, and as the Chairman of
CoPharma,

Inc., MicroPack Corporation and Protein Ingredient Technologies. He holds an
M.S. in Chemical Metallurgy from Columbia University.

Damion E. Wicker, M.D., age 40, has served as a Director of the Company
since May 1997. Dr. Wicker is a General Partner of Chase Capital Partners.
Previously, Dr. Wicker was President of Adams Scientific since July 1991, and,
prior to that, held positions with MBW Venture Partners and Alexon, Inc. Dr.
Wicker was also a Commonwealth Fund Medical Fellow for the National Institute of
Health. He currently is a director of Landec Corporation and several privately-
held health care companies. Dr. Wicker received a B.S. with Honors from the
Massachusetts Institute of Technology, an M.D. from Johns Hopkins University and
holds an M.B.A. from The Wharton School of the University of Pennsylvania.

Dr. Bernard Horowitz will not be standing for reelection to the Board.

Board Committees and Meetings

During the fiscal year ended December 30, 2000 ("Fiscal Year 2000"), the
Board of Directors held 5 meetings. The Board has an Audit Committee and a
Compensation Committee. There is no Nominating Committee or any committee
performing the functions of a nominating committee.

The Audit Committee consists of Dr. Charpie and Mr. Hayward-Surry, with Mr.
Hayward-Surry serving as Chairman. Neither Dr. Charpie nor Mr. Hayward-Surry
are current employees of the Company. The Audit Committee selects and evaluates
the Company's independent auditors, reviews the audited financial statements and
discusses the adequacy of the Company's internal controls with management and
the auditors. The Audit Committee met [one] time during the fiscal year ended
December 30, 2000. Each member of the Audit Committee is an "independent
director" as defined by the current rules of the Nasdaq Stock Market. The Audit
Committee operates under a written charter adopted by the board, a copy of which
is included as Appendix A to this proxy statement. For information about the
Audit Committee, see the "Audit Committee Report" below.

The Compensation Committee of the Board of Directors is currently composed
of Mr. Lerner, Mr. Parker and Dr. Wicker, with Mr. Lerner serving as Chairman.
None of the Compensation Committee members are employees of the Company. The
Compensation Committee determines the compensation to be paid to all executive
officers of the Company, including the Chief Executive Officer. The
Compensation Committee's duties include the administration of the Company's 1998
Director Plan. The Compensation Committee met once in Fiscal Year 2000.

PROPOSAL 2: AMENDMENT OF THE COMPANY'S 1998 DIRECTOR STOCK OPTION PLAN TO
INCREASE THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK FOR WHICH OPTIONS MAY BE
GRANTED UNDER THE 1998 DIRECTOR STOCK OPTION PLAN FROM 150,000 SHARES TO 250,000
SHARES

A proposal will be presented at the meeting that the Stockholders approve an
amendment to the Company's 1998 Director Stock Option Plan (the "1998 Director
Plan"), which is included as Appendix B to this proxy statement, to increase the
maximum shares of common stock for which options may be granted under the 1998
Director Plan from 150,000 shares to 250,000 shares, subject to adjustment for
stock splits, stock dividends and certain transactions affecting the Company's
capital stock. In order to ensure that sufficient shares are available for
options over the next few years, the Board of Directors has voted to increase
the number of shares for which awards may be granted under the 1998 Director
Plan by 100,000 shares.

General

In February 1998, the Company adopted the 1998 Director Plan to attract and
retain qualified persons to serve as Directors of the Company and to encourage
ownership of the common stock by such Directors. All of the Directors who are
not employees of the Company (the "Eligible Directors") are eligible to
participate in the 1998 Director Plan. The Company currently has 9 Eligible
Directors, but no options are granted under the 1998 Director Plan to any
Director who is prohibited by his or her affiliates or employers, or for any
other reason, from receiving stock options from the Company.

The 1998 Director Plan, as adopted in February 1998, provided for the grant
of an option to purchase 5,000 shares of common stock to each Eligible Director
upon election and upon each reelection to the Board and to each Eligible
Director who continued in office as a Director following a meeting of the
Stockholders of the Company at which any Directors were elected or reelected.
The term of these options was ten years and they became fully exercisable one
year after the date of grant if and only if the option holder remained a
Director at the opening of business on that anniversary date.

The 1998 Director Plan was subsequently amended, effective October 1998.
With these amendments, the provision for granting an option for the purchase of
5,000 shares of common stock was replaced with four kinds of option grants, each
of which is described below: (i) automatic initial grant of options on October
9, 1998; (ii) automatic grant of options upon initial election to the Board
subsequent to October 9, 1998; (iii) automatic annual grant of options; and (iv)
additional automatic initial grant of options on October 9, 1998. The term of
all options granted under the 1998 Director Plan as amended continues to be ten
years from the date of the grant. The exercise price for all options granted
under the 1998 Director Plan is equal to the last sale price for the common
stock on the business day immediately preceding the date of grant. The exercise
price may be paid in cash or shares. The 1998 Director Plan was amended again,
effective May 21, 1999. This amendment increased the number of shares available
for grant under the plan from 89,445 shares to 150,000 shares.

The plan provisions for the automatic initial grant provide that each
Eligible Director who was a member of the Board on October 9, 1998 automatically
received a grant of an option to purchase 15,000 shares of common stock. This
grant becomes exercisable in four equal installments occurring on the six month,
two-year, three-year and four-year anniversaries of the date of grant, if and
only if the option holder remains a Director of the Company at the opening of
business on the respective anniversary dates.

The plan provisions for the automatic grant of options upon initial election
to the Board subsequent to October 9, 1998 provide that each Eligible Director
who is initially elected to the Board after October 9, 1998 is automatically
granted an option to purchase 15,000 shares of common stock. This grant becomes
exercisable in four equal installments occurring on the six month, two-year,
three-year and four-year anniversaries of the date of grant, if and only if the
option holder remains a Director of the Company at the opening of business on
the respective anniversary dates.

The plan provisions for the automatic annual grant of options provide that
each Eligible Director who is reelected or continues in office as a Director of
the Company following a meeting of the Stockholders of the Company at which any
Directors are elected or reelected will automatically receive an option to
purchase 2,000 shares of common stock. This grant becomes fully exercisable on
the first anniversary of the date of grant, provided that the option holder
remains a Director of the Company at the opening of business on such date.

