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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant X
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Filed by a Party other than the Registrant |_|
Check the appropriate box
Preliminary Proxy Statement
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X Definitive Proxy Statement
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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HYDROMER INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required
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Fee computed on table below per Exchange Act Rules 14a(6)(i)(4) and 0-11.
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1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total Fee Paid:
________________________________________________________________________________
Fee paid previously with preliminary materials
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:___________________________________________________
2) Form, Schedule or Registration Statement No.______________________________
3) Filing party:_____________________________________________________________
4) Date Filed:_______________________________________________________________
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HYDROMER, INC.
35 Columbia Road
Branchburg, NJ 08876-3518
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
To be held October 30, 1997
The Annual Meeting of the Shareholders of HYDROMER, Inc. (the "Company")
will be held on Thursday, October 30, 1997, at the Corporate Headquarters of
Hydromer, 35 Columbia Road, Branchburg, New Jersey at 10 o'clock a.m. for the
following purpose, as more fully described in the accompanying Proxy Statement:
1. To elect directors of the Company for the ensuing year.
2. To ratify the selection by the Board of Directors of Rosenberg Rich
Baker Berman & Company as the Company's independent accountants for fiscal
1998
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on September 2, 1997 has been fixed by the Board of
Directors as the record date for the determination of shareholders entitled to
notice of, and to vote at the Meeting.
By Order of the Board of Directors
Robert D. Frawley, Secretary
Branchburg, New Jersey
September 5, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND PROMPTLY MAIL IT IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE
AFFIXED IF PROXY CARD IS MAILED IN THE UNITED STATES.
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PROXY STATEMENT
This Proxy Statement, which will be mailed commencing on or about September 5,
1997 to the persons entitled to receive the accompanying Notice of Annual
Meeting of Shareholders, is provided in connection with the solicitation of
Proxies on behalf of the Board of Directors of HYDROMER, INC. for use at the
Annual Meeting of Shareholders to be held at the Corporate Headquarters of
Hydromer, 35 Columbia Road, Branchburg, New Jersey at 10 o'clock a.m. on October
30, 1997 and at any adjournment thereof, for the purposes set forth in such
Notice. The Company's executive office is located at 35 Columbia Road,
Branchburg, New Jersey 08876-3518.
At the close of business on September 2, 1997, the record date stated in the
accompanying Notice, the Company had 4,367,987 outstanding shares of Common
Stock without par value ("Common Stock"), each of which is entitled to one vote
with respect to each matter to come before the Meeting. The Company has 10,917
shares of Common Stock which are Treasury Stock and not entitled to vote.
The Company has no class or series of stock outstanding other than the Common
Stock.
As of September 2, 1997, Manfred F. Dyck, Chairman of the Board and a director
of the Company, beneficially owned approximately 38.51% of the outstanding
Common Stock of the Company, and his wife Ursula M. Dyck, a director of the
Company, beneficially owned an additional 3.62% of the Common Stock. Such
ownership may enable such shareholders to exercise a controlling influence over
the Company's affairs.
I. ELECTION OF DIRECTORS
Five directors will be elected at the Annual Meeting of Shareholders, each to
serve for one year and until a successor shall have been duly chosen and
qualified. Each director is elected by a plurality of votes cast. It is the
intention of each of the persons named in the accompanying form of Proxy to vote
the shares represented thereby in favor of the five nominees listed in the
following table, unless otherwise instructed in the Proxy. In case any of the
nominees is unable or declines to serve, such persons reserve the right to vote
the shares represented by such Proxy for another person duly nominated by the
Board of Directors in his or her stead or, if no other person is so nominated,
to vote such shares only for the remaining nominees. The Board of Directors has
no reason to believe that any person named will be unable or will decline to
serve. Certain information concerning the nominees for election as directors is
set forth below. Such information was furnished by them to the Company.
Name of Nominee and Certain
Biographical Information
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MANFRED F. DYCK, age 62; President of Biosearch Medical Products, Inc.
(manufacturer and distributor of enteral feeding systems) since 1975; Chairman
of the Board of the Company since June 1983 and Chief Executive of the Company
since July of 1989; President from 1980 to June 1983; Director of Biosearch
Medical Products Inc. since 1975; Director of the Company since 1980. Manfred
and Ursula Dyck are husband and wife.
