<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
AMDL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
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) Dated Filed:
<PAGE> 2
AMDL, INC.
2492 WALNUT AVENUE, SUITE 100
TUSTIN, CALIFORNIA 92780
--------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 28, 2000
10:00 A.M.
--------------------
The Annual Meeting of Stockholders of AMDL, Inc. will be held at 2492
Walnut Avenue, Suite 100, Tustin, California 92780 on Wednesday, June 28, 2000,
at 10:00 a.m. to consider and vote upon:
1. The election of four directors to hold office until the next
annual meeting of stockholders or until their successors are
duly elected and qualified;
2. The ratification of our appointment of Corbin & Wertz as our
independent public accounts;
3. The ratification of our 1999 Stock Option Plan; and
4. Such other business as may properly come before the Annual
Meeting other than the matters listed above.
Our board of directors has fixed the close of business on June 6, 2000
as the record date for determination of stockholders entitled to notice of, and
to vote, at the Annual Meeting. TO ASSURE THAT YOUR SHARES WILL BE REPRESENTED
AT THE ANNUAL MEETING, PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE. YOU MAY REVOKE YOUR PROXY AT
ANY TIME BEFORE IT IS VOTED.
Stockholders are cordially invited to attend the meeting in person.
Please indicate on the enclosed proxy whether you plan to attend the meeting.
Stockholders may vote in person if they attend the meeting even though they have
executed and returned a proxy.
By Order of the Board of Directors,
Vivian Frazier,
Secretary
June 7, 2000
Tustin, California
<PAGE> 3
AMDL, INC.
--------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
--------------------
INTRODUCTION
This proxy statement is furnished by our board of directors in
connection with the solicitation of proxies for use at the Annual Meeting of
Stockholders to be held on June 28, 2000 and at any adjournments thereof. The
Annual Meeting has been called to consider and vote upon the election of four
(4) directors, the approval of Corbin & Wertz as our independent auditors, the
approval of our 1999 Stock Option Plan and to consider such other business as
may properly come before the Annual Meeting. We are sending this proxy statement
and the accompanying proxy to our stockholders on or about June 7, 2000.
PERSONS MAKING THE SOLICITATION
The proxy is solicited on behalf of our board of directors. The
original solicitation will be by mail. Following the original solicitation, our
board of directors expects that certain individual stockholders will be further
solicited through telephone or other oral communications from the board of
directors. The board of directors does not intend to use specially engaged
employees or paid solicitors. The board of directors intends to solicit proxies
for shares which are held of record by brokers, dealers, banks or voting
trustees, or their nominees, and may pay the reasonable expenses of such record
holders for completing the mailing of solicitation materials to persons for whom
they hold shares. We will bear all solicitation expenses.
TERMS OF THE PROXY
The enclosed proxy indicates the matters to be acted upon at the Annual
Meeting and provides boxes to be marked to indicate the manner in which your
shares are to be voted with respect to such matters. By appropriately marking
the boxes, you may specify whether the proxies shall vote for or against or
shall be without authority to vote the shares represented by the proxy. The
proxy also confers upon the proxies discretionary voting authority with respect
to such other business as may properly come before the Annual Meeting.
If the proxy is executed properly and is received by the proxy prior to
the Annual Meeting, the shares represented by the proxy will be voted. Where you
specify a choice with respect to the matter to be acted upon, your shares will
be voted in accordance with your request. If you return your signed proxy but do
not indicate your voting preferences, we will vote FOR the three proposals on
your behalf. You have the right to revoke your proxy any time before the meeting
by (1) notifying our Secretary, or (2) returning a later-dated proxy. You may
also revoke your proxy by voting in person at the meeting.
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<PAGE> 4
VOTING RIGHTS AND REQUIREMENTS
VOTING SECURITIES
Generally. The securities entitled to vote at the Annual Meeting
consist of all of the issued and outstanding shares of our common stock and
preferred stock. The common stock and the preferred stock vote together as a
group on all matters to be put to a vote of the stockholders. The shares of the
Series A Preferred Stock are convertible, at the option of the holders, into
shares of common stock and each share of Series A Preferred Stock entitles its
holder to cast the number of votes that such holder would be entitled to cast
assuming that such shares of preferred stock had been converted, on the record
date, into the maximum number of shares of common stock into which the preferred
stock is then convertible.
