ADVANCED MEDICAL PRODUCTS INC.
6 Woodcross Drive
Columbia, South Carolina 29212
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 12, 1996
To Our Stockholders:
Notice is hereby given that the Annual Meeting of
Stockholders of ADVANCED MEDICAL PRODUCTS INC. (the
"Company") will be held at the Company's facility at 6 Woodcross
Drive, Columbia, South Carolina, on Thursday, December 12, 1996,
at 10:00 a.m. local time (the "Annual Meeting"), for the following
purposes:
1. To elect six directors to serve on the Company's
Board of Directors until the next Annual Meeting of
Stockholders or until their successors are duly
elected and qualified as provided in the Company's
By-Laws;
2. To consider and vote upon a proposal to amend the
Company's Certificate of Incorporation to increase
the number of authorized shares of Common Stock
from 5,000,000 to 7,000,000.
3. To confirm and ratify the engagement of BDO
Seidman as the Company's independent auditors for
the fiscal year ending June 30, 1997; and
4. To transact such other and further business as may
properly come before the Annual Meeting or any
adjournment(s) thereof.
Only holders of record of the Company's Common Stock at
the close of business on October 18, 1996 will be entitled to vote.
A proxy statement and proxy are enclosed herewith. If you
are unable to attend the meeting in person you are urged to sign,
date and promptly mail the enclosed proxy so that your shares will
be represented at the meeting. If you attend the meeting in person,
you may withdraw your proxy and vote your shares.
By Order of the Board
of Directors
Deborah Riente,
Secretary
<PAGE>
ADVANCED MEDICAL PRODUCTS INC.
6 Woodcross Drive
Columbia, South Carolina 29212
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies for use at the annual meeting (the "Annual
Meeting") of stockholders of Advanced Medical Products Inc. (the
"Company"), to be held at the Company's facilities at 6 Woodcross
Drive, Columbia, South Carolina on Thursday, December 12, 1996
at 10:00 a.m., and at any adjournments thereof. The accompanying
proxy is solicited by the Board of Directors of the Company and is
revocable by the stockholder by notifying the Company's secretary
at any time before it is voted, or by voting in person at the Annual
Meeting. This proxy statement and accompanying proxy will be
distributed to stockholders beginning on or about November 11,
1996.
OUTSTANDING SHARES AND VOTING RIGHTS
Only stockholders of record at the close of business on
October 18, 1996, are entitled to receive notice of, and vote at the
Annual Meeting. At the close of business on that date, the
Company had 4,812,496 shares of Common Stock outstanding and
entitled to vote. A majority, or 2,406,248 of these shares, will
constitute a quorum for the transaction of business. Each share of
Common Stock is entitled to one vote on all matters. No other class
of securities will be entitled to vote at the meeting.
The nominees receiving the highest number of votes cast by
the holders of Common Stock will be elected as the Company's
directors. The affirmative vote of at least a majority of the shares
represented and voting at the Annual Meeting at which a quorum is
present (which shares voting affirmatively also constitute at least a
majority of the required quorum) is necessary for approval of
Proposal No. 2, 3 and 4.
Solicitation of proxies may be made personally or by
telephone, telegraph or mail by officers and employees of the
Company who will not be additionally compensated therefor. The
Company will request persons, such as brokers, nominees and
fiduciaries, holding stock in their names for others, or holding stock
for others who have the right to give voting instructions, to forward
proxy materials to their principals and request authority for the
execution of the proxy and will reimburse such persons for their
expenses in so doing. Certain agents of the Company may assist in
mailing proxy material for consideration consisting only of
reimbursement of mailing expenses or related costs. The total cost
of soliciting proxies will be borne by the Company.
Certain Relationships and Related Transactions
On January 12, 1996 Carolina Medical, Inc., a privately held
medical device manufacturing company located in King, North
Carolina, purchased 750,000 shares or 21.81% of Advanced Medical
Products authorized but unissued common stock for $150,000.
BIOTEL International, Inc., a holding company that owns a
majority interest in Carolina Medical's stock, purchased an
additional 1,400,000 shares of Advanced Medical's common stock
on March 29, 1996 for $280,000. As a result of these stock
purchases, BIOTEL International beneficially owns an aggregate of
2,150,000 shares, or 44.67%, of the Company's common stock.
In addition, Advanced Medical entered into a Licensing
Agreement with Carolina Medical to utilize the technology
embodied in Advanced Medical's Ultra PCI portable hand-held
ultrasound product line for other applications that will not be
directly competitive with Advanced Medical's current portable
applications.
