SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. ............................]
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DRUG SCREENING SYSTEMS, INC.
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(Name of Registrant as Specified in Its Charter)
DRUG SCREENING SYSTEMS, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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*Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:___________________________________________________________
<PAGE>
DRUG SCREENING SYSTEMS, INC.
604 VPR Commerce Center
1001 Lower Landing Road
Blackwood, NJ 08012
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
November 14, 1995
To the Shareholders of Drug Screening Systems, Inc.
Notice is hereby given that the Annual Meeting of Shareholders of Drug
Screening Systems, Inc. (the "Company") will be held at the offices of Gold &
Wachtel, 110 East 59th Street, New York, New York, on Tuesday, November 14, 1995
at 10:00 o'clock in the forenoon for the following purposes:
(1) To elect four (4) directors of the Company to serve until
the next Annual Meeting of Shareholders and until their successors have been
duly elected and shall have qualified;
(2) To ratify the appointment by the Board of Directors of the
Company of Deloitte & Touche as auditors of the Company for the fiscal year
commencing July 1, 1995; and
(3) To transact such other business as may properly come
before the meeting or any adjournment thereof.
Each shareholder of record at the close of business on October 13, 1995
is entitled to cast, in person or by proxy, one vote for each share of Common
Stock held by such stockholder on such date.
By order of the Board of Directors
Patrick J. Brennan, CPA
Secretary
Dated: October 16, 1995
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YOUR PROXY IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. PLEASE
FILL-IN, DATE, SIGN AND MAIL IT TODAY IN THE ACCOMPANYING SELF-ADDRESSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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<PAGE>
DRUG SCREENING SYSTEMS, INC.
604 VPR Commerce Center
1001 Lower Landing Road
Blackwood, NJ 08012
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To be held on November 14, 1995
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Drug Screening Systems, Inc. (the
"Company"), a Pennsylvania corporation having its principal office at 604 VPR
Commerce Center, 1001 Lower Landing Road, Blackwood, New Jersey 08012, for use
at the Annual Meeting of Shareholders to be held on Wednesday, November 14, 1995
or any adjournment or adjournments thereof. Only shareholders of record at the
close of business on Friday, October 13, 1995 (the "Record Date"), are entitled
to vote at the meeting. Proxy material is being mailed on or about October 16,
1995 to the Company's shareholders of record on the Record Date.
VOTING SECURITIES
The voting securities at the meeting will consist of 2,446,017 shares
of Common Stock, $0.01 par value (the "Common Stock"). Each shareholder of
record is entitled to cast, in person or by proxy, one vote for each share of
Common Stock held by such shareholder at the close of business on the Record
Date.
Shareholders who execute proxies retain the right to revoke them by
notifying the Company at any time before they are voted. Such revocation may be
effected by execution of a subsequently dated proxy or by a letter to the
Company, sent to the attention of the Secretary at the address of the Company's
principal office set forth above in the introductory paragraph to this Proxy
Statement or delivered at the Meeting, revoking the proxy. Unless so revoked,
the shares represented by proxies will be voted at the Meeting. Proxies
solicited by the Board of Directors of the Company will be voted in accordance
with the direction given therein. If no direction is given, a properly executed
proxy will be voted in favor of the election of management's nominees as
directors and in favor of the proposal to ratify the appointment of auditors.
A plurality of the votes cast at the Meeting shall be necessary to
elect a director. The affirmative vote of a majority of the votes cast at the
Meeting shall be necessary to approve the proposal numbered "2" in the Notice of
Annual Meeting to ratify the appointment of auditors. A shareholder shall have
no right to receive payment for his, her or its shares as a result of
shareholder approval of either proposal in the Notice of Annual Meeting.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of the Record
Date with respect to (1) all persons who are known to the Company to own
beneficially or exercise voting or dispositive control of 5% or more of the
outstanding shares of the Common Stock, (2) each current director who is also a
nominee for election as a director, (3) any executive officer of the Company
whose compensation exceeded $100,000 during the fiscal year ended June 30, 1995
("Fiscal 1995") (there were none) and (4) all directors and officers as a group.
Each beneficial owner, except Messrs. Gordon and Stout, has advised the Company
that he has sole voting and investment power with respect to his shares except
as to those shares still subject to exercise of an option or warrant as to which
there are no voting rights until the option or warrant is exercised. The
information in the table as to Messrs. Gordon and Stout was derived from a
Schedule 13 D filed by each of them pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act").