The close of business on June 6, 2000 has been fixed by our board of
directors as the record date. Only stockholders of record as of the record date
may vote at the Annual Meeting. As of the record date, we had 1,651,124 shares
of common stock issued and outstanding and entitled to vote at the Annual
Meeting. In addition, as of the record date, we had 405 shares of Series A
Preferred Stock issued and outstanding which are convertible into a maximum of
101,250 shares of common stock. The holders of the common stock and the
preferred stock shall vote together as a group on all matters submitted to the
shareholders at the Annual Meeting.
QUORUM
A majority of the outstanding shares, present or represented by proxy,
constitutes a quorum for the Annual Meeting.
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<PAGE> 5
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the shares of common stock as of June 6, 2000 by (i)
each person who is the beneficial owner of more than five percent (5%) of our
common stock, (ii) each of our directors and executive officers and (iii) all
directors and executive officers as a group.
<TABLE>
<CAPTION>
Percentage
Name and Address(1) Number of Shares Owned(2)
------------------------------- ------------------- ---------------
<S> <C> <C>
William M. Thompson III, M.D. 203,807(3) 10.4%
Douglas C. MacLellan 69,083(4) 3.8%
Gary L. Dreher 551,350(5) 23.9%
Edward R. Arquilla, M.D., Ph.D. 57,633(6) 3.2%
Vivian B. Frazier 5,000(7) (8)
All Directors and Officers
as a group (5 persons) 881,873 33.5%
</TABLE>
----------
(1) Address is 2492 Walnut Avenue, Suite 100, Tustin, California, 92780.
(2) Assumes the conversion of 405 shares of Series A Preferred Stock into
101, 250 shares of common stock.
(3) Includes 188,283 shares of common stock issuable upon the exercise of
currently outstanding warrants and options at an exercise price of $.68
per share and 15,000 shares of common stock issuable upon the exercise
of options at $1.75 per share.
(4) Includes 53,583 shares of common stock issuable upon the exercise of
currently outstanding warrants and options at an exercise price of $.68
per share and 15,000 shares of common stock issuable upon the exercise
of options at $1.75 per share.
(5) Includes 1,250 shares of common stock issuable upon the exercise of
currently outstanding options at an exercise price of $28.00 per share,
250,000 shares of common stock issuable upon the exercise of options at
$0.68 per share, and 300,000 shares of common stock issuable upon the
exercise of options at $1.75 per share.
(6) Includes 42,333 shares of common stock issuable upon the exercise of
currently outstanding warrants and options at an exercise price of $.68
per share and 15,000 shares of common stock issuable upon the exercise
of options at $1.75 per share.
(7) Represents 5,000 shares of common stock issuable upon the exercise of
currently outstanding options at an exercise price of $.68 per share.
Does not include options to purchase up to 10,000 shares of common
stock issuable upon the exercise of outstanding options that are
subject to vesting.
(8) Less than one percent.
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<PAGE> 6
MATTERS TO BE ACTED UPON
ITEM 1: ELECTION OF DIRECTORS
DIRECTORS
Our Certificate of Incorporation gives our board of directors the power
to set the number of directors at no less than three nor more than nine. The
size of our board is currently set at four. The directors elected at the Annual
Meeting will serve until the next Annual Meeting of stockholders.
Our board of directors has nominated four (4) directors to be elected
at the Annual Meeting to be held on June 28, 2000. These nominees are William M.
Thompson, III, M.D., Gary L. Dreher, Edward R. Arquilla, M.D. and Douglas C.
MacLellan. All of the nominees currently sit on our board of directors. Our
board knows of no reason why any nominee for director would be unable to serve
as a director. In the event that any of them should become unavailable prior to
the Annual Meeting, the proxy will be voted for a substitute nominee or nominees
designated by our board of directors or the number of directors may be reduced
accordingly.
The following table sets forth the name and age of each nominee for
director, the year he was first elected a director and his position(s) with
AMDL.
