AMERICAN BODY ARMOR & EQUIPMENT INC, SB-2, 1996-08-16

AMERICAN BODY ARMOR & EQUIPMENT INC
SB-2, 1996-08-16
ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES

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As filed with the Securities and Exchange Commission on August __, 1996

Registration No. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

--------------------------

FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

--------------------------

AMERICAN BODY ARMOR & EQUIPMENT, INC.
(Name of small business issuer in its charter)

--------------------------

Florida 3842 59-2044869
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction Classification Code Number) Identification No.)
of incorporation)
191 Nassau Place Road
Yulee, Florida 32097
(904) 261-4035
(Address and telephone number of principal executive offices
and principal place of business)

--------------------------

Warren B. Kanders
Chairman of the Board of Directors
American Body Armor & Equipment, Inc.
191 Nassau Place Road
Yulee, Florida 32097
(904) 261-4035
(Name, address and telephone number of agent for service)

--------------------------

Please send copies of all communications to:

Robert L. Lawrence, Esq.
Kane Kessler, P.C.
1350 Avenue of the Americas
New York, New York 10019
(212) 541-6222

--------------------------

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ] The Registrant hereby amends this
registration statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.

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<PAGE>

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=======================================================================================
Title of Each Proposed Proposed
Class of Maximum Maximum Amount of
Securities Amount Offering Price Aggregate Registration
to be Registered to be Registered Per Share(1) Offering Price(1) Fee
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.03 par value 560,931 $6.94 $3,892,861.10 $1,342.37
=======================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the high and low sale
prices for the Common Stock on the American Stock Exchange on August 13,
1996, as reported by The Wall Street Journal.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

Cross Reference Sheet Pursuant to Item 501 of Regulation S-B

Registration Statement Items and Headings Location in Prospectus
- ----------------------------------------- ----------------------
<C> <S> <C>

1
. Front of Registration Statement and Facing page of Registration Statement; second
Outside Front Cover of Prospectus page of Registration Statement; outside front
cover page; second page of Prospectus

2. Inside Front and Outside Back Second page of Prospectus; outside back cover
Cover Pages of Prospectus page of Prospectus; Available Information

3. Summary Information and Risk Prospectus Summary; Risk Factors; Comparative
Factors Rights of Shareholders

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Not Applicable

6. Dilution Risk Factors

7. Selling Security Holders Selling Shareholder

8. Plan of Distribution Outside and inside front cover pages; Prospectus
Summary--The Offering; Plan of Distribution

9. Legal Proceedings Legal Proceedings

10. Directors, Executive Officers, Management; Security Ownership of Certain
Promoters and Control Persons Beneficial Owners and Management

11. Security Ownership of Certain Security Ownership of Certain Beneficial
Beneficial Owners and Management Owners and Management

12. Description of Securities Description of Securities

13. Interest of Named Experts and Not Applicable
Counsel

14. Disclosure of Commission Position Business--Personal Liability and Indemnification
on Indemnification for Securities of Directors and Officers
Act Liabilities

15. Organization Within Last 5 Years Risk Factors--Shares Eligible for Future Sale;
Certain Relationships and Related Transactions

16. Description of Business Business
</TABLE>

<PAGE>

<TABLE>

<C> <S> <C>
17. Management's Discussion and Management's Discussion and Analysis of
Analysis of Financial Condition and Financial Condition and Results of Operations
Results of Operations

18. Description of Property Properties

19. Certain Relationships and Related Risk Factors--Shares Eligible for Future Sale;
Transactions Conflicts of Interest; Certain Relationships and
Related Transactions

20. Market for Common Equity and First page of Prospectus; Prospectus Summary;
Related Stockholder Matters Risk Factors; Description of Securities; Market
for Common Stock and Related Stockholder
Matters

21. Executive Compensation Executive Compensation

22. Financial Statements Unaudited Pro Forma Financial Statements;
Financial Statements

23. Changes In and Disagreements Not Applicable
With Accountants on Accounting
and Financial Disclosure
</TABLE>

<PAGE>

PROSPECTUS

AMERICAN BODY ARMOR & EQUIPMENT, INC.

560,931 Shares of Common Stock

This Prospectus relates to 560,931 shares of common stock, $.03 par value,
(the "Common Stock") of American Body Armor & Equipment, Inc., a Florida
corporation (the "Company"), of which 250,000 shares of Common Stock are being
offered by the Company (the "Company Shares") and 310,931 shares of Common Stock
are being offered by Ivers-Lee Corporation ("Ivers-Lee"). The Company issued to
Ivers-Lee 310,931 shares of Common Stock as consideration for the purchase by
the Company of certain assets of the NIK Public Safety Product Line ("NIK Public
Safety") from Ivers-Lee. NIK Public Safety is the leading manufacturer and
distributor of portable narcotic identification kits used for the identification
of narcotic substances by law enforcement agencies. In addition, NIK Public
Safety distributes the Flex-Cuf restraint, a patented disposable restraint
manufactured by Thomas & Betts, as well as Specimen Collection Kits, Evidence
Collection Kits and Tamper Guard Evidence Tape.

The Company and NIK Public Safety, Inc., a newly formed wholly-owned

subsidiary of the Company (collectively, the "Purchaser"), acquired from
Ivers-Lee and LFC No. 46 Corp., a wholly-owned subsidiary of Ivers-Lee
(Ivers-Lee and LFC No. 46 Corp., collectively, the "Seller"), certain assets of
NIK Public Safety from Ivers-Lee pursuant to an asset purchase agreement dated
as of July 2, 1996 (the "Asset Purchase Agreement"), pursuant to which: (i) the
Purchaser agreed to purchase inventory, receivables, intellectual property,
contracts and other tangible and intangible properties and related assets of NIK
Public Safety from the Seller (collectively, the "NIK Assets"); and (ii) in
consideration therefor, the Purchaser agreed to issue to the Seller $2,400,000
worth of Common Stock of the Company, to be valued in accordance with the Asset
Purchase Agreement (the "NIK Shares"), subject to adjustment (the "Purchase
Price"). Such valuation amounted to 310,931 shares of Common Stock of the
Company.

In connection with the execution of the Asset Purchase Agreement, the
Purchaser agreed to register the NIK Shares for sale under the Securities Act of
1933, as amended (the "Securities Act"). On the closing date, the Purchaser
advanced to the Seller $1,200,000 (the "Advance"). Such Advance will not bear
interest and must be repaid by the Seller with the first $1,200,000 realized by
the Seller from the sales of the NIK Shares. In the event that the sum of the
aggregate net proceeds from sales of the NIK Shares prior to December 31, 1996,
less any amounts paid to the Company on account of the Advance (the "Seller's
Balance"), and the Advance are less than $2,400,000, the Company has agreed to
pay to the Seller, on December 31, 1996, the difference between $2,400,000 and
the sum of the Seller's Balance and the

<PAGE>

Advance. In the event that the sum of the Seller's Balance and the Advance at
any time exceeds $2,400,000, the Seller has agreed to pay to the Purchaser, an
amount equal to the excess of the Seller's Balance and the Advance over
$2,400,000.

Pursuant to the provisions of the Asset Purchase Agreement, Ivers-Lee
irrevocably delivered to Union Bank of Switzerland, New York Branch ("UBS") the
stock certificate of the Company issued in the name of Ivers-Lee representing
the NIK Shares to be held by UBS (the "UBS/Ivers-Lee Account"). UBS is
authorized to hold the NIK Shares in its possession and to effect any sales of
NIK Shares as the Company, pursuant to an Irrevocable Power of Attorney granted
by Ivers-Lee in favor of Jonathan M. Spiller, President and Chief Executive
Officer of the Company, may from time to time direct (the "Power of Attorney").
Under the Power of Attorney, Mr. Spiller has the power to effect, in the name
of, for and on behalf of Ivers-Lee, any and all sales of the NIK Shares.

The terms of the UBS/Ivers-Lee Account are irrevocable, and pursuant to
the UBS/IversLee Account and the Power of Attorney, the Company has the right to
direct the sales of the NIK Shares; provided, however, that in the event that
Ivers-Lee has not received an aggregate of $2,400,000 (including net sales
proceeds from sales of the NIK Shares and the Advance) on or before December 31,
1996, or in the event that the Purchaser is otherwise in default of its
obligations to Ivers-Lee pursuant to the Asset Purchase Agreement, then the
provisions of the UBS/Ivers-Lee Account and the Power of Attorney will
terminate, and the NIK Shares will be delivered to Ivers-Lee. The UBS/Ivers-Lee

Account and the Power of Attorney will also terminate upon the sale of all of
the NIK Shares and the disposition of the proceeds therefrom.
"See NIK Acquisition."

The foregoing description and the description contained in the section
entitled "NIK Acquisition" of the Asset Purchase Agreement and the transactions
contemplated thereby is not intended to be complete and is qualified in its
entirety by the complete text of the Asset Purchase Agreement.

The NIK Shares will be offered or sold for the account of Ivers-Lee
(hereinafter, at times, the "Selling Shareholder"). See "Selling Shareholder."
The Company Shares will be offered or sold for the account of the Company.

The Selling Shareholder and/or the Company may be deemed to be an
"underwriter" as that term is defined in the Securities Act. The Selling
Shareholder and the Company may offer the NIK Shares and the Company Shares,
respectively, for sale from time to time, and, if and when offers and/or sales
are made, may be made through customary brokerage channels either through
broker-dealers acting as principals who may then resell the NIK Shares and the
Company Shares, as the case may be, on the American Stock Exchange or on such
other market as the shares of the Company's Common Stock may then be trading,
and such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Company, the Selling Shareholder and/or the
purchasers of the NIK Shares or the Company

<PAGE>

Shares for whom such broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation as to any particular broker-dealer may be
in excess of customary commissions); sales may be at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices, or at negotiated prices, or by a combination of
such methods. The period of distribution of the NIK Shares and the Company
Shares may occur over an extended period of time. The Selling Shareholder will
pay or assume brokerage commissions or discounts incurred in the sale of any of
the NIK Shares. The Company will pay or assume brokerage commissions or
discounts incurred in connection with the sale of the Company Shares. See
"Selling Shareholder."

The Common Stock is traded on the American Stock Exchange under the symbol
"ABE." On August ___ , 1996, the closing price of the Common Stock on the
American Stock Exchange was $ ______________ .

--------------------------------------

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND
IMMEDIATE SUBSTANTIAL DILUTION. SEE "RISK FACTORS."

--------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE

SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
===========================================================================================
Underwriting
Price to Public (1) Discounts(1)(2) Proceeds to Company (2)(3)
- -------------------------------------------------------------------------------------------
Company Company Company
NIK Shares Shares NIK Shares Shares NIK Shares Shares
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per $-- $-- $-- $-- None $--
Share
- -------------------------------------------------------------------------------------------
Total (3) $-- $-- $-- $-- None $--
===========================================================================================
</TABLE>

(1) The distribution of the NIK Shares and the Company Shares may be effected
on behalf of Ivers-Lee and the Company, respectively, in one or more
transactions that may take place on the American Stock Exchange, including
ordinary broker's transactions, privately negotiated transactions, or
through sales to one or more dealers for the resale of such shares as
principals, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, or at negotiated prices. See
"Plan of Distribution."

iii

<PAGE>

(2) There is no underwriter with respect to this offering. The Company will be
responsible for any commissions for the sale of the Company Shares and
Ivers-Lee will be responsible for any commissions for the sale of the NIK
Shares offered by this Prospectus. Usual and customary or specifically
negotiated brokerage commissions or fees may be paid in connection with
such sales. See "Plan of Distribution."

(3) The expenses of this offering, including those expenses incurred in
connection with the offering of the NIK Shares, are being paid by the
Company. The Company is paying the expenses incurred in connection with the
offering of the NIK Shares pursuant to the Asset Purchase Agreement with
Ivers-Lee. See "Plan of Distribution."

The date of this Prospectus is August ____, 1996.

<PAGE>

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"SEC") a Registration Statement on Form SB-2 (together with any amendments,
exhibits and schedules thereto, the "Registration Statement") under the
Securities Act, with respect to the securities offered hereby. This Prospectus,
which constitutes an integral part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
portions of which have been omitted in accordance with the rules and regulations
promulgated by the SEC. For further information with respect to the Company and
the securities offered hereby, reference is hereby made to the Registration
Statement. Statements contained in this Prospectus as to the contents of any
contract, agreement or any other document are not necessarily complete, and, in
each instance, reference is made to the copy of such contract, agreement or
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. The Company is subject to the
informational reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and in accordance therewith is required to file
periodic reports, proxy statements and other information with the SEC relating
to its business, financial statements and other matters. Such periodic reports,
proxy statements and other information filed with the SEC are available for
inspection and copying at the public reference facilities maintained by the SEC
at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
Such periodic reports, proxy statements and other information may be inspected
and copied at the public reference facilities maintained by the SEC at the SEC's
regional offices located at Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661, 1376 Peachtree Street, N.E., Suite 788, Atlanta,
Georgia 30367 and Seven World Trade Center, New York, New York 10048. Copies of
such material can be obtained from the Public Reference Section of the SEC, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed rates.

The Company's Common Stock is traded on the American Stock Exchange under
the symbol "ABE." Periodic reports, proxy statements and other information filed
with the SEC can also be inspected at the American Stock Exchange, 86 Trinity
Place, New York, New York 10006.

REPORTS TO SECURITY HOLDERS

The Company intends to furnish its shareholders with annual reports for
each fiscal year ending December 31, containing audited financial statements and
the Company may also provide unaudited quarterly or other interim reports as it
deems appropriate.

INCORPORATION BY REFERENCE

The Company will provide, without charge, to each person who receives a
Prospectus, upon the written request of such person, a copy of any document
incorporated by reference into this Prospectus, and all exhibits and amendments
thereto, including the financial statements and

<PAGE>

schedules, as filed with the SEC. Written requests for such copies should be
directed to the Company's Corporate Secretary at c/o American Body Armor &
Equipment, Inc., 191 Nassau Place Road, Yulee, Florida 32097, (904) 261-4035.

SPECIAL NOTICE REGARDING REINCORPORATION IN DELAWARE

The Company is incorporated under the laws of the State of Florida. At the
Company's Annual Meeting of Shareholders held on July 16, 1996, the Company's
shareholders approved a change of Company's state of incorporation from Florida
to Delaware (the "Reincorporation"). In order to effect the Reincorporation, the
Company will be merged with and into Armor Holdings, Inc. ("Armor Holdings"), a
newly formed, wholly-owned subsidiary of the Company incorporated in Delaware
for such purpose. Following the Reincorporation, Armor Holdings will qualify to
conduct business in Florida as a foreign corporation. Armor Holdings has not
engaged in any activities except in connection with the Reincorporation. The
mailing address of its principal executive offices and its telephone number are
the same as those of the Company. The consummation of the Reincorporation is
conditioned upon the receipt by the Company of any required third party consents
to the Reincorporation and upon the filing of appropriate certificates of merger
by the Secretaries of State of the States of Florida and Delaware.

Upon the effective time of the Reincorporation (the "Effective Time"),
each outstanding share of Common Stock and each share of Common Stock held in
the treasury of the Company will be automatically converted into one share of
common stock of Armor Holdings. Outstanding options to purchase shares of Common
Stock will be converted automatically into options to purchase the same number
of shares of common stock of Armor Holdings. Each employee stock plan and any
other employee benefit plan to which the Company is a party, whether or not such
plan relates to the Common Stock, will be assumed by Armor Holdings and, to the
extent any such plan provides for the issuance or purchase of Common Stock, it
will be deemed to provide for the issuance or purchase of shares of common stock
of Armor Holdings. Any reference in this Prospectus to the Company as of or for
any period ending after the Effective Time includes the Florida corporation.
Under the terms of the Reincorporation, the Delaware corporation is the
successor in interest to all the rights, interests, assets and liabilities of
the Florida corporation. Holders of certificates which, prior to the Effective
Time, evidenced securities of the Florida corporation, automatically become
holders of a like number of securities of the Delaware corporation and are
entitled (subject to compliance with customary procedures) to exchange their
certificates for certificates evidencing the Delaware corporation.

<PAGE>
TABLE OF CONTENTS

Page
----
AVAILABLE INFORMATION................................................... v

REPORTS TO SECURITY HOLDERS............................................. v

INCORPORATION BY REFERENCE............................................... v

SPECIAL NOTICE REGARDING REINCORPORATION IN DELAWARE..................... vi

PROSPECTUS SUMMARY....................................................... 1

RISK FACTORS............................................................. 7

USE OF PROCEEDS.......................................................... 13

SELLING SHAREHOLDER...................................................... 14

NIK ACQUISITION.......................................................... 14

UNAUDITED PRO FORMA FINANCIAL STATEMENTS................................. 16

PLAN OF DISTRIBUTION..................................................... 18

LEGAL PROCEEDINGS........................................................ 19

MANAGEMENT............................................................... 20

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT........................................................... 25

DESCRIPTION OF SECURITIES................................................ 28

BUSINESS................................................................. 29

REINCORPORATION IN DELAWARE.............................................. 41

COMPARATIVE RIGHTS OF SHAREHOLDERS....................................... 41

vii

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION....................................... 50

PROPERTIES............................................................... 55

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................... 55

MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS.................. 57

EXECUTIVE COMPENSATION................................................... 58

LEGAL MATTERS............................................................ 66

EXPERTS.................................................................. 66

ADDITIONAL INFORMATION................................................... 66

FINANCIAL STATEMENTS..................................................... F-1

viii

<PAGE>

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to
the more detailed information, including the Company's financial statements
(including the notes thereto), appearing elsewhere in this Prospectus. Terms
used but not defined in this Prospectus Summary have the meanings ascribed to
them elsewhere in this Prospectus. Cross references in this Prospectus are to
the captions of sections of this Prospectus.

The Company

The Company's predecessor was incorporated in January 1969, under the
laws of the State of New York under the name American Body Armor & Equipment,
Inc. (the "New York Corporation"). The Company was incorporated in October 1980,
under the laws of the State of Florida under the name of Armour of Fernandina
Beach, Inc., as a separate but affiliated company of the New York Corporation,
and commenced operating a manufacturing facility in Florida. In February 1983,
the New York Corporation moved its operations to Florida, and effective January
1, 1984, the two companies were merged with the Company surviving and changing
its name to its present form.

Since its founding, the Company has been engaged in the development,
manufacture and distribution of bullet and projectile resistant garments,
including bullet resistant and sharp instrument penetration resistant vests,
bullet resistant blankets, bomb disposal suits and helmets, bomb protection and
disposal equipment and load bearing vests. In addition to these products, the
Company develops, manufactures and distributes other ballistic protection and
security equipment, including explosive ordnance device ("EOD") handling and
detection equipment, EOD suppression and disposal equipment, helmets, face
masks, shields, hard armor ballistic plates, customized armor for vehicles and
other custom armored products. The Company's products are used by, among others,
police and other law-enforcement and security personnel as well as the military.
The Company's products are sold through a nationwide independent sales
representative and distributor network primarily to international and domestic
law enforcement agencies, the U.S. military, various federal government
agencies, federal and state correctional facilities, highway patrols and
sheriffs' departments.

The Company manufactures two basic types of body armor: (i)
concealable armor, which is generally intended to be worn beneath the user's
clothing; and (ii) tactical armor, which is worn externally and is designed to
protect more coverage area and defeat higher level ballistic threats
incorporating ballistic hard armor plates.

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<PAGE>

- -------------------------------------------------------------------------------

The Company manufactures and distributes a wide range of products,
including explosive ordnance disposal and handling equipment, bomb disposal
suits, bomb protection blankets and letter bomb suppression pouches; knife
resistant vests designed primarily for use by personnel in correctional
facilities and other law enforcement employees who are exposed to threats from
sharp instruments; and a variety of hard armor and ballistic shields, including
tactical face masks and helmets, Comspec(TM) shields, barrier shields and
blankets as well as upgrade armor plates. The Company also manufactures a
variety of specialty products, including non-ballistic load bearing vests,
armored press vests, executive vests, raincoats and fireman turnout coats.

In addition, the Company has the exclusive rights in the United
States to distribute Gallet(R) helmets, and the non-exclusive rights to
distribute Scanna(R) letter bomb detectors. The Company also manufactures
specialty armor applications for vehicles and aircraft, as well as armor for
stationary protection.

The Company's business strategy is twofold: (i) to increase its
channels of distribution through internal growth and strategic acquisitions; and
(ii) to increase channel utilization by expanding the number of products and
services offered. The Company believes that internal growth and strategic
acquisitions will enable the Company to leverage its existing infrastructure and
operations to achieve improved operating margins. As part of its acquisition
strategy, the Company purchased certain assets of the NIK Public Safety Product
Line ("NIK Public Safety") from Ivers-Lee Corporation. NIK Public Safety is the
leading manufacturer and distributor of portable narcotic identification kits
used for the identification of narcotic substances by law enforcement agencies.
In addition, NIK Public Safety distributes the Flex-Cuf restraint, a patented
disposable restraint manufactured by Thomas & Betts, as well as Specimen
Collection Kits, Evidence Collection Kits and Tamper Guard Evidence Tape. See
"Risk Factors-Rapid Growth Through Acquisitions" and "NIK Acquisition."

The Company maintains its executive offices at 191 Nassau Place
Road, Yulee, Florida 32097. Its telephone number is (904) 261-4035.

The Offering

- -------------------------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------------------------

of Common Stock as consideration for the purchase by the Company of certain
assets of the NIK Public Safety Product Line ("NIK Public Safety") from
Ivers-Lee. NIK Public Safety is the leading manufacturer and distributor of
portable narcotic identification kits used for the identification of narcotic
substances by law enforcement agencies. In addition, NIK Public Safety
distributes the Flex-Cuf restraint, a patented disposable restraint manufactured
by Thomas & Betts, as well as Specimen Collection Kits, Evidence Collection Kits
and Tamper Guard Evidence Tape. See "Risk Factors-Rapid Growth Through
Acquisitions" and "NIK Acquisition."

The Company and NIK Public Safety, Inc., a newly formed wholly-owned
subsidiary of the Company (collectively, the "Purchaser"), acquired from
Ivers-Lee and LFC No. 46 Corp., a wholly-owned subsidiary of Ivers-Lee
(Ivers-Lee and LFC No. 46 Corp., collectively, the "Seller"), certain assets of
NIK Public Safety from Ivers-Lee pursuant to an asset purchase agreement dated
as of July 2, 1996 (the "Asset Purchase Agreement"), pursuant to which: (i) the
Purchaser agreed to purchase inventory, receivables, intellectual property,
contracts and other tangible and intangible properties and related assets of NIK
Public Safety from the Seller (collectively, the "NIK Assets"); and (ii) in
consideration therefor, the Purchaser agreed to issue to the Seller $2,400,000
worth of Common Stock of the Company, to be valued in accordance with the Asset
Purchase Agreement (the "NIK Shares"), subject to adjustment (the "Purchase
Price"). Such valuation amounted to 310,931 shares of Common Stock of the
Company.

- -------------------------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------------------------

President and Chief Executive Officer of the Company, may from time to time
direct (the "Power of Attorney"). Under the Power of Attorney, Mr. Spiller has
the power to effect, in the name of, for and on behalf of Ivers-Lee, any and all
sales of the NIK Shares.

The terms of the UBS/Ivers-Lee Account are irrevocable, and pursuant to
the UBS/Ivers-Lee Account and the Power of Attorney, the Company has the right
to direct the sales of the NIK Shares; provided, however, that in the event that
Ivers-Lee has not received an aggregate of $2,400,000 (including net sales
proceeds from sales of the NIK Shares and the Advance) on or before December 31,
1996, or in the event that the Purchaser is otherwise in default of its
obligations to Ivers-Lee pursuant to the Asset Purchase Agreement, then the
provisions of the UBS/Ivers-Lee Account and the Power of Attorney will
terminate, and the NIK Shares will be delivered to Ivers-lee. The UBS/IversLee
Account and the Power of Attorney will also terminate upon the sale of all of
the NIK Shares and the disposition of the proceeds therefrom.

The foregoing description and the description contained in the section
entitled "NIK Acquisition" of the Asset Purchase Agreement and the transactions
contemplated thereby is not intended to complete is qualified in its entirety by
the complete text of the Asset Purchase Agreement.

The NIK Shares will be offered or sold for the account of Ivers-Lee.
See "Selling Shareholder." The Company Shares will be offered or sold for the
account of the Company.

There are, as of August __, 1996, 7,192,506 shares of Common Stock
outstanding (including the 310,931 Shares issued to Ivers-Lee), outstanding
options to purchase an additional 1,221,000 shares, and 41,100 shares of Common
Stock reserved for issuance upon conversion of the Company's 3% Convertible,
$1.00 stated value Preferred Stock (the "Old Preferred Stock") by holders who
have not yet submitted their shares of Old Preferred Stock for conversion. In
addition, 2,300,000 shares of Common Stock are reserved for issuance upon
conversion to Common Stock of the Company's 5% Convertible Subordinated Notes
due April 30, 2001. See "Risk Factors--5% Convertible Subordinated Notes." The
NIK Shares and the Company Shares constitute approximately 4.3% and 3.5%,
respectively, of all shares of the Company's outstanding Common Stock (without
giving effect to the exercise of outstanding options and the conversion of the
Old Preferred Stock). The sale of the NIK Shares and the Company Shares by the
Selling Shareholder and the Company, respectively, if and when made, may be made
through customary brokerage channels either through broker-dealers acting as
agents or brokers for the Selling Shareholder and/or the Company, or through
broker-dealers acting as principals who may then resell the NIK Shares and the
Company Shares on the American Stock Exchange or such other market as the
Company's Common Stock may then be trading on, or otherwise, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholder, the Company and/or the purchasers of
the NIK Shares or the Company Shares for whom such

- -------------------------------------------------------------------------------

4
<PAGE>
- -------------------------------------------------------------------------------

broker-dealers may act as agent or to whom they sell as principal or both (which
compensation as to any particular broker-dealer may be in excess of customary
commissions); sales may be at fixed prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices, or by a combination of such methods.

Offering Summary

Securities Offered Up to 560,391 shares of Common Stock. See
"Description of Securities."

Securities Outstanding Prior to 7,192,506 shares of Common
the Sale of the NIK Shares and Stock(1)(2)(3)(4).
the Company Shares

Securities Outstanding After 7,442,506 shares of Common
the Sale of the NIK Shares Stock(1)(2)(3)(4).
and the Company Shares

Use of Proceeds The net proceeds from the sale of the
NIK Shares will be received by Ivers-Lee
as consideration for the sale of the NIK
Assets by Ivers-Lee to the Company.
However, the Company will receive no
proceeds from the sale of the NIK
Shares. However, Ivers-Lee has a
contractual obligation pursuant to the
Asset Purchase Agreement to pay certain
amounts to the Company if and when net
proceeds realized by Ivers-Lee from the
sale of the NIK Shares exceeds a
threshold amount. The net proceeds
realized by the Company from the sale of
the Company Shares will be used by the
Company for working capital purposes.
See "Use of Proceeds" and "NIK
Acquisition."

American Stock Exchange
Symbol-Common Stock ABE

(1) Excludes outstanding options to purchase 818,500 shares of Common Stock,
which shares are reserved for issuance, under the Company's 1994 Incentive
Stock Plan, and up to 1,500,000 and 300,000 shares of Common Stock
reserved for issuance under the Company's 1996 Stock Option Plan (the
"1996 Plan") and the Company's 1996 Non-Employee Directors Stock Option
Plan (the "1996 Directors Plan"), respectively. To date, there are no
outstanding options to purchase shares under the 1996 Plan. There are, to

date, outstanding options to purchase 225,000 shares under the 1996
Directors Plan. Also excludes non-qualified options to purchase a total of
102,500 shares of Common Stock, which shares are reserved for issuance.