Ronald G. Moyer, Chairman and Chief Executive Officer of
Carolina Medical Inc. and C. Roger Jones, President of Carolina
Medical were appointed to the Company's Board of Directors on
January 12, 1996. L. John Ankney and David A. Heiden, outside
directors, were appointed to the Company's Board of Directors on
January 25, 1996, and were elected to the Company's Board of
Directors, as were Ronald G. Moyer, C. Roger Jones, James H.
Brown and George L. Down, at the Company's annual meeting on
April 11, 1996.
Clarence P. Groff resigned effective January 12, 1996 as the
Company's President, Treasurer, Chief Executive Officer, Chief
Financial Officer, Principal Accounting Officer and member of the
Company's Board of Directors. Ronald G. Moyer was elected as the
Company's President and Treasurer at a meeting of the Board of
Directors on January 25, 1996. During the course of 1996, Mr.
Groff will be paid the sum of $75,000 in severance, in addition to
past due accrued salary and expenses, and his health insurance
premium will be paid by the Company. His employment contract
has been terminated and he has agreed not to compete with the
Company before January 1, 1998.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The following table sets forth, as of the Record Date,
certain information concerning beneficial ownership of the
Company's Common Stock by (i) each person known to the
Company to own 5% or more of the Company's Common Stock, (ii)
each director of the Company and (iii) all directors and officers of
the Company as a group.
Amount and Nature Percent
of
Name & Address of Beneficial Ownership (1) Class
(2)
BIOTEL International 2,150,000 (3)
44.67%
6 Woodcross Drive
Columbia, SC 29212
Ronald G. Moyer 2,150,000 (3)
44.67%
6 Woodcross Drive
Columbia, SC 29212
Carolina Medical Inc. 750,000 (4)
15.58%
157 Industrial Drive
King, NC 27021
C. Roger Jones 750,000 (4)
15.58%
157 Industrial Drive
King, NC 27021
Clarence P. Groff 616,666
12.81%
231 N. Woodlake Dr.
Columbia, SC 29223
Steven Berkowitz, M.D. 264,200
5.49%
22 Malke Drive
Wayside, NJ 07712
George L. Down 196,766 (5)
4.08%
6 Woodcross Drive
Columbia, SC 29212
James H. Brown 162,058 (6)
3.36%
6 Woodcross Drive
Columbia, SC 29212
Officers and Directors as 2,632,248 (3),(5),(6),(7)
54.69%
a Group (of 4 persons)
(1) As used herein, the term beneficial ownership with respect to a security
is defined by Rule 13d-3 under the Securities Exchange Act of 1934 as
consisting of sole or shared voting power (including the power to vote or
direct the vote) and/or sole or shared investment power (including the power
to dispose or direct the disposition of) with respect to the security through
any contract, arrangement, understanding, relationship or otherwise,
including a right to acquire such power(s) during the next 60 days.
(2) Does not give effect to the issuance of up to 115,000 shares in the event
of exercise of outstanding qualified and non-qualified stock options (except
to the extent Securities and Exchange Commission rules require the table to
give effect to the issuance of such shares).
(3) Ronald G. Moyer as Chairman and controlling shareholder of BIOTEL
International Inc., a holding company which also owns voting control of
Carolina Medical, may be deemed to be beneficial owner of shares owned by
both Carolina Medical and BIOTEL by virtue of his control over the voting
power of those shares.
(4) C. Roger Jones as President and Director of Carolina Medical, may be
deemed to be beneficial owner of the shares owned by Carolina Medical Inc.
by virtue of the control over the voting power of those shares.
(See "Description of Business".)
(5) Includes (i) 14,976 shares owned of record by the Helen L. Down Trust
(Helen Down is the mother of Mr. Down), for which Mr. Down serves as trustee
and (ii) 19,576 shares owned of record by members of Mr. Down's family, which
shares are subject to voting proxies held by Mr. Down.
(6) Includes 1,000 shares issuable in the event of exercise of currently
exercisable stock options.
Also includes (i) 2,342 shares owned of record by the spouse of Mr. Brown and
(ii) 11,900 shares owned of record by Mr. Brown's sister-in-law, which shares
are subject to a voting proxy held by Mr. Brown.