<TABLE>
<CAPTION>
Year First
Name Age Elected Position
---- --- ---------- --------
<S> <C> <C> <C>
William M. Thompson III, Ph.D. 72 1989 Chairman of the Board of Directors
Gary L. Dreher 54 1999 President, Chief Executive Officer, and Director
Douglas C. MacLellan 43 1992 Director
Edward R. Arquilla, M.D., Ph.D. 77 1997 Director
</TABLE>
Dr. Thompson has been one of our directors since June 1989. From 1969
to the present, Dr. Thompson has been a practicing General Surgeon in Orange
County, California. From 1975 to the present, Dr. Thompson has also served as
Vice President for Medical Affairs and as a director of Beech Street in Irvine,
California.
Mr. Dreher joined AMDL in January 1998 as Vice President of Sales and
Marketing. Mr. Dreher has served as our president and as a member of our board
of directors since February 1999. From 1993 to 1997, Mr. Dreher served as
president of Medical Market International of Yorba Linda, California, a
marketing and management services company he co-founded. From 1991 to 1993, Mr.
Dreher served as Vice President of Sales and Marketing for Apotex Scientific of
Arlington, Texas, a division of Canada's largest pharmaceutical company. Mr.
Dreher also currently serves on the board of directors of Optimum Care
Corporation.
Mr. MacLellan has been one of our directors since September 1992. From
May 1992 to the present, Mr. MacLellan has served as President and Chief
Executive Officer of The MacLellan Group, Inc., a privately held financial
advisory firm. Since May 1997, Mr. MacLellan has also served as a director and
co-founder of Datalex Corporation, a Canadian based millennium software solution
provider. From November 1996 to February 1998, Mr. MacLellan was a member of the
board of directors and Investment Committee of the Strategic East European Fund.
From November 1995 to March 1998, Mr. MacLellan was President, Chief Executive
Officer and a director of PotraCom Wireless, Inc., a publicly held Canadian
company engaged in the business of developing and operating cellular and
wireless telecommunications ventures. Mr. MacLellan is also currently a member
of the board of directors of Albion Offset Group, a privately held international
trade advisory firm.
Dr. Arquilla has been one of our directors since February 1997. From
1959 until 1994, Dr. Arquilla was a full time faculty member in the Department
of Pathology at the University of Southern California, the University of
California at Los Angeles and the University of California, Irvine. From 1968 to
1986, Dr. Arquilla also served as Professor and Chair of Pathology at U.C.
Irvine and Chief of Pathology services at the U.C. Irvine Medical Center.
- 4 -
<PAGE> 7
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 1999, there were nine
meetings of the board of directors as well as numerous actions taken with the
unanimous written consent of the directors. The board of directors has
established a compensation committee consisting of Dr. Thompson and Mr.
MacLellan. The compensation committee reviews and recommends to the board of
directors the compensation and benefits of all of our officers and reviews
general policy matters relating to compensation benefits of our employees. The
board of directors has also established an audit committee consisting of Mr.
MacLellan, Dr. Thompson and Mr. Dreher. Mr. MacLellan serves as the Chairman of
the audit committee. The audit committee reviews the qualifications of the
independent auditors, our annual and interim financial statements, the
independent auditor's report, significant reporting or operating issues and
corporate policies and procedures as they relate to accounting and financial
controls.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
CASH COMPENSATION OF EXECUTIVE OFFICERS. The following table sets forth
the total compensation earned by the Chief Executive Officer and all other
executive officers who earned in excess of $100,000 per annum during any of our
last three fiscal years.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
-------------------------------------------------- --------------------------------------------------
Common Shares
Other Restricted Underlying Options
Annual Awards Stock Granted Granted All Other
Name and Position Year Salary Bonus Compensation ($) (# Shares) Compensation
----------------- ---- -------- ------ ------------- ------------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gary L. Dreher, 1999 $150,000(2) -0- $ 6,000(3) -0- 250,000 -0-
President and CEO(1) 1998 $100,000 -0- $ 11,791(3) -0- 1,250 -0-
1997 N/A -0- -0- -0- -0- -0-
That T. Ngo, 1999 $ 37,000(6) -0- $138,710(7) -0- 100,000 -0-
President and CEO(4) 1998 $222,000(5) -0- -0- -0- -0- -0-
1997 $222,000 -0- -0- -0- -0- -0-
</TABLE>
----------
(1) Mr. Dreher served as our Vice President of Sales and Marketing from
January 1998 to February 1999 with an annual salary of $100,000.