- -------------------------------------------------------------------------------

5
<PAGE>

- -------------------------------------------------------------------------------
(2) Does not give effect to 300,000 shares of Common Stock issuable upon
exercise of an option held by Richmont Capital Partners I, L.P. See "Risk
Factors - Exercise of Outstanding Options May Have Dilutive Effect on
Market."

(3) Does not give effect to 41,100 shares of Common Stock reserved for
issuance upon conversion of the Old Preferred Stock.

(4) Does not give effect to 2,300,000 shares of Common Stock reserved for
issuance upon conversion of the Company's 5% Convertible Subordinated
Notes due April 30, 2001.

Risk Factors

The securities offered hereby involve a high degree of risk. The
information presented under the caption "Risk Factors" in this Prospectus should
be carefully considered. Risk factors to be considered include, but are not
limited to, the following: (i) a reliance on governmental spending; (ii) risks
inherent in doing business internationally; (iii) products liability; (iv)
competition and technical obsolescence of the Company's products; (v) the
ability of the Company to protect its proprietary know-how and products
liability; (vi) competition and technical obsolescence of the Company's
products; (vii) the ability of the Company to protect its proprietary know-how
and trade secrets, as well as the development by other companies of more
effective technologies which render the Company's trade secrets obsolete; (viii)
negative economic factors which threaten the Company's solvency in light of its
prior bankruptcy; (ix) the ability of the Company to carry out its acquisition
strategy and integrate and manage businesses which it acquires; (x) the ability
of the Company to obtain additional financing; (xi) the ability of the Company
to redeem its 5% Convertible Subordinated Notes due 2001 in the event the
holders thereof elect not to convert such notes into shares of Common Stock; (x)
the control over the Company by certain shareholders; (xiii) the Company's
reliance upon certain key personnel; (xiv) the potential antitakeover effect of
certain provisions of the Company's Amended and Restated Articles of
Incorporation; (xv) the dilutive effect on the Company's shareholders of sales
of the NIK Shares, the Company Shares and other shares of Common Stock held by
certain third parties as well as the exercise of outstanding options to purchase
the Company's Common Stock; (xvi) the lack of dividends paid on the Common
Stock; (xvii) the volatility of the market price for the Common Stock; (xviii)
the reservation of issuance of a substantial number of shares of Common Stock;
(xix) potential sales pursuant to Rule 144; and (xx) the Reincorporation of the
Company in the State of Delaware. See "Risk Factors" and "Reincorporation in
Delaware."

Reincorporation In Delaware

At the Company's Annual Meeting of Shareholders held on July 16, 1996,
the Company's shareholders approved a change of Company's state of incorporation
from Florida to Delaware (the "Reincorporation"). In order to effect the
Reincorporation, the Company will be merged with and into Armor Holdings, Inc.
("Armor Holdings"), a newly formed, wholly-owned subsidiary of the Company
incorporated in Delaware for such purpose. The consummation of the
Reincorporation is conditioned upon the receipt by the Company of any required
third party consents to the Reincorporation and upon the filing of appropriate
certificates of merger by the Secretaries of State of the State of Florida and
Delaware. See "Reincorporation in Delaware."

- -------------------------------------------------------------------------------

<PAGE>

RISK FACTORS

The securities offered in this Prospectus involved a high degree of risk
and should not be purchased by persons who cannot afford the loss of their
entire investment. Accordingly, prospective investors should consider carefully
the following factors, in addition to the other information concerning the
Company and its business contained in this Prospectus.

Concentration of Business Activities; Reliance Upon Governmental Spending

The Company's products are sold nationally and internationally, primarily
to law enforcement agencies and military services. Sales to domestic law
enforcement agencies, including government, security and intelligence agencies,
police departments, federal and state correctional facilities, highway patrol
and sheriffs' departments, comprise the largest portion of the Company's
business. Accordingly, any substantial reduction in governmental spending or
change in emphasis in defense and law enforcement programs would have a material
adverse effect on the Company's business.

International Sales

The Company's expansion plans and its current sales are subject to certain
risks inherent in doing business on an international level, such as unexpected
changes in regulatory requirements, tariffs, customs, duties and other trade
restrictions, difficulties in staffing and managing foreign operations,
political instability, insurrection and other political risks, fluctuations in
currency exchange rates, limitations on technology imports, delays from custom
brokers or government agencies and potentially adverse tax consequences any or
all of which could adversely impact the success of the Company's planned
international business expansion, as well as the current level of sales the
Company presently enjoys. There can be no assurances that these or other factors
will not have an adverse affect on the Company's business generally.

Product Liability

The products manufactured by the Company are used in applications where
the failure of such products could result in serious personal injury and death.
The Company maintains product liability insurance in the amount of $15,000,000
per occurrence and $15,000,000 in the aggregate, excluding legal fees, which are
borne by the insurance carriers, less a deductible of $25,000. There is no
assurance that these amounts would be sufficient to cover the payment of any
potential claim. In addition, there is no assurance that this or any other
insurance coverage will continue to be available or, if available, that the
Company will be able to obtain it at a reasonable cost. Any substantial
uninsured loss would have to be paid out of the assets of the Company and may
have a material adverse effect on the Company's financial condition and
operations. In addition, the inability to obtain product liability coverage
would prohibit the Company from bidding for orders for certain municipal
customers since, at present, many

<PAGE>

municipal bids require such coverage, and any such inability would have a
material adverse effect on the Company's financial condition and results of
operations.

Competition/Technical Obsolescence

The ballistic-resistant garment industry is highly competitive and the
Company competes with a number of companies that are as established as the
Company. In addition, the Company's competitors may develop and/or improve their
products in which event the Company's products may be rendered obsolete or less
marketable. Although the Company is not aware of any new materials or products
that have recently been or will soon be introduced into the market which might
render the Company's products obsolete and result in a loss of its market share,
no assurances can be given that such materials and products will not be
developed or introduced into the market in the future. In addition, as
manufacturing technology changes, there can be no assurance that the Company
will continue to be able to manufacture its products at competitive prices.

Patent Protection and Proprietary Information

Several of the products manufactured and sold by the Company are subject
to manufacturing processes for which the Company holds United States and foreign
patents. The Company also relies on trade secrets, proprietary know-how and
technological innovation to develop and maintain its competitive position. There
can be no assurance that the patents will protect the Company from competing
technology or that, insofar as it relies on trade secrets and unpatented
technology, others will not independently develop similar technology or that
secrecy will not be breached. See "Business-Patent Protection and Proprietary
Information."

Prior Bankruptcy of the Company and Other Legal Matters

in 1989 and 1991, and the inability to collect a $1.5 million receivable related
to the shipment of vests to a Middle East customer in April 1991. The Company
emerged from bankruptcy protection effective September 20, 1993, upon
confirmation by the United States Bankruptcy Court for the Middle District of
Florida, Jacksonville Division (the "Bankruptcy Court") of the Company's Third
Amended and Restated Plan of Reorganization (the "Plan of Reorganization").
Despite the Company's emergence from bankruptcy protection, there can be no
assurance that the Company will not experience further operating losses or be
susceptible to other negative economic factors which may threaten its solvency
and its ability to continue as a going concern.

<PAGE>

Rapid Growth Through Acquisitions

The Company plans to grow largely through acquisition and is therefore
actively evaluating investments in operating businesses. The Company intends to
diversify through acquisition and expand its business operations through the
consolidation of one or more companies in the same or similar businesses,
including those that manufacture and/or supply products or services to law
enforcement, military and certain sectors of the security services industry. On
July 15, 1996, the Company acquired certain assets of the NIK Public Safety
Product Line ("NIK Public Safety") from Ivers-Lee Corporation ("Ivers-Lee"). NIK
Public Safety is the leading manufacturer and distributor of portable narcotic
identification kits used for the identification of narcotic substances by law
enforcement agencies. In addition, NIK Public Safety distributes the Flex-Cuf
restraint, a patented disposable restraint manufactured by Thomas & Betts, as
well as Specimen Collection Kits, Evidence Collection Kits and Tamper Guard
Evidence Tape. See "NIK Acquisition."

While the Company intends to grow aggressively through acquisition, there
can be no assurances that the Company will be: (i) able to identify and/or
acquire other suitable acquisition candidates on acceptable terms; (ii)
successful in managing the combined operations of the entities acquired; or
(iii) able to effectively and profitably integrate acquired operations into its
business. Additionally, there can be no assurances that any future acquisitions
will not have a material adverse effect on the Company's operating results,
particularly during the period immediately following such acquisitions. See
"Business."

5% Convertible Subordinated Notes

On April 30, 1996, the Company completed a private placement of its 5%
Convertible Subordinated Notes due April 30, 2001 (the "Notes") pursuant to
which $11,500,000 aggregate principal amount of Notes were sold by the Company
under a Convertible Subordinated Note Purchase Agreement dated as of April 30,
1996 (the "Convertible Subordinated Note Purchase Agreement"). The following
description of the Note offering, the Convertible Subordinated Note Purchase
Agreement and the Notes is not intended to be complete and is qualified in its
entirety by the complete texts of the form of Convertible Subordinated Note
Purchase Agreement and the form of Note.

The Notes bear interest at 5% per annum, mature five years from the date
of issuance, and are subordinated to all existing and future Senior Indebtedness
of the Company, as defined and as more fully set forth in the Convertible
Subordinated Note Purchase Agreement. In addition, the Notes may be convertible
into shares of Common Stock of the Company at the option of the holder thereof
at any time prior to the maturity date at a conversion price of $5.00 per share,
subject to adjustment as set forth in the Convertible Subordinated Note Purchase
Agreement.

The Company may redeem the Notes at par at any time two years after
issuance, or at

<PAGE>

any time after their issuance if the closing price of the Common Stock is equal
to or exceeds $7.50 per share for 10 consecutive trading days and the shares of
Common Stock underlying the Notes have been registered under the Securities Act.
In the event the Company elects to redeem the Notes, the holders of the Notes
will have the option to convert the Notes into shares of the Company's Common
Stock at a conversion price of $5.00 per share prior to such redemption, subject
to adjustment as set forth in the Convertible Subordinated Note Purchase
Agreement.

The Company presently expects that the Notes will be converted to Common
Stock (dilutive to common stockholders). In the event that the Notes are not
converted, the Company will require additional financing to repay the Notes upon
their maturity on April 30, 2001. There can be no assurances that the Company
will be able to obtain adequate replacement financing on terms acceptable to it
or at all.

Need For Additional Financing

As of May 1, 1996, the Company reduced its credit facility with LaSalle
Business Credit, Inc. ("LaSalle") to a zero balance. Effective June 30, 1996,
the financing agreement with LaSalle expired and was not renewed. The Company
believes that income from operations and the proceeds from the Notes will be
sufficient to finance its business in the normal course. As of July 24, 1996,
the Company is in discussions with other financial institutions to obtain
working capital financing. The Company may require additional financing to
pursue its growth through acquisitions and if such financing is required, there
are no assurances that financing will be available, or if available, that it can
be obtained on terms favorable to the Company, or that such financing will not
be dilutive to shareholders. See "Business."

Control By Certain Shareholders

Kanders Florida Holdings, Inc. ("KFH") owns in the aggregate 4,496,037
shares of the Company's Common Stock. Such shares are deemed to be beneficially
owned by Warren B. Kanders because he is the sole shareholder and sole director
of KFH. In addition, Mr. Kanders, who is the Chairman of the Board of Directors
of the Company, owns 29,141 shares individually. Such shares collectively
represent approximately 62.9% of the Company's outstanding shares of Common

Stock. KFH has the practical ability to control the election of all of the
members of the Company's Board of Directors and to otherwise exercise control
over the business, policies and affairs of the Company. The Company's Amended
and Restated Articles of Incorporation (the "Charter") do not provide for
cumulative voting rights with respect to the election of directors. The board
members appointed by KFH would have the ability to veto any proposed action,
control any matter presented at a special meeting and resolve any conflict of
interest. See "Security Ownership of Certain Beneficial Owners and Management."

Reliance Upon Key Personnel

The Company is substantially dependent upon the personal efforts and
abilities of Warren

<PAGE>

B. Kanders, Chairman of the Board of Directors, and Jonathan M. Spiller, the
President and Chief Executive Officer of the Company. Should either of these two
members of the Company's senior management be unable or unwilling to continue in
their present roles, or should such persons determine to enter into competition
with the Company, the Company's business could be adversely affected. Because of
the relatively small size of the Company, the loss of a senior executive may
have a materially adverse effect upon the Company until a suitable replacement
can be found. See "Management" and "Business."

Potential Antitakeover Effect of Certain Charter Provisions

The Company has 7,807,494 shares of authorized and unissued Common Stock
which could be issued to a third party selected by current management or used as
the basis for a shareholders' rights plan, which could have the effect of
deterring a potential acquiror. The ability of the Company's Board of Directors
to establish the terms and provisions of different series of preferred stock may
discourage unsolicited takeover bids from third parties.

Shares Eligible for Future Sale

Sales of substantial numbers of shares of Common Stock in the public
market in the future could adversely affect the market price of the Common Stock
and could impair the Company's ability to raise additional capital through the
sale of its equity securities. The 5,849,183 shares of Common Stock owned by
officers and directors as a group may be sold from time to time subject to the
restrictions contained in Rule 144 under the Securities Act or pursuant to a
separate registration statement. Ordinarily, under Rule 144, a person having
held restricted securities for a period of two years may, every three months,
sell in ordinary brokerage transactions or in transactions directly with a
market maker, an amount equal to the greater of 1% of the Company's then
outstanding Common Stock or the average weekly trading volume during the four
calendar weeks prior to such sale.

As part of the Company's acquisition strategy, the Company anticipates
issuing and registering under the Securities Act shares of its Common Stock.
Since the Company's acquisition strategy contemplates the issuance of shares of

Common Stock, the number of outstanding shares of Common Stock that are likely
to be eligible for sale in the future is likely to increase substantially. The
Company issued to Ivers-Lee $2,400,000 worth of Common Stock to pay for the NIK
Assets. The number of shares of Common Stock issued in connection therewith
totalled 310,931.

In addition, as of August __, 1996, 1,221,000 shares of Common Stock were
reserved for issuance upon the exercise of all outstanding stock options. Of
this amount, 818,500 shares were reserved for issuance upon the exercise of
options granted pursuant to the Company's 1994 Incentive Stock Plan (the "1994
Incentive Stock Plan"). The shares issuable upon exercise of these options have
been registered under the Securities Act. In addition, 402,500 shares of Common
Stock were reserved for issuance upon the exercise of non-qualified stock
options

<PAGE>

issued to Richmont Capital Partners I, L.P., the beneficial holder of 9.7% of
the Company's Common Stock ("Richmont"), and certain employees of the Company,
including Jonathan M. Spiller, the President and Chief Executive Officer of the
Company. In addition, 41,100 shares of Common Stock are reserved for issuance
upon conversion of the Company's 3% Convertible, $1.00 stated value Preferred
Stock (the "Old Preferred Stock") by holders who have not yet submitted their
shares of Old Preferred Stock for conversion and 2,300,000 shares of Common
Stock are reserved for issuance upon conversion of the Notes. See "Risk
Factors--5% Convertible Subordinated Notes," "Plan of Distribution" and "Certain
Relationships and Related Transactions."

Exercise of Outstanding Options May Have Dilutive Effect on Market

There are presently outstanding options to purchase up to 300,000 shares
of the Company's Common Stock, at a price of $7.50 per share, subject to
adjustment, for a term of up to 10 years, which are held by Richmont (the
"Richmont Options"). The Richmont Options provide an opportunity for Richmont to
profit from a rise in the market price of the Common Stock, with resulting
dilution in the ownership interest in the Company held by the then present
shareholders. Richmont would most likely exercise them and purchase the
underlying Common Stock at a time when the Company may be able to obtain capital
by a new offering of securities on terms more favorable than those provided by
the Richmont Options, in which event the terms on which the Company may be able
to obtain additional capital would be adversely affected. At the present time,
neither the Richmont Options nor the shares underlying the Richmont Options are
registered under the Securities Act, but the Company reserves the right to
register such shares at any time.

the Richmont Options, the Richmont Options will lapse and be of no further force
or effect. See "Certain Relationships and Related Transactions."

Dividends

The Company has paid no cash dividends on its Common Stock in the last
three fiscal years and for the foreseeable future intends to retain any earnings
to finance the development and expansion of its business. The declaration of
dividends in the future will be at the election of the Board of Directors, and
will depend upon the earnings, capital requirements and financial position of
the Company, plans for expansion, general economic conditions and other
pertinent factors. Accordingly, there are no assurances that any dividends will
ever be paid on the Company's Common Stock.

<PAGE>

Volatility of Market Price for Common Stock

The securities markets have experienced significant price and volume
fluctuations from time to time in recent years that have often been unrelated or
disproportionate to the operating performance of particular companies. These
broad fluctuations may adversely affect the market price of the Common Stock.
See "Market for Common Stock and Related Stockholder Matters."

Substantial Shares Reserved for Issuance

The Company has an aggregate of 5,321,000 shares of Common Stock reserved
for issuance upon the exercise of options to purchase Common Stock and the
conversion of the Notes. These include: (i) 2,300,000 shares of Common Stock
issuable upon the conversion of the Notes; (ii) 300,000 shares issuable upon the
exercise of the Richmont Options; (iii) 818,500 shares issuable upon the
exercise of options granted under the 1994 Incentive Stock Plan; (iv) 102,500
shares issuable upon the exercise of non-qualified stock options issued to
certain employees of the Company; (v) 1,500,000 shares issuable upon the
exercise of options (no options are outstanding to date) under the Company's
1996 Stock Option Plan (the "1996 Plan"); and (vi) 300,000 shares issuable upon
the exercise of options (225,000 options are outstanding to date) under the
Company's 1996 Non-Employee Directors Stock Option Plan (the "1996 Directors
Plan"). The conversion of the Notes and the exercise of the options may dilute
the net tangible book value of the Common Stock. Further, the holders of the
Notes and options, respectively, may be able to convert and exercise the Notes
and options, as the case may be, at a time when the Company would otherwise be
able to obtain additional equity capital on terms more favorable to the Company.
See "Security Ownership of Certain Beneficial Owners and Management,"
"Management," "Certain Relationships and Related Transactions" and "Executive
Compensation-Stock Option Plans."

FOR ALL OF THE FOREGOING REASONS AND OTHERS SET FORTH IN THIS PROSPECTUS, THE
SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY SHOULD BE AWARE OF THESE AND
OTHER FACTORS SET FORTH IN THIS PROSPECTUS. THE SECURITIES SHOULD BE PURCHASED
ONLY BY PERSONS WHO CAN AFFORD A TOTAL LOSS OF THEIR INVESTMENT IN THE COMPANY.

USE OF PROCEEDS

The net proceeds from the sale of the NIK Shares will be received by
Ivers-Lee (hereinafter, at times, the "Selling Shareholder") as consideration
for the sale of the NIK Assets by Ivers-Lee to the Company. No proceeds will be
realized by the Company as a result of the sale of the NIK Shares. Ivers-Lee has
a contractual obligation, however, pursuant to the Asset Purchase Agreement, to
pay certain amounts to the Company if and when net proceeds realized by the
Selling Shareholder from the sale of the NIK Shares exceeds a threshold amount.
See "NIK Acquisition." The net proceeds from the sale of the Company Shares will
be used for working capital purposes.

<PAGE>

SELLING SHAREHOLDER

A total of 310,931 shares of Common Stock may be offered by the Selling
Shareholder. The NIK Shares offered hereby constitute approximately 4.3% of all
shares of the Company's outstanding Common Stock, without giving effect to the
possible exercise of outstanding options and the conversion of the Notes, except
as noted. The following table sets forth certain information with respect to the
Selling Shareholder, for whom the Company is registering for resale to the
public shares of the Company's Common Stock. The table reflects the Selling
Shareholder's beneficial ownership of the Common Stock as of August , 1996. The
Company will not receive any proceeds from the sale of the NIK Shares. Ivers-Lee
has a contractual obligation, however, pursuant to the Asset Purchase Agreement
to pay certain amounts to the Company if and when net proceeds realized by the
Selling Shareholder from the sale of the NIK Shares exceeds a threshold amount.
See "Use of Proceeds" and "NIK Acquisition." There are no material relationships
between the Selling Shareholder and the Company or any of its predecessors or
affiliates, nor have any such material relationships existed within the past
three years, except as noted.
<TABLE>
<CAPTION>
==================================================================================================
Beneficial Ownership as of Maximum Beneficial Ownership
August____, 1996 to be Sold After Offering if
Selling Shareholder in this Maximum
Offering is Sold (1)
Amount Percent Amount Percent
(# of Shares) (# of (# of
Shares) Shares)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ivers-Lee Corporation 310,931 4.3% 310,931 0 --
==================================================================================================
</TABLE>

(1) Information contained in the table assumes that all securities offered
pursuant to this Prospectus will be sold.

NIK ACQUISITION

On May 13, 1996, the Board of Directors of the Company held a meeting at
which the Board of Directors authorized the purchase by the Company of certain
assets of NIK Public Safety from Ivers-Lee. NIK Public Safety is the leading
manufacturer and distributor of portable narcotic identification kits used for
the identification of narcotic substances by law enforcement agencies. In
addition, NIK Public Safety distributes the Flex-Cuf restraint, a patented
disposable restraint manufactured by Thomas & Betts, as well as Specimen
Collection Kits, Evidence Collection Kits and Tamper Guard Evidence Tape. The
Company and NIK Public Safety, Inc., a newly formed wholly-owned subsidiary of
the Company (collectively, the "Purchaser"), acquired from Ivers-Lee and LFC No.
46 Corp., a wholly-owned subsidiary of Ivers-Lee (Ivers-Lee and LFC No. 46
Corp., collectively, the "Seller"), certain assets of NIK Public Safety from
Ivers-Lee pursuant to an

<PAGE>

asset purchase agreement dated as of July 2, 1996 (the "Asset Purchase
Agreement"), pursuant to which: (i) the Purchaser agreed to purchase inventory,
receivables, intellectual property, contracts and other tangible and intangible
properties and related assets of NIK Public Safety from the Seller
(collectively, the "NIK Assets"); and (ii) in consideration therefor, the
Purchaser agreed to issue to the Seller $2,400,000 worth of Common Stock of the
Company, to be valued in accordance with the Asset Purchase Agreement (the "NIK
Shares"), subject to adjustment (the "Purchase Price"). Such valuation amounted
to 310,931 shares of Common Stock of the Company.

In connection with the execution of the Asset Purchase Agreement, the
Purchaser agreed to register the NIK Shares for sale under the Securities Act.
On the closing date, the Purchaser advanced to the Seller $1,200,000 (the
"Advance"). Such Advance will not bear interest and must be repaid by the Seller
with the first $1,200,000 realized by the Seller from the sales of the NIK
Shares. In the event that the sum of the aggregate net proceeds from sales of
the NIK Shares prior to December 31, 1996, less any amounts paid to the Company
on account of the Advance (the "Seller's Balance"), and the Advance are less
than $2,400,000, the Company has agreed to pay to the Seller, on December 31,
1996, the difference between $2,400,000 and the sum of Seller's Balance and the
Advance. In the event that the sum of the Seller's Balance and the Advance at
any time exceeds $2,400,000, then Seller has agreed to pay to the Purchaser, an
amount equal to the excess of such Seller's Balance and the Advance over
$2,400,000.

Under the Power of Attorney, Mr. Spiller has the power to effect, in the name
of, for and on behalf of Ivers-Lee, any and all sales of the NIK Shares.

The foregoing description of the Asset Purchase Agreement and the
transactions contemplated thereby is not intended to be complete and is
qualified in its entirety by the complete text of the Asset Purchase Agreement.

<PAGE>

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma balance sheet as of June 30, 1996 gives
effect to the acquisition of the NIK Assets as if such transaction had occurred
on June 30, 1996. The unaudited pro forma balance sheet may not be indicative of
the results that actually would have occurred if the transactions referred to
above had been in effect on the dates indicated or the results that may be
obtained in the future.

American Body Armor & Equipment, Inc.

Unaudited Pro Forma Balance Sheet
as of June 30, 1996

Acquisition
Historical of NIK
ABA Assets(1) Pro Forma
----------- ----------- -----------
ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 9,004,168 ($1,200,000) $ 7,804,168
Accounts receivable $ 1,967,827 $ 300,000 $ 2,267,827
Inventories $ 1,237,020 $ 500,000 $ 1,737,020
Prepaid expenses and other
current asssets $ 804,096 $ 804,096
----------- ----------- -----------
Total current assets $13,013,111 ($ 400,000) $12,613,111

PROPERTY AND EQUIPMENT, net $ 466,746 $ 466,746

REORGANIZATION VALUE IN
EXCESS OF AMOUNTS
ALLOCABLE TO IDENTIFIABLE
ASSETS, net $ 3,505,079 $ 3,505,079

PATENTS, TRADEMARKS and
OTHER INTANGIBLES $ 1,855,000 $ 1,855,000

OTHER ASSETS $ 735,297 $ 735,297
----------- ----------- -----------
TOTAL ASSETS $17,720,233 $ 1,455,000 $19,175,233
=========== =========== ===========

See Note to Unaudited Pro Forma Balance Sheet

<PAGE>

American Body Armor & Equipment, Inc.

Unaudited Pro Forma Balance Sheet - continued
as of June 30, 1996

<TABLE>
<CAPTION>
Acquisition
Historical of NIK
ABA Assets(1) Pro Forma
---------- ----------- -----------
LIABILITIES AND
STOCKHOLDERS' EQUITY

<S> <C> <C> <C>
Liability for Acquisition of NIK Assests $ 1,455,000 $ 1,455,000
Short term borrowings and current
portion of long-term debt $ 31,751 $ 31,751
Accounts payable, accrued expenses and
other current liabilities $ 947,631 $ 947,631
----------- ----------- -----------
Total current liabilities $ 979,382 $ 1,455,000 $ 2,434,382

5% CONVERTIBLE SUBORDINATED
NOTES
Due to directors and affiliates $ 3,450,000 $ 3,450,000
Due to others $ 8,050,000 $ 8,050,000
----------- -----------
Total 5% convertible subordinated
notes $11,500,000 $11,500,000

OTHER LONG-TERM DEBT AND
CAPITALIZED LEASE OBLIGATION,

less current portion $ 24,479 $ 24,479
----------- ----------- -----------

Total liabilities $12,503,861 $ 1,455,000 $13,958,861

STOCKHOLDERS' EQUITY Convertible
preferred stock, $1 stated value, 1,700,000
shares authorized, 0
shares issued and outstanding $ 0 $ 0
Common stock, $.03 par value,
15,000,000 shares authorized, 6,919,816
shares issued and outstanding $ 207,594 $ 207,594
Additional paid-in capital $ 3,829,058 $ 3,829,058
Retained earnings $ 1,179,720 $ 1,179,720
----------- ----------- -----------
Total stockholders' equity $ 5,216,372 $ 0 $ 5,216,372
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $17,720,233 $ 1,455,000 $19,175,233
=========== =========== ===========
</TABLE>

See Note to Unaudted Pro Forma Balance Sheet

<PAGE>

Note to Unaudited Pro Forma Balance Sheet

(1) Acquisition of NIK Assets

On July 15, 1996, the Company acquired, effective as of July 1, 1996, certain
assets of the NIK Public Safety Product Line from Ivers-Lee Corporation (the
"NIK Assets"). The purchase price of the acquisition was 310,931 shares (the
"NIK Shares") of the Company's Common Stock valued at $2,400,000 plus $255,000
in costs incurred related to the purchase. The Company acquired inventory,
receivables and certain intangibles. The total purchase price was allocated to
the NIK Assets based upon their respective relative fair market values. Patents,
trademarks and other intangibles will be amortized over their respective useful
lives, which range from 5-25 years. On the closing date, the Company advanced to
the seller $1,200,000 (the "Advance"). The Advance will not bear interest and
must be repaid with the first $1,200,000 realized from the sales of the NIK
Shares. In the event that the sum of the aggregate net proceeds from the sales
of the NIK Shares and the Advance are less than $2,400,000 by December 31, 1996,
the Company has agreed to pay the difference to the seller. Alternatively, if
the sum of the aggregate net proceeds from the sales of the NIK Shares and the
Advance are greater than $2,400,000 at any time, the seller has agreed to pay
the difference to the Company.