(7) Includes 52,924 shares beneficially owned by the Secretary of the Company
and 70,500 shares issuable in the event of exercise of currently exercisable
stock options granted to such officer.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, six directors will be elected to serve on the
Company's Board of Directors until the next Annual Meeting of Stockholders or
until their successors are duly elected and qualified as provided in the
By-Laws.
Ronald G. Moyer, L. John Ankney, James H. Brown, George L. Down,
David A. Heiden and C. Roger Jones will be nominated at the Annual Meeting
for election to the Board of Directors, and each has consented to serve as
such, if elected. In order to be elected, each such nominee must receive the
affirmative vote of a plurality of stock having voting power and present
at the Annual Meeting.
Background of Directors
Set forth below is information concerning each of the Company's
executive officers and each nominee to become a director.
Name Age Position
Ronald G. Moyer 60 President, Chief Executive Officer, Treasurer and
Chairman of the Board since January 1996.
L. John Ankney 67 Director since Janaruy 1996.
James H. Brown 48 Vice President and Director since September 1986,
Assistant Secretary since August 1992.
George L. Down 56 Vice President since April 1996 and Director since
September 1986.
David A. Heiden 48 Director since January 1996.
C. Roger Jones 56 Director since January 1996.
Deborah Riente 41 Vice President since December 1993 and Secretary
since August 1992.
Ronald G. Moyer is the President, Treasurer and Chairman of the
Board of the Company. Since 1992 he has been the Chief Executive Officer and
Chairman of Carolina Medical Inc., a manufacturer of medical instruments.
From 1991 to 1992 he served as Director of Mergers and Acquisitions for
Dominion Holdings Group, a Merchant Bank. From 1989 to 1991 he served as
Executive Vice President and Chief Operating Officer of CXR Corporation, an
AMEX listed company. Prior to that time since 1969 he was the President,
Chief Executive Officer and Chairman of the Board of Digilog, Inc., a NASDAQ
listed public company. He received an MS in Aerospace Engineering from
Drexel University in 1963 and completed the Harvard Business School Small
Corporation Management Program in 1981.
L. John Ankney served as President and Director from 1970 to 1993
for Transnational Electronic and Funding Corporation, an investment, venture
capital, and management consulting company. From 1968 to 1970 he was Senior
Vice President at Computer Leasing Company, and prior to that time he was
President and Director for Holland Associates. Mr. Ankney served as a
director of Digilog, Inc. from 1974 to 1989.
James H. Brown is Vice President, Assistant Secretary and a
Director of the Company and currently supervises the Company's product
development, international sales and OEM sales functions. Mr. Brown received
his Master of Science degree in electrical engineering from
Polytechnic Institute of New York in 1975 and a Bachelor of Science degree in
physics from Georgia Tech in 1970. Mr. Brown devotes his full-time to the
business of the Company.
George L. Down is Vice President and a Director of the Company and
currently oversees the Company's marketing functions. Until December 1992,
and for more than the preceding five years, he served as the president of
Design Realizations, Ltd. ("DRL"), a closely held corporation founded by Mr.
Down, which performed design and packaging services for a variety of
companies. Mr. Down received a Bachelor of Science in Industrial Design
degree from Syracuse University in 1964. Mr. Down devotes his full time to
the affairs of the Company.
David A. Heiden, is President and CEO of Urological Care America,
Inc., a company focused on enhancing the practice of urology in the managed
care environment. He served as President and CEO of Lithotripter
Technologies of the Americas from 1985 to 1988. Prior to that
he was Vice President of Marketing and Sales for Dornier Medical Systems.
C. Roger Jones, has served as President and Chief Operating Officer
of Carolina Medical since 1985. From 1970 to 1985, he was Vice President of
Sales & Marketing. He has been with Carolina Medical since 1961. He has
served as Chairman for Eagle Golf Ball Company, Inc. since 1988.
Deborah Riente is Vice President of the Company and currently
oversees corporate administration. From July 1991 to July 1992, Ms. Riente
was the Company's Human Resources Manager, and from 1987 to July 1991, served
as an administrative assistant to the Company's president. Ms. Riente
devotes her full-time to the business of the Company.
The Company's Board of Directors is comprised of Messrs. Moyer,
Ankney, Brown, Down, Heiden and Jones. The term of office of each Director
commences on the date of the Company's Annual Meeting of Stockholders, and
continues for one year thereafter, or until his successor is duly elected and
qualified.