The plan provisions for the additional automatic initial grant of options on
October 9, 1998 provide that each Eligible Director who was a member of the
Board on October 9, 1998 automatically received a grant of an option to purchase
2,000 shares of common stock. This grant becomes fully exercisable on the first
anniversary of the date of grant, provided that the option holder remains a
Director of the Company at the opening of business on such date.

Options Granted To Date under the 1998 Director Plan and Shares Available for
Future Grants

As of March 31, 2001, options to purchase an aggregate of 114,000 shares of
common stock had been granted and were outstanding under the 1998 Director Plan.
Currently, 36,000 shares of common stock remain available for awards under the
1998 Director Plan. Under the 1998 Director Plan as proposed to be amended,
136,000 shares would be available for awards.

Federal Income Tax Consequences Relating to 1998 Director Plan Options

Options granted under the 1998 Director Plan are nonstatutory stock options.
No income is realized by the Director at the time a nonstatutory stock option is
granted. Upon exercise of an option granted under the 1998 Director Plan, (a)
ordinary income is realized by the Director in an amount equal to the difference
between the option price and the fair market value of the shares on the date of
exercise and (b) the Company receives a tax deduction for the same amount. Upon
disposition of the shares received upon exercise of an option granted under the
1998 Director Plan, appreciation or depreciation after the date of exercise is
treated as a short-term or long term capital gain or loss and will not result in
any deduction by the Company.

Votes Required to Approve the Amendment

The affirmative vote of the holders of a majority of the shares of common
stock represented and voting at the meeting will be required to amend the 1998
Director Plan to increase the maximum number of shares of common stock for which
options may be granted under the 1998 Director Plan from 150,000 shares to
250,000 shares.

The Board of Directors believes that the ability of the Company to grant
options to directors under the 1998 Director Plan is essential to attracting and
retaining qualified directors for the Company. Therefore, the Board of
Directors believes that the proposed amendment to the 1998 Director Plan is in
the best interests of the Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF PROPOSAL 2.

PROPOSAL 3: PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

On February 6, 2001, the Board of Directors of the Company approved and
recommended to the stockholders that Article FOURTH of the Company's Certificate
of Incorporation be amended to increase the number of authorized shares of its
capital stock from 36,000,000 to 46,000,000 shares and the number of authorized
shares of its common stock from 35,000,000 to 45,000,000 shares, subject to
stockholder approval of the proposed amendment.

The principal reason for the proposed amendment is to ensure that a
sufficient number of shares of common stock are available for future use by the
Company. As of March 31, 2001, there were 22,486,978 shares of common stock
issued and outstanding, 3,000,000 shares of common stock reserved for issuance
under the 1998 Stock Option Plan, 1,000,000 shares of common stock reserved for
issuance under the 1999 Supplemental Stock Option Plan, and 150,000 shares of
common stock reserved for issuance under the Director Stock Option Plan.
Accordingly, only approximately 8,363,022 shares of common stock would be
available for future use without any increase in the number of authorized
shares. If the proposed amendment is adopted by the stockholders, the additional
authorized common stock would be available for issuance from time to time for
such corporate purposes as financings, acquisitions, stock splits and stock
dividends, as the Board of Directors may deem appropriate, without delay or the
necessity of a special stockholders' meeting to approve a further amendment to
the Certificate of Incorporation. No further action on the part of the Company's
stockholders would be necessary to issue additional shares of common stock
unless required by applicable law or regulations or under the rules governing
the Nasdaq National Market or any stock exchange on which the common stock may
then be listed.

The holders of any additional shares of common stock issued in the future
would have the same rights as the holders of common stock currently outstanding.
Those rights do not include preemptive rights with respect to the future
issuance of any additional shares. The issuance of additional shares of common
stock, while providing desirable flexibility in carrying out corporate purposes,
could have the effect of diluting the interests of existing holders of common
stock.

Votes Required to Approve the Amendment

The affirmative vote of the holders of a majority of the shares of common
stock will be required to approve the proposed amendment to the Certificate of
Incorporation. Therefore, abstentions and broker non-votes will have the effect
of votes against this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF PROPOSAL 3.

PROPOSAL 4: RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors of the Company has appointed KPMG LLP, independent
accountants, to audit the Company's consolidated financial statements for the
fiscal year ending December 29, 2001, and recommends that the stockholders vote
for ratification of such appointment. A representative of KPMG LLP will be
present at the meeting and will be available to respond to appropriate
stockholders' questions and to make a statement if he or she desires to do so.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF PROPOSAL 4.

ADDITIONAL INFORMATION

Management

Officers are elected annually by the Board and serve at the discretion of
the Board. Set forth below is information regarding the current executive
officers of the Company who are not Directors of the Company:

Name Age Position
---- --- --------
Thomas T. Higgins 49 Chief Financial Officer and Executive Vice
President, Operations

Bernadette L. Alford, 51 Executive Vice President of Development,
Ph.D. Regulatory and Clinical Affairs

Thomas T. Higgins has served as Chief Financial Officer and Executive Vice
President, Operations of the Company since June 1998. Prior to joining the
Company, Mr. Higgins was with the Cabot Corporation from 1985 to 1997, most
recently as President of Distrigas of Massachusetts Corporation, a subsidiary of
the Cabot Corporation with revenues of $190 million. Also in 1997, Mr. Higgins
was Executive Vice President and Chief Operating Officer of Cabot's Liquified
Natural Gas Division. From 1989 to 1997, Mr. Higgins served the Cabot
Corporation in Asia, as Vice President and General Manager of the Pacific Asia
Carbon Black Division in Malaysia (1996-1997), Managing Director in Indonesia
(1990-1995) and Director of New Ventures in Japan (1989-1990). Mr. Higgins
holds a B.B.A. from Boston University.