PLAN OF DISTRIBUTION

The sales of the NIK Shares by the Selling Shareholder and the sales of
the Company Shares by the Company may be effected from time to time in
transactions (which may include block transactions by or for the account of the
Selling Shareholder) on the American Stock Exchange or on such other market as
the Company's Common Stock may then be trading, in negotiated transactions, a
combination of such methods of sale, or otherwise. Sales may be made at fixed
prices which may be changed, at market prices prevailing at the time of sale, or
at negotiated prices.

The Selling Shareholder and the Company may effect such transactions by
selling the NIK Shares and the Company Shares, respectively, directly to
purchasers, through broker-dealers acting as agents for the Selling Shareholder
and the Company, as the case may be, or to broker-dealers who may purchase
shares as principals and thereafter sell the NIK Shares and/or the Company
Shares from time to time on the American Stock Exchange or on such other market
as the Company's Common Stock may then be trading, in negotiated transactions,
or otherwise. Such broker-dealers, if any, may receive compensation in the form
of discounts, concessions, or commissions from the Selling Shareholder, the
Company and/or the purchasers for whom such broker-dealers may act as agents or
to whom they may sell as principals, or both (which compensation as to a
particular broker-dealer may be in excess of customary commissions).

Pursuant to the provisions of the Asset Purchase Agreement, Ivers-Lee
irrevocably delivered to UBS the stock certificate of the Company issued in the
name of Ivers-Lee representing the NIK Shares to be held by UBS in the
UBS/Ivers-Lee Account. UBS is authorized to hold the NIK Shares in its
possession and to effect any sales of NIK Shares as the Company, pursuant to the
Power of Attorney. Under the Power of Attorney, Jonathan M. Spiller, the
President and Chief Executive Officer of the Company, has the power to effect,
in the name of, for and on behalf of Ivers-Lee, any and all sales of the NIK
Shares.

<PAGE>

The Selling Shareholder, the Company and broker-dealers, if any, acting in
connection with such sales might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act and any commission received by
them and any profit on the resale of the securities might be deemed to be
underwriting discounts and commissions under the Securities Act.

The Selling Shareholder entered into the Asset Purchase Agreement with the
Company, which provides for the registration of the NIK Shares under the
Securities Act and the blue sky laws of the several states. Pursuant to the
Asset Purchase Agreement, the Company is required to bear the cost of such
registration and indemnify, among others, the Selling Shareholder against
certain liabilities, including those under the Securities Act. Insofar as
indemnification for liabilities under the Securities Act may be permitted
pursuant to the above-described agreement or otherwise to directors, officers
and controlling persons of the Company, the Company has been advised that, in
the opinion of the SEC, such indemnification is against public policy expressed
in the Securities Act and is therefore unenforceable.

LEGAL PROCEEDINGS

In May 1992, the Company filed for relief under Chapter 11 of the United
States Bankruptcy Code. The bankruptcy filing was the result of a general
decline in the Company's operations, which included significant operating losses
in 1989 and 1991, and the inability to collect a $1.5 million receivable related
to the shipment of vests to a Middle East customer in April 1991. The Company
emerged from bankruptcy protection effective September 20, 1993, upon
confirmation by the Bankruptcy Court of the Company's Plan of Reorganization.

In November 1989, the Federal Trade Commission (the "FTC") conducted an
investigation into the accuracy of the Company's claims that body armor it sold
between 1988 and 1990 complied with testing sand certification procedures
promulgated by the National Institute of Justice (the "NIJ").

On November 2, 1994, the FTC issued a consent order embodying a voluntary
settlement of the FTC's charges that the Company engaged in false advertising.
Under the consent order, the Company admitted no violations of law but agreed to
establish a Body Armor Replacement Program (the "Program") under which persons
who had purchased body armor covered by the

<PAGE>

Program would be identified and offered the chance to buy new, replacement body
armor at a reduced price. The consent order sets forth many detailed
requirements governing the conduct of the Program, the retention of records and
the avoidance of false or misleading advertising. Failure to comply with the
requirements could make the Company liable for civil penalties.

On January 4, 1995, the Company filed with the FTC a comprehensive
Compliance Report detailing the manner in which it was performing the
obligations imposed upon it by the consent order. As of March 18, 1996, the FTC
had not asked for additional information or questioned the Company's compliance
with the consent order.

In addition to the above, the Company, in the normal course of its
business, is subject to claims and litigation in the areas of product and
general liability. The Company believes that it has adequate insurance coverage
for most claims that are incurred in the normal course of business. In such

cases, the effect on the Company's financial statements is generally limited to
the amount of its insurance deductibles. Management does not believe at this
time that any such claims have a material impact on the Company's financial
position.

MANAGEMENT

Directors

Each of the persons identified below has served as a director of the Company
since the date set forth opposite their respective name, and will continue to
serve in such capacity for one year or until their respective successors are
duly elected and qualified.

Positions Director
Name Age and Office Since
- ---- --- ---------- -----

Warren B. Kanders (1)(2)(3)(4) 38 Chairman of the Board of 1996
Directors

Jonathan M. Spiller 45 Director, Chief Executive 1991
Officer and President

Burtt R. Ehrlich (1)(2) 56 Director 1996

Nicholas Sokolow (2)(3) 46 Director 1996

Thomas W. Strauss(1) 53 Director 1996

Richard C. Bartlett(3)(4) 61 Director 1996

(1) Member of Audit Committee
(2) Member of Compensation Committee
(3) Member of Nominating Committee
(4) Member of Option Committee

Directors of the Company are elected annually at the Annual Meeting of
Shareholders. Their respective terms of office continue until the next Annual
Meeting of Shareholders and until

<PAGE>

their successors have been elected and qualified in accordance with the
Company's Amended and Restated Bylaws (the "Bylaws"). There are no family
relationships among any of the directors or executive officers of the Company.

Warren B. Kanders

Warren B. Kanders was elected Chairman of the Board of Directors on

January 18, 1996. Mr. Kanders also served as Vice Chairman of the Board of
Directors of Benson Eyecare Corporation, a New York Stock Exchange listed
company, from October 1992 to May 3, 1996. Mr. Kanders was the President and a
Director of Pembridge Holdings, Inc. from June 1992 to March 1993. Mr. Kanders
is also a Director of Eyecare Products plc, a United Kingdom public company
listed on the London Stock Exchange. Since 1990, Mr. Kanders has been President
of Kanders and Company, Inc., an investment management company. From 1987 to
1990, Mr. Kanders was the founder and Managing Director of Great Pacific
Capital, Inc., which provided investment management advice to the Jim Pattison
Group, one of Canada's largest privately- owned companies. From 1983 to 1987,
Mr. Kanders was Vice President and Director of U.S. Mergers and Acquisitions for
Orion Royal Bank Limited, a merchant bank wholly-owned by the Royal Bank of
Canada. Mr. Kanders also serves as Trustee and Chairman of the Investment
Committee of Choate Rosemary Hall School, Wallingford, Connecticut. Mr. Kanders
received a B.A. degree in Economics from Brown University.

Jonathan M. Spiller

Jonathan M. Spiller has been a Director of the Company since July 1991 and
is the Company's President and Chief Executive Officer. Mr. Spiller became
President of the Company in June 1991, and has served as its Chief Executive
Officer since September 21, 1993. Mr. Spiller formerly served as the Company's
Chief Operating Officer from June 1991 to September 1993, when he was named
Chief Executive Officer. Mr. Spiller is a certified public accountant and was
previously a partner in the international accounting firm of Deloitte & Touche
LLP, where he spent a total of eighteen years, most recently as a partner in the
Capital Markets Group, where he was responsible for international transactions.
From March 1988 to July 1989, Mr. Spiller was the Senior Vice President and
Chief Financial Officer of Hunter Environmental Services, Inc., a large publicly
held company in the environmental field. Mr. Spiller received a B.S. degree in
Economics from the University of Wales and is a Fellow of the Institute of
Chartered Accountants in England and Wales. For additional information
concerning Mr. Spiller, See "Management-Executive Officers-Involvement in
Certain Legal Proceedings."

Burtt R. Ehrlich

Burtt R. Ehrlich was elected a Director of the Company on January 18,
1996. Mr. Ehrlich previously served as a Director of Benson Eyecare Corporation,
a New York Stock Exchange listed company, from its inception in 1986 to 1995,
and as its Chairman and Chief Operating Officer from 1986 until October 1992.
Mr. Ehrlich is a Trustee of the Reserve Private Equity Series of mutual funds
and a Director of the Cater Allen family of mutual funds

<PAGE>

in the United Kingdom. He is also a former Treasurer and Trustee of the Carnegie
Council on Ethics and International Affairs, and a former Trustee of the
Buckingham Browne and Nichols School. Mr. Ehrlich received a B.A. degree from
Columbia College and an M.B.A. from Columbia University Graduate School of
Business.

Nicholas Sokolow

Nicholas Sokolow was elected a Director of the Company on January 18,
1996. Mr. Sokolow is a senior partner in the law firm of Sokolow, Dunaud,
Mercadier & Carreras. From June 1973 until October 1994, Mr. Sokolow was an
associate and partner with the international law firm of Coudert Brothers. Mr.
Sokolow is also a Director of Rexel, Inc., a New York Stock Exchange listed
company. Mr. Sokolow, who is a member of the Paris Bar, received his education
from the Paris School of Law, Institute of Political Sciences-Business
Administration and the University of Michigan.

Thomas W. Strauss

Thomas W. Strauss was elected a Director of the Company on May 13, 1996.
Mr. Strauss is a Principal with Ramius Capital Group, a privately held
investment management firm. Prior to joining Ramius Capital, Mr. Strauss was
Co-Chairman of Granite Capital International Group.

From 1963 to 1991, Mr. Strauss was with Salomon Brothers Inc. He was
admitted as a General Partner in 1972 and was appointed to the Executive
Committee in 1981. In 1986, Mr. Strauss became President of Salomon Brothers Inc
("Salomon") and a Vice Chairman and member of the Board of Directors of Salomon
Inc., the holding company of Salomon Brothers Inc, and Phibro Energy, Inc. As
President of Salomon, he had a special focus on the International Investment
Banking and High Yield activities of the firm. Prior to becoming President of
Salomon, he was responsible for the U.S. Government, Money Market and Foreign
Exchange Departments.

Mr. Strauss is a former member of the Boards of Governors of the American
Stock Exchange, the Chicago Mercantile Exchange, the Public Securities
Association, the Securities Industry Association and a former member of the U.S.
Japan Business-Council. He is a past President of the Association of Primary
Dealers in U.S. Government Securities.

Mr. Strauss currently serves as a member of the Boards of Trustees of The
Mount Sinai Medical Center, Riverdale Country School, the Board of Overseers of
the School of Arts & Sciences of the University of Pennsylvania, the Advisory
Board of Randall's Island Sports Foundation and The Corporation of the Hurricane
Island Outward Bound School. Mr. Strauss received a B.A. degree in Economics
from the University of Pennsylvania. For additional information concerning Mr.
Strauss, See "Management-Directors-Involvement in Certain Legal Proceedings."

<PAGE>

Richard C. Bartlett

Richard C. Bartlett was elected a Director of the Company on May 13, 1996.
Mr. Bartlett is the Vice Chairman of Mary Kay Holding Corporation and the
Chairman of The Richmont Group. Prior to being named Vice Chairman of Mary Kay
Holding Corporation in January 1993, Mr. Bartlett served as President and Chief

Operating Officer of Mary Kay Inc. from 1987 through 1992. Mr. Bartlett joined
Mary Kay in 1973 and became an officer in 1976. He has served on the Board of
Directors of Mary Kay Inc. from 1979 to 1995.

Prior to being named Chairman of the Board of The Richmont Group in 1995,
Mr. Bartlett served as Chief Executive Officer from 1994 to 1995. The Richmont
Group is a holding company comprised of six companies doing business in seven
countries. The Richmont companies' portfolio businesses includes, but is not
limited to, financial services, apparel, sporting goods and restaurant chains.

Mr. Bartlett is a former Chairman of the U.S. Direct Selling Education
Foundation ("US DSEF") and the U.S. Direct Selling Association. He currently
serves on the Boards of Directors of both organizations, as well as on the
executive committee of the US DSEF. Mr. Bartlett is Chairman and a Trustee of
The Nature Conservancy of Texas. He also serves on the Board of the Better
Business Bureau of Metropolitan Dallas, Inc., and is a member of the World
Economic Forum, the National Center for Policy Analysis, The Conference Board
and the Academy of Marketing Science. He also serves on the advisory boards of
the Positive Employee Practices Institute, the Center for Retailing Studies at
Texas A&M University, the Center for Retailing Education and Research at the
College of Business Administration at the University of Florida, the Department
of Range, Wildlife, and Fisheries Management at Texas Tech University, the
advisory council of the University of Texas Press and the global board of
advisors for The Economist Group's Crossborder Monitor.

Mr. Bartlett received a B.S. degree in Communications from the University
of Florida, Gainesville.

Involvement in Certain Legal Proceedings

Except as hereinafter provided with respect to Mr. Strauss, and as
hereinafter provided in "Management-Executive Officers-Involvement in Certain
Legal Proceedings," with respect to Mr. Spiller and J. Michael Elliott, the Vice
President-Operations of the Company, no director, director nominee, executive
officer, promoter or control person has, within the last five years: (i) had a
bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time; (ii) been convicted in a criminal
proceeding or is currently subject to a pending criminal proceeding (excluding
traffic violations or similar misdemeanors); (iii) been subject to any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities; (iv) been found by a court of competent
jurisdiction (in a civil action), the SEC or the

<PAGE>

Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.

On December 3, 1992, without admitting or denying any liability, Mr.
Strauss, a director, consented to an order of the SEC under which he was
suspended from associating with any broker, dealer, municipal securities dealer,
investment company or investment advisor for a period of six (6) months, and
paid a civil penalty of $75,000. The central claim in these proceedings was that
as President of Salomon, Mr. Strauss delayed in reporting an unauthorized bid by
the head of Salomon's Government Trading Desk who reported to one of Mr.
Strauss' subordinates. Mr. Strauss has maintained that he reported the
unauthorized bid both to Salomon's Chief Executive Officer and General Counsel
immediately upon learning of the unauthorized bid.

Executive Officers

Set forth below is certain information concerning the Company's executive
officers. Each of the persons identified below will continue to serve in such
capacity until the next meeting of the Board of Directors appointing officers
and until a successor is duly elected and qualified. For biographical
information concerning Mr. Spiller, see "Management - Directors."

Executive
Officer
Name Age Position Since
- ---- --- -------- -----

Jonathan M. Spiller 45 President and Chief Executive 1991
Officer

Richard T. Bistrong 33 Vice President - 1995
Sales and Marketing

Carol T. Burke 35 Vice President - Finance and 1995
Secretary

J. Michael Elliott 44 Vice President-Operations 1993

Richard T. Bistrong

Mr. Bistrong has been the Company's Vice President of Sales and Marketing
since February 1995, when he joined the Company. He is responsible for managing
and directing all efforts and activities of the Company's domestic sales staff.
Mr. Bistrong is also responsible for the development and support of all
distributor relationships. Prior to joining the Company, Mr. Bistrong held the
position of Director of Retail Operations for Fechheimer Brothers Company, a
wholly-owned subsidiary of Berkshire Hathaway, for a period of two years. From
1986 to 1992, Mr. Bistrong was the Executive Vice President of Point Blank Body
Armor where he was responsible for the domestic sales organization. Mr. Bistrong
has a B.A. degree in Political Science from the University of Rochester and a
Masters of Arts degree in Foreign

<PAGE>

Affairs from the University of Virginia.

Carol T. Burke

Ms. Burke has been the Vice President of Finance of the Company since
January 1996 and its Secretary since March 4, 1996. Ms. Burke joined the Company
as Controller in January 1995. She oversees and directs all treasury, budgeting
and accounting activities for the Company. Ms. Burke is also responsible for the
analysis of general economic, business and financial conditions and their impact
on the Company's policies and operations. Ms. Burke, who is a certified public
accountant, previously spent over five years with the Walt Disney organization
as a Senior Finance Manager where she worked in both Orlando and at the Euro
Disney operation in France. Prior to that time, Ms. Burke served as a Senior
Auditor for Arthur Andersen & Co. Ms. Burke has a B.S. degree in both Accounting
and Management Science from the University of South Carolina.

J. Michael Elliott

Mr. Elliott has been a Vice President of the Company since October 1991.
Mr. Elliott also previously served as the Secretary of the Company. He is
responsible for manufacturing (including quality control) and all of the
technical aspects of product development. Mr. Elliott is actively involved in
the marketing of the Company's Explosive Ordnance Disposal products (EOD) and in
sales to the United States military. Mr. Elliott has a B.S. degree in Industrial
Technology from California State University and has significant background in
the industry. Mr. Elliott previously served as Executive Vice-President at
O'Gara Coachworks, Vice President of Operations of Protective Materials Company
from 1986 to 1990, and from 1990 until October 1991 when he joined the Company,
Mr. Elliott was Vice President and Chief Operating Officer of Wes-Pine
Woodworking, Inc., a window manufacturing company located in Massachusetts.

Involvement in Certain Legal Proceedings

Messrs. Spiller and Elliott were employed by and served in similar
positions with the Company at the time the Company filed for Chapter 11
bankruptcy protection in May 1992 through the confirmation on September 20, 1993
of the Company's Plan of Reorganization, by the Bankruptcy Court.

SECURITY OWNERSHIP
OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information, as of August __, 1996,
to the knowledge of the Company, regarding the beneficial ownership of Common
Stock, which is the Company's only class of outstanding voting securities, by:
(i) each Shareholder who owns more than 5% of the outstanding Common Stock of
the Company; (ii) each director; (iii) each of the named executive officers of
the Company; and (iv) all directors and executive officers of the Company as a
group. The information set forth in the table and accompanying footnotes has

<PAGE>

been furnished by the named beneficial owners. Since the table and accompanying
footnotes reflect beneficial ownership determined pursuant to the applicable
rules of the Securities and Exchange Commission, the information is not
necessarily indicative of beneficial ownership for any other purpose.
<TABLE>
<CAPTION>

===============================================================================================
Name and Address Common Stock No. of
of Beneficial Owner Shares Beneficially Owned % of Class
===============================================================================================
<S> <C> <C>
Warren B. Kanders (1) and
Kanders Florida Holdings, Inc. 4,525,178 (1) 62.9%
c/o American Body Armor & Equipment, Inc.
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Jonathan M. Spiller
c/o American Body Armor & Equipment, Inc. 740,205 (2) 10.3%
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Richmont Capital Partners I, L.P. 700,000 (3)
4300 Westgrove Drive 9.7%
Dallas, TX 75248
- -----------------------------------------------------------------------------------------------
J. Michael Elliott
c/o American Body Armor & Equipment, Inc. 189,000 (4) 2.6%
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Burtt R. Ehrlich
c/o American Body Armor & Equipment, Inc. 182,300 (5) 2.5%
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Nicholas Sokolow
c/o American Body Armor & Equipment, Inc. 122,500 (6) 1.7%
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Richard T. Bistrong
c/o American Body Armor & Equipment, Inc. 50,000 (7) .70%
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Thomas W. Strauss
c/o American Body Armor & Equipment, Inc. 40,000 (8) .56%
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Richard C. Bartlett

c/o American Body Armor & Equipment, Inc. 0 (9) 0%
191 Nassau Place Road
Yulee, FL 32097
- -----------------------------------------------------------------------------------------------
Executive Officers and Directors as a Group 5,849,183 (1)(2)(4)(5) 81.3%
(8 Individuals) (6)(7)(8)(9)
===============================================================================================
</TABLE>

(1) Represents 4,496,037 shares owned by Kanders Florida Holdings, Inc.
("KFH"), which are deemed to be beneficially

<PAGE>

owned by Warren B. Kanders because he is the sole shareholder and sole
director of KFH, and 29,141 shares which are owned by Mr. Kanders
individually.

(2) Includes 432,000 stock options granted to Mr. Spiller under the terms of
his previous employment agreement, which was executed on January 1, 1994
but which was mutually terminated by Mr. Spiller and the Company and
superseded by a new employment agreement executed on January 18, 1996, and
18,000 shares granted to Mr. Spiller pursuant to the Company's 1994
Incentive Stock Plan. Such options are fully vested but unexercised. Also
includes a maximum of 50,000 stock options, subject to reduction, awarded
to Mr. Spiller on January 19, 1996. These options are fully vested but
unexercised. Of the 740,205 shares listed, 690,105 are subject to a three
year lock-up agreement by and among Mr. Spiller and KFH. Pursuant to the
terms of a letter agreement, dated January 18, 1996 (the "Letter
Agreement"), Mr. Spiller agreed that he will not, directly or indirectly,
without the prior written consent of KFH, offer to sell, sell, grant any
options for the sale of, assign, transfer, pledge, hypothecate or otherwise
encumber or dispose of such shares of Common Stock of the Company or
securities convertible into, exercisable or exchangeable for or evidencing
any right to purchase or subscribe for, such shares of Common Stock of the
Company or dispose of any beneficial interest therein for a period of three
years from January 18, 1996, except as provided in such Letter Agreement.
KFH and Mr. Spiller entered into an agreement, dated as of January 18,
1996, pursuant to which KFH granted a beneficial ownership interest in
316,823 shares of Common Stock of the Company owned by KFH. Such agreement
provides that, in the event that KFH sells at least 452,604 shares of
Common Stock of the Company in a single transaction, then Mr. Spiller shall
have the option to either (i) pay to KFH an amount equal to the Spiller
Acquisition Cost (as defined in such agreement), in which event Mr. Spiller
will be entitled to receive stock certificates representing such 316,823
shares of Common Stock, or (ii) receive the net proceeds relating to
316,823 shares of Common Stock that are the subject of the sale by KFH,
reduced by the Spiller Acquisition Cost relating to such shares of Common
Stock so sold by KFH. In the event that KFH does not sell at least 452,604
shares of Common Stock as described above, then Mr. Spiller's rights to the
316,823 shares of Common Stock shall vest on January 18, 1999; provided,

however, that, at such time, Mr. Spiller is the President and Chief
Executive Officer of the Company and his Employment Agreement with the
Company, dated as of January 18, 1996, is in full force and effect and Mr.
Spiller is not in breach thereof; and, provided, further, that if Mr.
Spiller's Employment Agreement with the Company is terminated due to his
death or disability, or without cause, prior to January 18, 1999, then a
pro-rata portion of such 316,823 shares of Common Stock, based upon the
number of months elapsed from January 18, 1996 in relation to 36 months,
shall vest to Mr. Spiller. Unless sooner acquired by Mr. Spiller as
hereinabove described, Mr. Spiller shall have the right to acquire any such
vested shares of Common Stock pursuant to such agreement on January 18,
2001 upon payment by Mr. Spiller to KFH of the Spiller Acquisition Cost
relating to such shares. Excludes the NIK Shares, which Mr. Spiller has the
power to direct the sale of pursuant to the Power of Attorney but over
which Mr. Spiller exercises no voting power. Mr. Spiller disclaims
beneficial ownership of the NIK Shares.

(3) Represents the number of shares deemed to be beneficially owned by Richmont
Capital Partners I, L.P. ("Richmont"), upon conversion of $3,000,000
principal amount of convertible subordinated notes into Common Stock at a
conversion rate of $5.00 per share. Also includes 100,000 stock options
granted to Richmont which are fully vested but unexercised pursuant to that
certain option granted by the Company to Richmont dated May 15, 1996,
entitling Richmont to purchase up to 300,000 shares of Common Stock (the
"Richmont Options"). Of the remaining 200,000 Richmont Options granted,
100,000 become fully vested on each of May 15, 1997 and May 15, 1998. The
Richmont Options expire after 5:00 P.M., Eastern Time, on May 15, 2006.

(4) Includes 138,000 stock options granted to Mr. Elliott under the terms of
his previous employment agreement, which was executed on January 1, 1994
but which was mutually terminated by Mr. Elliott and the Company and
superseded by a new employment agreement executed on January 18, 1996, and
30,000 stock options granted to Mr. Elliott pursuant to the Company's 1994
Incentive Stock Plan. Such options are fully vested but unexercised. All of
the shares listed are subject to a lock-up agreement, by and among Mr.
Elliott and KFH, of up to three years (the "Elliott Lock-Up"). Pursuant to
the Elliott Lock-Up, Mr. Elliott agreed that he will not, directly or
indirectly, without the prior written consent of KFH, offer to sell, sell,
grant any options for the sale of, assign, transfer, pledge, hypothecate or
otherwise encumber or dispose of any shares of Common Stock of the Company
or securities convertible into, exercisable or exchangeable for or
evidencing any right to purchase or subscribe for any shares of Common
Stock of the Company or dispose of any beneficial interest therein for a
period of three years from January 18, 1996, except as provided in such
agreement.

(5) Includes 10,000 shares owned by Mr. Ehrlich's children and 20,600 held in
trust for the benefit of his children, of which Mr. Ehrlich's spouse is
trustee, of which he disclaims beneficial ownership. Also includes 400
shares owned by Mr. Ehrlich's spouse's individual retirement account, of
which Mr. Ehrlich disclaims beneficial ownership. Also includes 50,000
shares which are deemed to be beneficially owned by Mr. Ehrlich upon
conversion of $250,000 principal amount of convertible subordinated notes
into Common Stock at a conversion rate of $5.00 per share. Excludes 75,000

stock

<PAGE>

options granted to Mr. Ehrlich under the terms of the 1996 Directors Plan.
Such options were granted to Mr. Ehrlich upon his initial election to the
Board of Directors on January 18, 1996, at an exercise price of $3.75 per
share, the closing trading price of the Company's Common Stock on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), on January 18, 1996. Such options vest in three equal annual
installments on January 18, 1997, 1998 and 1999. Of the 182,300 shares
listed, 100,000 shares are subject to a three year lock-up agreement by and
among Mr. Ehrlich and KFH (the "Ehrlich Lock-Up"). Pursuant to the Ehrlich
Lock-Up, Mr. Ehrlich agreed that he will not, directly or indirectly,
without the prior written consent of KFH, offer to sell, sell, grant any
options for the sale of, assign, transfer, pledge, hypothecate or otherwise
encumber or dispose of any shares of Common Stock of the Company or
securities convertible into, exercisable or exchangeable for or evidencing
any right to purchase or subscribe for any shares of Common Stock of the
Company or dispose of any beneficial interest therein for a period of three
years from January 18, 1996, except as provided in such agreement.