Directors do not receive compensation for their services as such,
but are and will be reimbursed for their reasonable out-of-pocket expenses
incurred in their capacities as members of the Board of Directors.
The ownership of the Company's Common Stock by each of the
foregoing nominees is set forth above under the caption "Voting Securities
and Principal Holders Thereof".
The Board of Directors recommends a vote FOR
the election
of each of the nominated Directors.
Board of Directors' Meetings and Committees
During the fiscal year ended June 30, 1996, the Board of Directors
held a total of five (5) meetings. No director then in office attended fewer
than 75% of the aggregate of (i) the total number of meetings of the Board
held during the period he has been a director and (ii) the total number of
meetings held by all committees of the Board on which such director served
during such period.
With the addition of four new Directors, the Company has initiated
an Audit Committee comprised of Mr. Heiden as Chairman, with Mr. Ankney as a
member. The Audit Committee will exercise the following powers:
(1) nominate the independent auditors of the Company to be approved by the
Board of Directors; (2) meet with the independent auditors to review the
annual audit; (3) assist the full Board in evaluating the auditor's
performance; and (4) review internal audit and control procedures, related
party transactions and, where appropriate, potential conflict of interest
situations.
A Compensation Committee has also been initiated. Mr. Ankney is
Chairman and Mr. Heiden is a member. The Compensation Committee will set up
and administer the Company's salary, cash bonus, stock and other compensation
plans for the Company's officers. Additionally, the Compensation Committee
administers the Company's Employee Stock Purchase Plan and other
stock benefit plans for officers and employees.
It is anticipated that immediately following the Annual Meeting,
the Board of Directors will hold a meeting of the Board of Directors. At
such meeting, it is anticipated that the current officers of the Company will
be re-elected to serve in their present capacities until the next
annual meeting of the Board of Directors or until their successors are duly
elected and qualified.
Executive Compensation
The following table discloses certain summary information
concerning the compensation paid to the Company's Chief Execxutive Officer
for services rendered in all capacities to the Company for the two fiscal
years in the period ended June 30, 1996. No other officer other than
the Chief Executive Officer had a total annual salary and bonus in excess of
$100,000.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
Name Fiscal Other All Other
and Year Annual Compensa-
Principal Ended Salary Bonus Compensation Option tion
Position June 30 ($) ($) ($) (#) ($)
Clarence P.
Groff(1) 1996 72,810 -0- -0- -0- 150,579(A)
Former Chief 1995 127,828 -0- 28,616 (A) -0- -0-
Executive Officer
Ronald G.
Moyer(2) 1996 39,367 -0- -0- -0- -0-
Chief Executive
Officer
______________________
(A) Amounts reported reflect the dollar value of the following:
Employer
Contributions
Named Under Profit Severance Car Performance Interest Debt
Executive Year Sharing Plan Package Allowance Plan Free Forgiveness
Officer Loan
Clarence P.
Groff 1996 -0- 85,040 539 -0- -0- 65,000
1995 1,416 -0- 5,250 12,120 296 9,534
(1) Resigned as Chief Executive Officer effective January 12, 1996
(2) Elected Chief Executive Officer effective January 25, 1996
Employment Agreements
Effective July 1, 1992, the Company entered into executive
employment agreements with Clarence P. Groff and James H. Brown. Effective
January 1, 1993, the Company entered into an employment agreement with George
L. Down. As of year end June 30, 1995 and continuing until January 26, 1996,
these employment agreements were in effect. However, coincident with the
investment by Carolina Medical, and the resulting change in control, all
employment agreements have been terminated.
Performance Plan
The Company instituted a Quarterly Performance and Salary Adjustment
Plan (the "Performance Plan") for key management and administrative
personnel. Pursuant to the Performance Plan, the employee's salary was
reviewed on a quarterly basis and could be increased, up to a maximum of 25%
of base salary, in accordance with a formula based upon achieving certain
objectives and goals previously agreed to by the Company and the employee.
Effective January 19, 1996, this plan was terminated.
Limitation on Liability of Directors; Indemnification
The Company's Certificate of Incorporation provides that a director
of the Company will not be personally liable to the Company or its
shareholders for monetary damages for breach of the fiduciary duty of care
as a director, including breaches which constitute gross negligence. However,
this provision does not eliminate or limit the liability of a director of the
Company (i) for breach
of the director's duty of loyalty to the Company or its shareholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law (relating to unlawful payment of dividends
or unlawful stock repurchases or redemptions), (iv) for gaining a financial
profit or other personal advantage to which he or she was not entitled or (v)
for breaches of a director's responsibilities under the Federal securities
laws.