MAXWELL BOROW, M.D., age 71, Medical Doctor, retired Chief of Surgery at
Somerset Medical Center (hospital) from 1985-1994, Chief of Vascular Surgery at
Somerset Medical Center from 1978-1985; Director of the Company since 1990.
URSULA M. DYCK, age 63; Vice President Sales and Marketing of Biosearch Medical
Products, Inc. since 1991; Director: Biosearch Medical Products Inc. since 1975;
and Director of the Company since 1980. Ursula and Manfred Dyck are wife and
husband.
DIETER HEINEMANN, age 59; Specialist, Frankfurt, Germany Stock Exchange since
prior to 1987. Director of the Company since 1991.
ROBERT H. BEA, age 44; Director of Quality Assurance & Regulatory Affairs of
Siemens Hearing Instruments, Inc. since 1994; Vice President of Quality
Assurance and Regulatory Affairs of Biosearch Medical Products, Inc. from 1992-
1994; Previously, he worked at Johnson & Johnson where he held positions of
increasing responsibility in Quality/Regulatory affairs from 1973-1991 .Director
of the Company since 1996.
Stock Owned
Beneficially as of
September 2, 1997 (1) Percent of Class
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MANFRED F. DYCK, ........... 1,682,173 (2) 38.51%
MAXWELL BOROW, M.D., ....... 6,000 Less than 1%
URSULA M. DYCK, ............ 158,076 (3) 3.62%
DIETER HEINEMANN, .......... 565,125 (4) 12.94%
ROBERT H. BEA .............. -0- --
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(1) As of September 2, 1997, except as otherwise indicated below, each nominee
has sole voting and investment power with respect to all shares shown in
the table as beneficially owned by such nominee.
(2) Includes an aggregate of 23,676 shares held by Mr. Dyck as custodian for
certain of his children and does not include 186,908 shares held with sole
voting investment power
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by Mr. Dyck's children and relatives of Mr. Dyck's, as to which Mr. Dyck
disclaims beneficial ownership, or shares held by Ursula M. Dyck, his wife.
(3) Includes an aggregate of 23,076 shares held by Mrs. Dyck as custodian for
certain of her children and does not include 140,756 shares held with sole
voting and investment power by Mrs. Dyck's children, as to which Mrs. Dyck
disclaims beneficial ownership, or shares held by Manfred F. Dyck, her
husband, individually or as custodian.
(4) Does not include 135,000 shares held by the wife and children of Mr.
Heinemann as to which he disclaims beneficial ownership.
During the past year, the Board of Directors of the Company met four times. Dr.
Borow attended 75% of the meetings and all other Directors attended 100% of the
meetings. Since May of 1990, directors have been compensated at the rate of $750
per meeting for directors meetings attended in person, and $200 per meeting for
telephone conference meetings. In addition, directors may attend operational
meetings with Company management, and will be compensated at the rate of $500
per meeting for attendance at such meetings. No such operational meetings were
held in the fiscal year 1997.
The Board of Directors of the Company does not have a separate Nominating
Committee, Audit Committee or Compensation Committee. These functions are
performed by the Board at its meetings.
Five Directors are standing for election at the annual meeting.
Executive Officers
Manfred F. Dyck has been Chairman of the Board of the Company since June 1983
and a Director of the Company since its inception. Mr. Dyck served as Chief
Executive Officer of the Company from its inception until October 1986, and as
of August 1989, reassumed the duties of Chief Executive Officer. Mr. Dyck has
been President and a Director of Biosearch Medical Products Inc. since 1975.
Mark Klypka has been Vice President of Finance and Administration and Chief
Financial Officer since May, 1995. Prior to joining the Company, Mr. Klypka had
been Vice President Treasurer for Bergen Commercial Bank, since October 1993,
Vice President Controller for First Morris Bank since June 1989.
Robert D. Frawley has been Secretary of the Company since January 1984. Mr.
Frawley has been an attorney in private practice since December 1985. He is
employed by the law firm of Smith, Stratton, Wise, Heher and Brennan, Princeton,
New Jersey in February 1994. From December 1983 to December 1985, Mr. Frawley
was Vice President - Corporate Counsel and Secretary of Bicsearch Medical
Products Inc..