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of
Name and Address of Common Stock Percent of
Beneficial Owner Beneficially Owned Class(1)
- ------------------- ------------------- ----------
<S> <C> <C>
Robert G. Wallace 183,918(2) 6.9%
49 Burr Avenue
Northport, NY 11768
James A. Gordon 416,511(3) 16.5%
Edgewater Private Equity Fund L.P.
666 Grand Avenue, Suite 200
Des Moines, Iowa 50309
John C. Stout, Jr. 129,800 (4) 5.3%
P. O. Box 76640
Atlanta, GA 30358
John Pappajohn(5) 685,721(6) 23.8%
c/o Pappajohn Capital Resources
2116 Financial Center
Des Moines, Iowa 50309
Jeff Davidowitz(5) 200,000(7) 8.0%
c/o JIBS Equities
Line and Grove Streets
PO Box 87
Nanticoke, PA 18634
Stephen C. Turner(5) 26,000(7) 1.0%
c/o Oncor, Inc.
209 Perry Parkway
Gaithersburg, MD 20877
Anthony Ian Newman(5) 75,000(7) 3.0%
The Grange
Harden Park
Alderley Edge
Cheshire England
All Executive Officers and
Directors as a Group (6 persons) 1,044,549(6)(7)(8) 35.2%
</TABLE>
2
<PAGE>
(1) The percentages are based upon 2,466,017 shares of the Common Stock being
outstanding on the Record Date and, where appropriate, effect is given to the
exercise of warrants or options as required by Rule 13d-3(d)(1)(i) under the
Exchange Act.
(2) Includes (a) 97,400 shares, after giving effect to anti-dilution provisions,
issuable upon exercise of an option expiring April 3, 1996; (b) 36,518 shares,
after giving effect to anti-dilution provisions, issuable upon the exercise of
an option expiring December 17, 1996; and (c) 50,000 shares issuable upon the
exercise of an option expiring August 9, 1999.
(3) Includes 61,418 shares, after giving effect to anti-dilution provisions,
issuable upon the exercise of a warrant expiring June 3, 1996 which is currently
exercisable.
(4) Includes 122,800 shares owned jointly with his spouse and 4,000 shares owned
directly by his spouse.
(5) A director of the Company and a nominee for re-election at the Annual
Meeting.
(6) Includes 117,088 shares, after giving effect to anti-dilution provisions,
issuable upon the exercise of a warrant expiring September 30, 1996 which is
currently exercisable and 11,207 shares, after giving effect to anti-dilution
provisions, issuable upon exercise of a warrant expiring June 3, 1996 held by an
affiliate of his wife as to which he disclaims beneficial ownership. Also
includes an aggregate of 98,152 shares, after giving effect to anti-dilution
provisions, subject to warrants expiring February 17, 1998, February 18, 1998.
March 11, 1998 and March 30, 1998 granted to Mr. Pappajohn in connection with a
loan guaranty and pledge. Also includes 187,547 shares, after giving effect to
anti-dilution provisions, issuable upon exercise of warrants expiring June 3,
1996 which are currently exercisable.
(7) Reflects 25,000 shares issuable upon exercise of an option expiring August
9, 1999.
(8) Includes (I) 25,000 shares issuable upon the exercise of an option expiring
September, 21, 1999 held by an executive officer and (ii) includes 18,840
shares, after giving effect to anti-dilution provisions, issuable upon exercise
of options expiring April 3, 1996 and December 17, 1996 and 10,000 shares
issuable upon exercise of an option expiring August 9, 1999 held by another
executive officer.
ELECTION OF DIRECTORS
Directors
The Board of Directors currently consists of four members. Four
directors will be elected the Annual Meeting. All current directors have been
nominated for re-election. Each director so elected will serve until the next
Annual Meeting of Shareholders and until his successor has been duly elected and
qualified or until his earlier resignation, removal from office or death.
Proxies received in response to this solicitation will be voted for the
election of the persons indicated below unless otherwise specified in the proxy.
If any nominees shall be unable or declines to serve, it is intended that the
proxies will be voted only for the balance of those named and such other persons
as the Board of Directors may designates as a substitute for such nominee, but
the Board of Directors knows of no reason to anticipate that this will occur.