PROPOSAL NO. 2
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
OF THE COMPANY TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
The Board of Directors has approved and recommends for stockholder
approval an amendment to the Company's Certificate of Incorporation to make
available for issuance additional shares of Common Stock. At present, the
Company has authority to issue up to 5,000,000 shares of Common Stock at $.01
par value. As of October 18, 1996, 4,812,496 shares of Common Stock were
issued and outstanding. On March 31, 1996 the Board of Directors approved
the sale of 300,000 shares of common stock to Nishimoto Sangyo at $.34 a
share in exchange for $102,000 and 113 shares of Preferred Stock at $1,000 a
share in exchange for $113,000, which together offsets the $215,000 which the
Company owed Nishimoto for past due dividends and interest on the 2000 shares
of Preferred Stock owned by Nishimoto. The additional 113 shares of
Preferred Stock have been issued. Issuance of the foregoing shares of common
and preferred stock do not result in preeminent rights for remaining
shareholders.
It is therefore proposed to amend the Certificate of Incorporation
of the Company to increase the number of authorized shares of Common Stock
from 5,000,000 to 7,000,000. The proposed amendment does not affect any
terms or rights of the outstanding stockholders.
The text of the proposed amendment is set forth below:
RESOLVED, that the first sentence of the Article numbered "Fourth"
in the Certificate of Incorporation of the Company, as amended, be deleted
and the following inserted in lieu:
"Fourth: The aggregate number of shares which the Company shall
have authority to issue is 7,004,000 shares, of which 7,000,000 shares shall
be common stock, all of which shall have a par value of $0.01, amounting in
the aggregate to $70,000.00, and 4,000 shares shall be Class A Preferred
Stock all of which shall have no par value."
Final issuance of the 300,000 shares of Common Stock of the Company
to Nishimoto shall be expressly contingent upon the Company receiving
stockholder approval to increase the number of authorized shares of Common
Stock as set forth herein. If the shares are not issued, the Company is
obligated to repay in full the unpaid dividend of $102,000 and interest
thereon at 10 percent. Approval of the proposed amendment requires the
affirmative vote of a majority of the Company's outstanding shares.
The Board of Directors recommends a vote FOR
this proposal.
PROPOSAL NO. 3
RATIFICATION OF ENGAGEMENT OF AUDITORS
Financial Statements of the Company are contained in the Company's
Annual Report for the fiscal year ended June 30, 1996, a copy of which is
delivered to Stockholders herewith. Such Financial Statements were audited
by BDO Seidman, the Company's independent public accountants.
At the Annual Meeting, Stockholders will be requested to confirm
and ratify the appointment of BDO Seidman as the Company's independent
auditors for the fiscal year to end June 30, 1997. The Board of Directors
recommends that Stockholders confirm and ratify the appointment of BDO
Seidman. Confirmation and ratification requires the affirmative vote of a
majority of stock having voting power present at the meeting.
Representatives of BDO Seidman are expected to be present at the
Annual Meeting to respond to stockholder questions, and will be given an
opportunity to address the Stockholders, if they so desire.
The Board of Directors recommends a vote FOR the ratification
of BDO Seidman as the Company's principal
independent accountants.
RIGHTS OF DISSENTING STOCKHOLDERS
There are no rights of appraisal or similar rights of dissenters
with respect to any matter proposed to be acted upon at the Annual Meeting.
OTHER PROPOSED ACTION
The only business which the Board of Directors intends to present
to the Annual Meeting are the proposals set forth above. The Board of
Directors is not aware at the time of solicitation of the enclosed proxy of
any other matter which may be presented for action at the meeting. In
the event that any other matter should come before the meeting for action,
the enclosed proxy will be voted in such manner as the named proxies
determine in accordance with their best judgment.
SUBMISSION OF
PROPOSALS BY SECURITY HOLDERS
The Company's next Annual Meeting of Stockholders has tentatively
been scheduled to take place on December 11, 1997. Stockholders who intend
to present proposals for consideration at the next Annual Meeting of
Stockholders are advised that such proposals must be received no later than
August 10, 1997, to be included in the proxy statement or information
statement to be used in connection with such meeting. Proposals should be
sent to the Secretary, Advanced Medical Products Inc., 6 Woodcross Drive,
Columbia, South Carolina 29212.