Bernadette L. Alford joined the Company in May 2000 and became Executive
Vice President of Development, Regulatory and Clinical Affairs in September
2000. Prior to joining Vitex, Dr. Alford was Vice President, Regulatory Affairs,
of Biopure Corporation of Cambridge, MA, where she was responsible for Biopure's
regulatory and quality functions. From 1994 to 1998 Dr. Alford was Senior Vice
President, Product Development at Alexion Pharmaceuticals, Inc. where she was
responsible for clinical and regulatory affairs, compliance and validation for
the company's immunoregulatory therapeutics. Dr. Alford received a Ph.D. in
molecular biology and biochemistry from Texas University and has also received
fellowships from the Massachusetts Institute of Technology and Baylor College of
Medicine.

There are no family relationships between any director, executive officer,
or person nominated or chosen by the Company to become a director or executive
officer of the Company.

Compensation of Directors

Mr. Tendler received $40,000 last year for his services as Chairman of the
Company's Board of Directors and Chairman of the Executive Committee. Mr. Lerner
received $1,000 for each meeting of the Board or of any committee of the Board
which he attends. Dr. Horowitz received $200 per hour for his services as a
consultant to the Company. All members of the Company's Board receive
reimbursement of
15

expenses associated with their attendance of meetings of the Board or of any
committee thereof of which they are a member.

In addition, directors who are not also officers or employees of the
Company receive grants of options under the 1998 Director Stock Option Plan, as
amended. This plan provides for four kinds of option grants, (i) automatic
initial grant of options on October 9, 1998; (ii) automatic grant of options
upon initial election to the Board subsequent to October 9, 1998; (iii)
automatic annual grant of options; and (iv) additional automatic initial grant
of options on October 9, 1998. The term of all options granted under the 1998
Director Plan, as amended, is ten years from the date of grant. The exercise
price for all options granted under the 1998 Director Plan, as amended, is equal
to the last sale price for the common stock on the business day immediately
preceding the date of grant. The exercise price may be paid in cash or shares.

Pursuant to the 1998 Director Plan, Mr. Tendler, Dr. Charpie, Mr. Parker,
Mr. Lerner and Dr. Wicker each received an automatic annual grant of options on
December 30, 2000 to purchase 2,000 shares of common stock.

Mr. Hayward-Surry is prohibited by his employer from receiving stock
options from the Company and has not received any grants under the 1998 Director
Plan. In 2000, Mr. Hayward-Surry received cash compensation in the form of a
[$14,000] annual retainer and a [$2,000] per meeting fee for a total of
[$28,000].

EXECUTIVE COMPENSATION

The following table provides certain summary information concerning
compensation (including salary, bonuses, stock options, and certain other
compensation) paid by the Company for services in all capacities for fiscal
years ended December 30, 2000, January 1, 2000, January 2, 1999, and December
31, 1997 to its Chief Executive Officer and to each of the other persons who
served as executive officers of the Company during Fiscal Year 2000 and whose
salary plus bonus exceeded $100,000 in Fiscal Year 2000 (both being hereinafter
referred to as the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

Annual Long-Term
Compensation Compensation
------------
Awards
------
-------------------------------------------------------------------------------------------------------------
Name and Year Salary($) Bonus Securities All Other
Principal Position Underlying Compensation
Options (1) ($) (2)
-------------------------------------------------------------------------------------------------------------

John R. Barr 2000 338,808 100,000 150,000 10,000
President and Chief 1999 324,231 122,500 50,000
Executive Officer 1998 294,811 22,500

Thomas T. Higgins 2000 219,960 56,980 100,000 7,500
Executive Vice President, 1999 199,231 64,750 40,000
Operations and 1998/(3)/ 94,098 -0- 100,000
Chief Financial Officer

Bernadette L. Alford, Ph.D. 2000/(4)/ 166,667 -0- 150,000
Executive Vice President,
Development, Regulatory
and Clinical Affairs

Samuel K. Ackerman, M.D./(5)/ 2000 240,000 100,000 2,000
Executive Vice President 1999/(6)/ 31,625

_________________________

(1) All stock options in this column were granted under the 1998 Equity Plan,
except those granted to Dr. Ackerman, which were granted under the 1998 Director
Plan. Both the 1998 Equity Plan and the 1998 Director Plan are administered by
the Compensation Committee. Each of the options granted under the 1998 Equity
Plan has an exercise price equal to fair market value on the date of the grant,
vests in four equal annual installments on the first four anniversaries of the
date of grant, and expires either ten years from the date of grant or in four
equal installments ten years from the dates of vesting. Each of the options
granted under the 1998 Director Plan has an exercise price equal to fair market
value on the date of grant, vests over a four-year period with 25% of the grant
vesting after six months, and 25% vesting at the end of the second, third and
fourth year thereafter, provided that the option holder is still a Director at
the opening of business on such date.

(2) Excludes perquisites and other personal benefits, securities or property
which, in the aggregate, are less than the lesser of $50,000 or ten percent
(10%) of the total of the annual salary and bonus reported for the Named
Executive Officer for the year.

(3) Mr. Higgins became Executive Vice President, Operations and Chief Financial
Officer of the Company in June 1998. The information shown in this table for
1998 reflects compensation earned by Mr. Higgins from June 1998 through January
2, 1999.

(4) Ms. Alford joined the Company in May 2000 and became Executive Vice
President, Development, Regulatory and Clinical Affairs in September 2000. The
information shown in this table for 2000 reflects compensation earned by Ms.
Alford from May 2000 through December 30, 2000. Her annual salary is $225,000.

(5) Dr. Ackerman served as Executive Vice President, Research and Development
until retiring from such position in September 2000.

(6) Dr. Ackerman became Executive Vice President of Research and Development
and Chief Science Officer in November 1999. The information shown in this table
for 1999 reflects compensation earned by Dr. Ackerman from November 1999 through
January 1, 2000. His annual salary was $280,000.

STOCK OPTION GRANTS IN FISCAL YEAR 2000

The following table sets forth information concerning individual grants of
options to purchase common stock made to each Named Executive Officer during
Fiscal Year 2000.