Effective February 26, 1999, Mr. Dreher became our President and Chief
Executive Officer with an annual salary of $160,000.
(2) At December 31, 1999, $40,000 of Mr. Dreher's salary had been accrued
and was owing to him. Effective January 1, 2000, Mr. Dreher's
compensation was also raised to $222,000 per annum.
(3) Represents commissions of $5,791 and a car allowance of $6,000 earned
by Mr. Dreher in 1998 and a car allowance of $6,000 earned in 1999. At
December 31, 1999, $2,179 of the commissions and $6,000 of the car
allowances were accrued and owing to Mr. Dreher.
(4) Dr. Ngo resigned from his positions as our President and as a director
effective February 26, 1999.
(5) Although Dr. Ngo earned $222,000 in 1998, he was actually paid only
$180,500 in 1998. The remaining unpaid portion was eventually canceled
in July 1999 as part of our debt restructuring. For a more complete
description of our debt restructuring, see "Certain Relationships and
Related Transactions".
(6) Although Dr. Ngo earned $37,000 in 1999, he was actually paid only
$21,062 in 1999. The remaining unpaid portion was eventually canceled
on July 1, 1999 as part of our debt restructuring. For a more complete
description of our debt restructuring, see "Certain Relationships and
Related Transactions." Dr. Ngo was engaged by us as a consultant on
October 1, 1999.
(7) Represents $27,710 of vacation pay paid to Dr. Ngo in 1999 and $111,000
of salary continuation per his employment agreement which was accrued
and eventually canceled in July 1999 as part of our debt restructuring.
For a more complete description of our debt restructuring, see "Certain
Relationships and Related Transactions".
- 5 -
<PAGE> 8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------------------------------
% of Total
Number of Securities Options/SARs Granted Exercise or
Underlying Options/SARs to Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
--------------------- ------------------------- ---------------------- ----------------- -----------
<S> <C> <C> <C> <C>
Gary Dreher,
President and CEO 250,000(1) 65%* 0.68 6/30/04
</TABLE>
-------------
*Exclusive of warrants issued on July 1, 1999 for debt restructuring agreements
with certain former employees and others.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISED IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
-----------------------------------------------------------------------------------------------------------------
Shares Value Number of Securities Value of Unexercised
Acquired on Realized Underlying Unexercised In-the-Money Option/SARs at
Name Exercise(#) ($) Options/SARs at FY-End(#) FY-End($)
Exercisable/ Exercisable/
Unexerciseable Unexercisable
------------------ ------------- ---------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Gary Dreher, 0 0 250,000/0 $267,500/0
President and CEO
</TABLE>
Based on a price of $1.75 per share as quoted on the "pink sheets" on December
31, 1999.
DIRECTOR COMPENSATION
Certain members of our board of directors receive cash compensation for
their services. Effective January 1, 1999, until further notice, payment to
directors for their services was suspended. However, the total of $81,000
accrued through June 30, 1999 was canceled in July 1999 as part of our debt
restructuring. Director fees have accrued at a rate of $6,000 per month since
July, 1999.
EMPLOYMENT AGREEMENTS
In January 1998, we entered into a two year employment agreement with
Gary L. Dreher to serve as our Vice President of Sales and Marketing. That
agreement terminated by its own terms when Mr. Dreher assumed the positions of
President and Chief Executive Officer in February 1999. However, pursuant to
that January 1998 employment agreement, Mr. Dreher received options to purchase
up to 1,250 shares of our common stock at the exercise price of $28.00 per share
exercisable until December 2002. The options vest in installments of 157 each at
the end of each of the eight calendar quarters after January 1, 1998. On
November 23, 1999, we entered into a new employment agreement with Mr. Dreher.
