ADVANCED MEDICAL PRODUCTS INC.
111 RESEARCH DRIVE
COLUMBIA, SOUTH CAROLINA 29203
NOTICE OF ANNUAL MEETING
OF
STOCKHOLDERS
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 111 Research
Drive, Columbia, South Carolina, on Thursday, April 11, 1996, at
2:00 p.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 confirm and ratify the engagement of BDO
Seidman as the Company's independent auditors for
the fiscal year ending June 30, 1996; and
3. To transact such other and further business as may
properly come before the Meeting or any
adjournment(s) thereof.
The foregoing items of business are more fully described in
the Proxy Statement accompanying this Notice. Only stockholders
of record at the close of business on March 8, 1996 are entitled to
notice of and to vote at the meeting and any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
IN PERSON, YOU ARE URGED TO SIGN AND PROMPTLY
MAIL THE ENCLOSED PROXY SO THAT YOUR SHARES
WILL BE REPRESENTED AT THE MEETING.
By Order of the Board of Directors
Deborah Riente, Vice President and
Secretary
<PAGE>
ADVANCED MEDICAL PRODUCTS INC.
111 RESEARCH DRIVE
COLUMBIA, SOUTH CAROLINA 29203
PROXY STATEMENT
The accompanying proxy (the "Proxy") is solicited on behalf
of the Board of Directors of Advanced Medical Products Inc., a
Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders of the Company to be held at Advanced
Medical Products Inc., 111 Research Drive, Columbia, South
Carolina on Thursday, April 11, 1996 at 2:00 p.m. (the "Annual
Meeting"). Only holders of record of the Company's Common Stock
at the close of business on March 8, 1996 will be entitled to vote.
At the close of business on that date, the Company had 3,438,576
shares of Common Stock outstanding and entitled to vote. A
majority, or 1,719,288 of these shares, will constitute a quorum for
the transaction of business. This Proxy Statement is being first
mailed to stockholders on or about March 20, 1996.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Holders of Common Stock are entitled to one vote for each
share held as of the above record date. Shares of Common Stock
may not be voted cumulatively for the election of directors. The
aggregate number of votes entitled to be cast by all stockholders
present in person or represented by proxy at the Annual Meeting,
whether those stockholders vote "for," "against," "abstain" or give no
instructions, will be counted for purposes of determining the
minimum number of affirmative votes required to ratify the
selection of Independent Public Accountants and the total number
of shares cast "for" this proposal will be counted for purposes of
determining whether sufficient affirmative votes have been cast.
An abstention from voting on a matter by a stockholder present in
person or represented by proxy at the Annual Meeting has the same
effect as a vote "against" the matter. In the event that a broker
indicates on a Proxy that it does not have discretionary authority to
vote certain shares on a particular matter, those shares will not be
considered present and entitled to vote with respect to that matter.
Each nominee to serve on the Company's Board of
Directors, to be elected, must receive a plurality of the votes of the
shares presented in person or represented by proxy at the Annual
Meeting and entitled to vote on the election of directors (provided a
quorum is present). Vote "Withheld," as well as broker non-votes,
will not contribute to the number of votes required to elect a
director.
Ratification of selection of independent public accountants,
require for approval the affirmative vote (a vote "For") of a
majority of the outstanding shares of Common Stock of the
Company present in person or by proxy at the Annual Meeting and
entitled to vote (provided a quorum is present). Votes "Against" and
"Abstain" will count toward the number of shares voted at the
Annual Meeting, but will not contribute toward the required
number of votes necessary. Broker non-votes will be counted
toward the number of shares present at the Annual Meeting for
determining whether a quorum is present but will not be counted
toward the number of shares present and entitled to vote with
respect to the matter on which the broker non-vote is given.
Therefore, if broker non-votes are received with respect to this
proposal, they will not be counted in determining the number of
affirmative votes necessary to approve such proposal.
Unless otherwise instructed by the stockholder or described
herein, each valid returned Proxy in the form accompanying this
Proxy Statement that is not revoked will be voted in the election of
directors "FOR" the nominees of the Board of Directors, "FOR"
ratification of the selection of independent public accountants, and
at the Proxy holder's discretion, on such other matters, if any, that
may come before the Annual Meeting (including any proposal to
adjourn the Annual Meeting).
Any proxy given pursuant to this solicitation may be
revoked by the person giving it at any time before it is exercised.
Proxies may be revoked by giving written notice to the Secretary of
the Company and the issuance of a subsequent proxy will revoke
any prior proxy even though written notice of revocation is not
given.
NO PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROXY STATEMENT, AND IF GIVEN,
SUCH INFORMATION OR REPRESENTATION SHOULD NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THE
DELIVERY OF THIS PROXY STATEMENT SHALL NOT,
UNDER ANY CIRCUMSTANCES, IMPLY THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF.
Certain Relationships and Related Transactions
On January 12, 1996 Carolina Medical, Inc. ("Carolina
Medical"), 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. Carolina Medical or its affiliate
BIOTEL International, Inc. ("BIOTEL"), a holding company that
owns a majority interest in Carolina Medical's stock, has agreed to
purchase an additional 1,400,000 shares of Advanced Medical's
common stock within 105 days for an additional $280,000, subject
to certain defined terms and conditions. In the event Carolina
Medical (or BIOTEL) purchases the additional 1,400,000 shares of
common stock, Carolina Medical (or BIOTEL) will beneficially own
an aggregate of 2,150,000 shares, or 44.44%, of the Company's
common stock. 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.
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.
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.