(6) Represents 100,000 shares owned by S.T. Investors Fund, LLC ("STI"), a
limited liability company of which Mr. Sokolow is a member and 20,000
shares owned by Mr. Sokolow's children, of which he disclaims beneficial
ownership. Excludes 75,000 stock options granted to Mr. Sokolow under the
terms of the 1996 Directors Plan. Such options were granted to Mr. Sokolow
upon his initial election to the Board of Directors on January 18, 1996, at
an exercise price of $3.75 per share, the closing trading price of the
Company's Common Stock on NASDAQ, on January 18, 1996. Such options vest in
three equal annual installments on January 18, 1997, 1998 and 1999. Of the
122,500 shares listed, 100,000 shares are subject to a three year lock-up
agreement, by and among STI and KFH (the "STI Lock-Up"). Pursuant to the
STI Lock-Up, STI agreed that it will not, directly or indirectly, without
the prior written consent of KFH, offer to sell, sell, grant any options
for the sale of, assign, transfer, pledge, hypothecate or otherwise
encumber or dispose of any shares of Common Stock of the Company or
securities convertible into, exercisable or exchangeable for or evidencing
any right to purchase or subscribe for any shares of Common Stock of the
Company or dispose of any beneficial interest therein for a period of three
years from January 18, 1996, except as provided in such agreement.

(7) Includes 50,000 stock options granted to Mr. Bistrong under the terms of
his previous employment agreement, which was executed on February 5, 1995
but which was mutually terminated by Mr. Bistrong and the Company and
superseded by a new employment agreement executed on January 18, 1996. Such
options are fully vested but unexercised. All of the shares listed are
subject to a three year lock-up agreement, by and among Mr. Bistrong and
KFH (the "Bistrong LockUp"). Pursuant to the Bistrong Lock-Up, Mr. Bistrong
agreed that he will not, directly or indirectly, without the prior written
consent of KFH, offer to sell, sell, grant any options for the sale of,
assign, transfer, pledge, hypothecate or otherwise encumber or dispose of

any shares of Common Stock of the Company or securities convertible into,
exercisable or exchangeable for or evidencing any right to purchase or
subscribe for any shares of Common Stock of the Company or dispose of any
beneficial interest therein for a period of three years from January 18,
1996, except as provided in such agreement.

(8) Represents the number of shares deemed to be beneficially owned by Mr.
Strauss, upon conversion of $200,000 principal amount of convertible
subordinated notes into Common Stock at a conversion rate of $5.00 per
share. Excludes 75,000 stock options granted to Mr. Strauss under the terms
of the 1996 Directors Plan. Such options were granted to Mr. Strauss upon
his initial election to the Board of Directors on May 13, 1996, at an
exercise price of $7.50 per share, the closing trading price of the
Company's Common Stock on the American Stock Exchange on May 13, 1996. Such
options vest in three equal annual installments on May 13, 1997, 1998 and
1999.

(9) Mr. Bartlett does not own any shares individually. Mr. Bartlett is Chairman
of the Board of Directors of The Richmont Group, whose subsidiary,
Richmont, is the beneficial owner of 700,000 shares of Common Stock. Mr.
Bartlett disclaims beneficial ownership of the shares owned by Richmont.

DESCRIPTION OF SECURITIES

The Company is authorized to issue 15,000,000 shares of Common Stock,
par value $.03 per share, and 1,700,000 shares of 3% Convertible, $1.00 stated
value Preferred Stock (the "Old Preferred Stock"). Such shares of Old Preferred
Stock were issued as part of the Company's Plan of Reorganization and have
subsequently been redeemed or converted to shares of Common Stock. The Common
Stock is the only class of equity securities being registered hereunder. All of
the issued and outstanding shares of the Common Stock, including the shares

<PAGE>

of Common Stock offered by the Selling Shareholder, are validly issued, fully
paid and non-assessable.

The holders of Common Stock are entitled to one vote for each share on
all matters submitted to a vote of shareholders. Accordingly, holders of a
majority of the Common Stock entitled to vote in any election of directors may
elect all of the directors standing for election. The holders of Common Stock
are entitled to receive ratably such dividends, if any, as may be declared by
the Board of Directors out of assets of the Company which are legally available
therefor. Dividends may be payable either in cash, in property or in shares of
Common Stock. Upon liquidation, dissolution or winding up of the Company, the
holders of the Common Stock are entitled to share ratably in all assets of the
Company which are legally available for distribution, after payment of all debts
and other liabilities of the Company. The holders of Common Stock have no
preemptive, subscription, redemption or conversion rights, and no sinking fund
provisions are applicable to holders of Common Stock of the Company. The
outstanding shares of Common Stock are fully paid and non-assessable. The
rights, preferences, and privileges of holders of Common Stock are subject to

the laws of the State of Florida, the Company's Charter and Bylaws. See
"Reincorporation in Delaware."

Restrictions on Change of Control

The Company's Charter contains a provision in Article VI thereof which
provides that for a period of 5 years terminating on September 20, 1998, in the
event the Board of Directors approves a contract for sale of substantially all
the Company's assets or a share exchange or the merger of the Company in a
transaction where the shareholders of the Company are to receive cash or less
than 50% of the outstanding securities of the surviving corporation, the Board
of Directors shall offer the shareholders a 30 day right of first refusal to
acquire the Company or its assets on substantially the same terms. Shareholders
electing to purchase the Company must make their election and post the deposit
required by the proposed contract within 30 days. Thereafter, closing shall
proceed pursuant to the terms of the proposed contract. In the event the
consideration being paid in the transaction is other than cash or notes, the
purchasing shareholders shall pay the appraised fair market value of the unique
consideration. Notwithstanding the foregoing, the Company is authorized to
negotiate and pay the initial buyer's attorney's reasonable fees and costs
associated with the proposed acquisition together with a contract termination
fee of not more than one and one-half percent of the total sale price.

BUSINESS

History

The Company's predecessor was incorporated in January 1969, under the
laws of the State of New York under the name American Body Armor & Equipment,
Inc. (the "New York Corporation"). The Company was incorporated in October 1980,
under the laws of the State of Florida, with the name of Armour of Fernandina
Beach, Inc., as a separate but affiliated company to the New York Corporation,
and commenced operating a manufacturing facility in Florida. In February 1983,
the New York Corporation moved its operations to Florida, and

<PAGE>

effective January 1, 1984, the two companies were merged with the Company
surviving and changing its name to American Body Armor & Equipment, Inc.

In May 1992, the Company filed for relief under Chapter 11 of the United
States Bankruptcy Code. The bankruptcy filing was the result of a general
decline in the Company's operations, which included significant operating losses
in 1989 and 1991, and the inability to collect a $1.5 million receivable related
to the shipment of vests to a Middle East customer in April 1991. The Company
emerged from Chapter 11 protection effective September 20, 1993, upon
confirmation by the Bankruptcy Court of the Company's Plan of Reorganization.

In January, 1996, the Company underwent a change in control in
connection with the purchase by KFH and certain other investors (the
"Investors") of all of the capital stock of the Company owned by Clark Schwebel,
Inc. ("Clark Schwebel"), a supplier of raw materials to the Company, and Hexcel

Corporation ("Hexcel") as of January 18, 1996 (the "Purchase"). Prior to the
closing of the Purchase (the "Closing"), at a meeting held on January 18, 1996,
the then existing Board of Directors, which consisted of Jonathan M. Spiller,
Julius Lasnick, Gardner F. Davis, John Innes and Robert Sullivan, authorized the
officers of the Company to take such actions as the officers deemed necessary,
prudent and appropriate to facilitate the Purchase by KFH and the Investors.
Following such action, Messrs. Lasnick, Davis, Innes and Sullivan conditionally
resigned from the Board of Directors, effective upon the Closing. Such
resignations were conditioned upon the occurrence of the Closing.
Contemporaneously with the tendering by Messrs. Lasnick, Davis, Innes and
Sullivan of their conditional resignations, the Board of Directors appointed
Warren B. Kanders, who was elected Chairman of the Board of Directors, Burtt R.
Ehrlich and Nicholas Sokolow to the vacancies to be created by such
resignations. Mr. Kanders is the sole shareholder and sole director of KFH. Upon
assuming office, Messrs. Kanders, Ehrlich and Sokolow constituted a majority of
the Board of Directors. Subsequent to the acquisition of shares in the Company
by KFH and the private placement of the Notes, Thomas W. Strauss and Richard C.
Bartlett were appointed to the Board of Directors.

The shares of Common Stock of the Company acquired by KFH were paid for
out of KFH's working capital funds. KFH acquired an aggregate of 2,880,217
shares of the Company's Common Stock and an aggregate of 1,131,075 shares of the
Company's Old Preferred Stock, for an aggregate purchase price of $3,190,000, of
which an aggregate of $2,340,000 was paid in cash. The remaining $850,000 of the
purchase price was paid by promissory notes. To secure the payment of the
promissory notes, KFH pledged to Springs Industries, Inc., the parent
corporation of Clark Schwebel, 900,000 shares of the Company's Common Stock. In
addition, Mr. Kanders individually acquired 28,141 shares of the Company's
Common Stock. Mr. Kanders acquired an additional 1,000 shares of Common Stock
upon the listing of the Company's Common Stock on the American Stock Exchange on
March 18, 1996.

Upon assuming their positions, the newly constituted Board of Directors
of the Company elected to require the holders of the Company's Old Preferred
Stock to convert such shares to Common Stock at 110% of the aggregate stated
value of the Old Preferred Stock, at a conversion price of $.77 per share (fair
market value as determined by an independent valuation firm), as required by the
Company's Charter. All shares of the Company's Old

<PAGE>

Preferred Stock were deemed to have been converted upon such election by the
Board of Directors.

Following the Closing, and assuming the conversion of the shares of Old
Preferred Stock owned by KFH, KFH and Mr. Kanders collectively owned 4,524,178
of the total outstanding shares of Common Stock of the Company, which holdings
constituted approximately 66.4% of the total outstanding shares of Common Stock
of the Company.

General

Since its founding, the Company has been engaged in the development,
manufacture and distribution of ballistic protective equipment. Such equipment
includes bullet resistant and sharp instrument penetration resistant vests,
bullet resistant blankets, bomb disposal suits and helmets, bomb protection and
disposal equipment and load bearing vests. In addition to these products, the
Company develops, manufactures and distributes other ballistic protection and
security equipment, including explosive ordnance device ("EOD") handling and
detection equipment, EOD suppression and disposal equipment, helmets, face
masks, shields, hard armor ballistic plates, customized armor for vehicles and
other custom armored products. See "Risk Factors-Product Liability."

The Company's products are marketed to municipal, state, federal and
foreign law enforcement agencies, private security entities, United States and
foreign military organizations, and private individuals with security needs.

Products

Body Armor

The Company manufactures two basic types of body armor: (i) concealable
armor, which is generally intended to be worn beneath the user's clothing, and
(ii) tactical armor, which is worn externally and is designed to protect more
coverage area and defeat higher level ballistic threats incorporating ballistic
hard armor plates. Both types of armor are manufactured using multiple layers of
an aramid or polyethylene ballistic fabric, stitched for integrity, covered and
finally enclosed in an outer carrier. The Company's lines of ballistic
protective vests each provide varying degrees of protection and are certified
under federal guidelines established by the National Institute of Justice (the
"NIJ"). All of the Company's body armor products sold in the United States are
certified under the NIJ's Body Armor Standard 0101.03.

The Company's concealable vests are contoured to closely fit the user's
body shape. Most of the Company's concealable vests are sold with a shock plate,
which is an insert designed to improve the protection of vital organs against
sharp instrument attack and to provide enhanced blunt trauma protection. These
vests may be supplemented with additional armor plates made of metal, ceramic or
Comspec(TM), to withstand increased ballistic threat levels than the vest is
otherwise designed to deter.

<PAGE>

The Company's tactical vests are designed to give maximum all around
protection and incorporate additional coverage around the neck, shoulders and
kidneys than that provided by the Company's concealable vests. A groin protector
is often supplied as an accessory. These vests usually contain pockets to
incorporate panels constructed from small high-alumina ceramic tiles or pressed
polycarbonate Comspec(TM), which provides additional protection against rifle
fire. The Company's tactical vests are offered in a variety of styles, including
tactical assault vests, tactical police jackets, floatation vests, high-coverage
armor and flak jackets, each of which is manufactured to protect against varying
degrees of ballistic threats.

Sharp Instrument Penetration Armor

The Company manufactures knife resistant vests designed primarily for
use by personnel in correctional facilities and other law enforcement employees
who are exposed to threats from sharp instruments. These vests are constructed
using an aramid ballistic fiber and titanium foil and are available in both
concealable and tactical versions. In addition, these vests can be combined with
ballistic armor configurations to provide combined ballistic resistant and sharp
instrument penetration resistant protection.

Explosive Ordnance Disposal Equipment ("EOD")

The Company manufactures and distributes a wide range of EOD disposal
and handling equipment as well as distributing EOD detection equipment
manufactured by a third party. This equipment includes bomb disposal suits,
which are primarily constructed of an aramid ballistic fabric covered by a
Nomex(R) brand fire-retardant cover. These suits cover the user's entire body
(except hands) and include a fitted helmet that provides protection and
communication capabilities. Other EOD equipment manufactured by the Company
includes bomb protection blankets and letter bomb suppression pouches.

Hard Armor and Shields

The Company manufactures a variety of hard armor and ballistic shields,
which are manufactured using aramid ballistic fibers, polyethylene ballistic
material, ballistic steel, ceramic tiles, ballistic glass or a combination of
any one or more of these materials. These products include tactical face masks
and helmets, Comspec(TM) shields, barrier shields and blankets as well as
upgrade armor plates. Upgrade armor plates are designed to fit into pockets
available on most ABA tactical vests. When used in conjunction with the
ballistic vests, these plates provide additional ballistic protection against
increased ballistic threats, including assault rifle ballistic protection.

Other Products

Other specialty products manufactured by the Company include armored
press vests, executive vests, raincoats and fireman turnout coats designed to
provide various levels of ballistic protection.

<PAGE>

Other activities of the Company include the design and manufacture of
specialty armor applications for vehicles and aircraft. Such applications
include the manufacture of customized armored cars. In connection therewith, the
Company purchases standard, readily available vehicles, strips them and
reconstructs them with a bullet resistant steel plate, ballistic glass and other
protective features. The orders for these vehicles come primarily from
international customers. The Company custom manufactures patented, lightweight
and removable, soft armor panels for aircraft of any dimension or configuration.
These panels are designed to protect passengers in helicopters and fixed-wing

aircraft from weapons fire from the ground. This armor meets or exceeds the
ballistic requirements in NIJ Standard 0108.01 for Threat Level IIIA. In
addition, the Company also designs and manufactures armor used in stationary
protection applications. Such armor can be custom designed for each individual
application or provided as a "kit" that can be installed on-site anywhere in the
world. The Company also has the exclusive rights in the United States to
distribute Gallet(R) helmets, as well as the non-exclusive rights to distribute
Scanna(R) letter bomb detectors.

Through its acquisition of NIK Public Safety, the leading manufacturer
and distributor of portable narcotic identification kits used for the
identification of narcotic substances by law enforcement agencies, the Company,
through its wholly-owned subsidiary NIK Public Safety, Inc., will have the
rights to distribute the Flex-Cuf restraint, a patented restraint manufactured
by Thomas & Betts. In addition, the Company will also manufacture and distribute
Specimen Collection Kits, Evidence Collection Kits and Tamper Guard Evidence
Tape.

Manufacturing

The Company manufactures substantially all of its bullet, bomb and
projectile resistant garments and other ballistic protection devices. The
primary raw materials used by the Company in manufacturing its ballistic
resistant garments are Kevlar(R), a patented product of E.I. Du Pont de Nemours
Co., Inc. ("Du Pont"), Twaron(R), a patented product of Akzo-Nobel, and
SpectraShield(R), a patented product of Allied Signal, Inc. ("Allied Signal").
The Company purchases cloth woven of Kevlar(R) from a number of independent
weaving companies located in the United States and abroad. See "Business-Raw
Materials, Sources and Availability." Ballistic garment components, such as the
front or back of a bullet-proof vest, are designed using a computer-aided design
system which creates over 500 cutting patterns based upon size, shape and style.
The woven fabric is then placed on tables and cut using electric knives in
accordance with the component specifications set by the computer. The fabric is
then stitched together with high tenacity thread. The various components of the
garment are then sewn together to create the finished product.

The Company's manufacturing techniques are not environmentally
hazardous, and the Company believes it is currently in compliance with all
applicable material environmental regulations.

Research and Development

The Company continually develops new products to meet the demands of the

<PAGE>

marketplace. Customer needs, including specific use requirements and cost, drive
the development process. The Company's product development process involves
combining state-ofthe-art ballistic fibers, cover materials and unique weaves
with improved design and manufacturing processes to produce competitively priced

products which provide the maximum comfort at the lowest possible weight, while
meeting the customer's ballistic threat requirements. During the fiscal year
ended December 31, 1995, the Company had expenditures related to new product
development and testing of $444,118, as compared with $263,596 during the fiscal
year ended December 31, 1994.

Raw Materials, Sources and Availability

The primary raw materials used by the Company in manufacturing ballistic
resistant garments are aramid ballistic fibers and polyethylene ballistic
materials, including Kevlar(R), Twaron(R) and SpectraShield(R). Du Pont and a
European licensee of Du Pont are currently the only producers of Kevlar(R). The
Company purchases cloth woven out of aramid yarn from a number of independent
weaving companies, including Clark Schwebel, a former holder of 45.8% of the
Company's capital stock, each of which account for more than 10% of the
Company's requirements of Kevlar(R). The Company has begun to use
SpectraShield(R), a patented product of Allied Signal, as a new, alternative
ballistic-resistant fabric to reduce its dependence on Kevlar(R).
SpectraShield(R) has been used in combination with Kevlar(R) in approximately
20% of all vests sold by the Company. SpectraShield(R) is not, however expected
to become a complete substitute for in the near future due to the fabric's
physical characteristics. In the opinion of management, the Company enjoys a
good relationship with its suppliers, including Clark Schwebel, Du Pont,
Akzo-Nobel and Allied Signal and would not experience significant delays in the
delivery of its products if Kevlar(R) cloth or any other raw material from any
one of these mills were to become unavailable. Kevlar(R), the Company's most
important raw material, is not a scarce resource and there are adequate supplies
of Kevlar(R) to meet the Company's needs. If, however, Du Pont or its European
licensee were to cease, for any reason, to manufacture and distribute Kevlar(R),
the Company would be required to utilize other fabrics, which although readily
available, may require the Company to modify the specifications of its products.
Until the Company selected an alternative fabric and such specifications were
modified, its operations could be severely curtailed and the Company's financial
condition and operations could be adversely affected.

The ballistic materials and the fiber weaving services required by the
Company are readily available from a number of suppliers worldwide. There are
many suppliers available to the Company worldwide that ensure, in the opinion of
management, adequate supplies of the necessary ballistic and fiber materials to
meet the Company's needs.

The Company purchases other raw materials used in the manufacture of its
products, such as ceramic tile, ballistic steel and cover materials, from a
variety of sources. The Company believes additional sources of supply of these
materials are readily available.

<PAGE>

Customers

The Company's products are sold nationally and internationally,
primarily to law enforcement agencies and the military. Sales to domestic law

enforcement agencies, including police departments, state correctional
facilities, highway patrols and sheriffs' departments, comprise the largest
portion of the Company's business.

Sales to the United States federal law enforcement and military
branches, including federal correctional facilities, also comprise a significant
portion of the Company's business. See "Risk Factors-Concentration of Business
Activities; Reliance Upon Governmental Spending."

Sales to international customers are made primarily to military and law
enforcement agencies. International sales are primarily made on terms requiring
ABA to receive payment in advance of shipment or payment through a letter of
credit confirmed by a major United States bank. All sales are made under terms
requiring payment in United States currency. See "Risk Factors-International
Sales."

During 1995, the Company had no sales to individual customers which
exceeded 10% of total sales. See "Risk Factors-Concentration of Business
Activities; Reliance Upon Governmental Spending."

Marketing and Distribution

The Company's distribution network consists of independent domestic
distributors and independent international agents, who in turn re-sell the
products to the end user. In certain rare situations, the Company sells directly
to end users. The Company has many independent domestic distributor locations as
well as many independent international agent representatives.

The Company employs regional sales managers who are responsible for
marketing the Company's products to domestic distributors and law enforcement
agencies in the United States. These regional sales managers are responsible for
calling upon the individuals within the distributor organization or agency who
are responsible for making purchasing decisions in order to provide product
demonstrations and information, including specifications, concerning the
Company's products. These regional sales managers employed by the Company are
compensated on a salary plus commission basis with commission amounts subject to
review based upon the profitability of the contract.

The Company's primary marketing emphasis is on the development of
relationships with key distributors and agents in order to improve the quality
of the distribution network. In conjunction with this effort, the Company may
work on joint marketing efforts with distributors for special promotions and
direct mailings. The Company's national advertising is generally targeted toward
increased name recognition and new product introduction, primarily for domestic
law enforcement agencies. This form of advertising consists of advertisements in
law enforcement trade magazines and attendance at trade shows. During the fiscal
years ended December 31, 1995 and 1994, advertising and marketing expenditures
were approximately

<PAGE>

$240,000 and $200,000, respectively.

Backlog

The Company's backlog of orders consists of orders received but not yet
manufactured. In the case of orders from new customers or international
customers, such backlog includes only orders where management believes an
acceptable assurance of payment has been received. Such assurance is normally in
the form of a substantial prepayment prior to placing the order into production
along with payment of the remaining balance prior to shipment, or a confirmed
letter of credit or other acceptable form of bank guarantee of payment.

As of December 31, 1995, the Company had an estimated backlog of
$3,058,000, as compared to $1,205,000 as of December 31, 1994. As of May 5,
1996, the Company had an estimated backlog of $1,102,576. Management believes
that a backlog of approximately four weeks production provides for reasonable
production scheduling. The Company may reduce or increase production in the
future as a result of changes in the level or mix of backlog.

Government and Industry Regulations and Standards

The bullet, sharp instrument penetration and bomb resistant garments and
accessories manufactured and sold by the Company are not currently subject to
government regulations. However, law enforcement agencies and the military
publish invitations for bidding which specify certain standards of performance
which bidders' products must meet. The National Institute of Justice (the
"NIJ"), under the auspices of the United States Department of Justice, has
issued a voluntary ballistic standard (NIJ 0101.03) for bullet resistant vests.
The Company regularly submits its vests to independent laboratories for
ballistic testing under this voluntary ballistic standard. In addition, such
garments and enclosures are regularly submitted by the Company for rating by
independent laboratories in accordance with a test commonly referred to as V50.
This test involves exposing the tested item to projectiles at increasing
velocity until 50% of the fragments penetrate the tested item. The tested item
is then given a velocity rating which may be used by prospective purchasers in
assessing the suitability of the Company's products for a particular
application. See "Risk Factors-Product Liability."

The Company's products utilize different "applications" or combinations
of material to produce equipment which provides protection against fragments or
gunshots fired from a variety of firearms at each "Threat Level," as defined by
NIJ's Standard 0101.03 ("Threat Levels"). The NIJ conducts a series of tests
designed to verify that armor used by domestic law enforcement officers meets a
designated standard of protection. The NIJ certification protocol requires,
among other things, that there be no projectile or fragment penetration through
an armored vest. In addition, the NIJ certification protocol limits the amount
of back face deformation, or blunt trauma, that can be inflicted upon the
armored vest wearer. NIJ Standard 0101.03 describes the procedure for ballistic
testing of body armor products and specifies seven Threat Levels for which body
armor products may be certified. The test consists of firing bullets at a
specimen vest or garment strapped to a block of clay with a density resembling
that of the human body. Six shots are required to be fired, four at a 90 degree
orientation, and two

<PAGE>

at opposing 30-degree orientations. Afterward, the vest is inspected to
determine whether any of the bullets pierced the armor. In addition, the
indentations in the clay backing are measured to determine the likelihood of
blunt trauma injury. The depth of the deformation in the clay may not exceed
1.73 inches (44mm). The protocol also requires that vests be tested under both
wet and dry conditions.

The following are the seven Threat Levels defined by the NIJ.

1) Level I: Protects against .22 Long Rifle High Velocity Lead Bullets,
with nominal masses of 40 grains impacting at a velocity of 1,050 feet per
second or less and .38 special round nose lead bullets, with nominal masses of
158 grains impacting at a velocity of 850 feet per second or less. In addition,
Level I provides protection against most handgun rounds in calibers of .25 and
.32. The NIJ deems Level I to be the minimum level of protection that should be
afforded to law enforcement officers.

2) Level II-A: Protects against .357 Magnum jacketed soft point bullets,
with nominal masses of 158 grains impacting at a velocity of 1,250 feet per
second or less, and 9mm full metal jacketed bullets, with nominal masses of 124
grains impacting at a velocity of 1,090 feet per second or less. Level II-A also
provides protection against threats such as .45 Automatic, .38 Special + P and
some other factory loads in caliber .357 Magnum and 9mm, as well as all Level I
threats.

3) Level II: Protects against .357 Magnum jacketed soft point bullets,
with nominal masses of 158 grains impacting at a velocity of 1,395 feet per
second or less, and 9mm full metal jacketed bullets, with nominal masses of 124
grains impacting at a velocity of 1,175 feet per second or less. Level II also
provides protection against most other factory loads in caliber .357 Magnum and
9mm, as well as against Levels I and II-A threats.

4) Level III-A: Protects against .44 Magnum, lead semi-wadcutter bullets
with gas check, nominal masses of 240 grains impacting at a velocity of 1,400
feet per second or less and 9mm full metal jacketed bullets, with nominal masses
of 124 grains impacting at a velocity of 1,400 feet per second or less. Level
III-A also provides protection against most handgun threats, as well as against
Levels I, II-A, and II threats. This is the highest level of protection
available in a soft body armor application. It is generally not used for routine
wear, unless a specific threat warrants it.

5) Level III: Protects against 7.62mm metal jacketed bullets (U.S.
military designation M80), with nominal masses of 150 grains impacting at a
velocity of 2,750 feet per second or less. Level III also provides protection
against such threats as the .223 Remington (5.56 mm FMJ) 30 cal. Carbine FMJ and
12 gauge rifled slug, as well as against the threats presented by Levels I,
II-A, II and III-A.

6) Level IV: Protects against .30 caliber armor-piercing bullets (U.S.
military designation APM2), with nominal masses of 166 grains impacting at a
velocity of 2,850 feet per second or less. Level IV also provides at least

single hit protection for threats described in

<PAGE>

Levels I, II-A, II, III-A and III. Vests that provide Level III and Level IV
protection are usually used only in tactical situations.

7) Special Type: A purchaser having special requirements for protection
level other than those described above may specify the number of tests rounds
and minimum impact velocities to be used.

Threat Levels are defined in recognition of the trade-off between
protection and wearability. The weight and bulk of body armor are generally
proportioned to the protection it provides. The Threat Level protection that a
police officer will desire in a vest is determined by the types of threats he
will face on the streets, including the officer's own weapon, should it be used
against the officer. As criminals continue to use heavier weapons, officers will
require protection at a higher Threat Level. The Company believes that police
department or other purchasers will seek vests that provide an adequate level of
protection without being so heavy and uncomfortable that the user is discouraged
from wearing it.