Individual Grants
---------------------------------------------
Percentage Potential Realizable Value at
of Total Assumed Annual Rates of Stock
Number of Options Price Appreciation for Option
Securities Granted to Term (4)
Underlying Employees Exercise or
Options in Fiscal Base Price Expiration
Name Granted(#)(1) Year 2000(2) ($/Share) Date [3] 5%($) 10%($)
----- ------------- ------------ --------- -------- -------- --------

Thomas T. Higgins 100,000 8.6% $7.63 1/28/10 $873,000 $1,215,000

John R. Barr 150,000 12.9% $9.25 3/24/10 $480,000 $2,211,000

Bernadette L. Alford 100,000 8.6% $6.75 5/26/10 $425,000 $1,076,000
50,000 4.3% $5.44 11/21/10 $171,000 $ 433,000

Samuel K. Ackerman 2,000 -- $4.78 12/30/10 $6,000 $ 15,000

_________________

(1) See Note (1) to the Summary Compensation Table.

(2) Options to purchase an aggregate of 1,155,639 shares were granted to all
employees in Fiscal Year 2000.

(3) Options expire 10 years from grant date unless the individual terminates
employment. At that time, all vested options expire 90 days from
termination date.

(4) 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 option holder.

2000 AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES

Presented below is information with respect to the number of shares issued
upon option exercises by the Named Executive Officers during Fiscal Year 2000
and the value realized by the Named Executive Officers upon such exercises. The
table also provides information about the number and value of unexercised stock
options to purchase the Company's common stock held by each Named Executed
Officer as of December 30, 2000.

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
December 30, 2000 December 30, 2000
Name (#)Exercisable/ ($)Exercisable/
Unexercisable Unexercisable(1)

--------------------------------------------------------------------------------------------------

John R. Barr 288,215/279,406 -/-
Thomas T. Higgins 110,000/130,000 -/-
Bernadette L. Alford 0/150,000 -/-
Samuel K. Ackerman 0/2,000 -/$937

_____________________

(1) Based on the difference between the option exercise price and the closing
price of the underlying common stock on December 30, 2000, which closing
price was $5.25.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors (the "Compensation
Committee") is composed of three independent, disinterested Directors who are
not employees of the Company. The Compensation Committee reviews and approves
all compensation and fringe benefit programs of the Company and also reviews and
determines the actual compensation of the Company's executive officers, as well
as all stock option grants, performance-based stock options and both long-term
and short-term cash incentive awards to all key employees.

The Company's executive compensation program is designed to be linked
closely to corporate performance and returns to Stockholders. To this end, the
Company has developed an overall compensation strategy and specific compensation
plan that tie a very significant portion of executive compensation to the
Company's success in meeting specified performance goals. In addition, through
the use of stock options, the Company ensures that a part of each executives'
compensation is closely tied to appreciation in the Company's stock price. The
overall objectives of this strategy are to attract and retain the best possible
executive talent, to motivate these executives to achieve the goals inherent in
the Company's business strategy, to link executive and stockholder interests
through equity based plans and, finally, to provide a compensation package that
recognizes individual contributions as well as overall business results.

The key elements of the Company's executive compensation consist of base
salary, annual incentive bonuses and stock options. The Compensation Committee's
policies with respect to each of these elements, including the bases for the
compensation awarded to Mr. Barr, are discussed below. In addition, while the
elements of compensation described below are considered separately, the
Compensation Committee takes into account the full compensation package afforded
by the Company to the individual, including insurance and other employee
benefits, as well as the programs described below.

Base Salary

Base salaries for new executive officers are initially determined by
evaluating the responsibilities of the position held and the experience of the
individual. In making determinations regarding base salaries, the Compensation
Committee considers generally available information regarding salaries
prevailing in the biotechnology industry, but does not utilize any particular
indices or peer groups. Base salaries are reviewed on an annual basis using
compensation surveys for the biotechnology industry. Mr. Barr's base salary was
determined by the compensation committee as being commensurate with the base
compensation paid to similarly situated officers in comparable companies.

Annual Incentive Bonus

The Committee reviews the Company's annual performance plan for the ensuing
fiscal year and sets specific incentive target bonus awards which are directly
linked to the short term financial and milestone target achievement performance
objectives of the Company as a whole. The executive officers of the Company then
have an opportunity to earn a payout of their individual target bonuses in each
fiscal year provided that the Company meets or exceeds its

performance plan for the year. These bonuses are prorated to the extent that the
Company achieves a portion of its performance plan. The Committee has complete
discretionary authority to award full bonuses or special bonuses for special
achievements. Mr. Barr's bonus reflects the Committee's assessment of Mr. Barr's
performance compared against agreed upon personal and Company goals, as well as
the overall progress of the Company.

Stock Options

Under the Company's 1998 Equity Incentive Plan, which was approved by
Stockholders, stock options are granted to the Company's executive officers.
Stock options granted to executives have an exercise price equal to the fair
market value of the Common Stock on the date of grant and vest over four years.
Stock option grants are designed to provide incentive for the creation of
stockholder value over the long term, since the full benefit of the compensation
package cannot be realized unless stock price appreciation occurs over a number
of years. In determining the amount of such grants, the Compensation Committee
evaluates the job level of the executive, responsibilities to be assumed in the
upcoming year, and responsibilities in prior years, and also takes into account
the size of the officer's awards in the past. Mr. Barr's option grant in Fiscal
Year 2000 reflects the Committee's assessment of Mr. Barr's performance compared
against agreed upon personal and Company goals, as well as the overall progress
of the Company.

The Committee believes that the foregoing combination of base salaries,
incentive bonuses and stock option incentives have helped develop a Senior
Management Group dedicated to achieving significant improvement in both the
short-term and long-term financial performance of the Company.

Irwin Lerner, Chairman of the Compensation Committee
Peter D. Parker
Damion Wicker, M.D.

AUDIT COMMITTEE REPORT

In the course of its oversight of the Company's financial reporting
process, the Audit Committee of the board of directors has (i) reviewed and
discussed with management the Company's audited financial statements for the
fiscal year ended December 30, 2000, (ii) discussed with KPMG, LLP, the
Company's independent auditors, the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit Committees,
(iii) received the written disclosures and the letter from the auditors required
by Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees, (iv) discussed with the auditors any relationships that may
impact their objectivity and independence, and (v) considered whether the
provision of nonaudit services by the auditors is compatible with maintaining
their independence.