The agreement, which has a term of five years, provides for an annual base
salary of $222,000 effective January 1, 2000. Among other provisions, the
agreement also provides for an annual cash bonus for the years 2000 through 2003
subject to meeting certain sales goals. The annual bonus is to be computed as
the difference between the average bid price of our common stock and $0.68
multiplied by 100,000, but not to exceed 10% of our net sales during the year in
which the bonus was earned. The average bid price for a given year is equal to
the average of the bid prices for our common stock on the 15th and 30th day of
each month for the months July through December for each bonus year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our officers and directors and those persons who beneficially own more
than 10% of our outstanding shares of common stock to file reports of securities
ownership and changes in such ownership with the Securities and Exchange
Commission. Officers,
- 6 -
<PAGE> 9
directors and greater than 10% beneficial owners are also required by rules
promulgated by the SEC to furnish us with copies of all Section 16(a) forms they
file.
Based solely upon a review of the copies of such forms furnished to us,
or written representations that no Form 5 filings were required, we believe that
during 1999 all Section 16(a) filing requirements applicable to our officers,
directors and greater than 10% beneficial owners were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
CANCELLATION OF INDEBTEDNESS
In June 1999, the board of directors approved a debt restructuring with
certain holders of accrued salaries and other forms of indebtedness. We entered
into debt restructuring agreements with eight current and former officers,
directors and employees. Pursuant to these agreements, the former employees,
officers and directors agreed to cancel accrued salaries and other forms of
indebtedness totaling $865,357 in exchange for cash consideration in the
aggregate amount of $84,412 and warrants to purchase an aggregate of 510,937
shares of common stock at an exercise price of $.68 per share. The warrants may
be exercised at any time commencing on July 1, 1999 and expiring on July 1,
2004.
- 7 -
<PAGE> 10
ITEM 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors recommends the ratification of the appointment
of Corbin & Wertz as independent public accountants, to audit our consolidated
financial statements for the year ending December 31, 2000 and to perform other
appropriate services as directed by our management and board of directors.
A proposal will be presented at the meeting to appoint Corbin & Wertz
as independent public accountants. It is expected that a representative of
Corbin & Wertz will be present at the Annual Meeting to respond to appropriate
questions or to make a statement if he or she so desires. If the stockholders do
not ratify Corbin & Wertz by the affirmative vote of a majority of the shares
represented in person or by proxy at the meeting, other independent public
accountants will be considered by the board of directors.
VOTE REQUIRED
The ratification of Corbin & Wertz as our independent public
accountants will require the affirmative vote of the holders of at least a
majority of the outstanding shares of our common and preferred stock, voting
together as a group, present or represented at the meeting. The board of
directors recommends a vote "FOR" ratification of the appointment of Corbin &
Wertz as our Company's independent public accountants.
ITEM 3: APPROVAL OF 1999 STOCK OPTION PLAN
On June 30, 1999, our board of directors adopted, subject to obtaining
stockholder approval, the AMDL, Inc. 1999 Stock Option Plan. The stock option
plan provides for the grant to employees, officers, directors, consultants and
independent contractors of non-qualified stock options as well as for the grant
of stock options to employees that qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986. The stock option plan
terminates on June 29, 2009. The purpose of the stock option plan is to enable
the Company to attract and retain qualified persons as employees, officers and
directors and others whose services are required by the Company, and to motivate
such persons by providing them with an equity participation in the Company. The
stock option plan reserved 2,000,000 shares of our common stock for issuance,
subject to adjustment upon occurrence of certain events affecting our
capitalization.
The stock option plan is administered by the board of directors , which
has, subject to specified limitations, the full authority to grant options and
establish the terms and conditions for vesting and exercise thereof. The
exercise price of incentive stock options granted under the stock option plan is
required to be no less than the fair market value of the common stock on the
date of grant (110% in the case of a greater than 10% stockholder). The exercise
price of non-qualified stock options is required to be no less than 85% of the
fair market value of the common stock on the date of grant. Options may be
granted for terms of up to 10 years (5 years in the case of incentive stock
options granted to greater than 10% stockholders). No optionee may be granted
incentive stock options such that the fair market value of the options which
first become exercisable in any one calendar year exceeds $100,000. If an
optionee ceases to be employed by, or ceases to have a relationship with us,
such optionee's options expire one year after termination by reason of death or
permanent disability, thirty days after termination for cause and three months
after termination for any other reason.