Compensation of Executive Officers
The following table sets forth information concerning cash compensation paid or
accrued
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by the Company during the fiscal year ended June 30, 1997, to the CEO and for
each of the executive officers of the Company whose total cash compensation
exceeded $100,000 and the aggregate cash compensation of all executives of the
Company as a group.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Name ------------------------ ------------------------------
And Other Restricted Options LTIP All
Principle Comp Stock /SAR($) Pay Other
Position Year Salary($) Bonus($) ($) Awards Awards Outs Comp
- ---------- ---- ---------- -------- ----- ---------- ------ ----------
Manfred 1995 50,000 -- -- -- -- -- --
F. Dyck 1996 52,500 -- 5,000
President 1997 64,257 25,687 6,250
C.E.O.
The aggregate value of restricted shares of the Company held by Manfred F. Dyck
as of June 30, 1997 was approximately $310,968 (includes only shares held
directly, does not include option or shares held as custodian.)
Cash compensation of all executive officers of the Company as a group (3
persons) was $190,888.
(1) Amount of Automobile Allowance which was paid in the year shown.
Stock Options
In 1984 the Board of Directors conferred upon Manfred F. Dyck, Chairman of the
Board of the Company, the authority to grant to, among others, employees of the
Company including executive officers, options to purchase up to 15,000 shares of
the Common Stock of the Company at an exercise price of $1.00 per share, and
upon such other terms and conditions as the Chairman may determine. No such
options were granted during the 1997 fiscal year.
Certain Agreements With Directors and Executive Officers
Manfred F. Dyck has served as Chairman, Chief Executive Officer and President of
the Company since July of 1989. He serves the Company approximately 5 days per
month, not to exceed 20% of his time. He is compensated by a salary of $77,500
per annum and a car allowance of $5,000 per annum. He also participates in a
management bonus program based upon Company profitability.
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Information Concerning Certain Shareholders
The shareholders (including any "group" as that term is used in Section 13(d)
(3) of the Securities Exchange Act of 1934) who, to the knowledge of the Board
of Directors of the Company, owned beneficially more than 5% of the outstanding
Common Stock as of September 2, 1997, and all directors and officers of the
Company as a group, and their respective shareholdings (according to information
furnished by them to the Company), are set forth in the following table. Except
as indicated in the footnotes to the table, all of such shares are owned with
sole voting and investment power.
Shares of Common
Stock Owned
Name and Address Beneficially (1) Percent of Class
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Manfred F. Dyck 1,682,173 (2)(3) 38.52%
255 Holland Road
Far Hills, NJ 07931
Ben A Posdal 355,361 8.14%
Post Office Box 23632
Tampa, FL 33623
Dieter Heinemann 565,125 (4) 12.92%
Goldbergweg 64
60599 Frankfurt AM
Federal Republic of Germany
All Directors 2,412,374 (2)(4)(5) 55.23%
and Officers
As a group (7 persons)
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(1) As of September 2, 1997, except as otherwise indicated below, each nominee
had sole voting and investment power with respect to all shares shown in
the table as beneficially owned by such nominee.
(2) Includes an aggregate of 23,676 shares held by Mr. Dyck as custodian for
certain of his minor children and does not include 186,908 shares held with
sole voting and investment power by Mr. Dyck's children and his mother, as
to which Mr. Dyck disclaims beneficial ownership.
(3) Does not include 158,076 shares held by Ursula M. Dyck, Mr. Dyck's wife,
individually and as custodian, and pursuant to exercisable options.
(4) Does not include 135,000 shares held by the wife and children of Mr.
Heinemann as to which he disclaims beneficial ownership.
(5) Includes 250 shares held by an officer as custodian for a minor child.
Includes an
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aggregate of 23,076 shares held by Mrs. Dyck as custodian for certain of
her minor children.
Other Information Concerning Directors, Officers and Shareholders
During the fiscal year ended June 30, 1997, the Company sold materials and
services in the aggregate amount of $31,257 to Biosearch Medical Products Inc.