There are no arrangements or understandings between any nominee and any other
person pursuant to which the nominee was selected , except that in connection
with a purchase of 62,500 shares of the Common Stock by Tepnel, the Company
agreed to elect, upon request, a designee of Tepnel to the Board of Directors
and thereafter, at each Annual Meeting of Shareholders, to use its best efforts
to have such designee elected by the shareholders so long as Tepnel retains at
least 4% of the shares initially purchased by it. On May 5, 1993, the Board
elected Anthony I. Newman, then a director and officer and a shareholder of
Tepnel, as a director of the Company pursuant to Tepnel's designation.
The following table sets forth certain information as of the Record
Date, concerning the nominees for election as directors of the Company. For
information as to the shares of the Common Stock held by each nominee, see the
section "Security Ownership of Certain Beneficial Holders and Management"
elsewhere in this Proxy Statement.
3
<PAGE>
<TABLE>
<CAPTION>
Year First
Became a
Name of Director Age Principal Occupation Director
- ---------------- --- -------------------- ----------
<S> <C> <C> <C>
John Pappajohn......................67 President of Equity Dynamics, Inc. 1991
a financial consulting and venture
capital firm
Steven C. Turner....................50 Chief Executive Officer of Oncor, 1991
Inc., a manufacture of genetic
medical diagnostics
Anthony I. Newman...................47 A founding shareholder and 1993
director of Swordfish International,
a technology transfer specialist
Jeff Davidowitz.....................39 Private Investor 1994
</TABLE>
All directors hold office until the next Annual Meeting of Shareholders
of the Company or until their successors have been duly elected and qualified.
Each of the current directors other than Mr. Davidowitz, was elected at the
Annual Meeting of Shareholders on March 8, 1994.
Executive Officers
As of the Record Date, the executive officers of the Company were:
<TABLE>
<CAPTION>
Year First
Became an
Name of Officer Age Position with the Company Officer
- ---------------- --- ------------------------- ----------
<S> <C> <C> <C>
Patrick J. Brennan, CPA.............51 Vice President, Chief Financial 1994
Officer, Secretary
Kenneth S. Carpenter................50 Vice President 1991
</TABLE>
Each executive officer of the Company will serve until the first
meeting of the Board of Directors following the next Annual Meeting of
Shareholders or until the Board otherwise directs.
Family Relationships
There are no family relationships among any of the directors or
executive officers of the Company.
Business History
John Pappajohn, a director of the Company since December 1991, has been
the President of Equity Dynamics, Inc., a financial consulting and venture
capital firm, and the sole owner of Pappajohn Capital Resources, a venture
capital firm, since 1969. Mr. Pappajohn is a member of the Board of Directors of
the following public companies: Pace Health Systems, Inc., a medical software
company; Core Management, Inc., a workmen's compensation software company;
United Systems Technology, Inc., a municipal software company; BioCryst
Pharmaceuticals, Inc., a pharmaceutical company and OncorMed, Inc., which is a
genetic based cancer service.
4
<PAGE>
Stephen C. Turner, a director of the Company since December 1991, has
been, since August 19883, the Chairman of the Board and Chief Executive Officer
of Oncor, Inc., a public company which manufactures genetic medical diagnostics.
Anthony I Newman, a director of the Company since May 1993, is a
technology transfer and licensing specialist, resident in England. Mr. Newman
also sits on a number of boards including public companies in the United
Kingdom.
Jeff Davidowitz, a director of the Company since June 1944, has been
President of Penn Footwear, a private company which manufactures shoes, since
January 1, 1991. Prior to that he was Vice President of Penn Footwear.
Patrick J. Brennan, CPA joined the Company on September 27, 1994 as
Vice President, Chief financial Officer and Secretary. Prior to that, Mr.
Brennan was Chief Financial Officer of Enzymatics, Inc., from June 1993 until
March 1994, Prior to that, he served as Chief Financial Officer for American
Film Technologies, Inc. (AFT) from August 1988 until December 1992. In February
1991, Mr. Brennan was elected to the Board of Directors of AFT. Mr. Brennan
continued on the Board after his resignation. In October 1993, AFT filed for
bankruptcy under Chapter 11 of the Federal Bankruptcy Code. Mr. Brennan, as well
as most directors, resigned upon the acquisition by a new investor. From
December 1992 to June 1993 and from March 1994 to September 1994, Mr. Brennan
was an independent consultant.