In order to exercise an option granted under the stock option plan, the
optionee must pay the full exercise price of the shares being purchased. Payment
may be made either: (i) in cash; (ii) at the discretion of the board of
directors, by delivering shares of common stock already owned by the optionee
that have a fair market value equal to the applicable exercise price; or (iii)
in the form of such other consideration as may be determined by the board of
directors and permitted by applicable law.
Subject to the foregoing, the board of directors has broad discretion
to describe the terms and conditions applicable to options granted under the
stock option plan. The board of directors may at any time discontinue granting
options under the stock option plan or otherwise suspend, amend or terminate the
stock option plan and may, with the consent of an optionee, make such
modification of the terms and conditions of such optionee's option as the board
shall deem advisable. However, the board has no authority to make any amendment
or modifications to the stock option plan or any outstanding option which would:
(i) increase the maximum number of shares which may be purchased pursuant to
options granted under the stock option plan, either in the aggregate or by an
optionee, except in connection with certain antidilution adjustments; (ii)
change the designation of the class of employees
- 8 -
<PAGE> 11
eligible to receive qualified options; (iii) extend the term of the stock option
plan or the maximum option period thereunder; (iv) decrease the minimum
qualified option price or permit reductions of the price at which shares may be
purchased for qualified options granted under the stock option plan, except in
connection with certain antidilution adjustments; or (v) cause qualified stock
options issued under the stock option plan to fail to meet the requirements of
incentive stock options under Section 422 of the Internal Revenue Code. Any such
amendment or modification shall be effective immediately, subject to stockholder
approval thereof within 12 months before or after the effective date. No option
may be granted during any suspension or after termination of the stock option
plan.
The stock option plan is designed to meet the requirements of an
incentive stock option plan as defined in Internal Revenue Code Section 422. As
a result, an optionee will realize no taxable income, for federal income tax
purposes, upon either the grant of an incentive stock option under the stock
option plan or its exercise, except that the difference between the fair market
value of the stock on the date of exercise and the exercise price is included as
income for purposes of calculating Alternative Minimum Tax. If no disposition of
the shares acquired upon exercise is made by the optionee within two years from
the date of grant or within one year from the date the shares are transferred to
the optionee, any gain realized upon the subsequent sale of the shares will be
taxable as a capital gain. In such case, we will be entitled to no deduction for
federal income tax purposes in connection with either the grant or the exercise
of the option. If, however, the optionee disposes of the shares within either of
the periods mentioned above, the optionee will realize earned income in an
amount equal to the excess of the fair market value of the shares on the date of
exercise (or the amount realized on disposition if less) over the exercise
price, and we will be allowed a deduction for a corresponding amount.
As of the date of this proxy statement, we have granted incentive stock
options to purchase 172,058 shares of common stock and non-qualified stock
options to purchase 662,941 shares of common stock, which grants are contingent
upon approval of the stock option plan by the Company's stockholders. The
following table presents certain information with respect to such grants.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
1999 STOCK OPTION PLAN
--------------------------------------------------------
NO. OF EXERCISE
NAME AND POSITION OPTIONS PRICE VESTING(4) EXPIRATION
--------------------------------------- ------------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Executive Officer Group(1) 565,000 $0.68 and Variable(2) 2004
$1.50
Non-Executive Officer Director Group(3) 144,999 $0.68 and Immediate 2004
$1.50
Non-Executive Officer Employee Group(4) 125,000 $0.68 Variable(5) 2004
Gary L. Dreher, President 550,000 $0.68 and Immediate 2004
$1.50
William M. Thompson III, M.D. 48,333 $0.68 and Immediate 2004
$1.50
Edward R. Arquilla, M.D. 48,333 $0.68 and Immediate 2004
$1.50
Douglas C. MacLellan 48,333 $0.68 and Immediate 2004
$1.50
</TABLE>
----------
(1) Includes Gary L. Dreher and Vivian B. Frazier
(2) The options granted to Mr. Dreher are immediately exercisable. The
options granted to Ms. Frazier vest in three annual installments of
5,000 options each commencing on June 30, 2000.