Based on the foregoing review and discussions, the Committee
recommended to the board of directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended December
30, 2000 for filing with the Securities and Exchange Commission.

By the Audit Committee,
Jeremy Hayward-Surry, Chair
Richard A. Charpie

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In February 1998, the Company and Pall Corporation ("Pall") entered into a
series of agreements (the "Pall Agreements") providing for, among other things,
a collaboration on the development and marketing of systems employing the
company's light-activated compounds and Quencher viral inactivation technologies
for red blood cell concentrates. Pall is a leading manufacturer and supplier of
filtration products, including those relating to the collection, preservation,
processing, manipulation, storage and treatment of blood and blood components.
Under the Pall Agreements, Pall receives exclusive worldwide distribution rights
to any system incorporating any of the Company's viral inactivation technology
for red blood cells and platelets. The parties have also agreed to share
research, development, clinical and regulatory responsibilities and will equally
share profits and joint expenses from operations after each party is reimbursed
for its cost of goods. Upon execution of the Pall Agreements in February 1998,
Pall acquired 477,042 shares of common stock for $4.0 million or $8.39 per
share. Pursuant to the terms of the Pall Agreements, Pall acquired 448,028
shares of the Company's common stock in a private placement, which closed
contemporaneously with, and at the same price, terms, and conditions as the
initial public offering of the Company's common stock in June 1998. In addition,
Pall purchased $4,000,000 million worth of common stock at approximately $4.96
per share on December 12, 2000 and will purchase up to $10,000,000 worth of
common stock at the prevailing market price per share in installments tied to
the achievement of specified development milestones in the development of the
Company's red blood cell concentrates. In Fiscal Year 2000, the Company
purchased approximately $400,000 of production related materials from Pall.
Mr. Hayward-Surry, a Director of the Company, is the President and a member of
the board of directors of Pall Corporation.

Dr. Bernard Horowitz, formerly a director of the Company and the Company's
Executive Vice President and Chief Scientific Officer, is one of the inventors
named in the patents covering viral inactivation technologies owned by the NYBC
and licensed to the Company. Under the terms of arrangements with the NYBC, Dr.
Horowitz will receive a percentage of the royalty payments made by the Company
to the NYBC based on sales of the Company's products and systems employing the
licensed S/D, UVC or LAC technologies.

In February 2001, the Company signed a letter of intent for a management-
led divestiture of its plasma operations. These operations are responsible for
producing intermediate plasma fractions and virally inactivated transfusion
plasma, PLAS+SD, and subject to successful completion of clinical trials and
receipt of FDA marketing approval, will be the manufacturer of Universal
PLAS+SD. The total value of the transaction is estimated to be in the range of
$34 to $38 million of which approximately $30 million is anticipated to be cash.
The Company could recognize a charge upon divestiture of the plasma operations
in the range of $5 million to $7 million. Ampersand Ventures, a Wellesley,
Massachusetts-based venture capital firm and VITEX shareholder, will be an
equity investor in the new company.

STOCKHOLDER RETURN PERFORMANCE PRESENTATION

The graph below compares the cumulative total stockholder return of the
Company's common stock from June 11, 1998 (the date that the Company's stock
began trading publicly) through December 30, 2000 against the cumulative total
return of the NASDAQ Stock Market Index and the NASDAQ Pharmaceutical Index
during the same period. Management cautions that the stock price performance
shown in the graph below should not be considered indicative of potential future
stock performance.

[THE TABLE BELOW WAS ALSO REPRESENTED IN THE PRINTED MATERIAL BY A LINE GRAPH]

===============================================================================================================================
Company/Index Name Base Date
June 11, 1998 December 31, 1998 December 31, 1999 December 30, 2000
-------------------------------------------------------------------------------------------------------------------------------

V.I. Technologies, Inc. $100.00 $ 92.22 $ 61.11
-------------------------------------------------------------------------------------------------------------------------------
NASDAQ Stock Market Index $100.00 $127.03 $235.71
-------------------------------------------------------------------------------------------------------------------------------
NASDAQ Pharmaceutical Index $100.00 $126.59 $234.06
===============================================================================================================================

The graph shown above assumes that $100 was invested in the Company's
common stock and in each index on June 11, 1998. The total return for the
indices used assumes the reinvestment of all dividends.

EMPLOYMENT AGREEMENTS AND SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS

Mr. Barr is party to a letter agreement with the Company, dated November
10, 1997, pursuant to which he serves as President and Chief Executive Officer.
Under this agreement, Mr. Barr is entitled to annual base compensation of
$280,000, subject to increase by the Board, and is also entitled to a
performance bonus based upon the achievement of financial and other performance
goals.

Mr. Higgins is a party to a letter agreement with the Company, dated June
15, 1998, pursuant to which he serves as Executive Vice President, Operations
and Chief Financial Officer. Under this agreement, Mr. Higgins is entitled to
annual base compensation of $185,000, subject to increase by the Board, and is
also entitled to a performance bonus based upon the achievement of financial and
other performance goals. In addition, the letter agreement provided for a grant
of an option to purchase 100,000 shares of common stock. This grant will vest
in four equal annual installments, with the first installment vesting one year
from the date of grant.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The current members of the Compensation Committee are Messrs. Lerner and
Parker and Dr. Wicker. No member of the Compensation Committee has at any time
been an officer or employee of the Company. No executive officer of the Company
served as a member of the compensation committee or board of directors of any
other entity which has an executive officer serving as a member of the Company's
Board of Directors or Compensation Committee.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Directors, executive officers, and greater than ten percent holders are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.

Based solely on its review of the copies of such forms received or written
representations from certain reporting persons, the Company believes that,
during Fiscal Year 2000 filing requirements under Section 16(a) applicable to
its directors and executive officers were met, except that one director failed
to timely file an initial statement of beneficial ownership.