Kenneth S. Carpenter, the Vice President of Production whose
responsibilities include quality control, joined the Company in February 1990 as
a Director of Manufacturing and was elected a Vice President in July 1991. From
October 1989 to February 1990, Mr. Carpenter was acting as an independent
consultant. From June 1984 to October 1989 , Mr. Carpenter was employed by
Princeton Biomedix, a Division of ENI, a manufacturer of clinical diagnostic
chemistry reagents, in the capacities of Plant Manager, Quality Assurance
Manager, Manufacturing Manager, and Quality Control Manager.
Messrs. Pappajohn and Turner (as indicated above) are the only
directors to currently serve as a director of another company which has a
security registered under Section 12(b) or (g) of the Exchange Act . No director
serves as a director of another company which is registered as an investment
company under the Investment Company Act of 1940, as amended.
Board Committees
The Board has an Audit Committee consisting of Stephen Turner as
Chairman and John Pappajohn and Jeff Davidowitz as members and a Compensation
Committee with Mr. Pappajohn as Chairman and Messrs. Turner and Davidowitz as
members.
Board Meetings
There were thirteen meetings of the Board held in Fiscal 1995. All of
the then directors attended or participated by telephone in all of the meetings
except Mr. Turner who missed one meeting and Mr. Newman who missed nine
meetings. During Fiscal 1995, there was one meeting of the Audit Committee and
one meeting of the Compensation Committee in which all members participated.
Compliance with Section 16(a) of the Exchange Act
Based solely on a review of Forms 3 and 4 furnished to the Company
under Rule 16-3 (e) promulgated under the Exchange Act with respect to Fiscal
1995, the Company is not aware of any director or officer of the Company who
failed to file on a timely basis, as disclosed in such forms, reports required
by Section 16 (a) of the Exchange Act during Fiscal 1995 or prior years. Except
as disclosed in "Security Ownership of Certain Beneficial Owners and Management"
elsewhere in this Proxy Statement, the Company is not aware of any beneficial
owner of 10% or more of the outstanding shares of the Common Stock, which is the
only security of the Company registered under Section 12 of the Exchange Act.
5
<PAGE>
Certain Transactions
On August 18, 1988, Robert G. Wallace, then the President, and Chief
Executive Officer and a director of the Company, borrowed $50,000 from the
Company. The loan was made to induce Mr. Wallace to leave his prior employment
and become active as a sales consultant to the Company and to provide a means by
which expenses he would incur in connection with his change of employment could
be paid. The note evidencing this loan bore interest at 2% over the Chemical
Bank prime rate and was collateralized pursuant to a pledge agreement by 15,000
shares of the Common Stock which he owned. The note (including interest) was
originally due on November 19, 1989 and was extended to June 30, 1994. Under the
terms of the latest extension, $7,500 due December 31, 1993, and $7,500 due
March 31, 1994 were paid on January 24, 1994 and April 14, 1994, respectively,
pursuant to the sales of a portion of the collateral on December 28, 1993 and
April 6, 1994, respectively. The outstanding balance as of June 30, 1994, the
note's last maturity date, was $70,456, which included accrued interest of
$20,456. The Company negotiated a settlement agreement with Mr. Wallace under
which this receivable and interest accrued thereon was forgiven in exchange for
the amount the Company owed him, which amount was accrued in the Fiscal 1994
financial statements.
During Fiscal 1994 and 1993, Mr. Wallace received compensation from the
Company of $121,200 and $145,100, respectively, for his duties as sales
representative to BWIS and, prior to March 8, 1993, as President and Chief
Executive Officer. (As part of the above mentioned settlement agreement
negotiated with Mr. Wallace, a consulting agreement provides that Mr. Wallace
will receive a commission of 5% for future sales to BWIS.) The agreement also
provides for an increase in the commission rate if certain goals are obtained,
and, in certain instances, sales made to other parties which are a result of his
efforts.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth summary compensation information awarded
to, earned by, or paid to each highly paid executive whose total annual salary
and bonuses exceeded $100,000 during Fiscal 1995, the fiscal year ended June 30,
1994 ("Fiscal 1994) and the fiscal year ended June 30, 1993 ("Fiscal 1993) by
the Company: (No executives received more than $100,000 in salary and bonus in
Fiscal 1995.)