("BMP"), a manufacturer and distributor of enteral feeding systems, and until
September 1982 the holder of 99% of the Company's Common Stock. In connection
with the distribution of BMP's shareholdings in the Company pro rata to the
holders of BMP's Common Stock, the Company granted to BMP a world-wide,
exclusive, royalty-free license to make, have made, use and sell Hydromer
coatings on enteral feeding products. In January 1991, the Company also licensed
BMP to apply its patented hydrophilic coatings to biliary stents, pancreatic
stents, and certain gastrointestinal devices. Royalties are payable upon
commercialization of the product and minimum royalties are due annually
beginning January 1, 1992. In June of 1996, the Company also licensed BMP to
apply its patented hydrophilic coatings to intermittent urinary catheters. In
August of 1996, the Company also licensed BMP to apply its patented hydrophilic
coatings to Medical Guidewires. Manfred F. Dyck and Ursula M. Dyck, both of whom
are directors or executive officers of the Company are also directors or members
of the management of BMP, hold approximately 20% of the Common Stock of BMP on a
fully diluted basis. The Company believes that the terms of the foregoing
arrangements are fair and equitable to both parties.
Robert D. Frawley, Secretary of the Company, is of counsel to the law firm
of Smith, Stratton, Wise, Heher and Brennan, Princeton, New Jersey. By agreement
with the Company, Mr. Frawley provides legal counsel to the Company on a
fee-for-service basis. Smith, Stratton, Wise, Heher & Brennan is expected to
render legal services in the future.
II. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the stockholders, the Board of Directors, has
selected the firm of Rosenberg Rich Baker Berman & Company as the Company's
independent public accountants for the current year.
Representatives of Rosenberg Rick Baker Berman & Company are expected to be
present at the Annual Meeting. They will have the opportunity to make a
statement if they desire to do so and will also be available to respond to
appropriate questions from stockholders.
III. OTHER MATTERS
The Board of Directors of the Company does not know of any other matters which
may be brought before the meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of Proxy to
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vote the shares represented thereby in accordance with their judgment on such
matters.
IV. MISCELLANEOUS
If the accompanying form of Proxy is executed and returned, the shares
represented thereby will be voted in accordance with the terms of the Proxy,
unless the proxy is revoked by written notice addressed to and received by the
Secretary of the Corporation. If no directions are indicated in such Proxy, the
shares represented thereby will be voted in the election of directors in favor
of the nominees proposed by the Board of Directors, and in favor of ratification
of The Independent Certified Public Accountants. Any Proxy may be revoked at any
time before it is exercised. The casting of a ballot at the Meeting by a
shareholder who may theretofore have given a Proxy will not have the effect of
revoking the same unless the shareholder so notifies the Secretary of the
meeting in writing at any time prior to the voting of the shares represented by
the Proxy.
Votes which are withheld and broker nonvotes will be treated as shares which are
present for purposes of determining a quorum. Withheld votes will be excluded in
determining whether a nominee for director or the ratification of independent
certified public accountants, has received a plurality of the votes cast.
All costs relating to the solicitation of Proxies will be borne by the Company.
Proxies may be solicited by mail and the Company may pay brokers and other
persons holding shares of stock in their names or those of their nominees for
their reasonable expenses in sending soliciting materials to their principals.
It is important that Proxies be returned promptly. Shareholders who do not
expect to attend the Meeting in person are urged to mark, sign and date the
accompanying form of Proxy and mail it in the enclosed return envelope, which
requires no postage if mailed in the United States, so that their vote can be
recorded.
V. EXCHANGE ACT COMPLIANCE
Section 16(a) of the Securities Exchange Act requires that certain of the
Company's officers, directors and persons who own more than ten percent of a
registered class of the Company's securities, file reports of ownership and
changes in ownership of the Company's securities with the Securities Exchange
Commission. Officers, directors and greater than ten percent shareholders are
required to provide the Company with copies of the forms they file.
Based solely upon its review of copies of such forms received by the Company,
and upon representations by the Company's officers and directors regarding
compliance with the filing requirements, the company believes that in Fiscal
1997, all filing requirements applicable to its officers, directors and ten
percent shareholders were complied within a timely manner.
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Shareholder Proposals
Shareholder proposals intended to be presented at the 1998 Annual Meeting of
Shareholders of the Company must be received by the Company by July 22, 1998 in
order to be considered for inclusion in the Company's Proxy Statement relating
to such meeting.
Branchburg, New Jersey
September 5, 1997
By Order of the Board of Directors
Robert D. Frawley