INFORMATION CONCERNING INDEPENDENT ACCOUNTANTS

The firm of KPMG LLP, independent accountants, has examined our financial
statements for the year ended December 30, 2000. The board of directors has
appointed KPMG to serve as our auditors for our fiscal year ending December 29,
2001. Representatives of KPMG are expected to attend the annual meeting and be
available to respond to appropriate questions. They will also have the
opportunity to make a statement if they desire. The fees for services provided
by KPMG to the Company in 2000 were as follows:

Audit Fees $94,000
Financial Information Systems [if applicable] $ 0
Design and Implementation Fees $ 0
All Other Fees [if applicable] $11,000

ANNUAL REPORT

The Company's Annual Report on Form 10-K for Fiscal Year 2000 is available
without charge upon request from the Company. Requests for copies of the Annual
Report on Form 10-K should be sent to Francesca DeVellis at V.I. Technologies,
Inc., 134 Coolidge Avenue, Watertown, Massachusetts 02472.

OTHER MATTERS

The Board does not know of any other matter which may come before the
meeting. If any other matters are properly presented to the meeting, it is the
intention of the persons named in the accompanying proxy to vote, or otherwise
to act, in accordance with their best judgment on such matters.

The Board hopes that stockholders will attend the meeting. Whether or not
you plan to attend, you are urged to complete, sign and return the enclosed
proxy in the accompanying envelope. A prompt response will greatly facilitate
arrangements for the meeting, and your cooperation will be appreciated.
Stockholders who attend the meeting may vote their shares even though they have
sent in their proxies.

By Order of the Board of Directors

June Heck, Secretary

Watertown, Massachusetts
April 27, 2001

Appendix A

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

_________________________________________________

Withheld
For All From
V.I. TECHNOLOGIES, INC. 1. Election Of Class III Directors. Nominees All
Nominees
Nominees: Samuel K. Ackerman, M.D.
David Tendler [_] [_]
Doros Platika, M.D.
Joseph M. Limber

[_] _____________________________________
For all nominees except for the nominees
listed in the space above.

For Against Abstain

RECORD DATE SHARES: 2. Amendment of the Company's 1998 Director
Stock Option Plan (the "1998 Director Plan") [_] [_] [_]
to increase the maximum number of shares of
the Company's common stock for which options
may be granted under the 1998 Director Plan
from 150,000 shares to 250,000 shares.
3. Amendment of the Company's Certificate of
Incorporation increasing the number of [_] [_] [_]
authorized shares from 36,000,000 to
46,000,000 and increasing the number of
shares of common stock from 35,000,000 to
45,000,000.
4. Ratification of appointment of KPMG LLP as
independent accountants. [_] [_] [_]

Please be sure to sign and Mark box at right if an address change or comment has been noted on [_]
date this Proxy. Date the reverse side of this card
----------------------

-----------------------------------------------------

Stockholder sign here Co-owner sign here

-----------------------------------------------------

DETACH CARD DETACH CARD

V.I. TECHNOLOGIES, 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 your Company 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,
May 24, 2001. Thank you in advance for your prompt consideration of these
matters.

Sincerely,
V.I. Technologies, Inc.

V.I. TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas T. Higgins and June Heck and each of them
as Proxies of the undersigned, each with the power to appoint a substitute, and
hereby authorizes each of them to represent the undersigned at the 2001 Annual
Meeting of Stockholders to be held on May 24, 2001, or any adjournment thereof,
and there to vote all the shares of V.I. Technologies, Inc. held of record by
the undersigned on April 16, 2001, as directed on the reverse side hereof. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR CLASS III
DIRECTOR AND FOR PROPOSALS 2, 3 and 4. If a nominee for director is unable or
unwilling to serve, the shares represented hereby will be voted for another
person in accordance with the judgment of the Proxies named herein.
In addition, in their discretion, the Proxies are hereby authorized to vote upon
such other business as may properly come before the meeting or any adjournment
thereof. This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder.

--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Please sign this proxy card exactly as your name or names appear hereon. 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, this signature should be that of an
authorized officer who should state his or her title.
--------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
(To be signed on the reverse side)

Appendix A

V.I. TECHNOLOGIES, INC.

Audit Committee Charter

Purpose

The principal purpose of the Audit Committee is to assist the Board of Directors
in fulfilling its responsibility to oversee management's conduct of the
Company's financial reporting process, including by reviewing the financial
reports and other financial information provided by the Company, the Company's
systems of internal accounting and financial controls, and the annual
independent audit process.

In discharging its oversight role, the Committee is granted the power to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose.

The outside auditor is ultimately accountable to the Board and the Committee, as
representatives of the stockholders. The Board and the Committee shall have the
ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditor. The Committee shall be responsible
for overseeing the independence of the outside auditor.

This Charter shall be reviewed for adequacy on an annual basis by the Board.

Membership

The Committee shall be comprised of not less than three members of the Board,
and the Committee's composition will meet the requirements of the Nasdaq Audit
Committee Requirements. Accordingly, all of the members will be directors:

. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and

. Who are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee.

In addition, at least one member of the Committee will have accounting or
related financial management expertise.

Key Responsibilities

The Committee's role is one of oversight, and it is recognized that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditor is responsible for auditing those
financial statements.

The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. The functions are set forth
as a guide and may be varied from time to time as appropriate under the
circumstances.

. The Committee shall review with management and the outside auditor the
audited financial statements to be included in the Company's Annual Report
on Form 10-K and the Annual Report to Stockholders, and shall review and
consider with the outside auditor the matters required to be discussed by
Statement on Auditing Standards No. 61.

. As a whole, or through the Committee chair, the Committee shall review with
the outside auditor, prior to filing with the Securities and Exchange
Commission, the Company's interim financial information to be included in
the Company's Quarterly Reports on Form 10-Q and the matters required to be
discussed by SAS No. 61.

. The Committee shall periodically discuss with management and the outside
auditor the quality and adequacy of the Company's internal controls.

. The Committee shall request from the outside auditor annually a formal
written statement delineating all relationships between the auditor and the
Company consistent with Independence Standards Board Standard No. 1,
discuss with the outside auditor any such disclosed relationships and their
impact on the outside auditor's independence, and take or recommend that
the Board take appropriate action regarding the independence of the outside
auditor.

. The Committee, subject to any action that may be taken by the Board, shall
have the ultimate authority and responsibility to select (or nominate for
stockholder approval), evaluate and, where appropriate, replace the outside
auditor.

Appendix B

V.I. TECHNOLOGIES, INC.