Prior to the January 12 Agreements, Mr. Groff owned or
exercised voting control over an aggregate of approximately 38.01%
of the outstanding common stock (which constituted the largest
single voting block of the Company's outstanding common stock).
Assuming full consummation of the January 12 Agreements,
BIOTEL will assume voting control over 44.44% of the Company's
outstanding voting stock. The January 12 Agreements immediately
vest control over the Company's Board of Directors in BIOTEL and,
upon full consummation of the January 12 Agreements, will vest
effective voting control over the Company's common stock in
BIOTEL. The Company is advised that decisions by Carolina
Medical and BIOTEL that could impact upon the Company will be
made by C. Roger Jones and Ronald G. Moyer, respectively.
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.
Percent
Amount and Nature of
Name & Address of Beneficial Ownership (1) Class (2)
Clarence P. Groff 984,366 (3) 28.54%
231 N. Woodlake Dr.
Columbia, SC 29223
Carolina Medical 750,000 (4) 21.8%
157 Industrial Drive
King, NC 27021
Ronald G. Moyer 750,000 (4) 21.8%
111 Research Drive
Columbia, SC 29203
C. Roger Jones 1,366,666 (3),(4) 39.75%
111 Research Drive
Columbia, SC 29203
Steven Berkowitz, M.D. 264,200 (5) 7.68%
22 Malke Drive
Wayside, NJ 07712
George L. Down 196,766 (6) 5.72%
111 Research Dr.
Columbia, SC 29203
James H. Brown 162,058 (7) 4.68%
111 Research Dr.
Columbia, SC 29203
Officers and Directors at 1,839,271 (3),(4),(6),(7),(8) 53.49%
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 178,556 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) Includes 264,200 shares over which Mr. Groff exercises voting
power pursuant to the
terms of a voting trust agreement with Dr. Steven Berkowitz. The
remaining 100,500 shares
in the voting trust are disbursed among eight individuals. Also
includes 3,000 shares
issuable in the event of exercise of currently exercisable stock
options. Mr. Groff has
granted to C. Roger Jones an Irrevocable Proxy as to the 616,666
shares owned by Mr. Groff authorizing such designee to represent
the shares at any meeting for the purpose of
establishing a quorum but to abstain from casting a vote.
(4) Ronald G. Moyer as Chairman and controlling shareholder of
Carolina Medical, and C.
Roger Jones as President and Director of Carolina Medical, may be
deemed to be beneficial owners of the shares owned by Carolina
Medical Inc. by virtue of their control over the
voting power of those shares. (See "Certain Relationships and
Related Transactions".)
(5) The shares owned by Dr. Berkowitz are subject to the voting
trust agreement described
in note 3, above.
(6) 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.
(7) 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.
(8) Includes 52,924 shares beneficially owned by the Secretary of
the Company (9,643 of
which are subject to the voting trust agreement described in note 3,
above) and 70,500 shares
issuable in the event of exercise of currently exercisable stock
options granted to such
officer.
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, Treasurer and
Chairman of the Board
L. John Ankney 67 Director
James H. Brown 47 Vice President, Assistant
Secretary and Director.
George L. Down 55 Director
David A. Heiden 48 Director
C. Roger Jones 56 Director
Deborah Riente 40 Vice President and Secretary
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. JOHM 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 domestic and international sales functions, including
OEM sales. He has served as Vice President and a Director since
the Company's inception in September 1986, and an Assistant
Secretary since August 1992. 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, has served as a Director of and
consultant to the company since its inception in September 1986,
and since January 1993, has been employed as the Company's
Coordinator of Communication and Design. 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, where he 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 has served as Vice President of the
Company since December 1993. She also has served as the
Company's Corporate Secretary since August 1992, and serves as
Director of Human Resources and Corporate Administration. From
July 1991 until July 1992, Ms. Riente was employed as the
Company's Human Resources Manager, and from 1987 to July
1991, served as an administrative assistant for the Company. 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, 1995, the Board of
Directors held a total of four 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 for services rendered in all
capacities to the Company for the three fiscal years in the period
ended June 30, 1995, to the Company's Chief Executive Officer.
No other officer other than the Chief Executive Officer had a total
annual salary and bonus in excess of $100,000.
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
Name Fiscal Other
and Year Annual All Other
Principal Ended Salary Bonus Compensation Options Compensation
Position June 30 ($) ($) ($) (#) ($)
Clarence P. Groff 1995 127,828 -0- 94,371 (A) -0- -0-
Chief Executive 1994 117,011 1,000 28,263 (A) -0- -0-
Officer 1993 108,286 3,000 45,884 (A) -0- -0-
(A) Amounts reported relect the dollar value of the following:
Employer
Contributions Life
Named Executive Under Profit Insurance Car Performance
Officer Year Sharing Plan Premiums Allowance Plan
Clarence P. 1995 1,416 -0- 5,250 12,120
Groff 1994 1,036 4,212 9,000 12,596
1993 -0- 2,278 9,000 12,566
Cancellation of
Indebtedness &
Interest Free Relocation
Year Loan Expenses
1995 66,051(B) 9,534
1994 1,419 -0-
1993 866 21,174
(B) $65,755 was cancellation of indebtedness. This was comprised of two loans
totalling $45,641.31, and $20,113.69 of household expenses related to Mr.
Groff's relocation in early 1993.
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.
ENGAGEMENT OF AUDITORS
Financial Statements of the Company are contained in the
Company's Annual Report for the fiscal year ended June 30, 1995,
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,
1996. 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 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 Thursday, December 12,
1996. 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, 1996, 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., 111 Research Drive, Columbia, South Carolina 29203.