The Company's management believes that it has created a competitive
advantage in "wearability." Wearability tests conducted by the Company have
convinced management that the Company's vests are more comfortable to wear, fit
better and can be worn for longer periods of time than similar products from
competitors. Management believes that the Company's products offer higher
protection at lower weight and bulk. The Company also offers designs that
provide greater vital-area coverage than other equipment on the market. The
Company custom manufactures each vest to specific measurements of individual
wearers. At least seven different body measurements are taken, after which the
basic design is then further modified by weight, height and sex of the
prospective wearer.

Patent Protection and Proprietary Information

The Company relies on trade secrets, proprietary know-how and continuing
technological innovation (collectively, the "Proprietary Information") to
develop and maintain its competitive position. There can be no assurance that
the Company's reliance on the Proprietary Information will protect the Company
from competing technology or that, insofar as it relies on trade secrets and
unpatented know-how, others will not independently develop similar technology or
secrecy will not be breached. See "Risk Factors-Patent Protection and
Proprietary Information."

Competition

The ballistic resistant garment business is highly competitive. In the
United States law enforcement, government and military markets, the Company has
three major competitors. Financial information on these competitors is

relatively scarce. The Company believes that the principal elements of
competition in the sale of ballistic resistant garments are price and quality.
In the law enforcement and military markets, the Company occasionally bids for
orders in response to invitations for bidding which set forth product
performance specifications. The Company believes that its products are priced
competitively and that the quality of its products

<PAGE>

is competitive with products manufactured by other companies having similar
ballistic capabilities. In the international market, the Company's competition
consists primarily of its larger American competitors as well as two large
international companies and, depending upon the market, smaller local
manufacturers. In certain international markets, the Company's ability to be
competitive is adversely affected by import duties imposed on its products. See
"Risk Factors-Competition/Technical Obsolescence."

Employees

As of December 31, 1995, the Company had 131 employees, 4 of whom were
executive officers of the Company. Of the remaining employees, 9 were office
personnel, 104 were employed in manufacturing, quality assurance, research and
development, purchasing, shipping and warehousing and 14 were sales personnel.
As of December 31, 1994, the total number of employees of the Company was 114.
The increase of 17 employees between 1994 and 1995 was due primarily to an
increase in manufacturing personnel.

Possible Future Acquisitions and Investments

The Company intends to diversify and expand its business operations
through the possible acquisition of one or more operating companies, which may
or may not be related to its current businesses, and is actively seeking to
acquire additional operating companies or interests therein. In furtherance of
this strategy, the Company may consider a public offering of its shares or an
acquisition or merger with a company that has a public trading market for its
securities. Other than the NIK Acquisition, the Company has no specific plans,
arrangements, understandings or commitments with respect to any such acquisition
at the present time, and it is uncertain as to when or if any acquisition will
be made. See "Risk Factors-Rapid Growth Through Acquisitions."

Liquidity and Capital Resources

The Company's principal sources of working capital during Fiscal 1995
were bank borrowings from LaSalle and trade credit. As of May 1, 1996, the
Company reduced its credit facility with LaSalle to a zero balance. Effective
June 30, 1996, the financing agreement with LaSalle expired and was not renewed.
As of July 24, 1996, the Company is in discussions with other financial
institutions to obtain working capital financing.

On April 30, 1996, the Company completed a private placement of the
Notes pursuant to which $11,500,000 aggregate principal amount of Notes were
sold by the Company under the Convertible Subordinated Note Purchase Agreement.

The following description of the Note offering, the Convertible Subordinated
Note Purchase Agreement and the Notes is not intended to be complete and is
qualified in its entirety by the complete texts of the form of Convertible
Subordinated Note Purchase Agreement and the form of Note.

The Notes bear interest at 5% per annum, mature on April 30, 2001, and
are subordinated to all existing and future Senior Indebtedness of the Company,
as defined and as

<PAGE>

more fully set forth in the Convertible Subordinated Note Purchase Agreement. In
addition, the Notes may be convertible into shares of Common Stock of the
Company at the option of the holder thereof at any time prior to the maturity
date at a conversion price of $5.00 per share, subject to adjustment as set
forth in the Convertible Subordinated Note Purchase Agreement. The Shares being
registered hereunder include the shares underlying the Notes.

The Company may redeem the Notes at par at any time two years after
issuance, or at any time after their issuance if the closing price of the Common
Stock exceeds $7.50 per share for 10 consecutive trading days and the shares of
Common Stock underlying the Notes have been registered under the Securities Act.
In the event the Company elects to redeem the Notes, the Holders of the Notes
will have the option to convert the Notes into shares of the Company's Common
Stock at a conversion price of $5.00 per share prior to such redemption, subject
to adjustment as set forth in the Convertible Subordinated Note Purchase
Agreement.

Personal Liability and Indemnification of Directors and Officers

The Company's Charter includes provisions that limit the liability of
the Company's directors. As permitted under the Florida Business Corporation
Act, directors of the Company will not be liable to the Company or its
shareholders for monetary damages arising from a breach of their fiduciary duty
of care as directors, including such conduct during a merger or tender offer.
Such limitations will not, however, affect liability for any breach of a
director's duty of loyalty to the Company or its shareholders, including
approval by the director of any transaction from which he derives an improper
personal benefit, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, or for the payment of
dividends in violation of Florida law. Such limitation of liability also will
not affect the availability of equitable remedies such as injunctive relief or
rescission, nor will it have any effect on claims arising under the federal
securities laws. These limitations may limit the ability of shareholders of the
Company to sustain a cause of action against the Company's directors based on
grossly negligent business decisions, including those relating to attempts to
change control of the Company. The Company's Amended and Restated Bylaws (the
"Bylaws") provide for indemnification by the Company of its directors and
officers to the fullest extent permitted by Florida law. The Company has
obtained directors' and officers' insurance for the Company's directors and
officers. In cases of large damage awards and nonexistent or inadequate
insurance, the indemnification provisions contained in the Company's Bylaws may

require the Company to make payments to its officers and directors sufficiently
large to impair the Company's financial condition or a shareholder's investment
and/or reduce stockholder's equity.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling

<PAGE>

person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

REINCORPORATION IN DELAWARE

At the Company's Annual Meeting of Shareholders held on July 16, 1996,
the Shareholders approved a change of the Company's state of incorporation from
Florida to Delaware (the "Reincorporation"). In order to effect the
Reincorporation, the Company will be merged with and into Armor Holdings, Inc.
("Armor Holdings"), a newly formed, wholly-owned subsidiary of the Company
incorporated in Delaware for such purpose. The Reincorporation is conditioned
upon the receipt by the Company of any required third party consents to the
Reincorporation, and upon the filing of appropriate certificates of merger by
the Secretaries of State of the States of Florida and Delaware. Upon the
effective time of the Reincorporation (the "Effective Time"), each outstanding
share of Common Stock and each share of Common Stock held in the treasury of the
Company will be automatically converted into one share of Common Stock of Armor
Holdings. Outstanding options to purchase shares of Common Stock will be
converted automatically into options to purchase the same number of shares of
Common Stock of Armor Holdings. Under the terms of the Reincorporation, the
Delaware corporation will be the successor in interest to all the rights
interests, assets and liabilities of the Florida corporation. Holders of
certificates which, prior to the Effective Time, evidenced securities of the
Florida corporation, will automatically become holders of a like number of
securities of the Delaware corporation and are entitled (subject to compliance
with customary procedures) to exchange their certificates evidencing the
Delaware corporation.

COMPARATIVE RIGHTS OF SHAREHOLDERS

Upon the Effective Time of the Reincorporation, holders of the Common

Stock will become holders of Armor Holdings common stock and the rights of
former Company Shareholders will be governed by the Armor Holdings Certificate
of Incorporation, the Armor Holdings Bylaws and the Delaware General Corporation
Law (the "DGCL").

Shareholders should note the following significant differences between
the DGCL and the Florida Business Corporation Act (the "FBCA") as they affect
the rights of shareholders. The following comparison of the DGCL and the Armor
Holdings Certificate of Incorporation and the Armor Holdings Bylaws, on the one
hand, and the FBCA and the Company's existing Charter and Bylaws, on the other,
is not intended to be complete and is qualified in its entirety by reference to
the Armor Holdings Certificate of Incorporation and the Armor Holdings Bylaws
and the Company's Charter and Bylaws. Copies of the Company's existing Charter
and Bylaws are available for inspection at the offices of the Company and copies
will be sent to the holders of the Common Stock upon written or telephone
request.

<PAGE>

Distributions To Shareholders

A Delaware corporation may pay dividends out of surplus or, if there is
no surplus, out of net profits for the fiscal year in which declared or for the
preceding fiscal year. A Florida corporation may make distributions to
shareholders as long as, after giving effect to such distribution, the
corporation will be able to pay its debts as they become due in the usual course
of business and the corporation's total assets will not be less than the sum of
its total liabilities plus (unless the articles of incorporation permit
otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.

Business Combinations

The FBCA and the DGCL have "Control-Share Acquisition" and "Business
Combination" statutes, respectively, which are designed to encourage potential
acquirers of publicly traded corporations to obtain the consent and approval of
the proposed target's Board of Directors prior to commencing a tender offer for
the target company's shares. This encouragement is accomplished by prohibiting
or restricting acquirers from undertaking many post-acquisition financial
restructuring alternatives.

Both the FBCA and the DGCL permit a corporation to opt out of the
Control-Share Acquisition statute and the Business Combination statute,
respectively. The Company has opted out of the Florida Control-Share Acquisition
statute, and therefore is not governed by the provisions contained therein.
Armor Holdings would be governed by the Business Combination statute of the
DGCL.

Liability and Indemnification of Directors, Officers and Employees

The DGCL and the FBCA both have provisions and limitations regarding
directors' liability and indemnification by a corporation of its directors,
officers and employees.

The DGCL permits a Delaware corporation to include in its certificate of
incorporation a provision which eliminates or limits the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duties as a director; provided, however, that no such provision may
eliminate or limit the liability of a director: (i) for any breach of the
director's duty of loyalty to the corporation or its shareholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for declaration of unlawful dividends or illegal
redemptions or stock repurchases; or (iv) for any transaction from which the
director derived an improper personal benefit. The Armor Holdings Certificate of
Incorporation includes such a provision.

Under the DGCL, a director or officer may, in general, be indemnified by
the corporation if he or she has acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal

<PAGE>

action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. No indemnification is permitted if the person is adjudged liable to
the corporation in a derivative suit unless the court determines that
indemnification would be appropriate.

Under the FBCA, a director is not personally liable for monetary damages
to any person for his actions as a director unless the director breached his
duties by way of: (i) a criminal violation, unless the director has reasonable
cause to believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful; (ii) a transaction from which the director derived an
improper personal benefit; (iii) declaration of unlawful distributions; (iv) in
a derivative action, conscious disregard by the director for the best interests
of the corporation or willful misconduct by the director; or (v) in a third
party action, recklessness or actions or omissions committed in bad faith or
with malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety or property.

Under the FBCA, a corporation has the power to indemnify any director,
officer, employee or agent of the corporation against liability incurred in
connection with any proceeding, including any appeal, if the director acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal action
or proceeding, he had no reasonable cause to believe his conduct was unlawful.
No indemnification is permitted if the person is adjudged liable unless the
court determines that in view of all of the circumstances of the case,
indemnification would be proper. In addition, no indemnification is permitted
for criminal violations (unless the director, officer, employee or agent had
reasonable cause to believe his conduct was lawful or had no reasonable cause to
believe his conduct was unlawful), transactions in which the director or officer

derived an improper personal benefit, declaration of unlawful dividends or, in
derivative actions, willful misconduct or conscious disregard for the best
interests of the corporation.

As a result of the additional limitations on the liability of directors
and the additional indemnification that would be afforded by the Company to its
directors, officers and employees under the DGCL if the Reincorporation is
approved, the directors of the Company may benefit personally if the
Reincorporation is consummated.

Calling A Special Meeting Of Shareholders

Under the DGCL, a special meeting of shareholders can be called by the
corporation's board of directors or by such person or persons as may be
authorized by the corporation's certificate of incorporation or bylaws. The
Armor Holdings Certificate of Incorporation does not authorize any person to
call a special meeting of shareholders. The Armor Holdings Bylaws, however,
provide that a special meeting may be called by the Chairman of the Board of
Directors, the President, a majority of the Board of Directors or a majority of
the shareholders of record of all shares entitled to vote.

The FBCA provides that a special meeting of shareholders can be called
by: (i) a corporation's board of directors; (ii) the persons authorized by the
articles of incorporation or bylaws; or (iii) the holders of not less than 10%
of all votes entitled to be cast on any issue to

<PAGE>

be considered at the proposed special meeting. A corporation's articles of
incorporation can require a higher percentage of votes, up to a maximum of 50%,
to call a special meeting of shareholders. The Company's Charter does not
include any such provision. The Bylaws of the Company do, however, provide that
a special meeting of Shareholders may be called by the President or a majority
of the Board of Directors.

Amendments To Bylaws

Under the DGCL, directors can amend the bylaws of a corporation only if
such right is expressly conferred upon the directors in its certificate of
incorporation. Under the FBCA, a corporation's board of directors may amend or
repeal the bylaws unless such power is expressly reserved to the shareholders in
the articles of incorporation or the FBCA or the shareholders expressly provide,
in amending or repealing all or any part of the bylaws, that the board of
directors may not amend or repeal the affected bylaws. The Armor Holdings
Certificate of Incorporation permits the Board of Directors to adopt, alter or
amend the Armor Holdings Bylaws. The Company's Charter provides the Board of
Directors with the authority to adopt, alter or amend the Bylaws.

Merger With Subsidiary

Under the DGCL, a parent corporation may merge into a subsidiary and a
subsidiary may merge into its parent, without shareholder approval, where such

parent corporation owns at least 90% of the outstanding shares of each class of
capital stock of its subsidiary. The FBCA permits such a merger of a subsidiary
without shareholder approval if 80% of each class of capital stock of the
subsidiary is owned by the parent corporation.

Removal Of Directors; Filling Vacancies On The Board Of Directors

Under the DGCL, any director or the entire board of directors generally
may be removed, with or without cause, by the holders of a majority of the
shares entitled to vote at an election of directors. Under the FBCA,
shareholders may remove one or more directors with or without cause, unless the
articles of incorporation provide that directors may be removed only with cause,
at a meeting of the shareholders called expressly, at least in part, for that
purpose. The Company's Charter does not refer to removal of directors.
Therefore, any member of the Company's Board of Directors may be removed with or
without cause.

Under the Armor Holdings Bylaws, newly created directorships resulting
from any increase in the number of directors or any vacancies on the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office. In addition, the Armor Holdings Bylaws provide that the
directors elected to fill vacancies on the Board of Directors will hold office
until the next election of directors.

The Company's existing Bylaws provide that vacancies on the Board of
Directors will be filled by a majority vote of the remaining members of the
Board of Directors.

<PAGE>

Regardless of whether the Reincorporation is effected, there will be no
vacancies on the Board of Directors of either Armor Holdings or the Company, as
the Armor Holdings Certificate of Incorporation and the Company's Charter each
provide for a minimum of three and a maximum of fifteen directors, and all such
directorships shall be filled by Messrs. Kanders, Spiller, Ehrlich, Sokolow,
Strauss and Bartlett.

Amendment Or Repeal Of The Certificate

Under the DGCL, unless the certificate of incorporation otherwise
provides, amendments of the certificate of incorporation generally require the
approval of the holders of a majority of the outstanding stock entitled to vote
thereon, and if the amendment would increase or decrease the number of
authorized shares of any class or series or the par value of such shares or
would adversely affect the rights, powers or preferences of such class or
series, a majority of the outstanding stock of such class or series also would
have to approve the amendment. The Armor Holdings Certificate of Incorporation
does not provide otherwise.

Except with regard to minor amendments, all amendments to the articles
of incorporation of a Florida corporation must be approved by a majority of all
the votes entitled to be cast by each voting group, unless the articles require

a greater or lesser vote. The Company's Charter does not provide for a greater
or lesser vote.

Vote Required For Mergers

The FBCA provides that the sale, lease, exchange or disposal of all, or
substantially all, of the assets of a Florida corporation, not in the ordinary
course of business, as well as any merger, consolidation or share exchange,
generally must be recommended by the Board of Directors and approved by a vote
of a majority of the shares of each class of the stock of the corporation
entitled to vote on such matters. Under the FBCA, the vote of the shareholders
of a corporation surviving a merger is not required if: (i) the articles of
incorporation of the surviving corporation will not substantially differ from
its articles before the merger; and (ii) and each shareholder of the surviving
corporation before the effective date will hold the same number of shares, with
identical designations, preferences, limitations and relative rights immediately
after the merger. The DGCL has a similar provision requiring shareholder
approval in the case of the disposition of assets or a merger or a share
exchange.

Dissenters' Rights in Mergers

Under both the DGCL and the FBCA, a shareholder of a corporation
participating in certain merger transactions may, under certain circumstances,
receive cash in the amount of the fair market value of his or her shares (as
determined by a court) in lieu of the consideration he or she would otherwise
receive in the merger. Unless a corporation's certificate of incorporation
provides otherwise, the DGCL does not require that such dissenters' rights of
appraisal be afforded to shareholders with respect to: (i) a merger or
consolidation by a corporation the shares of which are either listed on a
national securities exchange or designated as a national market security on an
interdealer quotation system by the National Association of Securities

<PAGE>

Dealers, Inc. or widely held (by at least 2,000 shareholders), if the
shareholders of such corporation receive only shares of the surviving
corporation or of such a listed or widely held corporation; or (ii) those
shareholders who are the shareholders of a corporation surviving a merger if no
vote of such shareholder is required because, among other things, the number of
shares to be issued in the merger plus those initially issuable upon conversion
of any other securities to be issued or delivered pursuant to such merger does
not exceed 20% of the shares of the surviving corporation outstanding
immediately prior to the merger (if certain other conditions are met).

Unless a corporation's articles of incorporation provide otherwise, the
FBCA does not require that dissenters' rights be afforded to holders of shares
which, on the record date fixed to determine the shareholders entitled to vote
at the meeting of shareholders at which such action is to be acted upon, were
listed on a national securities exchange.

Stock Redemptions and Repurchases

Both Delaware and Florida corporations may generally purchase or redeem
their own shares of capital stock. Under the DGCL, a Delaware corporation may
purchase or redeem its own shares of capital stock except when the capital of
the corporation is impaired or when such purchase or redemption would cause any
impairment of the capital of the corporation. Subject to any restrictions
imposed by its articles of incorporation (the Company's Charter contains no such
restriction), a Florida corporation may make distributions to shareholders as
long as, after giving effect to such distribution: (i) the corporation would be
able to pay its debts as they become due in the usual course of business; and
(ii) the corporation's total assets would not be less than the sum of its total
liabilities plus, unless the articles of incorporation permit otherwise, (which
the Company's Charter does not) the amount that would be needed if the
corporation were to be dissolved at the time of the distribution to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the distribution (the Company currently has no
shares authorized or outstanding with such preferential rights).

Shareholder Records

Under both the DGCL and the FBCA, any Shareholder with a proper purpose
may inspect and copy the books, records and stockholder lists of the Company.

Corporate Action Without A Shareholder Meeting

The DGCL and the FBCA both permit corporate action without a meeting of
shareholders upon the written consent of the holders of that number of shares
necessary to authorize the proposed corporate action being taken, unless the
certificate of incorporation or articles of incorporation, respectively,
expressly provide otherwise. In the event such proposed corporate action is
taken without a meeting by less than the unanimous written consent of
shareholders, the DGCL requires that prompt notice of the taking of such action
be sent to those shareholders who have not consented in writing. The FBCA
provides that such notice must be

<PAGE>

given within ten days of the date such shareholder authorization is granted.

Rights And Options

The DGCL and the FBCA do not require shareholder approval of rights or
option plans, although various other applicable legal requirements, such as the
rules of the SEC, may make shareholder approval of certain rights or option
plans necessary or desirable.

Purposes And Effects Of Certain Provisions Of The Certificate Of Incorporation
And Bylaws Of Armor Holdings

Limitation Of Director, Officer and Employee Liability

The Armor Holdings Certificate of Incorporation contains a provision in

Article Ninth that provides for the indemnification by the Company of any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that he is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
Armor Holdings Certificate of Incorporation also provides that the Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in manner he reasonably believed to be in or not opposed
to the best interests of the Company. As they relate to directors, these two
provisions eliminate a director's liability for monetary damages for breaches of
fiduciary duty of care, subject to certain exceptions described below (the
"Liability Provisions").

Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the Company in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer at the commencement of such action, suit or
proceeding to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Company. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the Board of Directors of the Company deems
appropriate. The indemnification and advancement of expenses

<PAGE>

provided by, or granted pursuant to, the other sections of the Armor Holdings
Certificate of Incorporation shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under law, bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office. The indemnification and
advancement of expenses provided by, or granted pursuant to, Article Ninth of
the Armor Holdings Certificate of Incorporation shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

The Delaware legislature enacted an amendment to the DGCL in 1985
allowing provisions such as the Liability Provisions as a response to changes in
the market for directors' liability insurance. The proliferation of shareholder
derivative and class action suits for breaches of directors' fiduciary duties
has in large part made it difficult to obtain liability insurance. Thus, the
Delaware legislature amended the DGCL in order to maintain qualified and able
directors to govern companies. While the Company has not experienced difficulty
in attracting and retaining qualified and able persons to serve on the Company's
Board of Directors, the ability to attract and retain qualified directors is
often contingent upon a corporation's ability to indemnify such persons against
certain liabilities. For this reason, among others, the Company wishes to avail
itself of the broader indemnification provisions contained in the DGCL so that
it may continue to attract and retain qualified directors.

The Liability Provisions do not relieve a director of monetary liability
for breaches of the duty of loyalty, acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law, the unlawful
repurchase or redemption of stock or payment of unlawful dividends or any
transaction from which a director derives an improper personal benefit. Thus,
liability for monetary damages will still exist under the Liability Provisions
if liability is based upon one of these grounds. The Liability Provisions will
have no effect on the availability of equitable remedies, such as an injunction
or rescission for the breach of a director's fiduciary duty, and will in no way
limit or otherwise affect liability for violation of the federal securities
laws.

The Liability Provisions do not eliminate the liability of directors of
the Company for monetary damages arising out of the directors' breach of their
fiduciary duty of care. The duty of care refers to the fiduciary duty of
directors to be sufficiently diligent and careful in considering a transaction
or taking or refusing to take some corporate action. Liability for a breach of
the duty of care arises when directors have failed to exercise sufficient care
in reaching decisions and otherwise attending to their responsibilities as
directors. The Liability Provisions do not eliminate the duty of care; they only
eliminate monetary damage awards occasioned by a breach of that duty in certain
circumstances. Thus a breach of the duty of care remains a valid basis for a
suit seeking to stop a proposed transaction from occurring. After the
transaction has occurred, however, except in certain limited circumstances, the
shareholders would no longer have a claim for monetary damages based on a breach
of the duty of care even if that breach involved gross negligence on the part of
the directors.

<PAGE>

The indemnification provided by the Liability Provisions and the
limitation on the personal liability of a director to its shareholders for
monetary damages for violations of a director's fiduciary duty of care provided
by the Liability Provisions extend only so far as is legally permitted. If the
DGCL is amended to permit broader indemnification rights, the protection
afforded to directors and officers of the Company by the Liability Provisions
will be expanded to the fullest extent authorized by the DGCL, as so amended,

without further shareholder action. Similarly, if the DGCL is amended to permit
the further elimination or limitation of the personal liability of directors for
breaches of fiduciary duties, then the liability of directors shall be
eliminated or limited to the fullest extent authorized by the DGCL.

The Company believes that the indemnification provisions described
above, together with the limitation of directors' liability provided for by the
Armor Holdings Certificate of Incorporation, will ensure that the shareholders
will continue to benefit from the services of qualified directors and officers.
Notwithstanding the foregoing, under certain circumstances, because of such
indemnification provisions, the Company may in the future be obligated to incur
additional expense in indemnifying its officers and directors, which may affect
the Company's future profitability. In addition, shareholders should note that
limitations on directors' liability may have the effect of reducing the
likelihood of derivative litigation against directors and may also discourage or
deter shareholders or management from bringing a lawsuit against directors for
breach of their fiduciary duty of care, even though such an action, if
successful, might otherwise have benefitted the Company and its shareholders.
Furthermore, because of the limitation of a director's liability, the Company's
shareholders will lose the right to maintain certain causes of action in the
future that exist under common law, including a shareholder's right on behalf of
himself or the Company to recover monetary damages against directors for
negligence or gross negligence.

Accounting Treatment of Reincorporation
Federal Tax Consequences

It is the Company's belief that the merger which will take place in
connection with the Reincorporation will, under current law, constitute a
tax-free reorganization under Section 368 of the Internal Revenue Code of 1986,
as amended (the "Code"). However, no ruling has been, or is expected to be
requested from, the Internal Revenue Service (the "IRS") and no opinion of
counsel or of any other tax advisor has been obtained, nor will such an opinion
be requested, by the Company as to the tax consequences of the Reincorporation.
Since no ruling has been, or will be, obtained, no assurance can be given that
the IRS will agree with the Company's conclusions with respect to the tax-free
nature of the Reincorporation, or that a challenge by the IRS, if made, will not
be successful.

Assuming that the Reincorporation and the merger resulting therefrom
constitute a tax-free reorganization, there will be no adverse federal income
tax consequences to the Company or its shareholders because no gain or loss will
be recognized to the Company or Armor Holdings as a result of the
Reincorporation. Shareholders will have the same tax basis in the shares of
Armor Holdings received in this transaction as the basis in the shares of the
Company exchanged therefor, and the holding period of the shares of Armor
Holdings will

<PAGE>

include the period during which the shares of the Company were held, provided
such shares of the Company were held as capital assets at the Effective Time of

the Reincorporation.

The foregoing summary of federal income tax consequences is included for
general information only and does not address the federal income tax
consequences to all shareholders, including those who acquired shares of Common
Stock pursuant to the exercise of employee stock options or otherwise as
compensation and those subject to the alternative minimum tax. In view of the
individual nature of tax consequences, shareholders are urged to consult their
own tax advisors as to the specific tax consequences of the Reincorporation,
including the application and effect of state, local and foreign income and
other tax laws.

Amendment

The Agreement and Plan of Merger by and among the Company and Armor
Holdings, pursuant to which the Reincorporation will be effected (the "Merger
Agreement"), may be amended, modified or supplemented prior to the Effective
Time of the Reincorporation upon the approval of the Board of Directors of the
Company and Armor Holdings. However, no amendment, modification or supplement
may be made after the adoption of the Merger Agreement by the shareholders of
the Company which changes the Merger Agreement in a way which, in the judgment
of the Board of Directors of the Company, would have a material adverse effect
on the shareholders of the Company, unless such amendment, modification or
supplement is approved by the shareholders. The Merger Agreement was approved by
the shareholders on July 16, 1996. Therefore, no amendment, modification or
supplement may be made to the Merger Agreement which would have a material
adverse effect on the shareholders without the approval of the shareholders.

Termination

The Merger Agreement provides that the Board of Directors of the Company
may terminate the Merger Agreement and abandon the merger contemplated thereby
at any time prior to the Effective Time, whether before or after approval by the
shareholders of the Company, if: (i) the Reincorporation shall not have received
the requisite approval of the shareholders of the Company; (ii) the Board of
Directors of the Company determines for any reason in its sole judgment that the
consummation of the transaction would be inadvisable or not in the best
interests of the Company and its shareholders; or (iii) the Company shall not
have received all required third party consents and the Board of Directors
determines that such failure will have a material adverse effect on the Company
if the Reincorporation is consummated.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the
financial statements and notes thereto included herein and the financial
statements and management's discussion and analysis or plan of operation
included in the Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 1995.