(3) Includes William M. Thompson, III, M.D., Edward R. Arquilla, M.D. and
Douglas C. MacLellan
(4) Includes Thomas V. Tilton, Diane L. Moore and Brian Kyker
(5) All of the options are immediately exercisable except those granted to
Mr. Tilton, of which 25,000 options are immediately exercisable and
37,500 options vest on each of June 30, 200 and 2001.
- 9 -
<PAGE> 12
VOTE REQUIRED
The approval of the stock option plan will require the affirmative vote of the
holders of at least a majority of the outstanding shares of our common stock and
preferred stock, voting together as a group, present or represented at the
meeting. The board of directors recommends a vote "FOR" approval of the stock
option plan.
ITEM 4: OTHER MATTERS
Except for the matters referred to in the accompanying Notice of Annual
Meeting, management does not intend to present any matter for action at the
Annual Meeting and knows of no matter to be presented at the meeting that is a
proper subject for action by the stockholders. However, if any other matters
should properly come before the meeting, it is intended that votes will be cast
pursuant to the authority granted by the enclosed proxy in accordance with the
best judgment of the person or persons acting under the proxy.
ANNUAL REPORT
Our annual report on Form 10-KSB under the Securities Exchange Act of
1934 for the year ended December 31, 1999, including the financial statements
and schedules thereto, which we have filed with the Securities and Exchange
Commission, was mailed to stockholders on or about June 6, 2000.
STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at the 2000
Annual Meeting of stockholders and to be included in the proxy materials for
that meeting must be received by our secretary no later than January 1, 2001.
REQUEST TO RETURN PROXIES PROMPTLY
A proxy is enclosed for your use. Please mark, date, sign and return
the proxy at your earliest convenience in the envelope provided. A prompt return
of your proxy will be appreciated.
By Order of the Board of Directors,
Vivian Frazier,
Secretary
Tustin, California
June 6, 2000
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AMDL, INC. PROXY - 1999 ANNUAL MEETING
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING JUNE 28, 2000
The undersigned, a stockholder of AMDL, Inc., a Delaware corporation, appoints
Vivian Frazier his, her or its true and lawful agent and proxy, with full power
of substitution, to vote all the shares of stock that the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
AMDL, Inc. to be held at 2492 Walnut Avenue, Suite 100, Tustin, California 92780
on Wednesday, June 28, 2000, at 10:00 a.m., and any adjournment thereof, with
respect to the following matters which are more fully explained in our proxy
statement dated June 6, 2000 receipt of which is acknowledged by the
undersigned:
ITEM 1: ELECTION OF DIRECTORS.
______ FOR all nominees ______ WITHHOLD AUTHORITY
(Except as listed below.) (As to all nominees.)
---
NOMINEES: WILLIAM M. THOMPSON, III, M.D., GARY L. DREHER,
EDWARD R. ARQUILLA, M.D., AND DOUGLAS C. MACLELLAN
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name in the space provided below.
____________________________________________________________
ITEM 2: RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
_____ FOR _____ AGAINST _____ ABSTAIN
ITEM 3: APPROVAL OF AMDL, INC. 1999 STOCK OPTION PLAN
_____ FOR _____ AGAINST _____ ABSTAIN
ITEM 4: OTHER MATTERS. The board of directors at present knows of no
other matters to be brought before the Annual Meeting.
This proxy will be voted in accordance with the instructions given. If no
direction is made, the shares represented by this proxy will be voted FOR the
election of the directors nominated by the board of directors and will be voted
in accordance with the discretion of the proxies upon all other matters which
may come before the Annual Meeting.
DATED:____________________________, 2000
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Signature of Stockholder
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Signature of Stockholder
PLEASE SIGN AS YOUR NAME APPEARS ON THE PROXY
Trustees, Guardians, Personal and other Representatives,
please indicate full titles.
IMPORTANT: PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
PLEASE CHECK IF YOU ARE PLANNING TO ATTEND THE MEETING [ ]
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