<TABLE>
<CAPTION>
Awards
Annual Compensation ------
------------------- Options/ All Other
Other Annual SARs(4) Compensation
Name and Principal Position Year Salary Compensation (#) ($)
- --------------------------- ---- ------ ------------ --------- -------------
<S> <C> <C> <C> <C> <C>
Patrick Byrne 1994 106,000 None None None
COO, Vice President-Sales 1993 117,800 None None None
& Marketing (1)
Gary Nacht, Senior 1994 121,600 2,590 None None
Vice President, CFO 1993 139,300 2,580 None None
and Secretary (2)
Francis Pfeiffer 1994 92,508 554 None None
Vice President, Research 1993 112,900 2,975 None None
& Development (3)
</TABLE>
6
<PAGE>
(1) Mr. Byrne joined the Company in March 1992 and was terminated on July 21,
1994. Under an agreement with Mr. Byrne, he received severance of approximately
$52,000 which was paid bi-weekly from the date of termination through April 28,
1995.
(2) Mr. Nacht was terminated in July 1994.
(3) Dr. Pfeiffer resigned in March 1994.
(4) Amounts reflect anti-dilution provisions of options.
Option/SAR Grants Table
On September 22, 1994, the Board of Directors ratified the adoption of
the Drug Screening Systems, Inc. Stock Option Plan of 1994 (the "1994 Option
Plan") which provides for the granting of non-qualified stock options to
purchase up to 500,000 shares of the Common Stock, subject to possible
adjustment in the event of stock dividends, stock splits and similar
transactions. Pursuant to the 1994 Option Plan, options may be granted to key
employees, officers, directors, consultants and advisers of the Company and, if
later incorporated, subsidiaries; the options may become exercisable in
installments; the exercise price of an option may not necessarily be at the fair
market value of the Common Stock at its date of grant; the expiration date of an
option may be five to ten years after its date of grant; and there is a
provision permitting exercise if there is a "change of control" (which
definition does not include a transaction approved by the then current
directors).
Pursuant to this Plan, options to purchase an aggregate of 270,000
shares of the Common Stock at $0.625 a share (the fair market value at the date
of grant) were granted on July 29, 1994 and an option to purchase 25,000 shares
at $1.375 a share (the fair market value at the date of grant) on September 22,
1994 (subsequently reduced to $.0625 to reflect current market) as follows.
These options are exercisable on the respective date of grant and expire five
years from the respective date of grant.
<TABLE>
<CAPTION>
Name of Optionee Position with Company Number of Shares
- ---------------- --------------------- -----------------
<S> <C> <C>
Granted July 29, 1994
- ---------------------
Joseph Shaya Consultant 125,000
Robert G. Wallace Sales Consultant 50,000
Stephen C. Turner Director 25,000
Anthony Ian Newman Director 25,000
Jeff Davidowitz Director 25,000
Kenneth S. Carpenter Vice President 10,000
Jeffrey M. Bachrach Consultant 10,000
Granted September 22, 1994
- --------------------------
Patrick J. Brennan Vice President, Chief Financial
Officer and Secretary 25,000
</TABLE>
7
<PAGE>
Aggregated Option/SAR Exercises during Fiscal 1995 and Option/SAR values
at June 30. 1995
<TABLE>
<CAPTION>
Number (#) of Value ($) of
Unexercised Unexercised
Shares Options/SARs Options/SARs
Acquired Value at June 30, 1994 at June 30, 1994
on Realized Exercisable/ Excercisable/
Name Exercise ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Patrick J. Brennan None None 25,000/0 None
Vice President, Secretary
& Chief Financial Officer
Kenneth S. Carpenter None None 28,840/0 (1) None
Vice President,
</TABLE>
(1) These amounts reflect anti-dilutive provision of certain options.
Compensation of Directors
Directors of the Company receive no compensation for their services as
directors. Three of the Directors, Messrs. Newman, Turner & Davidowitz each
received an option to purchase 25,000 shares as described above.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Action is to be taken at the Annual Meeting with respect to the
ratification of the appointment by the Board of Directors of the Company of
Deloitte & Touche as independent public accountants to audit the books of the
Company for the fiscal year commencing July 1, 1995. Deloitte & Touche has been
regularly employed by the Company since 1989 to examine its books and accounts,
and for other purposes, for which services their customary fees have been paid.
Although neither federal nor state law requires the approval of the
auditors by shareholders, the Board believes that, in view of the importance of
financial statements to the shareholders, the selection of independent public
accountants should by passed on by shareholders. Accordingly, approval of the
following resolution will be requested at the Meeting:
"RESOLVED, that the Board of Directors' appointment of Deloitte &
Touche to serve as the Company's independent public accountants for the fiscal
year beginning July 1, 1995 is ratified and approved."