<PAGE>

Results of Operations

Fresh-Start Reporting

The Company emerged from Chapter 11 bankruptcy reorganization on
September 20, 1993 as a result of the confirmation of the Company's Plan of
Reorganization by the Bankruptcy Court. In connection with the confirmation of
the Plan of Reorganization, the Company adopted "fresh-start reporting" in
accordance with the American Institute of Certified Public Accountants Statement
of Position 90-7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code." Accordingly, since September 20, 1993, the Company's financial
statements have been prepared as if it were a new reporting entity.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net sales for the fiscal year ended December 31, 1995 ("Fiscal 1995")
amounted to $11,741,367, as compared to $11,355,142 for the fiscal year ended
December 31, 1994 ("Fiscal 1994"). This increase of $386,225 (3.4%) between
periods results primarily from an increase in sales in the domestic market.

The Company's gross profit amounted to $4,298,287 (37% of sales) in
Fiscal 1995, as compared to $3,614,339 (32% of sales) in Fiscal 1994. The
increase of $683,948 in gross profit in Fiscal 1995 is due to positive
manufacturing variances (better utilization of labor and purchases of raw
material). In addition, the domestic market experienced better margins and
contributed a greater percentage to the overall sales figures.

Selling, general and administrative expenses ("SG&A Expenses") amounted
to $2,976,975 (25.3% of sales) in Fiscal 1995, as compared to $2,432,521 (21.4%
of sales) in Fiscal 1994. The increase in SG&A Expenses amounted to $544,454 or
22.3%. Increases in salaries for additional personnel in the sales and marketing
areas of the Company and domestic commissions (due to the increase in domestic
sales) comprised the majority of the overall increase in SG&A Expenses. In
addition, increased domestic travel costs were incurred and certain costs
associated with the acquisition by KFH of shares of the Company's capital stock
are included in the Fiscal 1995 expenses.

Increases in research and development expenses were incurred due to new
vest certification and testing costs, as well as in connection with the ISO 9002
certification of the Company's quality control standards. The Company received
the ISO 9002 certification in October 1995.

Non-operating income amounted to $227,500 in Fiscal 1995. This income is
non-recurring and relates to the termination of a non-compete agreement entered
into in 1990 between the Company and a competitor.

Interest expense of $280,891 in Fiscal 1995 represents an increase of
$64,573 (or 30%), as compared to Fiscal 1994. This increase resulted primarily
from higher borrowings under the

<PAGE>

Company's financing agreement with LaSalle. As of May 1, 1996, the Company
reduced its credit facility with LaSalle to a zero balance and effective June
30, 1996, the financing agreement with LaSalle expired and was not renewed.

Income before income taxes for Fiscal 1995 amounted to $823,803, as
compared to $701,904 for Fiscal 1994. This increase in pre-tax profit reflects
the improved margins and non-recurring, non-operating income received in Fiscal
1995, being partially offset by the increase in SG&A Expenses.

Effective September 20, 1993 the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"). In accordance with this standard, the Company recorded a
deferred tax asset, representing its cumulative net operating loss carryforward
and deductible temporary differences, subject to applicable limits and an asset
valuation allowance. Any future benefit obtained from the realization of this
asset will be applied to reduce the reorganization value in excess of amounts
allocable to identifiable assets. As of December 31, 1995, the gross amount of
this deferred tax asset was $2,037,000, of which the entire amount has been
offset by a valuation allowance.

The Company's backlog of orders consists of orders received but not yet
manufactured. As of March 8, 1996, the Company had a backlog of orders of
approximately $2,900,000. Management believes that a backlog of approximately
four weeks production provides for reasonable production scheduling.

Liquidity and Capital Resources

The Company's principal sources of working capital during Fiscal 1995
were bank borrowings from LaSalle and trade credit. The Company's financing
agreement with LaSalle was renewed effective July 1, 1994, at terms more
favorable to the Company. The outstanding balance owed by the Company pursuant
to its financing agreement with LaSalle was reduced to a zero balance with the
proceeds from the Notes and was terminated on June 30, 1996.

In conjunction with the Plan of Reorganization, the Company retained or
incurred administrative claims liabilities amounting to $925,000. This amount
included unsecured creditors electing cash payments upon the effective date of
the Plan of Reorganization, professional fees awarded by the Bankruptcy Court
for services provided during the pendency of the proceeding, amounts set aside
for contingent or disputed claims and deferred claims payments required by the
Plan of Reorganization. As of December 31, 1995, $736,294 of these liabilities
had been paid and the remaining balance of $188,706 is included in current
liabilities as of December 31, 1995.

As of December 31, 1995, the Company had working capital of $795,370,
which reflects an improvement of $755,038 from December 31, 1994. This increase
reflects the Company's continued profitability.

The Company had an income tax net operating loss carryforward ("NOL") of

<PAGE>

approximately $4,700,000 as of December 31, 1995. Until January 18, 1996, this
loss carryforward was relatively unrestricted as to the amount which could have
been utilized in any year to offset future income tax liabilities of the
Company. However, due to the sale of all of the issued and outstanding shares of
capital stock owned by Clark Schwebel and Hexcel on January 18, 1996 to KFH,
which sale resulted in a change in control of the Company, the amount of the NOL
that can be utilized in any one year is restricted to approximately $300,000.

The Company anticipates that continuing profitable operations and
utilization of the proceeds from the Notes will enable the Company to meet its
liquidity and working capital requirements during the next year. Such
requirements include generating sufficient cash to make payments required under
the Plan of Reorganization and the purchase of capital equipment.

The Company is in the process of finalizing its capital expenditure plan
for the fiscal year ending December 31, 1996. Such expenditures approximate
$250,000, which will include, among other things, upgrading the Company's
Management Information Systems and miscellaneous capital equipment during the
next twelve month period.

Results of Operations

Three Months Ended June 30, 1996 Compared to Three Months Ended July 1, 1995

Sales for the three months ended June 30, 1996, were $3,595,521
representing an increase of $656,539 compared to the same period in 1995.
Domestic law enforcement sales increased by 29% and international sales
increased by 31%.

The gross profit margin (sales less manufacturing costs for materials,
labor and overhead as a percent of total sales) increased to 37.2% for the 1996
period from 37% in the comparable period for 1995.

SG&A Expenses for the three month period ended June 30, 1996 were
$1,008,071 (28% of sales) compared to $809,483 (28% of sales) during the
comparable period in 1995. The increase in the actual dollar amount of SG&A
Expenses between the periods, amounted to $198,588 and consisted primarily of
increased international commissions due to the increase in international sales.

Interest expense of $30,448 for the three month period ended June 30,
1996 is approximately $40,000 lower than the comparable period in the prior
year. The decrease resulted primarily from the paying down of the Company's
credit facility with LaSalle on May 1, 1996. Effective April 30, 1996, the
Company received proceeds of $11,500,000 related to the issuance of the Notes.
Deferred debt issue costs associated with the Notes are being amortized over the
term of the Notes, which is five years.

Income tax expense for the three month period ended June 30, 1996
represents the federal and state statutory rates. The Company's operating loss
carry forward at January 1, 1996 amounted to approximately $5,000,000. Due to
the Company's change in control in

<PAGE>

January 1996, this tax benefit became restricted to approximately $300,000 per
year. For the second quarter of 1996, pre-tax income and net income amounted to
$245,555 and $143,555, respectively, compared to $209,718 and $127,718 for the
comparable period in 1995. This change reflects the increase in gross profit
margin and lower interest costs between the periods, as discussed above, being
partially offset by the increase in SG&A Expenses and amortization costs related
to debt issue and reorganization value in excess of amounts allocable to
identifiable assets.

Six Months Ended June 30, 1996 Compared to Six Months Ended July 1, 1995

Sales for the six months ended June 30, 1996 were $6,862,849
representing an increase of $1,386,715 compared to the same period in 1995. The
increase results primarily from the increase in domestic sales of 28% over last
year.

Gross profit on sales for the six months ended June 30, 1996 increased
by $454,886 compared to the same period in the prior year, primarily due to the
increase in gross sales. The gross profit margin decreased by approximately 1%,
primarily due to the impact of price increases incurred on the Company's main
raw material and the mix of sales between the Company's major market segments.
The effect of the price increase on the Company's gross margin is expected to
yield an approximate one point decrease in margin percentage for the full year
of 1996, as compared to 1995.

SG&A Expenses for the first six months of 1996 were $1,976,488 (29%) of
sales) compared to $1,516,791 (28% of sales) in the 1995 period. Increases in
commissions due to increased sales plus increased marketing efforts accounted
for a majority of the overall dollar increase between the periods.

Interest expense of $102,459 for the 1996 period was approximately
$27,000 lower than the prior year. As noted previously, the decrease is due
primarily to the paying down of the Company's credit facility with LaSalle on
May 1, 1996.

Income tax expense for the six month period ended June 30, 1996
represents a deferred tax expense amounting to 38% of pre-tax income. The
Company's operating loss carry forward at January 1, 1996 amounted to
approximately $5,000,000. Due to the Company's change in control in January
1996, this tax benefit became restricted to approximately $300,000 per year. For
the first six months of 1996, pre-tax income and net income decreased to
$362,042 and $215,042, respectively, from $393,244 and $239,244 for the first
half of 1995. This change reflects the effect of amortization expenses as they
relate to the Company's current tax situation and the Note offering, being
partially offset by the increase in gross profit margin between the periods.

Financial Condition

The Company backlog consists of orders received but not yet
manufactured. As of July 21, 1996, the Company had a backlog of orders of
approximately $802,356.

<PAGE>

As of May 1, 1996, the Company paid down its credit facility with
LaSalle. Effective June 30, 1996, the financing agreement with LaSalle expired
and was not renewed. As of July 24, 1996 the Company is in discussions with
other financial institutions to obtain working capital financing.

As of June 30, 1996, the Company had working capital of $12,033,729
which reflects the gross proceeds from the issuance of convertible debt of
$11,500,000 and the continued profitability of operations. Working capital at
March 31, 1996 was $949,749 and at June 30, 1995 was $154,379.

The Company anticipates that continuing operations will enable the
Company to meet its liquidity, working capital requirements, and capital
expenditure requirements during the next year.

Effect of Inflation and Changing Prices

The Company is effected by changes in the cost of its raw materials,
primarily fabric woven from Kevlar(R) yarn and SpectraShield(R), which costs
have not increased substantially over the past year. Such increases can normally
be passed on to customers in the normal course of business. The Company does not
expect inflation to have a material impact on either the Company's ability to
obtain raw materials or its results of operations.

PROPERTIES

The Company occupies a 50,000 square foot office, sales, manufacturing
and warehouse facility in Nassau County, Florida (the "Yulee Facility"). The
Yulee Facility has been utilized as the Company's primary manufacturing facility
and headquarters since 1987. As a result of a sale leaseback transaction, the
Company has leased the Yulee Facility since July 1989. The Company's current
lease is for a six year term ending April 30, 1999, at an annual base rental of
$110,000 (plus annual inflationary escalations). The lease provides the Company
with options to extend the lease for two additional five year terms at
prevailing market rental rates; however, to the extent the Company makes certain
improvements to the Yulee Facility, the Company may elect to extend the lease at
the present rental rate. In addition, the lease requires the Company to pay all
utilities and maintenance expenses incurred in connection with the premises, as
well as all real estate taxes, insurance, water and sewer charges. The Company
believes that it has adequate insurance coverage for this property and its
contents.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions With Management And Others

The Company has historically purchased substantially all of the
ballistic resistant fabric used in the manufacture of its products from Clark
Schwebel, a subsidiary of Springs and a former holder of 45.7% of the Company's
outstanding capital stock. KFH purchased all of the capital stock of the Company

owned by Clark Schwebel on January 18, 1996. The

<PAGE>

Company's purchases from Clark Schwebel totalled approximately $5.1 million,
$3.4 million and $3.2 million in fiscal years 1995, 1994 and 1993, respectively,
and were made in the normal course of business at prices which the Company
believes were competitive with other available sources for such materials.

On May 15, 1996, the Company issued options to purchase 300,000 shares
of the Company's Common Stock to Richmont at an exercise price of $7.50 per
share, subject to adjustment (the "Richmont Options"). The Richmont Options and
the underlying shares, whether vested or unvested, are callable by the Company
in the event that the closing price per share of the Company's Common Stock is
equal to or greater than $10 for a period of 10 consecutive trading days after
December 31, 1997, upon written notice to Richmont given within 30 days of the
conclusion of such ten consecutive trading days during which the closing price
per share of the Company's Common Stock was equal to or greater than $10. In
such event, the Company may require Richmont to exercise the Richmont Options in
whole with respect to all such shares within 10 days of such notice to Richmont.
In the event that Richmont does not exercise the Richmont Options, the Richmont
Options will lapse and be of no further force or effect.

Richmont is also the holder of $3,000,000 worth of Notes. Richmont may
convert such Notes into 600,000 shares of Common Stock pursuant to the terms of
the Convertible Subordinated Note Purchase Agreement. Taking the 100,000
Richmont Options which have fully vested and the shares into which the Notes are
convertible into account, Richmont is the beneficial owner of 9.7% of the
Company's outstanding Common Stock. Richard C. Bartlett, a director of the
Company, is the Chairman of the Board of Directors of the Richmont Group, the
parent corporation of Richmont. Mr. Bartlett disclaims beneficial ownership of
any shares of Common Stock beneficially owned by Richmont. See "Risk Factors"
and "Security Ownership of Certain Beneficial Owners."

Burtt Ehrlich, a director of the Company, is the holder of $250,000
worth of Notes. Mr. Ehrlich may convert such Notes into 50,000 shares of Common
Stock pursuant to the terms of the Convertible Subordinated Note Purchase
Agreement.

Thomas W. Strauss, a director of the Company, is the holder of
$200,000 worth of Notes. Mr. Strauss may convert such Notes into 40,000 shares
of Common Stock pursuant to the terms of the Convertible Subordinated Note
Purchase Agreement.

Other than as described above, there have not been, nor are there any
currently proposed transactions, or any series of similar transactions, since
the beginning of Fiscal 1995, to which the Company was or is to be a party, in
which the amount involved exceeds $60,000 and in which any director, executive
officer, security holder or any member of the immediate family of any of the
foregoing persons had, or will have, a direct or indirect material interest.

Since the beginning of Fiscal 1995, no director or executive officer

of the Company, nor any member of their immediate family or any affiliate
thereof is, has become or was indebted to the Company in an amount in excess of
$60,000.

<PAGE>

MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Effective March 18, 1996, the Company's Common Stock began trading on
the American Stock Exchange under the symbol "ABE." The closing price of the
Company's Common Stock on its first day of trading on the American Stock
Exchange was $5.375. Prior to March 18, 1996, the Company's Common Stock was
traded in the over-the-counter market, and was listed in the bid and ask quotes
of brokers as reported by the National Quotation Bureau, Inc. (the "Bulletin
Board") under the symbol "ABOA."

The following tables set forth the range of reported high and low bid
quotations for the Company's Common Stock as listed on the Bulletin Board for
the last two fiscal years. Such quotations reflect inter-dealer prices without
retail mark-up, mark-down or commission, and may not necessarily represent
actual transactions. The bid quotations were determined from information
provided by a majority of the market makers for the Company's Common Stock to
the Bulletin Board.

Fiscal Year 1994 High Low
---------------- ---- ---
Quarter Ended 3/31/94 $2.50 $0.75
Quarter Ended 6/30/94 $2.50 $1.00
Quarter Ended 9/30/94 $2.25 $1.25
Quarter Ended 12/31/94 $2.00 $1.00

Fiscal Year 1995
----------------
Quarter Ended 3/31/95 $1.25 $0.75
Quarter Ended 7/1/95 $1.00 $0.625
Quarter Ended 9/30/95 $0.9375 $0.875
Quarter Ended 12/31/95 $3.25 $1.00

The following table sets forth the range of reported high and low bid
quotations for the Common Stock on the Bulletin Board for the period January 1,
1996 to March 17, 1996, and range of high and low sales prices on the American
Stock Exchange for the period March 13, 1996 to March 31, 1996, and for the
fiscal quarter ended June 30, 1996.

Fiscal Year 1996 High Low
---------------- ---- ---
1/1/96 to 3/17/96 $5.75 $2.75
3/18/96 to 3/31/96 $5.50 $5.0625
Quarter Ended 6/30/96 $9.00 $5.125

<PAGE>

As of August 7, 1996, the number of holders of record of the Company's
Common Stock was approximately 500. Holders of shares held in "nominee" or
street names are included in this number.

The Company did not declare any cash dividends on its Common Stock during
the last three fiscal years, and does not anticipate paying cash dividends on
its Common Stock in the foreseeable future. Any earnings in the near future will
be utilized to fund the growth of the Company's business.

In late 1995, the Company elected to convert 242,851 shares of the
Company's Old Preferred Stock to Common Stock at 110% of the aggregate stated
value of the Old Preferred Stock at a conversion price equal to the fair market
value of the Common Stock. The fair market value of the Common Stock was
determined by an independent valuation firm as of the conversion date.

On January 19, 1996, the Board of Directors of the Company elected to
require the holders of the Company's Old Preferred Stock to convert such shares
to shares of the Company's Common Stock at 110% of the aggregate stated value of
the Old Preferred Stock, at a conversion price of $.77 per share (fair market
value, as determined by an independent valuation firm), as required by the
Company's Charter. All shares of the Company's Old Preferred Stock were deemed
to have been converted upon such election by the Board of Directors.

EXECUTIVE COMPENSATION

Compensation of Directors

During Fiscal 1995, each non-Management director (a "Non-Employee
Director") was entitled to receive, pursuant to the terms of the Company's 1994
Outside Directors' Stock Plan (the "1994 Outside Directors Stock Plan"), which
was implemented in 1994 following the approval of the Shareholders at the 1994
annual meeting, an annual retainer of $5,000 plus $1,000 for attendance at each
special meeting of the Board of Directors. Additionally, the Chairman of the
Audit Committee of the Board of Directors was entitled to $1,000 for each
Committee meeting. Under the terms of the 1994 Outside Directors' Stock Plan,
Non-Employee Directors' fees may be paid either in cash or stock. The 1994
Outside Directors Stock Plan was discontinued, and no additional awards will be
granted under said plan. At the Company's Annual Meeting of Shareholders held on
July 16, 1996, the Company's Shareholders approved the 1996 Non-Employee
Directors Stock Option Plan (the "1996 Directors Plan").

Under the 1996 Directors Plan, each Non-Employee Director is automatically
granted non-qualified options to acquire 75,000 shares of the Company's Common
Stock upon the date of his or her initial election or appointment to the Board
of Directors in consideration for service as a Director. Under the 1996
Directors Plan, the exercise price for all 75,000 options granted to each
Director is the closing price on the date of the grant of the Company's Common
Stock as quoted on the composite tape of American Stock Exchange, or on such
exchange as the

<PAGE>

Company's Common Stock may then be trading. Of the 75,000 options granted to
each NonEmployee Director, options to acquire 25,000 shares become exercisable
upon each of the first three anniversary dates following the date of the grant
and all 75,000 options granted to each Non-Employee Director shall expire ten
years from the date of grant. There are an aggregate of 300,000 shares of Common
Stock reserved for issuance under the 1996 Directors Plan.

Stock Option Plans

The 1994 Incentive Stock Plan, which was approved by the Shareholders on
June 10, 1994, provides for the award of stock options and stock grants. The
1994 Incentive Stock Plan was terminated to the extent that no further stock
options or stock grants will be awarded thereunder, on July 16, 1996, upon the
approval by the Shareholders of the 1996 Plan at the Annual Meeting of
Shareholders held on such date.

The purpose of the 1994 Incentive Stock Plan was to enhance the ability of
the Company to attract and retain key employees and to stimulate the efforts of
these employees by providing an opportunity for capital appreciation and
recognition of outstanding service to the Company, all of which Management
believes contributes to the long term growth and profitability of the Company.

The 1994 Incentive Stock Plan is administered by the Option Committee of
the Board of Directors. Members of the Option Committee are not eligible for
awards. The Option Committee has full power to select, from among employees
eligible for awards, the individuals to whom awards will be granted, to make any
combination of awards to any participants, and to determine the specific terms
of each grant, subject to the provisions of the 1994 Incentive Stock Plan. For
awards made to employees other than the Chief Executive Officer, such selections
were made after consideration of the recommendations of the Chief Executive
Officer.

Persons eligible to participate in the stock portion of the 1994 Incentive
Stock Plan were those officers and other key employees of the Company who were
responsible for, or contributed to, the management, growth or profitability of
the business of the Company. All full time employees of the Company were
eligible to participate in the stock grant portion of the 1994 Incentive Stock
Plan.

The per share exercise price of the Common Stock underlying the options
may not be less than the fair market value of the Common Stock on the date the
option is granted. No person who owns, directly or indirectly, at the time of
the granting of an incentive stock option to him, 10% or more of the total
combined voting power of all classes of stock of the Company (a 10%
Stockholder") was eligible to receive any incentive stock options under the 1994
Incentive Stock Plan unless the option price was at least 110% of the fair
market value of the Common Stock subject to the option, determined on the date
of grant.

No stock option may be transferred by an optionee other than by will or
the laws of descent and distribution, and, during the lifetime of an optionee,

the option will be exercisable only by him or by his legal guardian or legal
representative. In the event of termination of

<PAGE>

employment other than by death or for cause, the optionee will have, in the case
of an incentive stock option, three months after such termination during which
he can exercise the option, and in the case of a non-qualified option, one year
from the date of such termination during which he can exercise the option. Upon
termination of employment of an optionee by reason of death, his option remains
exercisable for one year thereafter to the extent it was exercisable on the date
of such termination.

No options under the 1994 Incentive Stock Plan are permitted to be granted
after the tenth anniversary of the effective date of the 1994 Incentive Stock
Plan. All options granted under the 1994 Incentive Stock Plan cannot be
exercised more than 10 years from the date of grant except that options issued
to a 10% Stockholder are limited to five year terms. All options granted under
the 1994 Incentive Stock Plan provide for the payment of the exercise price in
cash or, with the approval of the Board of Directors of the Company, by delivery
to the Company of shares of Common Stock already owned by the optionee having a
fair market value equal to the exercise price of the options being exercised, or
by a combination of those methods of payment. Therefore, an optionee may be able
to tender shares of Common Stock to purchase additional shares of Common Stock
and may theoretically exercise all of his stock options with no additional
investment other than his original shares.

Any unexercised option that terminated, is canceled or expires for any
reason without being exercised in full may again become available for issuance
under the 1994 Incentive Stock Plan.

The Board of Directors may amend or discontinue the 1994 Incentive Stock
Plan at any time, but except in accordance with certain provisions of the 1994
Incentive Stock Plan relating to certain adjustments made if there is a
reclassification or change of the share structure of the Company, no change
shall be made which will have a material adverse effect upon any option
previously granted unless the consent of the optionee is obtained; provided,
however, that the Board may not, without further approval of the Shareholders,
(a) increase the maximum number of shares for which options may be granted under
the 1994 Incentive Stock Plan, or (b) change the class of persons eligible to
receive options.

At the Annual Meeting of Shareholders held on July 16, 1996, the
Shareholders approved the 1996 Plan.

The Board of Directors believes that stock options and other stock-based
awards are desirable (1) as an effective incentive for participating key
employees, consultants and Directors (collectively, "Participants") to use their
judgment, initiative and efforts to ensure the successful conduct of the
Company's business, (2) to further align such Participants' interests with those
of the Company's Shareholders by providing an opportunity to increase their
stock ownership and (3) to encourage such Participants to remain in the service

of the Company. Pursuant to the 1996 Plan, Participants may be granted stock
options ("Options"), which may be incentive stock options ("Incentive Options")
or non-qualified stock options ("Non-Qualified Options").

The total number of Options authorized under the 1996 Plan will be
1,500,000 shares

<PAGE>

(which number is subject to adjustment in the event of stock dividends, stock
splits and other similar events) of the Company's Common Stock. To the extent
that Options granted under the 1996 Plan expire or terminate without having been
exercised, the shares of the Company's Common Stock covered by such Options will
again become available for award. There are currently no outstanding Options
under the 1996 Plan.

The Option Committee of the Board of Directors has the authority to
administer the 1996 Plan although, under certain conditions, the Board of
Directors shall have the power to administer the 1996 Plan. The Option Committee
must consist of no fewer than two members, each of whom is a "disinterested
person" within the meaning of Rule 16b-3 of the Exchange Act. The Option
Committee will have the authority to determine the employees to whom Options
will be granted, the time when such Options shall be granted, the number of
shares which shall be subject to each Option (subject to certain limitations in
the case of Incentive Options), the purchase price or exercise price of each
Option (no less than 100% of fair market value for Incentive Options), the
period(s) during which such Options shall be exercisable (whether in whole or in
part) (no more than ten years for Incentive Options) and the other terms and
provisions thereof. Generally, Options may be granted only to employees employed
and consultants engaged by the Company or of any subsidiary corporation or
parent corporation of the Company. Directors who are also employees of the
Company are also eligible to participate. Consultants are eligible to receive
awards of Non-Qualified Options, but are not eligible to receive Incentive
Options. No person who owns, directly or indirectly, at the time of the granting
of an Incentive Option to him, 10% or more of the total combined voting power of
all classes of stock of the Company will be eligible to receive any Incentive
Options under the 1996 Plan unless the option price is at least 110% of the fair
market value of the Common Stock subject to the option, determined on the date
of grant.

Common Stock purchased on the exercise of Options may be paid for in cash
or by certified check, or with shares of the Company's Common Stock (if
permitted by the terms of the Option and by applicable law) or by payment on
such terms as the Option Committee shall determine.

The Option Committee shall have the option at any time to suspend or
terminate the 1996 Plan, provided that rights and obligations under any Option
granted while the 1996 Plan was in effect may not be altered or impaired by
suspension or termination of the 1996 Plan, except with the consent of the
holder thereof.

The Board of Directors or the Option Committee, as the case may be, shall

have the right, from time to time, to amend the 1996 Plan, provided that no
amendment shall be made without the approval of the Shareholders to the extent
required by Rule 16b-3 or for the exception for performance-based compensation
under Section 162(m) of the Code that will: (i) increase the total number of
shares reserved for Options under the 1996 Plan (other than an increase
resulting from certain adjustments); (ii) reduce the exercise price of any
Option granted thereunder; (iii) modify the provisions of the 1996 Plan relating
to eligibility; or (iv) materially increase the benefits accruing to
participants under the 1996 Plan or extend the maximum option period thereunder.
The Board of Directors or the Option Committee, as the case may be, shall

<PAGE>

be authorized to amend the 1996 Plan and the Options granted thereunder to
permit the Incentive Options granted thereunder to qualify as incentive stock
options within the meaning of Section 422 of the Code.

In the event of any change in the outstanding shares of the Company's
Common Stock (through events such as a stock split, stock dividend,
recapitalization of the Company or other like change in its capital structure),
the Option Committee will make such adjustment to each outstanding Option that
it, in its sole discretion, deems appropriate, subject to the provisions of
Section 424(a) of the Code as to Incentive Options. It is intended that
Incentive Options granted under the 1996 Plan will meet the definitional
requirements of Section 422(b) of the Code for "incentive stock options."