1998 Director Stock Option Plan
-------------------------------

1. Purpose.
-------

This 1998 Director Stock Option Plan (the "Plan") governs options to
purchase Common Stock, $.01 par value per share (the "Common Stock"), of V.I.
Technologies, Inc. (the "Company") granted by the Company to members of the
Board of Directors of the Company who are not also officers or employees of the
Company. The purpose of the Plan is to attract and retain qualified persons to
serve as Directors of the Company and to encourage ownership of the Common Stock
of the Company by such Directors.

2. Administration.
--------------

Grants of stock options under the Plan shall be automatic as provided in
Section 8. However, all questions of interpretation of the Plan or of any
options granted hereunder shall be determined by the Board of Directors of the
Company (the "Board"). Any and all powers of the Board under the Plan may be
exercised by a committee consisting of one or more Directors appointed by the
Board.

3. Eligibility.
-----------

Members of the Board who are not also officers or employees of the Company
shall be eligible to participate in the Plan.

4. Shares Subject to the Plan.
--------------------------

Options may be granted under the Plan in respect of a maximum of 150,000
shares of Common Stock, subject to adjustment as provided in Section 5 below.
Shares to be issued upon the exercise of options granted under the Plan may be
either authorized but unissued shares or shares held by the Company in its
treasury. Whenever options under the Plan lapse or terminate or otherwise become
unexercisable, the shares of Common Stock which were available for such options
shall again be available for the grant of options under the Plan. The Company
shall at all times while the Plan is in force reserve such number of shares of
Common Stock as will be sufficient to satisfy the requirements of the Plan.

5. Adjustment of Number of Option Shares.
-------------------------------------

In the event of a stock dividend, split-up, combination or reclassification
of shares, recapitalization or other similar capital change relating to the
Company's Common Stock, the maximum aggregate number and kind of shares or
securities of the Company as to which options may be granted under this Plan and
as to which options then outstanding shall be exercisable, and the option price
of such options shall be appropriately adjusted so that the proportionate number
of shares or other securities as to which options may be granted and the
proportionate

interest of holders of outstanding options shall be maintained as before the
occurrence of such event.

In the event of any reorganization, consolidation or merger to which the
Company is a party and in which the Company does not survive, or upon the
dissolution or liquidation of the Company, all outstanding options shall
terminate; provided, however, that (i) in the event of the liquidation or
-------- -------
dissolution of the Company, or in the event of any such reorganization,
consolidation or merger in which the Company does not survive and with respect
to which the resulting or surviving corporation does not assume such outstanding
option or issue a substitute option therefor, such option shall be exercisable
in full, without regard to any installment restrictions on exercise imposed
pursuant to this Plan or any Option Agreement (as defined below), during such
period preceding the effective date of such liquidation, dissolution,
reorganization, consolidation or merger (unless such option is terminated
earlier by its terms) as may be specified by the Board; and (ii) in the event of
any such reorganization, consolidation or merger, the Board may, in its good
faith discretion, arrange to have the resulting or surviving corporation assume
such outstanding option or issue a substitute option therefor.

No fraction of a share shall be purchasable or deliverable upon exercise of
an option, but, in the event any adjustment hereunder of the number of shares
covered by the option shall cause such number to include a fraction of a share,
such fraction shall be adjusted to the nearest smaller whole number of shares.

6. Non-Statutory Stock Options.
---------------------------

All options granted under the Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").

7. Form of Option Agreements.
-------------------------

Options shall be granted hereunder pursuant to the terms of written
agreements ("Option Agreements") which shall be substantially in the form of the
attached Exhibit A or in such other form as the Board may from time to time
---------
determine.

8. Grant of Options and Option Terms.
---------------------------------

a. Automatic Initial Grant of Options on October 9, 1998. Each non-employee
director of the Company who is a director of the Company on October 9, 1998
shall automatically be granted an option to purchase 15,000 shares of Common
Stock.

b. Automatic Grant of Options Upon Initial Election to the Board Subsequent
to October 9, 1998. Each non-employee director of the Company who is initially
elected to the Company's Board of Directors after October 9, 1998 shall, upon
his or her initial election to the Board of Directors by the Company's
stockholders, automatically be granted an option to purchase 15,000 shares of
Common Stock. No options shall be granted hereunder after ten years from the
date on which this Plan was initially approved and adopted by the Board.

c. Automatic Annual Grant of Options. Commencing after the closing of the
initial public offering of the Company's Common Stock, each non-employee
director of the Company who is thereafter

reelected to the Board of Directors or who continues in office as a director of
the Company following a meeting of the stockholders of the Company at which any
directors are elected or reelected (a "Stockholder Meeting") shall, upon each
reelection or his or her continuation in office as described above,
automatically be granted an option to purchase 2,000 shares of Common Stock.

d. Additional Automatic Initial Grant of Options on October 9, 1998. Each
non-employee director of the Company who is a director of the Company on October
9, 1998 shall automatically be granted an option to purchase 2,000 shares of
Common Stock.

e. Limitations on Grants. No options shall be granted hereunder after ten
years from the date on which this Plan was initially approved and adopted by the
Board. No options will be granted hereunder to any director who is prohibited by
his or her affiliates or employers, or for any other reason, from receiving
stock options from the Company.

f. Date of Grant. The "Date of Grant" for options granted under Sections
8(b) or 8(c) of the Plan due to elections or reelections to the Board of
Directors shall be the date of the respective director's election or reelection
or the date of the Stockholder Meeting for directors continuing in office. The
"Date of Grant" for the options granted pursuant to Section 8(a) or 8(d) of the
Plan is October 9, 1998.

g. Option Price. The option price for each option granted under this Plan
shall be the current fair market value of a share of Common Stock of the Company
as determined by the Board of Directors in good faith, provided that if the
Company's Common Stock is then quoted on the National Association of Securities
Dealers Automated Quotations National Market ("Nasdaq") or traded on any other
exchange, then the current fair market value of a share of Common Stock of the
Company shall be the closing price for the Company's Common Stock as reported by
Nasdaq, or the principal exchange on which the Company's Common Stock is then
traded, on the last trading day prior to the Date of Grant.

h. Term of Option. The term of each option granted under the Plan shall be
ten years from the Date of Grant.