The Board of Directors recommends a vote FOR the foregoing resolution
because of the familiarity of Deloitte & Touche with the Company's financial and
other affairs. In the event that shareholders disapprove of the selection, the
Board of Directors will consider the selection of other auditors.
8
<PAGE>
A member of Deloitte & Touche will be present at the Meeting. He will
not make any statement, but will answer any questions any shareholder may have
with respect to the financial statements of the Company for Fiscal 1995
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT BY THE BOARD OF DIRECTORS OF THE COMPANY OF
DELOITTE & TOUCHE AS INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE BOOKS OF THE
COMPANY FOR THE FISCAL YEAR COMMENCING JULY 1, 1995
OTHER MATTERS COMING BEFORE THE MEETING
As of the date of this Proxy Statement, the Company knows of no
matters, other than those described above, intended to be presented at the
meeting. If any other business should properly come before the meeting, the
accompanying form of proxy will be voted in accordance with the judgment of the
persons named therein, and discretionary authority to do so is included in the
form of proxy.
MISCELLANEOUS
Cost of Solicitation
The expenses in connection with the solicitation of proxies, including
the cost of preparing, assembling and mailing this Proxy Statement and the
related material, will be borne by the Company. The Company will pay brokers and
other custodians, nominees and fiduciaries their reasonable expenses for sending
proxy materials to principals and obtaining their proxies. In addition to
solicitations by mail, proxies may be solicited personally or by telephone or
telegraph by directors, officers and regular employees of the Company, who will
receive no additional compensation therefor.
Annual Report to Shareholders
A copy of the Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1995 accompanies this Proxy Statement. There will be no separate Annual
Report to Shareholders other than the Annual Report on Form 10-KSB. A copy of
any exhibits to the Annual Report on Form 10-KSB may be obtained by written or
oral request to Patrick J. Brennan, Vice President, Chief Financial Officer and
Secretary of the Company, at the principal office of the Company, the address of
which is set forth in the introductory paragraph to this Proxy Statement. A
reasonable fee for duplicating and mailing will be charged if a copy of any
exhibit is requested.
Shareholder Proposals
Shareholder proposals for inclusion in the Company's Proxy Statement
for the next Annual Meeting of Shareholders must be received no later than a
reasonable time before the proxy material for such Meeting is mailed.
DRUG SCREENING SYSTEMS, INC.
Patrick J. Brennan, CPA
Secretary
Dated: Blackwood, New Jersey
October 16, 1995
9
<PAGE>
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PROXY
DRUG SCREENING SYSTEMS, INC.
PROXY SOLICITATION BY THE BOARD OF DIRECTORS FOR
1994 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby constitutes and appoints PATRICK J. BRENNAN and
KENNETH S. CARPENTER as proxies, with power of substitution, to vote all shares
of Common Stock of the Undersigned at the Annual Meeting of Shareholders of Drug
Screening Systems, Inc. to be held on November 14, 1995 (receipt of Notice and
Proxy Statement for which is acknowledged), and at any adjournment thereof, as
specified below, and hereby authorizes all such shares of Common Stock to be
voted FOR the election of directors and FOR the appointment of Deloitte & Touche
as auditors of the Company for the fiscal year commencing July 1, 1995 unless
specify to the contrary below. This proxy revokes all prior proxies.
1. ELECTION OF DIRECTORS / / FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote
for all nominees listed below
Jeff Davidowitz, Anthony I. Newman, John Pappajohn, Stephen Turner
(INSTRUCTION: To withhold authority to vote for any individual write
that nominee's name on the space provided below.
- -------------------------------------------------------------------------------
2. APPROVAL OF THE APPOINTMENT OF DELOITTE & TOUCHE AS AUDITORS OF
DRUG SCREENING SYSTEMS, INC. FOR FISCAL 1995
/ / FOR / / AGAINST / / ABSTAIN
3. Upon the transaction of such other business as may properly come before the
meeting or on any adjournment.
(To be filled in, dated and signed on reverse side.)
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<PAGE>
- -------------------------------------------------------------------------------
Fill in, date and return the Proxy Card promptly using the enclosed envelope.
Dated: , 1995
------------------------
-------------------------------------
-------------------------------------
Signature(s)
(Please sign exactly as your name
appears hereon. If the holder is a
corporation, partnership or other
association, please sign its name and
add your own name and title. When
signing as attorney, executor,
administrator, trustee or guardian,
please also give your full title. If
shares are held jointly, EACH holder
should sign.)
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