Compensation of Executive Officers

The following table sets forth all compensation, in excess of $100,000,
paid to the Company's Chief Executive Officer and the four other most highly
compensated executive officers of the Company for the fiscal years 1995, 1994
and 1993. The Company paid no compensation to its executive officers under any
long term compensation or retirement plans during the last three years. The
incremental cost of certain incidental personal benefits does not exceed the
lesser of $50,000 or 10% of compensation for any named executive officer of the
Company.
<TABLE>
<CAPTION>

SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------
Long Term
Compensation
Annual Compensation ----------------
Awards

- -----------------------------------------------------------------------------------------
(a) (b) (c) (d) (g) (i)
- -----------------------------------------------------------------------------------------
Securities All Other
Name and Underlying Compen-
Principal Salary Bonus Options/SARs sation

Position Year ($) ($) (#) ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jonathan M. Spiller 1995 $160,000 $ 21,000 18,000 $5,775(1)
President and Chief 1994 $140,000 $ 62,000 432,000 --
Executive Officer 1993 $137,801 -- -- --
- -----------------------------------------------------------------------------------------
Richard T. Bistrong 1995 $120,000 $105,000 50,000 --
Vice President-Sales 1994 -- -- -- --
and Marketing 1993 -- -- -- --
- -----------------------------------------------------------------------------------------
J. Michael Elliott 1995 $100,000 $ 7,000 30,000 $9,660(2)
Vice President- 1994 $ 90,010 $ 27,000 138,000 --
Operations 1993 $ 85,020 -- -- --
- -----------------------------------------------------------------------------------------
</TABLE>

<PAGE>

(1) Represents the dollar value of 7,500 Common Stock grants awarded to Mr.
Spiller in December 1995. They became fully vested on January 19, 1996.

(2) Represents the dollar value of 12,000 Common Stock grants awarded to Mr.
Elliott pursuant to the terms of his previous employment agreement, which
was executed on January 1, 1994 but which was mutually terminated by Mr.
Elliott and the Company and superseded by a new employment agreement
executed on January 18, 1996. 4,000 of such grants became fully vested in
June 1995, and the additional 8,000 grants became fully vested on January
19, 1996.

OPTION/SAR GRANTS TABLE

The following table summarizes individual grants of stock options
(whether or not in tandem with stock appreciation rights ("SARs")), and
freestanding SARs made during Fiscal 1995, the Company's most recently completed
fiscal year, to each of the named executive officers.
<TABLE>
<CAPTION>

STOCK OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants

===================================================================================
Number of % of Total
Securities Options/SARs Exercise or Expiration
Underlying Granted to Base Price Date
Options/SARs Employees in ($/share)
Name Granted (#) Fiscal Year

- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jonathan M. Spiller 18,000 12.5% $.97 3/28/2005

President and Chief
Executive Officer
- -----------------------------------------------------------------------------------
Richard T. Bistrong 50,000 34.8% $.97 2/6/2005
Vice President-Sales and
Marketing
- -----------------------------------------------------------------------------------
J. Michael Elliott 30,000 20.9% $.97 3/28/2005
Vice President - Operations
===================================================================================
</TABLE>

(1) Stock option grants consist of stock options granted in Fiscal 1995,
pursuant to the Company's 1994 Incentive Stock Plan, all of which are
fully vested but are not exercisable until the expiration of the
respective named executive's employment agreement.

<PAGE>

OPTION/SAR EXERCISES AND
FISCAL YEAR-END OPTION/SAR VALUE TABLE

The following table summarizes information concerning each exercise of
stock options (or tandem SARs) and freestanding SARs made during Fiscal 1995,
the Company's most recently completed fiscal year, to each of the named
executive officers, and the fiscal year-end value of unexercised options and
SARs. No options were exercised in Fiscal 1995.
<TABLE>
<CAPTION>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

============================================================================================
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs
FY-End (#) at FY-End ($)

Shares Acquired Exercisable (E)/ Exercisable
Name on Exercise (#) Value Realized Unexercisable (U) (E)/
($) Unexercisable
(U)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jonathan M. Spiller -0- -0- 324,000(E) -0-(E)
President and Chief Executive 126,000(U) -0-(U)
Officer
- --------------------------------------------------------------------------------------------

Richard T. Bistrong -0- -0- -0-(E) -0-(E)
Vice President-Sales and 50,000(U) -0-(U)
Marketing
- --------------------------------------------------------------------------------------------
J. Michael Elliott -0- -0- 103,500(E) -0-(E)
Vice President - Operations 64,500(U) -0-(U)
============================================================================================
</TABLE>

Pension/Long-Term Compensation Arrangements

The Company has no pension arrangements or other long-term
compensation plans for its executive officers or other employees.

Employment Agreements

Set forth below are descriptions of the Company's employment
agreements with Messrs. Spiller, Elliott and Bistrong. No employment agreement
has been entered into between Ms. Burke and the Company.

<PAGE>

Jonathan M. Spiller

Mr. Spiller's employment agreement, dated as of January 18, 1996,
provides that he will serve as the President and Chief Executive Officer of the
Company for an initial term expiring January 17, 1999, at a base salary of
$160,000 per annum. In addition to his base salary, Mr. Spiller shall also be
entitled to a yearly bonus during the term of his employment agreement. The
bonus shall be based upon the Company's earnings before interest and taxes. Mr.
Spiller will also be entitled, at the sole and absolute discretion of the
Compensation Committee of the Board of Directors, to participate in the
Company's incentive stock plan and other bonus plans adopted by the Company.
Eligibility to participate in the Company's incentive stock plan shall be based
upon, among other things, the performance of Mr. Spiller and the Company. As
part of his compensation package, the Company provides Mr. Spiller with other
benefits commensurate with his position, as more fully set forth in his
employment agreement. Mr. Spiller's employment with the Company shall continue,
unless earlier terminated by Mr. Spiller or due to Mr. Spiller's death or
disability or by the Company, for successive one year periods, on terms to be
mutually agreed upon by the Company and Mr. Spiller.

Richard T. Bistrong

Mr. Bistrong's employment agreement, dated as of January 18, 1996,
provides that he will serve as Vice President-Sales and Marketing of the Company
for an initial term expiring January 17, 1999, at a base salary of $120,000 per
annum. Mr. Bistrong shall also be entitled to a yearly bonus during the term of
his employment agreement. The bonus shall be based upon the Company's earnings
before interest and taxes. In addition to his base salary and bonus, Mr.
Bistrong is entitled to receive non-qualified options to purchase 21,250 shares
of the Company's Common Stock and incentive stock options to purchase 28,750

shares of the Company's Common Stock, in each case at an exercise price of $.97
per share of Common Stock. These options are exercisable for a period of eight
years from the date of the grant, and all of such options vest on January 18,
1999. The vesting of the options may be accelerated on a pro rata basis in the
event of the occurrence of certain events. Pursuant to his employment agreement,
Mr. Bistrong will also be entitled, at the sole and absolute discretion of the
Compensation Committee of the Board of Directors, to participate in the
Company's incentive stock plan and other bonus plans adopted by the Company.
Eligibility to participate in the Company's incentive stock plan shall be based
upon, among other things, the performance of Mr. Bistrong and the Company. As
part of his compensation package, the Company provides Mr. Bistrong other
benefits commensurate with his position, as more fully set forth in his
employment agreement. Mr. Bistrong's employment with the Company shall continue,
unless earlier terminated by Mr. Bistrong or due to Mr. Bistrong's death or
disability or by the Company, for successive one year periods, on terms to be
mutually agreed upon by the Company and Mr. Bistrong.

J. Michael Elliott

Mr. Elliott's employment agreement, dated as of January 18, 1996,
provides that he will serve as Vice President-Operations of the Company for an
initial term expiring

<PAGE>

January 17, 1997, at a base salary of $100,000 per annum. Mr. Elliott shall also
be entitled to a yearly bonus during the term of his employment agreement. The
bonus shall be based upon the Company's earnings before interest and taxes. In
addition to his base salary and bonus, Mr. Elliott is entitled to receive
non-qualified options to purchase 8,500 shares of the Company's Common Stock and
incentive stock options to purchase 11,500 shares of the Company's Common Stock,
in each case at an exercise price of $.97 per share of Common Stock. These
options are exercisable for a period of eight years from the date of the grant,
and all of such options vest on January 18, 1999. The vesting of the options may
be accelerated on a pro rata basis in the event of the occurrence of certain
events. Pursuant to his employment agreement, Mr. Elliott will also be entitled,
at the sole and absolute discretion of the Compensation Committee of the Board
of Directors, to participate in the Company's incentive stock plan and other
bonus plans adopted by the Company. Eligibility to participate in the Company's
incentive stock plan shall be based upon, among other things, the performance of
Mr. Elliott and the Company. As part of his compensation package, the Company
provides Mr. Elliott with other benefits commensurate with his position, as more
fully set forth in his employment agreement. At the Company's option, Mr.
Elliott's employment with the Company shall continue, unless earlier terminated
by Mr. Elliott or due to Mr. Elliott's death or disability or by the Company,
for one two year period, on the same terms and conditions. Following the two
year renewal, the employment of Mr. Elliott shall automatically continue for
successive one year periods on terms to be mutually agreed upon by the Company
and Mr. Elliott.

LEGAL MATTERS

The validity of the securities offered hereby has been passed upon
for the Company by Kane Kessler, P.C., 1350 Avenue of the Americas, New York,
New York 10019.

EXPERTS

The financial statements included in this prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein, and are included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the SEC, Washington, D.C., its
Registration Statement No. under the Securities Act with respect to the shares
of Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in such Registration Statement and the exhibits thereto.
For further information with respect to the Company and the shares offered
hereby, reference is made to such Registration Statement and exhibits, which may
be obtained from the SEC at its principal office in Washington, D.C., upon
payment of charges prescribed by the SEC. Statements contained in this
Prospectus as to the contents of any contract or other documents referred to are
not necessarily complete, and in each

<PAGE>

instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
all respects by such reference.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

INDEX TO FINANCIAL STATEMENTS

Page

Report of Deloitte & Touche LLP F-2

Balance Sheets F-3

Income Statements F-4

Statements of Stockholders' Equity F-5

Statement of Cash Flows F-6

Notes to Financial Statements F-7

F-1

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
American Body Armor & Equipment, Inc.
Fernandina Beach, Florida

We have audited the accompanying balance sheets of American Body Armor &
Equipment, Inc. (the "Company") as of December 31, 1995 and 1994 and the related
statements of income, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1995 and
1994, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Deloitte & Touche LLP
Jacksonville, Florida
February 23, 1996

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- --------------------------------------------------------------------------------

(Interim financial information as of June 30, 1996 and for the six months
ended June 30, 1996 and 1995 is unaudited. The unaudited interim financial
statements reflect all adjustments, consisting of normal recurring
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods. Information for the
interim periods is not necessarily indicative of results to be achieved for
the full year.)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business - American Body Armor & Equipment, Inc. is a
manufacturer of ballistic and stab resistant armor and bomb disposal
equipment. The Company's products are sold domestically and
internationally, primarily to law enforcement agencies and the military.
The Company has no foreign manufacturing operations.

Basis of Presentation - On September 20, 1993, the Company emerged from
Chapter 11 bankruptcy reorganization and adopted the recommended
fresh-start reporting treatment for such entities, as set forth in the
American Institute of Certified Public Accountants' Statement of Position
90-7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOP 90-7"). As such, the Company's 1995 and 1994
financial statements have been prepared as if the Company were a new
reporting entity and are not comparable to financial statements of previous
periods.

The Company's Plan of Reorganization under Chapter 11 bankruptcy became
effective on September 20, 1993 (the "Effective Date"). The Plan of
Reorganization was designed to repay secured claims in full with interest
without impairment, to repay over time unsecured claims related to an FTC
Replacement Vest Consent Agreement (see Note 8) via replacement of vests,
and to repay general unsecured, tort and lease claims in cash or a
combination of preferred and common stock.

In connection with the adoption of fresh-start reporting, the Company was
required to determine its reorganization value by consideration of several
factors and reliance on various valuation methods, including discounted
estimated future cash flows, market comparables and price/earnings ratios.
All such valuations depended in large part upon the Company's projected
future operating results and cash flows, with such projections including
assumptions as to anticipated sales and margins, marketing plans, operating
expense levels and capital expenditure programs.

Cash Equivalents - The Company considers all highly liquid investments
purchased with original maturities of three months or less to be cash
equivalents.

Concentration of Credit Risk - The Company's accounts receivable consist of
amounts due from customers, including amounts due from distributors,
located throughout the United States. International sales generally require
cash in advance or confirmed letters of credit on U.S. banks.

Inventories - Inventories are stated at the lower of cost or market
determined on the first-in, first-out ("FIFO") basis.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

Property and Equipment - In accordance with SOP 90-7, property and
equipment consisting primarily of manufacturing equipment and office
furniture and fixtures were recorded at their estimated fair values upon
emergence from bankruptcy. Subsequent additions of property and equipment
have been recorded at cost. Property and equipment are depreciated over
their estimated useful lives of 3 to 10 years on a straight-line basis.

Reorganization Value in Excess of Amounts Allocable to Identifiable Assets
- Reorganization value in excess of amounts allocable to identifiable
assets is amortized or otherwise reduced in amounts not less than those
which would be recognized on a straight-line basis over twenty-five years.

Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

Income Taxes - In connection with the adoption of fresh-start reporting,
the Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109"). Under the asset and liability
method specified thereunder, deferred taxes are determined based on the
difference between the financial reporting and tax bases of assets and
liabilities. Deferred tax liabilities are offset by deferred tax assets
representing the tax-effected cumulative net operating loss carryforwards
and deductible temporary differences, subject to applicable limits and an
asset valuation allowance. Future benefits obtained from utilization of net
operating loss carryforwards or from the reduction in the income tax asset
valuation allowance existing on September 20, 1993 have been and will be
applied to reduce reorganization value in excess of amounts allocable to
identifiable assets.

Revenue Recognition - The Company records sales at gross amounts to be
received, including amounts to be paid to agents as commissions.
Non-operating income includes amounts received in settlement of a
non-competition agreement.

New Accounting Standards - Statement of Financial Accounting Standards
(SFAS) No. 123, "Accounting for Stock-Based Compensation", establishes
financial accounting and reporting requirements for stock-based employee
compensation plans. The Company intends to adopt the reporting requirements
of SFAS 123 in 1996 and does not expect implementation of the new standard
to have a significant impact on its financial position or results of
operations. The Company will also be required to adopt the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of"
for the year ending December 31, 1996. The impact of such adoption is not
presently known.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

2. INVENTORIES

Inventories are summarized as follows:

December 31,
-------------------------------
1995 1994

Raw materials $ 546,707 $ 651,479
Work-in-process 382,680 273,838
Finished goods 172,548 117,088
---------- ----------
$1,101,935 $1,042,405
========== ==========

3. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accounts payable, accrued expenses and other current liabilities are
summarized as follows:

December 31,
-------------------------------
1995 1994

Trade and other payables $ 466,441 $ 524,769
Accrued expenses:
Payroll and related taxes 143,721 146,675
Unresolved bankruptcy claims 188,706 279,082
Other 240,470 70,227
Other current liabiities 64,555 280,455
---------- ----------
$1,103,893 $1,301,208

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

4. INDEBTEDNESS
<TABLE>
<CAPTION>

December 31,
--------------------------

Debt: 1995 1994
<S> <C> <C>
Line-of-credit under revolving credit and
security agreement expiring June 30, 1996 $ 1,997,060 $ 1,668,061

Capital expenditure facility under revolving credit
and security agreement expiring June 30, 1996 52,000

Mortgage loan payable in monthly installments
of $310 including interest at 8.5 percent through
August 1996, with a balloon installment of $23,684
Mortgage loan payable in monthly installments
due September 1996, collateralized by a first
mortgage on a condominium apartment 24,886 26,301

Other installment loan 839 4,524
----------- -----------
2,074,785 1,698,886
Less current portion (2,074,785) (1,673,256)
----------- -----------

$ - $ 25,630
=========== ===========

Capitalized lease obligation:
Equipment lease bearing interest at 10.88%,
expiring November, 1999, collateralized by equipment
with an amortized cost of approximately $35,000
at December 31, 1995 $ 35,163 $ 43,451

Less current portion (7,613) (8,288)
----------- -----------

$ 27,550 $ 35,163
=========== ===========
</TABLE>

Effective with the emergence from Chapter 11 bankruptcy reorganization, the
Company entered into a revolving credit facility replacing the Company's
previous pre-petition and "debtor-in-possession" facility. The revolving
credit facility, as renewed July 1, 1994, provides for the borrowing in the
aggregate of up to $3,000,000, with maximum availability based upon 50% of
eligible inventories (with a cap of $850,000) and 85% of eligible accounts
receivable. Interest is payable at the Bank's Reference Rate plus 2% (10.5%
at December 31, 1995). Additional borrowings of approximately $230,000 were
available under the revolving credit facility at December 31, 1995. The
Company also has a related capital expenditures facility which provides for
borrowings up to $250,000. The facility contains certain restrictive
covenants including limitations on the encumbrance and transfer of assets
and the creation of indebtedness and the maintenance of certain levels of
tangible net worth and working capital. In addition, the facility restricts
the payment of dividends other than those dividends on preferred stock. The
agreement is collateralized by substantially all of the Company's assets
other than those assets collateralizing the mortgage and installment loan.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

Aggregate principal maturities on indebtedness are as follows:

Obligation
Under
Capitalized
Year ending December 31, Debt Lease

1996 $ 2,074,785 $ 11,065
1997 11,065
1998 11,065
1999 10,143
----------- -----------

$ 2,074,785 43,338
===========
Less amount representing interest on
obligation under capitalized lease (8,175)
-----------

$ 35,163
===========

5. SALES INFORMATION AND SIGNIFICANT CUSTOMERS

Information with respect to sales to principal geographic areas for the
years ended December 31, 1995 and 1994 is as follows:

1995 1994

Foreign $ 1,370,003 $ 1,594,831
Domestic 10,371,364 9,760,311
----------- -----------

$11,741,367 $11,355,142
=========== ===========

Approximately 32% of the Company's sales during the year ended December 31,
1994 were derived from two significant customers, the United States
government, including various agencies, and the government of Puerto Rico.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

6. INCOME TAXES

Income tax expense for the years ended December 31, 1995 and 1994
consisted of the following components:

1995 1994

Current $ 3,650 $ 15,000
Deferred 300,000 263,500
------------- ------------

Total provision for income taxes $303,650 $278,500
============= ============

Significant components of the Company's net deferred tax asset are as
follows:

1995 1994

Deferred tax assets:
Reserves not currently deductible $ 206,000 $ 217,500
Operating loss carryforwards 1,783,000 1,755,000
Other 48,000 133,000
------------- ------------
2,037,000 2,105,500
Deferred tax asset valuation allowance (2,037,000) (2,105,500)
------------- ------------

Net deferred tax asset $ - $ -
============= ============

The Company provided a valuation allowance of $2,037,000 and $2,105,500
against deferred tax assets recorded as of December 31, 1995 and 1994 in
view of, among other things, historical operating losses and the expiration
dates and other limitations on usage of the net operating loss
carryforwards.

The Plan of Reorganization resulted in an ownership change since a
substantial portion of the new stock was issued to the creditors of the
Company. However, since the ownership change occurred pursuant to Chapter
11 proceedings and because more than 50% of the new stock was issued to
qualifying creditors and shareholders, the Company has taken advantage of
certain favorable rules contained in Section 382(1)(5) relating to usage of
net operating losses. After an ownership change, Section 382(1)(5) requires
a reduction in the amount of net operating loss carryforwards and other tax
attributes. As of emergence from bankruptcy, the net operating loss
carryforward was estimated to have been reduced to approximately $5,200,000
as a result of the adjustments required by Section 382. As of December 31,

1995 the Company's net operating losses approximate $4,700,000 and expire
in varying amounts in fiscal years 2003 to 2008. See also Note 12.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

7. OPERATING LEASES

The Company leases its manufacturing facilities under a six year operating
lease expiring in 1999, with an option to renew. The Company is also party
to various other equipment and vehicle leases. Approximate total future
minimum annual lease payments under all such arrangements are as follows:

Year ending December 31

1996 $174,000
1997 165,000
1998 141,000
1999 132,000
2000 47,000
--------
$659,000
========

The Company incurred rent expense of approximately $161,000 and $167,000
during the years ended December 31, 1995 and 1994.

8. COMMITMENTS AND CONTINGENCIES

Chapter 11 Proceedings - The Company has provided for payment of certain
classes of bankruptcy related claims. Such amounts include amounts with
respect to claims that have been allowed by the Bankruptcy Court, as well
as amounts with respect to claims that are still being disputed by the
Company. Among the disputed claims is one in which an unsecured creditor
did not originally exercise its opportunity to elect to receive stock in
satisfaction of its claim, but has since asserted that it is so entitled.
While there can be no assurance that the actual amounts of any such claims
that are ultimately allowed by the Bankruptcy Court will not exceed the
amounts reserved, the Company does not expect that any variance between
such actual and reserved amounts will have a material adverse effect on the
Company's financial position.

Employment Contracts - The Company is party to several employment contracts
with its management. Such contracts are for varying periods and include
restrictions on competition after termination. These agreements provide for
salaries, bonuses and other benefits and also specify and delineate the
granting of various stock options, as further described in Note 9.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

Legal/Litigation Matters - In November 1989, the Federal Trade Commission
("FTC") conducted an investigation into the accuracy of the Company's
claims that body armor sold by the Company between 1988 and 1990 complied
with testing and certification procedures promulgated by the National
Institute of Justice ("NIJ"). On November 2, 1994, the FTC issued a consent
order embodying a voluntary settlement of the FTC's charges that the
Company engaged in false advertising. Under the consent order, the Company
admitted no violations of law but agreed to establish a Body Armor
Replacement Program (the "Program") under which persons who had purchased
body armor covered by the Program would be identified and offered the
chance to buy new, replacement body armor at a reduced price. The consent
order sets forth many detailed requirements governing the conduct of the
Program, the retention of records and the avoidance of false or misleading
advertising. Failure to comply with the requirements could make the Company
liable for civil penalties. On January 4, 1995, the Company filed with the
FTC a comprehensive Compliance Report detailing the manner in which it was
performing the obligations imposed upon it by the consent order. The FTC
has not asked for additional information or questioned the Company's
compliance with the consent order. Management has established reserves to
cover the estimated cost of the above program.

In addition to the above, the Company, in the normal course of business, is
subjected to claims and litigation in the areas of product and general
liability. Management does not believe any of such claims will have a
material impact on the Company's financial position.

9. STOCKHOLDERS' EQUITY AND REDEEMABLE PREFERRED STOCK

Convertible Preferred Stock - The Plan of Reorganization provided for the
filing by the Company of its Restated Articles of Incorporation which
authorized the issuance of 15,000,000 shares of common stock, $.03 par
value ("common stock") and 1,700,000 shares of $1 stated value, 3%
convertible preferred stock ("preferred stock"). Pursuant to the Plan of
Reorganization, the Company issued 4,415,833 shares of its new common stock
and 1,700,000 shares of preferred stock.

In 1995 and 1994, the Company elected to convert 242,851 shares of
preferred stock to common stock at $.77 per share and 242,857 shares of
preferred stock to common stock at $.97 per share, respectively, under
conversion provisions calling for the issuance of common stock, the fair
market value of which represents 110% of the aggregate stated value of the
preferred stock then subject to redemption.

Stock Options and Grants - In 1994, the Company implemented an incentive
stock plan and an outside directors' stock plan, which plans collectively
provide for the granting to certain key employees of options to acquire the
Company's common stock as well as providing for the grant of common stock

to outside directors and to all full time employees. Pursuant to such
plans, 1,050,000 shares of common stock were reserved and made available
for distribution. The option prices of stock which may be purchased under
the incentive stock plan are not less than the fair market value of common
stock on the dates of the grants. Stock granted under the plans results in
the recognition of compensation expense in the Company's financial
statements.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

The following is a summary of stock option activity in 1995 and 1994:

Number of
Option Price Shares
Shares Per Share Exercisable

Granted 727,500 $.79-$1.05 384,000
Forfeited (69,000) $.79-$1.05
-------

Outstanding at December 31, 1994 658,500 384,000

Granted 136,000 $.97
Forfeited (11,000) $.79-$1.05
-------

Outstanding at December 31, 1995 783,500 461,667
=======

The following is a summary of employee stock grant activity in 1995 and 1994:

Granted 128,500
Forfeited (9,877)

Outstanding at December 31, 1994 118,623

Exercised (32,956)
Forfeited (14,186)
-------
Outstanding at December 31, 1995 71,481
=======

Under this plan, 14,000 and 6,022 shares were issued to directors in 1995 and
1994, respectively.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

Earnings Per Share - The following table details the number of shares used
in computing primary and fully diluted earnings per share:

1995 1994

Primary:
Weighted average common shares outstanding 4,753,999 4,625,394

Effect of shares issuable under stock option
and stock grant plans, based on the treasury
stock method 325,290 254,498

Effect of shares issuable under conversion of
preferred stock 1,290,383 922,507
--------- ---------

6,369,672 5,802,399
========= =========

Fully diluted:
Weighted average common shares outstanding 4,753,999 4,625,394

Effect of shares issuable under stock option
and stock grant plans, based on the treasury
stock method 598,191 284,319

Effect of shares issuable under conversion of
preferred stock 1,290,383 922,507
--------- ---------

6,642,573 5,832,220
========= =========

Primary and fully diluted earnings per share are the same amounts.

10. RELATED PARTY TRANSACTIONS

The Company purchases a primary raw material for the manufacture of its
products from a significant stockholder. During the years ended December
31, 1995 and 1994 approximately $5,040,000 and $3,428,000 of such materials
were purchased. No amounts were payable to such stockholder as of December
31, 1995 and 1994. See also Note 12.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

At December 31, 1995 and 1994, the Company's financial instruments
consisted of cash and cash equivalents, receivables, payables and other
evidences of indebtedness. Because the cash equivalents and receivables and
payables have short maturities, their market value approximates their
carrying value as presented in the balance sheets. Effective September 20,
1993, the Company restructured the terms of its liabilities in accordance
with the Plan of Reorganization, which resulted in the issuance of
indebtedness at then fair market values. The Company later renewed its bank
credit facility on then market terms in June, 1994. Because the interest
rates on the Company's indebtedness are generally variable and the debts
are of relatively short maturities, management believes the carrying values
of debt as of December 31, 1995 and 1994 approximate fair value.

12. SUPPLEMENTAL INTERIM INFORMATION (UNAUDITED)

Change in Control - On January 18, 1996, Kanders Florida Holdings, Inc.
("KFH") purchased a majority interest in the Company by acquiring all of
the Company's preferred stock and common stock owned by the Company's two
largest shareholders, Clark Schwebel, Inc. and Hexcel Corporation. Upon
such transaction, the Company elected to convert all outstanding preferred
stock to common shares. After this conversion, KFH owned approximately 66%
of the Company.

This change in control of the Company resulted in the imposition of an
annual limitation on the use of the Company's net operating loss
carryforwards in future years.

Issuance of Convertible Debt - On April 30, 1996, the Company completed a
private placement of its 5% Convertible Subordinated Notes due April 30,
2001 (the "Notes") pursuant to which $11,500,000 aggregate principal
amounts of Notes were sold by the Company. Of the $11,500,000 Notes,
$3,450,000 are held by directors and affiliates of the Company.