i. Period of Exercise. Options granted under Section 8(a) or 8(b) of the
Plan shall become exercisable as to 25% of the shares subject to the option in
four cumulative installments occurring on the six-month, two-year, three-year
and four-year anniversaries of the Date of Grant, respectively, if and only if
the option holder is a member of the Board at the opening of business on that
anniversary date. Options granted under Section 8(c) or 8(d) of the Plan shall
become exercisable in full on the first anniversary of the Date of Grant if and
only if the option holder is a member of the Board at the opening of business on
that anniversary date. Directors holding exercisable options under the Plan who
cease to serve as members of the Board of the Company for any reason other than
death may, for a period of seven months following the date of cessation of
service, exercise the rights they had under such options at the time they ceased
being a Director. Any rights that have not yet become exercisable shall
terminate upon cessation of membership on the Board. Upon the death of a
Director, those entitled to do so under the Director'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 Director at the time of his death. The rights of the option
holder may be exercised by the holder's guardian or legal representative in the
case of disability and by the beneficiary designated by the holder in writing
delivered to the Company or, if none has been designated, by the holder's estate
or his or her transferee on death in accordance with this Plan, in the case of
death. Options granted under the Plan shall terminate, and no rights thereunder
may be exercised, after the expiration of the applicable exercise period.
Notwithstanding the foregoing provisions, no rights under any options may be
exercised after the expiration of ten years from their Date of Grant.

j. Method of Exercise and Payment. Each exercise of an option hereunder may
be effected only by giving written notice, in the manner provided in Section 12
hereof, of intent to exercise the option, specifying the number of shares as to
which the option is being exercised, and accompanied by full payment of the
option price for the number of shares then being acquired. Such payment shall be
made in cash, by certified or bank check payable to the order of the Company,
credit to the Company's account at a financial or brokerage institution on the
date of exercise or a payment commitment of such an institution acceptable to
the Company, or if the option so provides, (i) in shares of Common Stock having
an aggregate Fair Market Value, at the time of such payment, equal to the total
option price for the number of shares of Common Stock for which payment is then
being made, or (ii) partly in cash or by certified or bank check payable to the
order of the Company and the balance in shares of Common Stock having an
aggregate Fair Market Value, at the time of such payment, equal to the
difference between the total option price for the number of shares of Common
Stock for which payment is then being made and the amount of the payment in cash
or by certified or bank check. Shares of Common Stock surrendered in payment of
all or part of the option price shall have been held by the person exercising
the option free of restrictions imposed by the Company for at least six months
unless otherwise permitted by the Board. For purposes hereof, the "Fair Market
Value" of the Common Stock shall be the current fair market value of a share of
Common Stock of the Company as determined by the Board of Directors in good
faith, provided that if the Company's Common Stock is then quoted on Nasdaq or
traded on any other exchange, then the Fair Market Value shall be the closing
price for the Company's Common Stock as reported by Nasdaq, or the principal
exchange on which the Company's Common Stock is then traded, for the business
day immediately preceding the option exercise date.

Receipt by the Company of such notice and payment shall, for purposes of
this Plan, constitute exercise of the option or a part thereof. Within twenty
(20) days thereafter, the Company shall deliver or cause to be delivered to the
optionee a certificate or certificates for the number of shares of Common Stock
then being purchased by the optionee. Such shares shall be fully paid and non-
assessable. If any law or applicable regulation of the Securities and Exchange
Commission or other public regulatory authority (including, but not limited to,
a stock exchange) shall require the Company or the optionee (i) to register or
qualify, under the Securities Act, any similar federal statute then in force or
any state law regulating the sale of securities, any shares of Common Stock
covered by an option with respect to which notice of intent to exercise shall
have been delivered to the Company or (ii) to take any other action in
connection with such shares before issuance thereof may be effected, then the
delivery of the certificate or certificates for such shares shall be postponed
until completion of the necessary action, which the Company shall take in good
faith and without delay. All such action shall be taken by the Company at its
own expense.

To the extent determined necessary by counsel to the Company to comply with
any applicable law, the Company may require an individual exercising an option
to represent that his purchase of shares of Common Stock pursuant to such
exercise is for his own account, for investment and without a view to resale or
distribution, and that he will not sell or otherwise dispose of any such shares
except pursuant to (i) an effective registration statement covering such
transaction filed with the Securities and Exchange Commission and in compliance
with all of the applicable provisions of the Securities Act, and the rules and
regulations thereunder, or (ii) an opinion of Company counsel that such
registration is not required.

k. Non-transferability. Options granted under the Plan shall not be
transferable by the holder thereof otherwise than by will or the laws of descent
and distribution or by such other means as may be permitted by Rule 16b-3 (or
any successor provision) under the Securities Exchange Act of 1934, as amended.

9. Limitation of Rights.
--------------------

No Right to Continue as a Director. Neither the Plan, nor the granting of
an option or any other action taken pursuant to the Plan, shall constitute an
agreement or understanding, express or implied, that the Company will retain an
optionee as a Director for any period of time or at any particular rate of
compensation.

No Stockholders' Rights for Options. Directors shall have no rights as
stockholders with respect to the shares covered by their options until the date
they exercise such options and pay the option price to the Company, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such option is exercised and paid for.

10. Stockholder Approval.
--------------------

The Plan is subject to approval by the stockholders of the Company by the
affirmative vote of the holders of a majority of the shares of voting capital
stock present or represented and entitled to vote at a meeting of the Company's
stockholders. In the event such approval is not obtained, all options granted
under this Plan shall be void and without effect.

11. Amendment or Termination.
------------------------

The Board may amend or terminate this Plan at any time subject to any
stockholder approval that the Board deems necessary.

12. Notices.
-------

Any communication or notice required or permitted to be given under this
Plan shall be in writing and mailed by registered or certified mail or delivered
in hand, if to the Company, to its Chief Financial Officer at V.I. Technologies,
Inc., 155 Duryea Road, Melville, New York 11747 and, if to an optionee, to such
address as the optionee shall last have furnished to the Company.

13. Governing Law.
-------------

The Plan shall be governed by and construed in accordance with the laws of
Delaware.