The Notes bear interest at 5% per annum, due semi-annually beginning
December 31, 1996 and mature April 30, 2001. In addition, the Notes may be
convertible into shares of common stock of the Company (the "Common Stock")
at the option of the holder thereof at any time prior to the maturity date
at a conversion price of $5.00 per share, subject to adjustment as set
forth in the Convertible Subordinated Note Purchase Agreement. The Company
may redeem the Notes at par at any time two years after issuance, or at any
time after their issuance if the closing price of the Common Stock exceeds
$7.50 per share for 10 consecutive trading days and the shares of Common
Stock underlying the Notes have been registered under the Securities Act of
1933, as amended.

On July 19, 1996 the Company filed with the Securities and Exchange
Commission a registration statement on Form S-3 for the shares of Common
Stock into which the Notes are convertible.

<PAGE>

AMERICAN BODY ARMOR & EQUIPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994 (Continued)
- --------------------------------------------------------------------------------

Acquisition of NIK Assets - On July 15, 1996, the Company acquired,
effective as of July 1, 1996, certain assets of the NIK Public Safety
Product Line from Ives-Lee Corporation (the "NIK Assets"). The purchase
price of the acquisition was 310,931 shares (the "NIK Shares") of the
Company's Common Stock valued at $2,400,000, plus $255,000 in costs
incurred related to the purchase. The Company acquired inventory,
receivables and certain intangibles. The total purchase price was allocated
to the NIK Assets based upon their respective relative fair market values.
Patents, trademarks and other intangibles will be amortized over their
respective useful lives, which range from 5-25 years. On the closing date,
the Company advanced to the seller $1,200,000 (the "Advance"). The Advance
will not bear interest and must be repaid with the first $1,200,000
realized from the sales of the NIK Shares. In the event that the sum of the
aggregate net proceeds from the sales of the NIK Shares and the Advance are
less than $2,400,000 by December 31, 1996, the Company has agreed to pay
the difference to the seller. Alternatively, if the sum of the aggregate
net proceeds from the sales of the NIK Shares and the Advance are greater
than $2,400,000 at any time, the seller has agreed to pay the difference to
the Company.

Income Taxes - As of January 1, 1996, the Company had an income tax net
operating loss carryforward ("NOL") of approximately $5 million. Effective
with the change in control of the Company by Kanders Florida Holdings, Inc.
on January 18, 1996, the utilization of the NOL became restricted to
approximately $300,000 per year. As a result, the Company has income taxes
currently payable. In previous years, the future benefits obtained by the
Company from utilization of the NOL had been applied to reduce the
reorganization value in excess of amounts allocable to identifiable assets.
Beginning in 1996, and for future years, amortization expenses related to
this intangible will be a minimum of approximately $51,000 and a maximum of
approximately $160,000 per year which is non-deductible for income tax
purposes.

Submission of Matters to a Vote of Security Holders - The Company held its
Annual Meeting of Shareholders on July 16, 1996. Of the 6,812,490 shares of
Common Stock entitled to vote at the meeting, 5,426,401 shares of Common
Stock were present in person or by proxy and entitled to vote. Such number
of shares represented approximately 80% of the Company's outstanding shares
of Common Stock.

At the meeting, the Company's shareholders approved: (i) an amendment to
the Company's Amended and Restated Articles of Incorporation changing the
name of the Company to "Armor Holdings, Inc."; (ii) the reincorporation of
the Company under the laws of the State of Delaware by means of a merger of
the Company with and into a newly formed wholly-owned subsidiary

incorporated in the State of Delaware for such purpose; (iii) an amendment
to the Company's Amended and Restated Articles of Incorporation, increasing
the number of authorized shares of the Company's Common Stock from
15,000,000 shares to 50,000,000 shares; (iv) an amendment to the Company's
Amended and Restated Articles of Incorporation, creating a series of
preferred stock, with the right conferred upon the Board of Directors to
set the dividend, voting, conversion, liquidation and other rights, as well
as such redemption or sinking fund provisions and the qualifications,
limitations and restrictions with respect thereto, as the Board may from
time to time determine; (v) the adoption of the Company's 1996 Stock Option
Plan of which 1,500,000 shares of Common Stock are reserved for issuance;
and (vi) the adoption of the Company's 1996 Non-Employee Directors Stock
Option Plan of which 300,000 shares of Common Stock are reserved for
issuance.

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

The Company's Charter includes provisions that limit the liability of the
Company's directors. As permitted under the Florida Business Corporation Act,
directors of the Company will not be liable to the Company or its shareholders
for monetary damages arising from a breach of their fiduciary duty of care as
directors, including such conduct during a merger or tender offer. Such
limitations will not, however, affect liability for any breach of a director's
duty of loyalty to the Company or its shareholders, including approval by the
director of any transaction from which he derives an improper personal benefit,
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, or for the payment of dividends in violation of
Florida law. Such limitation of liability also will not affect the availability
of equitable remedies such as injunctive relief of rescission, nor will it have
any effect on claims arising under the federal securities laws. These
limitations may limit the ability of shareholders of the Company to sustain a
cause of action against the Company's directors based on grossly negligent
business decisions, including those relating to attempts to change control of
the Company. The Company's Bylaws provide for indemnification by the Company of
its directors and officers to the fullest extent permitted by Florida law. The
Company has obtained directors' and officers' insurance for the Company's
directors and officers. In cases of large damage awards and nonexistent or
inadequate insurance, the indemnification provisions contained in the Company's
Bylaws may require the Company to make payments to its officers and directors
sufficiently large to impair the Company's financial condition or a
shareholder's investment and/or reduce stockholder's equity.

Item 25. Other Expenses of Issuance and Distribution.

The following table sets forth the Company's estimates of the expenses to
be incurred by it in connection with the issuance and distribution of the

securities being registered, other than underwriting discounts and commissions:

Securities and Exchange Commission registration fee...................$1,342.37
Printing registration statement and other documents...................$ *
Fees and expenses of Registrant's counsel.............................$ *
Accounting fees and expenses..........................................$ *
Blue Sky expenses and counsel fees....................................$ *
Transfer agent, registrar fees and....................................$ *
Miscellaneous.........................................................$ *
--------
Total.......................$ *
========
- ------------
* To be supplied by amendment.

II-1

<PAGE>

Item 26. Recent Sales Of Unregistered Securities

The following information consists of information relating to unregistered
securities sold by the Company during the past three years.

5% Convertible Subordinated Notes

On April 30, 1996, the Company completed a private placement the of its 5%
Convertible Subordinated Notes due April 30, 2001 (the "Notes") pursuant to
which $11,500,000 aggregate principal amount of Notes were sold by the Company
solely to accredited investors pursuant to a Convertible Subordinated Note
Purchase Agreement dated as of April 30, 1996 (the "Convertible Subordinated
Note Purchase Agreement"). The following description of the Note offering, the
Convertible Subordinated Note Purchase Agreement and the Notes is not intended
to be complete and is qualified in its entirety by the complete texts of the
form of Convertible Subordinated Note Purchase Agreement and the form of Note.

The Company may redeem the Notes at par at any time two years after
issuance, or at any time after their issuance if the closing price of the Common
Stock exceeds $7.50 per share for 10 consecutive trading days and the shares of
Common Stock underlying the Notes have been registered under the Securities Act,
as amended. In the event the Company elects to redeem the Notes, the holders of
the Notes will have the option to convert the Notes into shares of the Company's
Common Stock at a conversion price of $5.00 per share prior to such redemption,
subject to adjustment as set forth in the Convertible Subordinated Note Purchase
Agreement.

The Company has filed with the SEC a Registration Statement on Form S-3
registering the shares of Common Stock into which the Notes are convertible.

The Notes were sold for the Company by placement agents. The placement
agents received an aggregate of $576,000 in commissions on the placement of the
Notes. The Note offering was deemed to be exempt from registration pursuant to
Section 4(2) of the Securities Act.

NIK Acquisition

Pursuant to the terms of the Asset Purchase Agreement, the Company
acquired certain assets of the NIK Public Safety Line of Ivers-Lee Corporation
on July 15, 1996 in exchange for 310,931 unregistered shares of the Company's
Common Stock. Such shares were deemed

II-2

<PAGE>

exempt from registration pursuant to Sections 4(2) and/or 4(6) of the Securities
Act. Such shares are being registered pursuant to this Registration Statement.
See "NIK Acquisition."

Options Granted to Richmont Capital Partners, I, L.P.

On May 15, 1996, the Company granted to Richmont an option to purchase
300,000 shares of the Company's Common Stock, at a price of $7.50 per share,
subject to adjustment, for a term of up to 10 years (the "Richmont Options"). At
the present time, neither the Richmont Options nor the shares underlying the
Richmont Options are registered under the Securities Act, but the Company
reserves the right to register such shares at any time.

The Richmont Options and the underlying shares, whether vested or
unvested, are callable by the Company in the event that the closing price per
share of the Company's Common Stock is equal to or greater than $10 for a period
of 10 consecutive trading days after December 31, 1997, upon written notice to
Richmont given within 30 days of the conclusion of such ten consecutive trading
days during which the closing price per share of the Company's Common Stock was
equal to or greater than $10. In such event, the Company may require Richmont to
exercise the Richmont Options in whole with respect to all such shares within 10
days of such notice to Richmont. In the event that Richmont does not exercise
the Richmont Options, the Richmont Options will lapse and be of no further force
or effect. The foregoing sale of securities made pursuant to the sale by the
Company of the Richmont Options was made in reliance upon an exemption from the
registration provisions of the Securities Act set forth in Section 4(2) thereof
as a transaction by an issuer not involving any public offering.

1996 Non-Employee Directors Stock Option Plan

The Company has granted option to purchase 75,000 shares of Common Stock
to each of Messrs. Ehrlich, Sokolow and Strauss, each a director of the Company,
pursuant to the Company's 1996 Non-Employee Directors Stock Option Plan (the
"1996 Directors Plan"). The 1996 Directors Plan was approved by the Shareholders

at the Annual Meeting of Shareholders held on July 16, 1996.

The 1996 Directors Plan is a formula plan pursuant to which non-qualified
options to acquire 75,000 shares of the Company's Common Stock will be
automatically granted to each Non-Employee Director upon the date of his or her
initial election or appointment to the Board of Directors in consideration for
service as a Director. There are 300,000 shares of Common Stock reserved for
issuance under the 1996 Directors Plan. Under the 1996 Directors Plan's formula,
the exercise price for all 75,000 options granted to each Non-Employee Director
under the 1996 Directors Plan will be the closing price on the date of the grant
of the Company's Common Stock as quoted on the composite tape of the American
Stock Exchange, or on such exchange as the Company's Common Stock may then be
trading. Of the 75,000 options granted to each Non-Employee Director, options to
acquire 25,000 shares become exercisable upon each of the first three
anniversary dates following the date of the grant and all 75,000 options granted
to each Non-Employee Director shall expire ten years from the date of grant. The
exercise price must be paid in cash. If, on the day of the grant, counsel for
the Company determines, in

II-3

<PAGE>

her/his sole discretion, that the Company is in possession of material,
undisclosed information that would prevent it from issuing securities, then the
grant of options to Non-Employee Directors will be suspended until the second
day after public dissemination of the information (or the first trading day
thereafter). The amount, pricing and other terms of the grant will remain as set
forth in the 1996 Directors Plan, with the exercise price of the option to be
determined in accordance with the formula on the date the option is finally
granted.

Upon retirement, a Non-Employee Director's options will continue to become
exercisable and must be exercised by the earlier of (i) 36 months following the
date of retirement or (ii) the expiration of the applicable option period, or
such options shall be forfeited. Upon a Non-Employee Director's disability or
death, those options held by the Non-Employee Director for at least one year
prior to the date of death or the date of cessation of service following
disability shall become immediately exercisable; the Non-Employee Director or
his/her legal representatives or heirs must exercise such options by the earlier
of (i) 6 months or 36 months from the date of cessation of service due to
disability or death, respectively, as the case may be, or (ii) the expiration of
the applicable option period, or such options shall be forfeited. Should an
individual cease to serve as a Non-Employee Director for any reason other than
retirement, disability, death or cause, he/she will have 90 days within which to
exercise only those options which were exercisable as of the date he/she ceased
to serve as a director.

Upon their initial election to the Board of Directors on January 18, 1996,
each of Messrs. Ehrlich and Sokolow, both of whom are Non-Employee Directors,
were granted 75,000 stock options pursuant to the terms of the 1996 Directors
Plan, subject to Shareholder approval of such plan. Such options vest in three
equal annual installments on January 18, 1997, 1998 and 1999, at an exercise
price of $3.75 per share, the closing trading price of the Company's Common

Stock on the National Association of Securities Dealers Automated Quotation
System on January 18, 1996.

Upon his initial election to the Board of Directors on May 13, 1996, Mr.
Strauss, a NonEmployee Director, was granted 75,000 stock options pursuant to
the terms of the 1996 Directors Plan, subject to Shareholder approval of such
plan. Such options vest in three equal annual installments on May 13, 1997,
1998, and 1999, at an exercise price of $7.50 per share, the closing trading
price of the Company's Common Stock on American Stock Exchange on May 13, 1996.

The sale of securities made pursuant to the grant of options under the
1996 Directors Plan were made in reliance upon an exemption from the
registration provisions of the Securities Act set forth in Section 4(2) thereof
as transactions by an issuer not involving any public offering and Section 4(6)
thereof as sales to accredited investors not exceeding, on an aggregate basis
per issuance of such securities, $5,000,000.

Other Stock Option Grants

Since August 1993, the Company has issued options to purchase 102,500
shares of Common Stock outside of the 1994 Incentive Stock Plan and the 1996
Plan and exclusive of the

II-4

<PAGE>

Richmont Options and those options granted under the 1996 Directors Plan. Such
options were awarded at exercise prices ranging from $0.79 to $1.05 per share.
See "Executive Compensation-Stock Option Plans." The shares of Common Stock
underlying the options are restricted from further sale, transfer or disposition
unless registered or an exemption is available from the registration
requirements of the Securities Act.

The foregoing sales of securities and were made in reliance upon an
exemption from the registration provisions of the Securities Act set forth in
Section 4(2) thereof as transactions by an issuer not involving any public
offering and Section 4(6) thereof as sales to accredited investors not
exceeding, on an aggregate basis per issuance of such securities, $5,000,000.
The Company has reason to believe that all the foregoing purchasers were
familiar with or have access to information concerning the operations and
financial condition of the Company.

Item 27. Exhibits.

The following table lists all exhibits to the Registration Statement
as amended hereby. Substantially all such exhibits are incorporated herein by
reference to registration statements, reports, and amendments thereof previously
filed by the Registrant, as more fully set forth below. Documents filed
herewith, if any, are marked with an asterisk (*). Documents incorporated by
reference are marked with two asterisks (**). Documents to be filed by amendment
to this Registration Statement, if any, are marked with three asterisks (***).

Exhibit

No. Description
--- -----------
2.1** Order confirming Debtor's Third Amended and Restated Plan of
Reorganization with the Third Amended and Restated Plan of
Reorganization attached thereto (filed as Exhibit 2 to Form 8-K,
Current Report of the Company, dated October 1, 1993 and incorporated
herein by reference).

2.2** Asset Purchase Agreement, dated as of July 2, 1996, by and among
American Body Armor & Equipment, Inc., NIK Public Safety, Inc.,
Ivers-Lee Corporation and LFC No. 46 Corp. (filed as Exhibit 99.4 to
the Company's Registration Statement on Form S-3, filed with the
Securities and Exchange Commission on July 19, 1996).

3.1** Articles of Restatement of Articles of Incorporation of American Body
Armor & Equipment, Inc. (with the Amended and Restated Articles of
Incorporation of American Body Armor & Equipment, Inc. attached
thereto) (filed as Exhibit 3 to Form 8-K, Current Report of the
Company, dated October 1, 1993 and incorporated herein by reference).

3.2** Amended and Restated Bylaws of American Body Armor & Equipment, Inc.,
as amended on May 13, 1996 (filed as Exhibit 3.1 to Form 8-K, Current
Report of the Company, dated May 14, 1996 and incorporated herein by
reference).

5.1*** Opinion of Kane Kessler, P.C., including consent.

10.1* Letter Agreement, dated July 12, 1996, by and among Ivers-Lee
Corporation and Union Bank of Switzerland, New York Branch.

10.2* Irrevocable Power of Attorney, dated July 12, 1996, granted by
Ivers-Lee Corporation in favor of Jonathan M. Spiller.

11.1* Statement regarding computation of per share earnings.

II-5

<PAGE>

21.1* Subsidiaries of the Company.

23.1*** Consent of Kane Kessler, P.C. (included in Exhibit 5.1).

23.2* Consent of Deloitte & Touche LLP.

24.1* Power of Attorney (included on signature page).

27.1* Financial Data Schedule.

* Filed herewith.
** Incorporated herein by reference.
*** To be filed by amendment to this Registration Statement.

Item 28. Undertakings

The Company hereby undertakes as follows:

1. The Company shall file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to:

(a) Include any prospectus required by Section 10(a)(3) of the Securities
Act;

(b) Reflect in the prospectus any facts or events which individually or
together, represent fundamental change in the information in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
the volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of the Registration Fee"
table in the effective Registration Statement; and

2. The Company shall, for determining liability under the Securities Act,
treat each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be the
initial bona fide offering.

II-6

<PAGE>

3. The Company shall file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.

II-7

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and has authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Yulee, State of Florida on the 16th day of
August, 1996.

AMERICAN BODY ARMOR & EQUIPMENT, INC.

By: /s/ Jonathan M. Spiller
--------------------------------------
Jonathan M. Spiller
President and Chief Executive Officer

POWER OF ATTORNEY

KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each Warren B. Kanders and Jonathan M.
Spiller, jointly and severally, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments and any abbreviated registration statement,
and any amendments thereto, filed pursuant to Rule 462(b) increasing the amount
of securities or which registration is being sought) to this registration
statement and all documents relating thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

II-8

<PAGE>

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.

Signature Title Date
- --------- ----- ----

/s/ Warren B. Kanders Chairman of the Board of August 16, 1996
- --------------------------------Directors
Warren B. Kanders

/s/ Jonathan M. Spiller President, Chief Executive August 16, 1996
- --------------------------------
Jonathan M. Spiller Officer and Director
(Principal Executive Officer)

/s/ Carol T. Burke Vice President, Finance and August 16, 1996
- --------------------------------
Carol T. Burke Secretary (Principal
Accounting Officer)

/s/ Burtt R. Ehrlich Director August 16, 1996
- --------------------------------
Burtt R. Ehrlich

/s/ Nicholas Sokolow Director August 16, 1996
- --------------------------------
Nicholas Sokolow

/s/ Thomas W. Strauss Director August 16, 1996
- --------------------------------
Thomas W. Strauss

/s/ Richard C. Bartlett Director August 16, 1996
- --------------------------------
Richard C. Bartlett

II-9

<PAGE>

EXHIBIT INDEX

The following Exhibits are filed herewith:

Exhibit No. Description Page
----------- ----------- ----

10.1 Letter Agreement, dated July 12, 1996,
by and among Ivers-Lee Corporation and
Union Bank of Switzerland, New York
Branch

10.2 Irrevocable Power of Attorney, dated
July 12, 1996, granted by Ivers-Lee
Corporation in favor of Jonathan M.
Spiller.

11.1 Statement regarding computation of
per share earnings.

21.1 Subsidiaries of the Company.

23.2 Consent of Deloitte & Touche LLP.

24.1 Power of Attorney (included on
signature page).

27.1 Financial Data Schedule.

II-10

<PAGE>
EXHIBIT 10.1

<PAGE>
Ivers-Lee Corporation
147 Clinton Road
West Caldwell, New Jersey 07006

July 12, 1996

Union Bank of Switzerland, New York Branch
1345 Avenue of the Americas
50th Floor
New York, New York 10105

Re: Shares of American Body Armor & Equipment, Inc.

Dear Sirs:

Reference is hereby made to that certain Asset Purchase
Agreement (the "Agreement"), dated as of July 2, 1996, among
American Body Armor & Equipment, Inc. ("ABA"); NIK Public Safety,
Inc. ("NIK"); Ivers-Lee Corporation ("Ivers-Lee"); and LFC #46
Corp. ("LFC").

In accordance with the provisions of Section 2.1 of the
Agreement, Ivers-Lee hereby irrevocably delivers to you the stock
certificate of ABA issued in the name of Ivers-Lee representing
310,931 shares of common stock of ABA (the "Shares"). You are
hereby authorized to hold the shares in your possession and to
effect any sales of such Shares as ABA may from time to time
instruct you to perform.

The first $1,200,000 of net sales proceeds realized from
any such sales of the Shares shall be delivered to ABA.
Thereafter, all net sales proceeds up to the next $1,200,000 shall
be delivered to Ivers-Lee. In the event that net sales proceeds
are realized from the sale of the Shares in excess of $2,400,000,
any such excess shall be delivered to ABA.

ABA shall effect any such sales of the Shares only after
the registration statement relating to the Shares has been declared
effective by the Securities and Exchange Commission. ABA shall
advise you of the effectiveness of such registration statement.

You hereby agree that you will use reasonable care in the
custody and safekeeping of the Shares. You will not be responsible
for any loss in value of the Shares.

Ivers-Lee hereby agrees that the terms of this letter
agreement are irrevocable, and that ABA shall at all times have the
right to direct the sales of the shares as herein provided;
provided, however, that in the event that Ivers-Lee has not
received an aggregate of $2,400,000 (including net sales proceeds
from sales of the Shares and the Advance (as defined in the

<PAGE>
Agreement)) on or before December 31, 1996, or in the event that
NIK or ABA is otherwise in default of its obligations to Ivers-Lee
pursuant to the Agreement, then the provisions of this letter
agreement shall terminate, and the Shares shall be delivered to
Ivers-Lee. Ivers-Lee and ABA shall notify you of any termination
due to the failure by Ivers-Lee to receive $2,400,000 by
December 31, 1996 or other dafault by NIK or ABA. This letter
agreement shall also terminate upon the sale of all of the Shares
and the disposition of the proceeds therefrom.

If you are in agreement with the foregoing, please so
indicate by signing this letter agreement in the space indicated
below and returning a fully-executed copy to us.

Very truly yours,

IVERS-LEE CORPORATION

By: /s/ Robert Sullivan
Name: Robert Sullivan
Title: CFO

ABOVE AGREED TO AND ACCEPTED:

UNION BANK OF SWITZERLAND,
NEW YORK BRANCH

By: /s/ Lawrence E. Gore
Name: Lawrence E. Gore
Title: Managing Director

<PAGE>
EXHIBIT 10.2

<PAGE>
IRREVOCABLE POWER OF ATTORNEY

The undersigned, Ivers-Lee Corporation ("Ivers-Lee"),
hereby irrevocably constitutes and appoints Jonathan Spiller, the
President and Chief Executive Officer of American Body Armor &
Equipment, Inc. ("ABA"), with full power of substitution, the true
and lawful attorney-in-fact (the "Attorney") of Ivers-Lee with the
full power in the name of, for and on behalf of Ivers-Lee, to
effect any and all sales of the 310,931 shares of common stock of
ABA delivered to Ivers-Lee (the "Shares") pursuant to that certain
Asset Purchase Agreement (the "Agreement"), dated as of July 2,
1996, among ABA, Ivers-Lee, LFC #46 Corp. and NIK Public Safety,
Inc. ("NIK").

The power and authority granted to the Attorney hereunder
shall include, but not be limited to, the power and authority to
instruct all appropriate persons to sell and deliver the Shares in
accordance with the instructions of ABA, all in conformity with the
terms and provisions of the Agreement.

This power of attorney is an agency coupled with an
interest and all authority conferred hereby shall be irrevocable;
provided, however, that in the event that Ivers-Lee has not
received an aggregate of $2,400,000 (including net sales proceeds
from sales of the Shares and the Advance (as defined in the
Agreement)) on or before December 31, 1996, or in the event that
NIK or ABA is otherwise in default of its obligations to Ivers-Lee
pursuant to the Agreement, then this power of attorney shall
terminate.

IVERS-LEE CORPORATION

By: /s/ Robert Sullivan
Name: Robert Sullivan
Title: CFO

State of New York
County of New York ss.

On the 12 day of July, 1996, before me came Robert
Sullivan to me known, who being by me duly sworn, did depose and say
that he resides at 1410 East Woodbank Way, city of West Chester,
state of Pennsylvania; that he is the Chief Financial Officer of
Ivers-Lee Corporation, the corporation described in and which
executed the foregoing instrument; that he knows the seal of the
said corporation; that it was so affixed by the order of the Board
of Directors of said corporation; and that he signed his name
thereto by like order.

Allen David Hirsh
Notary Public
New York County

<PAGE>

EXHIBIT 11.1

<PAGE>

EARNINGS PER SHARE COMPUTATIONS

Six Month Period Ended
----------------------

June 30, 1996 July 1, 1995
------------- ------------

PRIMARY EARNINGS PER SHARE:
Net Income $ 215,042 $ 239,244
---------- ----------

Shares:
Weighted average common shares outstanding 6,644,740 4,697,255

Effect of shares issuable under stock option
and stock grant plans, based on the treasury
stock method 853,701 118,623

Effect of shares issuable under conversion of
preferred stock - if converted method (for 1996
the "if converted" method is applied from the
beginning of the period to the actual conversion
date of the preferred stock of January 19, 1996) 181,095 1,761,382
---------- ----------

Adjusted common shares and equivalents 7,679,536 6,577,260
---------- ----------

Earnings per share - primary $ .03 $ .04
---------- ----------

FULLY DILUTED EARNINGS PER SHARE:

Net Income $ 215,042 $ 239,244
Add Back:
After tax interest expense accrued on Notes $ 59,580 --
---------- ----------

Adjusted net income 274,622 239,244
---------- ----------

Weighted Average common shares outstanding 6,644,740 4,697,255

Effect of shares issuable under stock option

and stock grants plans, based on the treasury
stock method 961,809 209,350

Effect of shares issuable under conversion of
subordinated note - if converted method (for
1996 the "if converted" method is applied from
the date of the note of April 30, 1996
to the end of the period) 770,879 --

Adjusted common shares and equivalents 8,558,523 6,667,987
---------- ----------

Earnings per share - fully diluted $ .03 $ .04
---------- ----------

EXHIBIT 21.1

SUBSIDIARIES OF THE COMPANY

Name of Subsidiary State of Incorporation
------------------ ----------------------

Armor Holdings, Inc. Delaware

NIK Public Safety, Inc. Delaware

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of American Body Armor &
Equipment, Inc. on Form SB-2 of our report dated February 23, 1996, appearing in
the Prospectus, which is part of this Registration Statement and to the
reference to us under the heading "Experts" in such Prospectus.

DELOITTE & TOUCHE LLP
Jacksonville, Florida

August 16, 1996

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE COMPANY'S FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,004,168
<SECURITIES> 0
<RECEIVABLES> 2,055,568
<ALLOWANCES> 87,741
<INVENTORY> 1,237,020
<CURRENT-ASSETS> 13,013,111
<PP&E> 815,322
<DEPRECIATION> 348,576
<TOTAL-ASSETS> 17,720,233
<CURRENT-LIABILITIES> 979,382
<BONDS> 11,524,479
0
0
<COMMON> 207,594
<OTHER-SE> 5,008,778
<TOTAL-LIABILITY-AND-EQUITY> 17,720,233
<SALES> 6,862,849
<TOTAL-REVENUES> 6,862,849
<CGS> 4,368,251
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,976,488
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130,573
<INCOME-PRETAX> 362,042
<INCOME-TAX> 147,000
<INCOME-CONTINUING> 215,042
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 215,042
<EPS-PRIMARY> .03
<EPS-DILUTED> .03

</TABLE>